Document:

Exhibit
4.5

 

 

Advanced
Life Sciences Holdings, Inc.

 

and

 

Onyx
Stock Transfer, LLC,

 

Warrant
Agent

 

 

Warrant Agent Agreement

 

Dated as of May       ,
2010

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  Certain Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  Appointment of Warrant Agent

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  Book-Entry Warrant Certificates

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Form of Warrant Certificates

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  Countersignature and Registration

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  Transfer, Split Up, Combination and Exchange of Warrant
  Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  Exercise of Warrants

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  Cancellation and Destruction of Warrant Certificates

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  Certain Representations; Reservation and Availability of
  Shares of Common Stock or Cash

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  Common Stock Record Date

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  Adjustment of Exercise Price, Number of Shares of Common
  Stock or Number of the Company Warrants

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.

  	
   

  	
  Certification of Adjusted Exercise Price or Number of
  Shares of Common Stock

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.

  	
   

  	
  Reclassification, Consolidation, Purchase, Combination,
  Sale or Conveyance

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.

  	
   

  	
  Agreement of Warrant Certificate Holders

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.

  	
   

  	
  Concerning the Warrant Agent

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 16.

  	
   

  	
  Purchase or Consolidation or Change of Name of Warrant
  Agent

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 17.

  	
   

  	
  Duties of Warrant Agent

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 18.

  	
   

  	
  Change of Warrant Agent

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 19.

  	
   

  	
  Notices

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 20.

  	
   

  	
  Supplements and Amendments

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 21.

  	
   

  	
  Successors

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 22.

  	
   

  	
  Benefits of this Agreement

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 23.

  	
   

  	
  Governing Law

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 24.

  	
   

  	
  Counterparts

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 25.

  	
   

  	
  Captions

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 26.

  	
   

  	
  Force Majeure

  	
   

  	
  12

  

 

i

 

WARRANT AGENT AGREEMENT

 

WARRANT AGENT AGREEMENT,
dated as of May       , 2010 (“Agreement”),
between Advanced Life Sciences Holdings, Inc., a Delaware corporation (the
“Company”), and Onyx Stock Transfer, LLC, a California limited liability
company (the “Warrant Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to an
effective registration statement, SEC File No. 333-165388, the Company
wishes to issue an aggregate of up to 2,900,000 Units , each unit consisting of
100 shares of common stock, par value $0.01 (the “Common Stock”), and 50
warrants (the “Warrants”), entitling the respective holders of the
Warrants (the “Holders” which term shall include a Holder’s transferees,
successors and assigns) to purchase one share of Common Stock upon the terms
and subject to the conditions set forth herein and in the Warrant Certificate;
and

 

WHEREAS, the Company wishes
the Warrant Agent to act on behalf of the Company, and the Warrant Agent is
willing so to act, in connection with the issuance, registration, transfer,
exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s
capacity as the Company’s transfer agent, the delivery of the Warrant Shares;

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the
parties hereby agree as follows:

 

Section 1.                                            Certain
Definitions.  For
purposes of this Agreement, the following terms have the meanings indicated:

 

(a)                                  “Business
Day” means any day other than a Saturday, Sunday or a day on which the New
York Stock Exchange is authorized or obligated by law or executive order to
close.

 

(b)                                 “Close of
Business” on any given date means 5:00 p.m., New York City time, on
such date; provided, however, that if such date is not a Business
Day it means 5:00 p.m., New York City time, on the next succeeding
Business Day.

 

(c)                                  “Exercise
Price” means, depending on the context, the Initial Exercise Price or the
adjusted exercise price per share, adjusted from time to time as described in
the Warrant Certificate.

 

(d)                                 “Initial
Exercise Price” means $[        ]
per share of Common Stock.

 

(e)                                  “Person”
means an individual, sole proprietorship, corporation, partnership, limited
liability partnership, limited liability company, association, joint venture,
trust, unincorporated organization, estate or
other mutual company, joint stock company, estate, union, employee
organization, bank, trust company, land trust or other organization, whether or
not a legal entity.

 

 

(f)                                    “Warrant
Certificate” means a certificate in substantially the form attached as Exhibit 1
hereto representing such number of Warrant Shares as is indicated on the face
thereof, provided that any reference to the delivery of a Warrant Certificate
in this Agreement shall include delivery of notice from the Depository or a
Participant (each as defined below) of the transfer or exercise of Warrant in
the form of a Book-Entry Warrant Certificate (as defined below).

 

(g)                                 “Warrant
Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

 

Section 2.                                            Appointment of
Warrant Agent.  The Company
hereby appoints the Warrant Agent to act as agent for the Company in accordance
with the terms and conditions set forth herein and in the Warrant Certificate,
and the Warrant Agent hereby accepts such appointment. The Company may from
time to time appoint such Co-Warrant Agents as it may, in its sole discretion,
deem necessary or desirable.

 

Section 3.                                            Book-Entry
Warrant Certificates.

 

(a)                                  The Warrants
shall be issuable in book entry (the “Book-Entry Warrant Certificates”).
All of the Warrants shall initially be represented by one or more Book-Entry
Warrant Certificates deposited with the Depository Trust Company (“Depository”)
and registered in the name of Cede & Co., a nominee of the Depository.
Ownership of beneficial interests in the Warrants shall be shown on, and the
transfer of such ownership shall be effected through, records maintained by (i) the
Depository or its nominee for each Book-Entry Warrant Certificate or (ii) institutions
that have accounts with the Depository (such institution, with respect to a
Warrant in its account, a “Participant”).

 

(b)                                 If the
Depository subsequently ceases to make its book-entry settlement system
available for the Warrants, the Company may instruct the Warrant Agent
regarding other arrangements for book-entry settlement. In the event that the
Warrants are not eligible for, or it is no longer necessary to have the
Warrants available in, book-entry form, the Warrant Agent shall provide written
instructions to the Depository to deliver to the Warrant Agent for cancellation
each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant
Agent to deliver to each Holder a Warrant Certificate.

 

Section 4.                                            Form of
Warrant Certificates.  The Warrant
Certificate, together with the form of election to purchase Common Stock (“Exercise
Notice”) and the form of assignment to be printed on the reverse thereof,
shall be substantially in the form of Exhibit 1 hereto.

 

Section 5.                                            Countersignature
and Registration.  The Warrant
Certificates shall be executed on behalf of the Company by its Chairman, or its
President, either manually or by facsimile signature, and have affixed thereto
the Company’s seal or a facsimile thereof which shall be attested by the
Secretary, either manually or by facsimile signature. The Warrant Certificates
shall be countersigned by the Warrant Agent either manually or facsimile
signature and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issuance and delivery by the 

 

2

 

Company, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and delivered
with the same force and effect as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date
of the execution of this Warrant Agreement any such person was not such an
officer.

 

The Warrant Agent will keep
or cause to be kept, at its office in Mountain View, California, or at the
office of one of its agents, books for registration and transfer of the Warrant
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Warrant Certificates, the number of warrants
evidenced on the face of each of such Warrant Certificate and the date of each
of such Warrant Certificate.   The
Warrant Agent will create a special account for the issuance of Warrant
Certificates.

 

Section 6.                                            Transfer, Split
Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed,
Lost or Stolen Warrant Certificates.  Subject to the provisions of Section 14
hereof and the last sentence of this first paragraph of Section 7 and
subject to compliance with any applicable securities laws, the Warrant
Certificate or Warrant Certificates or Book-Entry Warrant Certificate or
Book-Entry Warrant Certificates and all rights thereunder, are transferable, in
whole or in part, upon surrender of the Warrant Certificate or Warrant
Certificates to be transferred at the principal office of the Company or the
Warrant Agent, provided that no such surrender is applicable to the Holder of a
Book-Entry Warrant Certificate, together with a written assignment of such
Warrant Certificate duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender, and if
required, such payment, the Company shall execute and deliver a new Warrant
Certificate or Warrant Certificates in the name of such assignee or assignees
and in the denomination or denominations specified in such instrument of
assignment to the Warrant Agent to be countersigned and delivered to such
assignee or assignees.  The Company shall
execute and deliver a new Warrant Certificate evidencing the portion of the
Warrant Certificate not so assigned to the Warrant Agent to be countersigned
and delivered to the assignor.  The
original Warrant Certificate shall promptly by cancelled by the Warrant
Agent.  Any such transfer shall be promptly
recorded in the warrant register.

 

The Company and the Warrant
Agent covenant that upon receipt by the Company or the Warrant Agent of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of the Warrant Certificate or any stock certificate relating to the
Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to the Company or the Warrant Agent and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver the a new Warrant Certificate or stock
certificate, without charge, of like date, tenor and denomination, to the
Warrant Agent for delivery to the Holder in lieu of such Warrant Certificate or
stock certificate.

 

3

 

Section 7.                                            Exercise of
Warrants.

 

(a)                                  Subject to the
provisions of the Warrant Certificate, the Holder of a Warrant may exercise the
Warrant at any time in whole or in part, at the option of the Holder, upon
surrender of the Warrant Certificate, if required, with the executed Exercise
Notice and payment of the Exercise Price, which may be made, at the option of
the holder, by certified or bank cashier’s check payable to the Company, or a
wire transfer of funds to an account designated by the Company, to the Warrant
Agent at the principal office of the Warrant Agent in Mountain View, California
or to the office of one of its agents as may be designated in writing by the
Warrant Agent. In the case of the Holder of a Book-Entry Warrant Certificate,
the Holder shall deliver the executed Exercise Notice and the payment of the
Exercise Price as described herein.  Upon
receipt of an Exercise Notice for a cashless exercise, the Warrant Agent will
promptly deliver a copy of the Exercise Notice to the Company to confirm the
number of Warrant Shares issuable in connection with the cashless exercise. The
Company shall calculate and transmit to the Warrant Agent, and the Warrant
Agent shall have no obligation under this section to calculate, the number of
Warrant Shares issuable in connection with the cashless exercise.

 

(b)                                 Upon receipt of
by the Warrant Agent of the Warrant Certificate, as applicable, the Exercise
Notice and the Exercise Price as described in Section 7(a) above, the
Warrant Agent shall use reasonable efforts to cause the Warrant Shares to be
delivered to or upon the order of the Holder of such Warrant, registered in
such name or names as may be designated by such Holder by the date that is
three (3) Business Days after the latest of (A) the delivery to the
Warrant Agent of the executed Exercise Notice, (B) surrender of the
Warrant Certificate (but only if required herein) and (C) payment of the
Exercise Price and other amounts as set forth herein or in the Warrant
Certificate (including by cashless exercise, if permitted) (such date, the “Warrant
Share Delivery Date”); provided, however, that the Warrant Agent shall not
be liable to the Company or the Holder for any damages arising out of the
failure to deliver the Warrant Share by the Warrant Share Delivery Date. If the
Warrant Agent fails to deliver to the Holder a certificate or the certificates
representing the Warrant Shares (or, as described below, to credit the account
of the Holder’s prime broker through the DWAC system) by the Warrant Share
Delivery Date, the Holder will have the right to rescind such exercise.
Notwithstanding the foregoing, if the Company is then a participant in the
Deposit Withdrawal Agent Commission (“DWAC”) system of the Depository
and either (A) there is an effective registration statement permitting the
issuance of the Warrant Shares to and resale of the Warrant Shares by holder or
(B) the Warrant is being exercised via cashless exercise, the certificates
for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by
crediting the account of the Holder’s prime broker with the Depository through
its DWAC system.

 

(c)                                  In case the
Holder of any Warrant Certificate shall exercise fewer than all Warrants
evidenced thereby, a new Warrant Certificate evidencing the number of Warrants
equivalent to the number of Warrants remaining unexercised shall be issued by
the Warrant Agent to the Holder of such Warrant Certificate or to his duly
authorized assigns, subject to the provisions of Sections 7 and 14 hereof.

 

Section 8.                                            Cancellation
and Destruction of Warrant Certificates.  All Warrant Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange 

 

4

 

shall, if surrendered to the Company or to
any of its agents, be delivered to the Warrant Agent for cancellation or in
canceled form, or, if surrendered to the Warrant Agent, shall be canceled by
it, and no Warrant Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement or the Warrant
Certificate. The Company shall deliver to the Warrant Agent for cancellation
and retirement, and the Warrant Agent shall so cancel and retire, any other
Warrant Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. Upon written request by the Company, the Warrant Agent shall
deliver all canceled Warrant Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Warrant Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company,
subject to any applicable law, rule or regulation requiring the Warrant
Agent to retain such canceled certificates.

 

Section 9.                                            Certain
Representations; Reservation and Availability of Shares of Common Stock or Cash.

 

(a)                                  This Agreement
has been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery hereof by the Warrant Agent,
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, and the Warrants have been
duly authorized, executed and issued by the Company and, assuming due
authentication thereof by the Warrant Agent pursuant hereto, constitute valid
and legally binding obligations of the Company enforceable against the Company
in accordance with their terms and entitled to the benefits hereof; in each
case except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

(b)                                 As of the date
hereof, the authorized capital stock of the Company consists of (i) 390,372,067
shares, of Common Stock, of which 100,372,067 shares of Common Stock are issued
and outstanding, 145,000,000  shares
of Common Stock are reserved for issuance upon exercise of the Warrants, up to [                   ]
shares issuable upon the exercise of other outstanding warrants and not more
than 6,279,303 shares of Common Stock are reserved for future issuance under
equity incentive plans and (ii) 5,000,000 shares of preferred stock, no
par value per share, of which no shares are outstanding. There are no other
outstanding obligations, warrants, options or other rights to subscribe for or
purchase from the Company any class of capital stock of the Company.

 

(c)                                  The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock or its authorized and
issued shares of Common Stock held in its treasury, free from preemptive
rights, the number of shares of Common Stock that will be sufficient to permit
the exercise in full of all outstanding Warrants.

 

(d)                                 The Company
further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of
the original issuance or delivery of the Warrant Certificates or certificates
evidencing Common Stock upon exercise of the Warrants. The Company shall not,
however, be required to 

 

5

 

pay any tax or governmental charge which may
be payable in respect of any transfer involved in the transfer or delivery of
Warrant Certificates or the issuance or delivery of certificates for Common
Stock in a name other than that of the Holder of the Warrant Certificate
evidencing Warrants surrendered for exercise or to issue or deliver any
certificate for shares of Common Stock upon the exercise of any Warrants until
any such tax or governmental charge shall have been paid (any such tax or
governmental charge being payable by the holder of such Warrant Certificate at
the time of surrender) or until it has been established to the Company’s
reasonable satisfaction that no such tax or governmental charge is due.

 

Section 10.                                      Common Stock
Record Date.  Each person
in whose name any certificate for shares of Common Stock is issued (or to whose
prime broker’s account is credited shares of Common Stock through the DWAC
system) upon the exercise of Warrants shall for all purposes be deemed to have
become the holder of record for the Common Stock represented thereby on, and
such certificate shall be dated, the date upon which the Warrant Certificate
evidencing such the Company Warrants was duly surrendered (but only if required
herein) and payment of the Exercise Price (and any applicable transfer taxes)
and submission of the Exercise Notice was made; provided, however, that if the
date of such surrender (if applicable), payment and submission is a date upon
which the Common Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding day on which the Common Stock
transfer books of the Company are open.

 

Section 11.                                      Adjustment of
Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants.  The Exercise Price, the number of shares
covered by each Warrant and the number of Warrants outstanding are subject to
adjustment from time to time as provided in the Warrant Certificate.

 

Section 12.                                      Certification
of Adjusted Exercise Price or Number of Shares of Common Stock.  Whenever the Exercise Price or the number of
shares of Common Stock issuable upon the exercise of each Warrant is adjusted
as provided in the Warrant Certificate, the Company shall (a) promptly
prepare a certificate setting forth the Exercise Price of each Warrant as so
adjusted, and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Warrant Agent and with each transfer agent for the Common Stock a
copy of such certificate and (c) instruct the Warrant Agent to mail a
brief summary thereof to each holder of a Warrant Certificate.

 

Section 13.                                      Reclassification,
Consolidation, Purchase, Combination, Sale or Conveyance.  If, at any time while this Warrant is
outstanding, the Company shall effect any Fundamental Transaction, as such
terms is used in the Warrant Certificate, the Company shall instruct the
Warrant Agent to mail by first class mail, postage prepaid, to each Holder of a
Warrant, written notice of the execution of any such amendment, supplement or
agreement. Any supplemented or amended agreement entered into by the successor
corporation or transferee shall provide for adjustments as set forth in the
Warrant Certificate. The Warrant Agent shall be under no responsibility to
determine the correctness of any provisions contained in such agreement
relating either to the kind or amount of securities or other property
receivable upon exercise of warrants or with respect to the method employed and
provided therein for any adjustments and 

 

6

 

shall be entitled to rely upon the provisions
contained in any such agreement. The provisions of this Section 13 shall
similarly apply to successive Fundamental Transactions.

 

Section 14.                                      Agreement of
Warrant Certificate Holders.  Every holder of a Warrant Certificate by
accepting the same consents and agrees with the Company and the Warrant Agent
and with every other holder of a Warrant Certificate that:

 

(a)                                  the Warrant
Certificates are transferable only on the registry books of the Warrant Agent
if surrendered at the principal office of the Warrant Agent, duly endorsed or
accompanied by a proper instrument of transfer; and

 

(b)                                 the Company and
the Warrant Agent may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificates made by anyone other than the Company or the Warrant
Agent) for all purposes whatsoever, and neither the Company nor the Warrant
Agent shall be affected by any notice to the contrary.

 

Section 15.                                      Concerning the
Warrant Agent.  The Company
agrees to pay to the Warrant Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Warrant
Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder.

 

The Company covenants and
agrees to indemnify and to hold the Warrant Agent harmless against any costs,
expenses (including reasonable fees of its legal counsel), losses or damages,
which may be paid, incurred or suffered by or to which it may become subject,
arising from or out of, directly or indirectly, any claims or liability
resulting from its actions as Warrant Agent pursuant hereto; provided, that
such covenant and agreement does not extend to, and the Warrant Agent shall not
be indemnified with respect to, such costs, expenses, losses and damages
incurred or suffered by the Warrant Agent as a result of, or arising out of,
its gross negligence, bad faith, or willful misconduct.

 

Promptly after the receipt by
the Warrant Agent of notice of any demand or claim or the commencement of any
action, suit, proceeding or investigation, the Warrant Agent shall, if a claim
in respect thereof is to be made against the Company, notify the Company
thereof in writing. The Company shall be entitled to participate as its own
expense in the defense of any such claim or proceeding, and, if it so elects at
any time after receipt of such notice, it may assume the defense of any suit
brought to enforce any such claim or of any other legal action or proceeding.
For the purposes of this Section 15, the term “expense or loss” means any
amount paid or payable to satisfy any claim, demand, action, suit or proceeding
settled with the express written consent of the Warrant Agent, and all
reasonable costs and expenses, including, but not limited to, reasonable
counsel fees and disbursements, paid or incurred in investigating or defending
against any such claim, demand, action, suit, proceeding or investigation.

 

The Warrant Agent shall be
responsible for and shall indemnify and hold the Company harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments, 

 

7

 

expenses
and liability arising out of or attributable to the Warrant Agent’s refusal or
failure to comply with the terms of this Agreement, or which arise out of
Warrant Agent’s negligence or willful misconduct or which arise out of the
breach of any representation or warranty of the Warrant Agent hereunder, for
which the Warrant Agent is not entitled to indemnification under this
Agreement; provided, however, that Warrant Agent’s aggregate liability during
any term of this Agreement with respect to, arising from, or arising in
connection with this Agreement, or from all services provided or omitted to be
provided under this Agreement, whether in contract, or in tort, or otherwise,
is limited to, and shall not exceed, the amounts paid under this Agreement by
the Company to Warrant Agent as fees and charges, but not including
reimbursable expenses.

 

Promptly after the receipt by
the Company of notice of any demand or claim or the commencement of any action,
suit, proceeding or investigation, the Company shall, if a claim in respect
thereof is to be made against the Warrant Agent, notify the Warrant Agent
thereof in writing. The Warrant Agent shall be entitled to participate at its
own expense in the defense of any such claim or proceeding, and, if it so
elects at any time after receipt of such notice, it may assume the defense of
any suit brought to enforce any such claim or of any other legal action or
proceeding.

 

Section 16.                                      Purchase or
Consolidation or Change of Name of Warrant Agent.  Any corporation into which the Warrant Agent
or any successor Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent or any successor Warrant Agent shall be party, or any
corporation succeeding to the business of the Warrant Agent or any successor
Warrant Agent, shall be the successor to the Warrant Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Warrant Agent under the provisions of Section 18.
In case at the time such successor Warrant Agent shall succeed to the agency
created by this Agreement any of the Warrant Certificates shall have been
countersigned but not delivered, any such successor Warrant Agent may adopt the
countersignature of the predecessor Warrant Agent and deliver such Warrant
Certificates so countersigned; and in case at that time any of the Warrant
Certificates shall not have been countersigned, any successor Warrant Agent may
countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor Warrant Agent; and in all such
cases such Warrant Certificates shall have the full force provided in the
Warrant Certificates and in this Agreement.

 

In case at any time the name
of the Warrant Agent shall be changed and at such time any of the Warrant
Certificates shall have been countersigned but not delivered, the Warrant Agent
may adopt the countersignature under its prior name and deliver Warrant
Certificates so countersigned; and in case at that time any of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its
changed name; and in all such cases such Warrant Certificates shall have the
full force provided in the Warrant Certificates and in this Agreement.

 

Section 17.                                      Duties of
Warrant Agent.  The Warrant
Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which

 

8

 

the Company and the Holders of Warrant
Certificates, by their acceptance thereof, shall be bound:

 

(a)                                  The Warrant
Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete authorization
and protection to the Warrant Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.

 

(b)                                 Whenever in the
performance of its duties under this Agreement the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed
by the Chairman, or President of the Company and by the Secretary of the
Company and delivered to the Warrant Agent; and such certificate shall be full
authentication to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.

 

(c)                                  The Warrant
Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct, pursuant to Section 16, above.

 

(d)                                 The Warrant
Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Warrant Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Company only.

 

(e)                                  The Warrant
Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof
by the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant Certificate; nor shall it be responsible for the
adjustment of the Exercise Price or the making of any change in the number of
shares of Common Stock required under the provisions of Section 11, Section 13
and the Warrant Certificate or responsible for the manner, method or amount of
any such change or the ascertaining of the existence of facts that would
require any such adjustment or change (except with respect to the exercise of
Warrants evidenced by Warrant Certificates after actual notice of any adjustment
of the Exercise Price); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Warrant
Certificate or as to whether any shares of Common Stock will, when issued, be
duly authorized, validly issued, fully paid and nonassessable.

 

(f)                                    The Company
agrees that it will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing by the Warrant Agent of the provisions
of this Agreement.

 

9

 

(g)                                 The Warrant
Agent is hereby authorized to accept instructions with respect to the
performance of its duties hereunder from the Chairman or the President or the
Secretary of the Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable and shall be
indemnified and held harmless for any action taken or suffered to be taken by
it in good faith in accordance with instructions of any such officer, provided
Warrant Agent carries out such instructions without gross negligence, bad faith
or willful misconduct.

 

(h)                                 The Warrant
Agent and any shareholder, director, officer, manager, member or employee of
the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any other legal
entity.

 

(i)                                     The Warrant
Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorney or
agents, and the Warrant Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorney or agents or for any
loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.

 

Section 18.                                      Change of
Warrant Agent.  The Warrant
Agent may resign and be discharged from its duties under this Agreement upon 30
days’ notice in writing mailed to the Company and to each transfer agent of the
Common Stock by registered or certified mail, and to the holders of the Warrant
Certificates by first-class mail. The Company may remove the Warrant Agent or
any successor Warrant Agent upon 30 days’ notice in writing, mailed to the
Warrant Agent or successor Warrant Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or certified mail, and to the
holders of the Warrant Certificates by first-class mail. If the Warrant Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Warrant Agent. If the Company shall
fail to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by the holder of a Warrant
Certificate (who shall, with such notice, submit his Warrant Certificate for
inspection by the Company), then the Holder of any Warrant Certificate may
apply to any court of competent jurisdiction for the appointment of a new
Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing business under the
laws of the United States or of a state thereof, in good standing. After
appointment, the successor Warrant Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the predecessor Warrant Agent
shall deliver and transfer to the successor Warrant Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with 

 

10

 

the predecessor Warrant Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing to the
Holders of the Warrant Certificates. However, failure to give any notice
provided for in this Section 18, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the Warrant Agent or
the appointment of the successor Warrant Agent, as the case may be.

 

Section 19.                                      Notices.  Notices or demands authorized by this
Agreement to be given or made (i) by the Warrant Agent or by the Holder of
any Warrant Certificate to or on the Company, (ii)  subject to the
provisions of Section 18, by the Company or by the Holder of any Warrant
Certificate to or on the Warrant Agent or (iii) by the Company or the
Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given (x) on
the date delivered, if delivered personally, (y) on the first Business Day
following the deposit thereof with Federal Express or another recognized
overnight courier, if sent by Federal Express or another recognized overnight
courier, and (z) on the fourth Business Day following the mailing thereof
with postage prepaid, if mailed by registered or certified mail (return receipt
requested), in each case to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):

 

(a)                                  If to the
Company, to:

 

Advanced
Life Sciences Holdings, Inc.

1440
Davey Road

Woodridge,
Illinois  60517-5037

Attention:
Chief Financial Officer

 

(b)                                 If to the
Warrant Agent, to:

 

Onyx Stock Transfer, LLC

2672 Bayshore Parkway, Suite 1055

Mountain View,
California  94043

Attention:  President & Managing Partner

Telecopy:
(650) 215-4881

 

(c)                                  If to the
Holder of any Warrant Certificate, to the address of such holder as shown on
the registry books of the Company. Any notice required to be delivered by the
Company to the Holder of any Warrant may be given by the Warrant Agent on
behalf of the Company.

 

Section 20.                                      Supplements and
Amendments.

 

(a)                                  The Company and
the Warrant Agent may from time to time supplement or amend this Agreement
without the approval of any Holders of Warrant Certificates in order to cure
any ambiguity, to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, or to make
any other provisions with regard to matters or questions arising hereunder
which the Company and the Warrant Agent may deem necessary or desirable and
which shall not adversely affect the interests of the Holders of Warrants
Certificates.

 

11

 

(b)                                 In addition to
the foregoing, with the consent of Holders of Warrants entitled, upon exercise
thereof, to receive not less than a majority of the shares of Common Stock
issuable thereunder, the Company and the Warrant Agent may modify this
Agreement for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Warrant Agreement or modifying in
any manner the rights of the holders of the Warrant Certificates; provided,
however, that no modification of the terms (including but not limited to
the adjustments described in Section 11) upon which the Warrants are
exercisable or reducing the percentage required for consent to modification of
this Agreement may be made without the consent of the holder of each
outstanding warrant certificate affected thereby.

 

Section 21.                                      Successors.  All covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

 

Section 22.                                      Benefits of
this Agreement.  Nothing in
this Agreement shall be construed to give any Person other than the Company and
the Warrant Agent any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 23.                                      Governing Law.  This Agreement and each Warrant Certificate
issued hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York without giving effect to the conflicts of law
principles thereof.

 

Section 24.                                      Counterparts.  This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

 

Section 25.                                      Captions.  The captions of the sections of this
Agreement have been inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.

 

Section 26.                                      Force Majeure.  Notwithstanding anything to the contrary
contained herein, Warrant Agent shall not be liable for any delays or failures
in performance resulting from acts beyond its reasonable control including,
without limitation, acts of God, terrorist acts, shortage of supply, breakdowns
or malfunctions, interruptions or malfunction of computer facilities, or loss
of data due to power failures or mechanical difficulties with information
storage or retrieval systems, labor difficulties, war, or civil unrest.

 

12

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.

 

 

	
   

  	
  ADVANCED
  LIFE SCIENCES HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Michael
  T. Flavin, Ph.D.

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ONYX
  STOCK TRANSFER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Jennifer
  Hodges, Esq.

  
	
   

  	
  Title:

  	
  President
  and Managing Partner

  

 

13Exhibit 10.29

 

Dawson James Securities, Inc.

925 South Federal Highway - Suite #600

Boca Raton, FL 33432

 

February 26,
2010

 

PERSONAL &
CONFIDENTIAL

 

Mr. John
Flavin

President
and Chief Financial Officer

Advanced
Life Sciences, Inc.

1440
Davey Road

Woodridge,
IL 60517

 

Dear
John:

 

Dawson
James Securities, Inc. (“DJSI”) is pleased to act as exclusive placement agent
for Advanced Life Sciences Holdings, Inc. (the “Company”, or “ADLS”) in
connection with the proposed offering of the Company’s securities as described
in this letter (the “Registered Placement”), subject to the terms and
conditions of this letter agreement. We will provide investment banking
services to the Company which may include: (i) advising the Company with
respect to the proposed structure, terms and conditions of the Registered
Placement and (ii) reviewing publicly-available documents to advise whether the
Company has an appropriate capital structure given its market opportunity, with
the understanding that DJSI may advise changes in the Company’s capital
structure as a result of this review and present strategies to effect such
changes. The purpose of this letter is to memorialize the terms of our
engagement by the Company.

 

1.                                       Transaction
Summary. During the term of this engagement, as defined in paragraph 7, DJSI
will be the exclusive placement agent to the Company with respect to the
Registered Placement of approximately $20 million of newly issued common stock
and warrants (to the extent such common stock and warrants are offered together,
the “Units” and collectively, the “Securities”) pursuant to a registration
statement on Form S-1 which may be amended and supplemented (as amended and
supplemented, the “Registration Statement”) to be filed with the Securities and
Exchange Commission (the “SEC”). The Units may be sold in one ore more closings
during the term of this engagement (each, a “Closing”). The specific terms of
the Registered Placement will depend on the results of DJSI’s due diligence, as
well as market conditions, and will be subject to negotiation between the
Company and DJSI.

 

2.                                       Best Efforts. It is
understood that DJSI’s involvement is strictly on a best efforts basis and that
the consummation of the Registered Placement will be subject to, among other
things, market conditions.

 

 

3.                                       Interim
Activity. Except (i) in connection with (a) the exercise of
warrants and options outstanding prior to the closing of the Registered
Placement, (b) the Company’s grant of options to its officers, directors,
employees, and consultants under its stock option plan, and (c) the sale of
approximately $500,000 worth of Common Stock to Y.A. Global Investors, LLC (“YA”)
on or about March 4, 2010 under the Company’s Standby Equity Distribution
Agreement with YA, and (ii) as contemplated by this letter agreement, the
Company will not directly during the term of this engagement, without DJSI’s
prior written consent sell shares of capital stock or issue warrants or
options.

 

Notwithstanding
the foregoing and the exclusive nature of this engagement, DJSI hereby
acknowledges and agrees that during the term of this engagement, the Company
may assist with the identification of one or more other persons or entities to
act as potential selected dealers for the distribution by DJSI of the
securities to be sold in the Registered Placement.

 

4.                                       Information
Provided to DJSI. In connection with our engagement, the Company has
agreed to furnish to DJSI, on a timely basis, all relevant information needed
by DJSI or its advisors or legal counsel to perform under the terms of this
letter agreement. During our engagement, it may be necessary for us: to
interview the management of, the auditors for, and the consultants and advisors
to the Company; to rely (without independent verification) upon data furnished
to us by them; and to review any financial and other reports relating to the
business and financial condition of the Company as we may determine to be
relevant under the circumstances. In this connection, the Company will make
available to us such information as we may request, including information with
respect to the assets, liabilities, earnings, earning power, financial
condition, historical performance, future prospects and financial projections
and the assumptions used in the development of such projections of the Company.
We agree that all nonpublic information obtained by us in connection with our
engagement will be held by us in strict confidence and will be used by us
solely for the purpose of performing our obligations relating to our
engagement. In that regard, we acknowledge that we are aware of our
responsibilities under the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, including, without limitation, rules
and regulations with respect to insider trading.

 

We
do not assume any responsibility for, or with respect to, the accuracy,
completeness or fairness of the information and data supplied to us by the
Company or its representatives. In addition, the Company acknowledges that we
will assume, without independent verification, that all information supplied to
us with respect to the Company that is included in the Registration Statement
will be true, correct and complete in all material respects and will not
contain any untrue statements of material fact or omit to state a material fact
necessary to make the information supplied to us not misleading. If at any time
during the course of our engagement the Company becomes aware of any material
change in any of the information previously furnished to us, it will promptly
advise us of the change or furnish us with additional information.

 

5.                                       Company
Representations. The Company hereby represents and warrants to DJSI
that the Company will:

 

 

(a)                                  Issue a press
release as soon as possible following the pricing of the offering upon
agreement by the Company and DJSI. To the extent permissible under Rule 134
under the Securities Act of 1933, as amended (the “Securities Act”), such press
release will include the number and price of the Securities offered, the number
of and exercise price of the warrants sold as part of the Units and the gross
proceeds from the Registered Placement.

 

(b)                                 On date ofeach
Closing, cause outside counsel to the Company to deliver an opinion to DJSI
regarding such matters as DJSI shall reasonably request, including the
following (i) good standing in all jurisdictions where it does business, (ii) the
shares included in the Units, the shares issuable upon exercise of warrants
included in the Units, the shares issuable upon exercise of the warrants to be
issued to DJSI, and all other shares of common stock sold in the Registered
Placement are, or will be upon receipt of payment therefore, duly authorized,
validly issued, fully-paid and nonassessable, (iii) the Registered Placement
has been duly authorized by the Board of Directors and, is not subject to
stockholder approval, (iv) the Registered Placement does not conflict with or
require notice under the Company’s bylaws or charter or any material agreement
to which the Company is a party and which the Company has filed as an exhibit
to the Registration Statement pursuant to Item 601(b)(l0) of Regulation S-K,
and (v) the Registration Statement complies as to form in all material respects
with the Securities Act and the rules and regulations related thereto.

 

(c)                                  Prior to the
consummation of the Registered Placement, obtain written lock-up agreements
restricting the Company, its Officers and its Directors from directly or
indirectly selling, offering, contracting or granting any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open “put equivalent position” within the meaning of Rule l6a-l(h) under the
Securities Exchange Act of 1934, as amended, or otherwise dispose of any
shares, options or warrants to acquire the Company’s common stock, or
securities exchangeable or exercisable for or convertible into the Company’s
common stock currently or hereafter owned by them either of record or
beneficially, or publicly announce an intention to do any of the foregoing. This
restriction terminates after the close of trading of the shares on and
including the 90 days after the latest Closing. However, subject to certain
exceptions, in the event that either (i) during the last 17 days of the 90-day
restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs or (ii) prior to the expiration
of the 90-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
90-day restricted period, then in either case the expiration of the 90-day
restricted period will be extended until the expiration of the 18-day period
beginning on the date of the issuance of an earnings release or the occurrence
of the material news or event, as applicable, unless DJSI waives, in writing,
such an extension. DJSI may, in its sole discretion and at any time or from
time to time before the termination of the 90-day period, without notice,
release all or any portion of the securities subject to lock-up agreements.

 

 

(d)                                 Prior to the
initial filing of the registration statement, all officers and directors of the
Company shall execute NASD questionnaires.

 

(e)                                  Other than
DJSI, no FINRA member has provided investment banking, financial advisory
and/or consulting services to the Company during the 180 day period prior to
filing the Registration Statement, nor is any F1NRA member expected to provide
such services during the 90 day period following completion of the Registered
Placement; provided, however, that none of the foregoing
other than DJSI have provided or, during the term of the engagement, will
provide such services to the Company in connection with the Registered
Placement, nor have or will they be compensated by the Company in connection
with the Registered Placement.

 

6.                                       Scope of
Engagement. The Company acknowledges that we will not make, or
arrange for others to make, an appraisal of any physical assets of the Company.

 

DJSI
has been engaged by the Company only in connection with the matters described
in this letter agreement and for no other purpose. Except as provided in this
letter, we have not made, and will assume no responsibility to make any
representation in connection with our engagement as to any legal matter. Except
as specifically provided in this letter agreement, DJSI shall not be required
to render any advice or reports in writing or to perform any other services.

 

7.                                       Term of
Engagement. Our representation on an exclusive basis will
continue for a period of nine (9) months from the date first set forth above;
however, either party may terminate the relationship at any time upon 15 days
prior written notice to the other party; provided, that no such expiration or
termination will effect the matters set forth in Section 9-18 of this letter
agreement and reimbursement of legal expenses pursuant to Section 8(a).

 

8.                                       Fees and
Expenses.

 

(a)                                  Upon signing of
this letter agreement, DJSI will be paid a cash deposit of $10,000 (the “Deposit”)
against actual out-of-pocket expenses; any unused amounts of the Deposit will
be returned to the Company along with appropriate documentation of amounts
expended promptly upon demand by the Company in writing. The Company shall also
reimburse DJSI for any legal expenses incurred in connection with the
Registered Placement up to $40,000. Upon each Closing of the Registered
Placement, the Company will also pay DJSI a non-accountable expense allowance
equal to 2.0% of the gross proceeds received from the Registered Placement in
each such Closing. For clarification, if the Registered Placement is not
consummated, DJSI will be reimbursed for up to $40,000 of legal expenses
incurred pursuant to this Section 8(a) and only reasonable out of pocket
expenses, each upon presentation of appropriate documentation of amounts
incurred or expended.

 

 

(b)                                 Compensation
for our investment banking services will be as follows:

 

(i)                                     Transaction Fee. Upon each
Closing of the Registered Placement (with the first Closing resulting in gross
proceeds to the Company of at least $15,000,000), the Company will pay DJSI a
transaction fee in cash (the “Fee”) in an amount equal to 6.0% of the gross
proceeds received from sale of its Securities in such Closing. DJSI agrees that
the Fee is contingent on the Closing of the Registered Placement, and that the
Company will not be obligated to pay the Fee unless the Registered Placement is
completed.

 

(ii)                                  Transaction Fee Warrants. Upon each
Closing of the Registered Placement, the Company will issue DJSI warrants to
purchase 5% of the common stock sold in such Registered Placement with an
exercise price equal to 160% of the price of the Units in such Closing;
however, the warrants issued to DJSI will be exercisable for only shares of
common stock and not warrants or other securities included in the Units in the
Registered Placement The warrants will have a term of five (5) years from the
date of effectiveness of the Registration Statement and will be exercisable
after six (6) months from the date of effectiveness. The warrants will be
issued pursuant to the warrant purchase agreement substantially in the form
attached as Exhibit B.

 

(c)                                  All warrants
issued to DJSI shall be subject to the following additional terms and
conditions.

 

(i)                                     The DJSI warrants shall not
have anti-dilution terms that allow DJSI and related persons to receive more
shares or to exercise at a lower price than originally agreed upon at the time
of the Registered Placement when the public shareholders have not been
proportionally affected by a stock split, stock dividend, or other similar
event.

 

(ii)                                  The DJSI warrants shall not
have anti-dilution terms that allow DJSI and related persons to receive or
accrue cash dividends prior to the exercise or conversion of the DJSI warrants.

 

(iii)                               For a period of six months
after the issuance date of the DJSI warrants (which shall not be earlier than
the respective Closing date of the Registered Placement), neither the D3SI
warrants nor any warrant shares issued upon exercise of the DJSI warrants shall
be (A) sold, transferred, assigned, pledged, or hypothecated, or (B) the
subject of any hedging, short sale, derivative, put, or call transaction that
would result in the effective economic disposition of the securities by any
person for a period of 180 days immediately following the date of effectiveness
or commencement of sales of the Registered Placement, except the transfer of
any security as permitted by the FINRA rules.

 

 

(iv)                              The DJSI warrants shall
include any other terms and conditions, or any modifications to the above terms
and conditions, as may be required under the FINRA rules.

 

(d)                                 Except as set
forth above, the warrants issued to DJSI shall have terms identical to those
sold to the investors in the Registered Placement. The Company acknowledges and
agrees that it will be responsible for, and shall pay all of the Company’s
costs and expenses related to the purchase, sale and delivery of its Securities
in the Registered Placement. This includes, without limitation, all fees and
expenses of filing with the SEC and FINRA, all Blue Sky fees and expenses, fees
and disbursements of counsel and accountants for the Company, printing costs,
and any Company specific road show costs and expenses of Company management
and/or staff.

 

9.                                       Indemnity and
Contribution. The parties agree to the terms of DJSI’s standard
indemnification agreement, which is attached hereto as Appendix A and
incorporated herein by reference. The provisions of this paragraph 9 shall
survive any termination of this letter agreement.

 

10.                                 Other Business. The Company
understands that if DJSI is asked to act for the Company in any other formal
additional capacity relating to this engagement but not specifically addressed
in this letter, then such activities shall constitute separate engagements and
the terms and conditions of any such additional engagements will be embodied in
one or more separate written agreements, containing provisions and terms to be
mutually agreed upon, including without limitation appropriate indemnification
provisions.

 

11.                                 Other DJSI Activities. DJSI is a
fill service securities firm engaged in securities trading and brokerage
activities as well as investment banking and financial advisory services. In
the ordinary course of our trading and brokerage activities, DJSI or its
affiliates may hold positions, for its own account or the accounts of
customers, in equity, debt or other securities of the Company or any other
company that may be involved in a Registered Placement with the Company. DJSI
represents that there are no existing agreements between DJSI and any of the
Company’s stockholders who will execute a lock-up agreement, providing consent
to the sale of shares prior to the expiration of the lock-up period.

 

12.                                 Compliance with
Applicable Law. In connection with this engagement, the Company
and DJSI will comply with all applicable federal, state and foreign securities
laws and other applicable laws.

 

13.                                 Independent
Contractor. DJSI is and at all times during the term hereof
will remain an independent contractor, and nothing contained in this letter
agreement will create the relationship of employer and employee or principal
and agent as between the Company and DJSI or any of its employees. Without
limiting the generality of the foregoing, all final decisions with respect to
matters about which DJSI has provided services hereunder shall be solely those
of the Company, and DJSI shall have no liability relating thereto or arising
therefrom. It is understood that DJSI’s responsibility to the Company is solely
contractual in nature and that DJSI does not

 

 

owe
the Company, or any other party, any fiduciary duty as a result of its
engagement. DJSI shall maintain a detailed record of potential purchasers that
received a preliminary prospectus during the offering.

 

14.                                 Successors and
Assigns. This letter agreement and all obligations and benefits of the parties
hereto shall bind and shall inure to their benefit and that of their respective
successors and assigns. The indemnity and contribution provisions incorporated
into this letter agreement are for the express benefit of the officers,
directors, employees, consultants, agents and controlling persons of DJSI and
their respective successors, assigns and parent companies.

 

15.                                 Announcements. The Company
grants to DJSI the right to place customary announcement(s) of this engagement
(following completion of the Registered Placement) in certain newspapers and to
mail announcement(s) to persons and firms selected by DJSI, and all costs of
such announcement(s) will be borne by DJSI. DJSI agrees that all such
announcements shall be made in compliance with federal and state securities
laws, and subject to approval by the Company.

 

16.                                 Governing Law
and Arbitration. This agreement shall be governed by and construed
under the laws of the State of Delaware applicable to contracts made and to be
performed entirely within the State of Delaware.

 

17.                                 General
Provisions. No purported waiver or modification of any of the
terms of this letter agreement will be valid unless made in writing and signed
by the parties hereto. Section headings used in this letter agreement are
for convenience only, are not a part of this letter agreement and will not be
used in construing any of the terms hereof. This letter agreement constitutes
and embodies the entire understanding and agreement of the parties hereto
relating to the subject matter hereof, and there are no other agreements or
understandings, written or oral, in effect between the parties relating to the
subject matter hereof. No representation, promise, inducement or statement of
intention has been made by either of the parties hereto which is to be embodied
in this letter agreement, and none of the parties hereto shall be bound by or
liable for any alleged representation, promise, inducement or statement of
intention, not so set forth herein. No provision of this letter agreement shall
be construed in favor of or against either of the parties hereto by reason of
the extent to which either of the parties or its counsel participated in the
drafting hereof. If any provision of this letter agreement is held by a court
of competent jurisdiction to be invalid, illegal or unenforceable, the
remaining provisions hereof shall in no way be affected and shall remain in
full force and effect. This letter agreement may be executed in any number of
counterparts and by facsimile signature.

 

18.                                 Nondisclosure. The Company
agrees that any information or advice (other than any information or advice
relating to the U.S. tax treatment and U.S. tax structure of any transaction)
rendered by DJSI or any of DJSI representatives in connection with this
engagement is for the confidential use of the Company and its agents, advisors
and representatives only and the Company will not, and will not permit any
other third party to, disclose or otherwise refer to such advice or information
or to DJSI in any manner without the prior written consent of DJSI.

 

 

If
the foregoing correctly sets forth your understanding of our agreement, please
sign the enclosed copy of this letter and return it to DJSI.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  DAWSON
  JAMES SECURITIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Joseph E. Balagot

  
	
   

  	
   

  	
  Joseph
  E. Balagot

  
	
   

  	
   

  	
  Senior
  Managing Director, Investment Banking

  

 

 

The
undersigned hereby accepts, agrees to and becomes party to the foregoing letter
agreement, effective as of the date first written above.

 

	
  ADVANCED
  LIFE SCIENCES HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  /s/
  Michael T. Flavin

  	
   

  
	
   

  	
  Michael
  T. Flavin, Ph.D.

  	
   

  
	
   

  	
  Chief
  Executive Officer

  	
   

  

 

 

APPENDIX A-INDEMNIFICATION AGREEMENT

 

The
Company agrees to indemnify and hold harmless DJSI and its officers, directors,
employees, affiliates (as such term is defined in Rule 501(b) under the
Securities Act of 1933, as amended) and controlling persons (within the meaning
of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the
Securities Exchange Act of 1934, as amended) (DJSI and each such other persons
are collectively and individually referred to below as an “Indemnified Party”)
from and against any and all loss, claim, damage, liability and expense
whatsoever, as incurred, including, without limitation, reasonable costs of any
investigation, legal and other fees and expenses incurred in connection with,
and any amounts paid in settlement of, any action, suit or proceeding or any
claim asserted, to which the Indemnified Party may become subject under any
applicable federal or state law (whether in tort, contract or on any other
basis) or otherwise, (i) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement (including documents, incorporated by reference) (the “Registration
Statement”) or arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or (ii) related to the performance by the
Indemnified Party of the services contemplated by this letter agreement
(including, without limitation, the offer and sale of the Securities) and will
reimburse the Indemnified Party for all expenses (including reasonable legal
fees and expenses) in connection with the investigation of, preparation for or
defense of any pending or threatened claim or any action or proceeding arising
therefrom, whether or not the Indemnified Party is a party and whether or not
such claim, action or proceeding is initiated or brought by the Company. The
Company will not be liable under clause (ii) of the foregoing indemnification
provision to the extent that any loss, claim, damage, liability or expense is
found in a judgment by a court or arbitrator to have resulted from the
Indemnified Party’s willful misconduct, gross negligence, or bad faith. The
Company also agrees that the Indemnified Party shall have no liability (whether
direct or indirect, in contract, tort or otherwise) to the Company related to,
or arising out of, the engagement of the Indemnified Party pursuant to, or the
performance by the Indemnified Party of the services contemplated by, this
letter agreement except to the extent that any loss, claim, damage, liability
or expense is found in a judgment by a court or arbitrator to have resulted
from the Indemnified Party’s willful misconduct, gross negligence, or bad
faith.

 

If
the indemnity provided above shall be unenforceable or unavailable for any
reason whatsoever, the Company, its successors and assigns, shall contribute to
all such losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable costs of any investigation, legal or other fees and
expenses incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted) (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and
DJSI under the terms of this letter agreement or (ii) if the allocation
provided for by clause (i) of this sentence is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i), but also the relative fault of the Company and DJSI
in connection with the matter(s) as to which contribution is to be made. The
relative benefits received by the Company and DJSI shall be deemed to be in the
same proportion as the fee the

 

 

Company
actually pays to DJSI bears to the total value of the consideration paid or to
be paid to the Company in the Registered Placement. The relative fault of the
Company and DJSI shall be determined by reference to, among other things,
whether any untrue or alleged untrue statement of material fact or omission or
alleged omission to state a material fact relates to information supplied by
the Company or by DJSI and the Company’s and DJSI’s relative intent, knowledge,
access to information and opportunity to correct. The Company and DJSI agree
that it would not be just or equitable if contribution pursuant to this
paragraph were determined by pro rata allocation or by any other method of
allocation which does not take into account these equitable considerations.
Notwithstanding the foregoing, to the extent permitted by law, in no event
shall the Indemnified Party’s share of such losses, claims, damages,
liabilities and expenses exceed, in the aggregate, the fee actually paid to the
Indemnified Party by the Company. The Company further agrees that, without DJSI’s
prior written consent, which consent will not be unreasonably withheld, it will
not enter into any settlement of a lawsuit, claim or other proceeding arising
out of the transactions contemplated by this agreement unless such settlement
includes an explicit and unconditional release from the party bringing such
lawsuit, claim or other proceeding of all such lawsuits, claims, or other
proceedings against the Indemnified Parties.

 

The
Indemnified Party will give prompt written notice to the Company of any claim
for which it seeks indemnification hereunder, but the omission to so notify the
Company will not relieve the Company from any liability which it may otherwise
have hereunder except to the extent that the Company is damaged or prejudiced
by such omission or from any liability it may have other than under this
Appendix A. In addition to the Company’s other obligations hereunder and
without limitation, the Company agrees to pay monthly, upon receipt of itemized
statements therefore, all reasonable fees and expenses of counsel incurred by
an Indemnified Party in defending any claim of the type set forth in the
preceding paragraphs or in producing documents, assisting in answering any
interrogatories, giving any deposition testimony or otherwise becoming involved
in any action or response to any claim relating to the engagement referred to
herein, or any of the matters enumerated in the preceding paragraphs, whether
or not any claim is made against an Indemnified Party or an Indemnified Party
is named as a party to any such action.

 

 

DAWSON
JAMES SECURITIES, INC.

925
South Federal Highway, Suite No. 600

Boca
Raton, Florida  33432

 

May 27, 2010

 

Mr. John Flavin

President and Chief
Financial Officer

Advanced Life Sciences
Holdings, Inc.

1440 Davey Road

Woodridge, IL 60517

 

Re: Amendment of Engagement Letter

 

Dear Mr. Flavin,

 

This letter amends the letter agreement between
Advanced Life Sciences Holdings, Inc. (the “Company”) and Dawson James
Securities, Inc. (“DJSI”) dated February 26, 2010 (the “Engagement
Letter”) as follows:

 

1.  Non-accountable Expense Allowance.  The non-accountable expense allowance
referenced in Section 8(a) is deemed to include the $10,000 deposit
paid by the Company to DJSI.

 

2.  Legal Expense Reimbursement. 
The reference to “$40,000” of legal expenses in Section 8(a) of
the Engagement Letter is hereby replaced with “$20,000” so that the amount of
legal expenses the Company will reimburse DJSI is up to $20,000 rather than
$40,000.

 

3.  Transaction Fee.  The
reference to the gross proceeds of “$15,000,000” in Section 8(b)(i) of
the Engagement Letter is hereby replaced with “an amount to be mutually agreed
to by the Company and DJSI” so that the Fee described in Section 8(b)(i) of
the Engagement Letter will be payable upon the first closing of an offering
resulting in gross proceeds to the Company of an amount to be mutually agreed
to by the Company and DJSI rather than $15,000,000.

 

4.  Warrant Coverage The reference to “5%” in Section 8(b)(ii) of
the Engagement Letter is hereby replaced with “4%” so that the warrant issuable
to DJSI is 4% of the common stock sold in the Registered Placement, rather than
5%.

 

Except as set forth above, the Engagement Letter
shall remain in full force and effect. 
If you agree with the above please sign below and return an executed copy
of this letter to my attention.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  DAWSON
  JAMES SECURITIES, INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Joseph E. Balagot

  
	
   

  	
  Joseph
  E. Balagot

  
	
   

  	
  Senior Managing Director

  

 

 

AGREED AND ACCEPTED:

 

Advanced Life Sciences
Holdings, Inc.

 

	
  /s/ John Flavin

  	
   

  
	
  John
  Flavin

  	
   

  
	
  President and Chief
  Financial Officer

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