Document:

Exhibit 4.3

 

EXECUTION COPY

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE
AGREEMENT (this “Agreement”)
is entered into as of this 29th day of September, 2008 by and between ADVANCED  LIFE SCIENCES HOLDINGS,
INC., a Delaware corporation (the “Company”), and WYETH, a Delaware corporation  (the “Investor”).

 

RECITALS

 

WHEREAS, the Company and the Investor have entered
into that certain Development and Commercialization Agreement, dated as of the
date hereof, pursuant to which the Company granted the Investor the exclusive
right and license to develop and commercialize cethromycin and all
pharmaceutically acceptable forms thereof in the geographical territory
specified therein, subject to the terms and conditions thereof (the “License
Agreement”); and

 

WHEREAS, in connection with the execution and
delivery of the License Agreement, the Company desires to sell, and the
Investor agrees to purchase, shares of the Company’s common stock, $0.01 par
value per share (the “Common Stock”), all subject to the terms and conditions
set forth below;

 

NOW, THEREFORE, in consideration of the foregoing Recitals
and the mutual agreements and covenants contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Investor hereby agree as follows:

 

ARTICLE
I

PURCHASE AND SALE OF THE SHARES

 

1.1           Purchase and Sale.  The Company and the Investor agree that, at
the Closing (as defined below), the Investor will purchase from the Company,
and the Company will issue and sell to the Investor, 1,888,606 shares of the
Common Stock (the “Shares”).  The
purchase price payable by the Investor to the Company at the Closing shall be
equal to $0.908 per Share, which represents the average of the closing prices
of the Common Stock on the Nasdaq Capital Market (“Nasdaq”) over the eighteen
(18) trading day period ending on the last trading day prior to the date
hereof, or an aggregate of $1,714,854.25 for all the Shares (the “Purchase
Price”).

 

1.2           Delivery of the Shares at Closing.  It is expected that the completion of the
purchase and sale of the Shares (the “Closing”) shall occur on or about September 29,
2008 (the “Closing Date”), at the Chicago offices of the Company’s outside
legal counsel, Winston & Strawn LLP. 
At the Closing, the Company shall deliver to the Investor one or more
stock certificates representing the Shares, each such certificate to be
registered in the name of the Investor.

 

1.3           Conditions to the
Company’s Obligations.  The Company’s
obligation to issue the Shares to the Investor shall be subject to the
following conditions, any one or more of which may be waived by the Company: (a) the
License Agreement shall have become effective according to its terms; (b) receipt
by the Company of a certified or official bank check or wire transfer of funds
in the full amount of the Purchase Price; and (c) the accuracy in all
material respects of the representations and warranties made by the Investor
when made and the fulfillment in all material respects of those undertakings of
the Investor to be fulfilled prior to the Closing.

 

1.4           Conditions to the
Investor’s Obligations.  The Investor’s
obligation to purchase the Shares shall be subject to the following conditions,
any one or more of which may be waived by the 

 

 

Investor: (a) the License Agreement shall have become effective
according to its terms; (b) the representations and warranties of the
Company set forth herein shall be true and correct as of the Closing Date
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such date)
in all material respects (except for representations that are qualified by
materiality, which shall be true and correct in all respects) and the
fulfillment of those undertakings of the Company in this Agreement to be
fulfilled on or prior to the Closing Date; and (c) the Investor shall have
received a legal opinion from the Company’s outside legal counsel, Winston &
Strawn LLP, as to the matters set forth on Exhibit A attached
hereto.

 

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE COMPANY

 

The Company
hereby represents and warrants to, and covenants with, the Investor, as
follows:

 

2.1             Organization. 
The Company is duly organized and validly existing in good standing
under the laws of the State of Delaware. 
The Company has full power and authority to own or lease its properties
and to conduct its business as presently conducted and as described in the
documents filed by the Company under the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder (the “Securities Act”)
and the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the “Exchange Act”) since the end of its
most recently completed fiscal year through the date hereof (collectively, the “SEC
Documents”) and is registered or qualified to do business and in good standing
in each jurisdiction in which the nature of the business conducted by it or the
location of the properties owned or leased by it requires such qualification
and where the failure to be so qualified would have a material adverse effect
upon the condition (financial or otherwise), operations (including results
thereof), business or properties of the Company or on the transactions
contemplated by this Agreement (a “Material Adverse Effect”), and no proceeding
has been instituted in any such jurisdiction, revoking, limiting or curtailing,
or seeking to revoke, limit or curtail, such power and authority or
qualification.  Other than Advanced Life
Sciences, Inc., the Company has no subsidiaries (as defined in Rule 405
of the Securities Act).

 

2.2             Due Authorization and Valid Issuance.  The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement, and this Agreement has been duly authorized and validly executed and
delivered by the Company and constitutes the legal, valid and binding agreement
of the Company enforceable against the Company in accordance with its terms,
except as rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).  The Shares, when issued pursuant to this
Agreement, upon receipt of the agreed consideration therefor, will be duly
authorized, validly issued, fully-paid and nonassessable.

 

2.3             Non-Contravention.  The execution and delivery of this Agreement,
the issuance and sale of the Shares under this Agreement, the fulfillment of
the terms of this Agreement and the consummation of the transactions
contemplated hereby will not (A) conflict with or constitute a violation
of, or default (with the passage of time or otherwise) under, (i) any
bond, debenture, note or other evidence of indebtedness, lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company is a party or by which it or its
properties are bound, (ii) the charter, by-laws or other organizational
documents of the Company, or (iii) any law, administrative regulation,
ordinance or order of any court or governmental agency, arbitration panel or
authority applicable 

 

2

 

to the Company or its properties, except in the case of clauses (i) and
(iii) for any such conflicts, violations or defaults that are not
reasonably likely to have a Material Adverse Effect or (B) result in the
creation or imposition of any lien, encumbrance, claim, security interest or
restriction whatsoever upon any of the properties or assets of the Company or
an acceleration of indebtedness pursuant to any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or any indenture, mortgage, deed of trust or any other agreement
or instrument to which the Company is a party or by which it is bound or to
which any of the material property or assets of the Company is subject, except
for such liens, encumbrances, claims, security interests or restrictions upon
any of the properties or assets of the Company or accelerations of indebtedness
that are not reasonably likely to have a Material Adverse Effect.  No consent, approval, authorization or other
order of, or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body or any other person is
required for the execution and delivery of this Agreement or the valid issuance
and sale of the Shares, other than such as have been made or obtained, and
except for any post-closing securities filings or notifications required to be
made under federal or state securities laws.

 

2.4             Capitalization. 
The capitalization of the Company as of June 30, 2008 is as set
forth in the most recent applicable SEC Documents, increased as set forth in
the next sentence.  The Company has not
issued any capital stock since that date other than pursuant to (i) employee
benefit plans disclosed in the SEC Documents, (ii) outstanding warrants,
options or other securities disclosed in the SEC Documents and (iii) that
certain Standby Equity Distribution Agreement (the “SEDA”) between the Company
and YA Global Investments, L.P. dated on or about the date hereof, pursuant to
which the Company has issued or will issue a number of shares equal to less
than 1.0% of its outstanding Common Stock. 
The outstanding shares of capital stock of the Company have been duly
and validly issued and are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and were not issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  Except (i) as
set forth in the SEC Documents, (ii) for options issued to officers,
directors and employees of the Company under its employee benefit plans and (iii) for
warrants issued to Leaders Bank entitling Leaders Bank to purchase a number of
shares of Common Stock not to exceed 100,000 shares and (iv) as provided
in the SEDA, there are no outstanding rights (including, without limitation,
preemptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any unissued shares of capital stock or other equity
interest in the Company, or any contract, commitment, agreement, understanding
or arrangement of any kind to which the Company is a party or of which the
Company has knowledge and relating to the issuance or sale of any capital stock
of the Company, any such convertible or exchangeable securities or any such
rights, warrants or options.  Without
limiting the foregoing, no preemptive right, co-sale right, right of first
refusal or other similar right exists with respect to the Shares or the
issuance and sale thereof.  No further
approval or authorization of any stockholder or the Board of Directors of the
Company or others is required for the issuance and sale of the Shares.  Except as disclosed in the SEC Documents,
there are no stockholders agreements, voting agreements or other similar
agreements with respect to the capital stock of the Company to which the
Company is a party or, to the knowledge of the Company, between or among any of
the Company’s stockholders. The issuance and sale of the Shares will not result
in a right of any current holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any securities of the Company.

 

2.5             Legal Proceedings; Disagreements with Advisors.  There is no material legal or governmental
investigation, action, suit or proceeding pending or, to the knowledge of the
Company, threatened to which the Company is or may be a party or of which the
business or property of the Company is or could reasonably be expected to be subject
that is not disclosed in the SEC Documents. 
There are no material disagreements presently existing, or reasonably
anticipated by the Company to arise, between the accountants formerly or
presently employed by the Company.

 

2.6             No Violations. 
The Company is not (i) in violation of its charter, bylaws or any
other organizational documents; (ii) in violation of any federal, state or
local law, administrative regulation, 

 

3

 

ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to the Company, which violation, individually or
in the aggregate, would be reasonably likely to have a Material Adverse Effect;
or (iii) in default (and there exists no condition which, with the passage
of time or otherwise, would constitute a default) in the performance of any
bond, debenture, note or any other evidence of indebtedness, any indenture,
mortgage or deed of trust or any other agreement or instrument to which the
Company is a party or by which the Company is bound or by which the properties
of the Company are bound, which would be reasonably likely to have a Material
Adverse Effect.

 

2.7             Governmental Permits, Etc.  With the exception of the matters which are
dealt with separately in Sections 2.1 and 2.11, the Company has all
necessary permits, franchises, licenses, certificates and other authorizations
from any foreign, federal, state or local government or governmental agency,
department, or body that are currently necessary for the operation of the
business of the Company as currently conducted and as described in the SEC
Documents, except where the failure to currently possess any such permit,
franchise, license, certificate or other authorization would not be reasonably
expected to have a Material Adverse Effect.

 

2.8             Intellectual Property.  Except as specifically disclosed in the SEC
Documents (i)  the Company owns or possesses sufficient rights to use all
patents, patent rights, trademarks, copyrights, licenses, inventions, trade
secrets, trade names and know-how (including trade secrets and other unpatented
and/or unpatentable property or confidential information, systems, processes,
methods or procedures) (collectively, “Intellectual Property”) that are
necessary for the conduct of its business as now conducted or as described in
the SEC Documents except where the failure to currently own or possess would
not reasonably be expected to have a Material Adverse Effect, (ii) the
Company is not infringing, and has not received any notice of, and has no
knowledge of, any asserted infringement by the Company of, any rights of a
third party with respect to any Intellectual Property that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect
and (iii) the Company has not received any notice of, and has no knowledge
of, infringement by a third party with respect to any Intellectual Property
rights of the Company that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect. 
Further, except as described in the SEC Documents or exhibits thereto,
or as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect, no third party, including any academic or
governmental organization, possesses rights to any Intellectual Property which,
if exercised, could enable such third party to develop products competitive
with the business of the Company as currently being conducted.

 

2.9             Financial Statements; Obligations to Related Parties.  (a) The financial statements of the
Company and the related notes contained in the SEC Documents present fairly, in
accordance with generally accepted accounting principles (“GAAP”), the
financial position of the Company as of the dates indicated therein, and the
results of its operations and cash flows for the periods specified therein
consistent with the books and records of the Company except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which are not expected to be material in amount.  Such financial statements (including the
related notes) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods therein specified, except as may be
disclosed  in the notes to such
financial statements, or in the case of unaudited statements, as may be
permitted by the Securities and Exchange Commission (the “SEC”) on Form 10-Q
under the Exchange Act and except as disclosed in the SEC Documents.  The other financial information contained in
the SEC Documents has been prepared on a basis consistent with the financial
statements of the Company.  As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and published rules and regulations of the SEC
with respect thereto.

 

(b)           Except as set forth in any SEC Documents, there are no
obligations of the Company to officers, directors, stockholders or employees of
the Company other than (i) for payment of salary for 

 

4

 

services rendered and for
bonus payments made in the ordinary course of business consistent with past
practice; (ii) reimbursements for reasonable expenses incurred on behalf
of the Company; (iii) for other standard employee benefits made generally
available to all employees (including stock option agreements outstanding under
any stock option plan approved by the Board of Directors and stockholders of
the Company); and (iv) obligations listed in the Company’s financial
statements contained in the SEC Documents.

 

2.10           No Material Adverse Change.  Since June 30, 2008, there has not been (i) any
material adverse change in the financial condition or earnings of the Company, (ii) any
material adverse event affecting the Company, (iii) any obligation, direct
or contingent, that is material to the Company, incurred by the Company, except
for (A) an increase to the Company’s loan facility with Leaders Bank in
the amount of $5 million, effective on or about the date hereof, (B) the
Company’s obligations pursuant to that certain Fifth Amendment to License
Agreement with Abbott Laboratories, effective on or about the date hereof and (C) obligations
incurred in the ordinary course of business consistent with past practice, (iv) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company or (v) any loss or damage (whether or not insured) to
the physical property of the Company which has been sustained, which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.

 

2.11           Nasdaq Compliance. 
The Company’s Common Stock is registered pursuant to Section 12(g) of
the Exchange Act and is listed on Nasdaq, and the Company has taken no action
designed to, or that would reasonably be expected to, have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from Nasdaq, nor has the Company received any
notification that the SEC or Nasdaq is contemplating terminating such
registration or listing.

 

2.12           Reporting Status.  The Company has filed in a timely manner all
documents that the Company was required to file under the Exchange Act and the
Securities Act during the preceding twelve months.  All such documents complied in all material
respects with the SEC’s requirements as of their respective filing dates, and
the information contained therein as of the date thereof did not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein in light of
the circumstances under which they were made not misleading.

 

2.13           Company not an “Investment Company”.  The
Company has been advised of the rules and requirements under the
Investment Company Act of 1940, as amended (the “Investment Company Act”).  The Company is not, and immediately after the
purchase and sale of the Shares will not be, an “investment company” or, to the
knowledge of the Company, an entity “controlled” by an “investment company”
within the meaning of the Investment Company Act and shall conduct its business
in a manner so that it will not become subject to the Investment Company Act.

 

2.14           Foreign Corrupt
Practices.  Neither the Company, nor
to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed
to disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law; (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (v) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.

 

2.15         Accountants.  Deloitte & Touche LLP, who have
audited certain financial statements included in the SEC Documents, is an
independent registered public accounting firm as required 

 

5

 

by
the Securities Act, the rules and regulations promulgated thereunder and
the Public Company Accounting Oversight Board. 
Except as pre-approved in accordance with the requirements set forth in Section 10A
of the Exchange Act, Deloitte & Touche LLP has not been engaged by the
Company to perform any “prohibited activities” (as defined in Section 10A
of the Exchange Act).

 

2.16           Contracts.  The contracts described in and/or filed as
exhibits to the SEC Documents that are material to the Company are in full
force and effect, and neither the Company nor, to the Company’s knowledge, any
other party to such contracts is in breach of or default, or received a notice
of termination, under any of such contracts which would reasonably be expected
to have a Material Adverse Effect.  The
Company has filed with the SEC all contracts and agreements required to be
filed by the Exchange Act and the Securities Act.

 

2.17           Taxes.  The Company has filed (or has obtained from
the applicable tax authority an extension of time within which to file) all
necessary federal, state and foreign income and franchise tax returns and has
paid all taxes shown as due on such tax returns, except where the failure to so
file or the failure to so pay would not reasonably be expected to have a
Material Adverse Effect.  The Company is not
aware of any tax deficiency that has been or might be asserted or threatened
against it that would reasonably be expected to have a Material Adverse Effect.

 

2.18           Private Offering.  The offer and sale of the Shares are exempt
from registration under the Securities Act. 
The Company has not in the past nor will it hereafter take any action to
sell, offer for sale or solicit offers to buy any securities of the Company
which would bring the offer, issuance or sale of the Shares as contemplated by
this Agreement within the provisions of Section 5 of the Securities Act,
unless such offer, issuance or sale was or shall be within the exemptions of Section 4
of the Securities Act.

 

2.19           Disclosure
Controls and Procedures.  The Company
is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002
which are applicable to it as of the Closing Date.  The Company maintains a system of internal
control over financial reporting (as such term is defined in the Exchange Act)
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.  The
Company’s certifying officers are responsible for establishing and maintaining
disclosure controls and procedures (as defined in the Exchange Act) for the
Company and they have (a) designed such disclosure controls and
procedures, or caused such disclosure controls and procedures to be designed
under their supervision, to ensure that material information relating to the
Company is made known to the certifying officers by others within the Company,
particularly during the periods in which the Company’s filings under the
Exchange Act have been prepared; and (b) evaluated the effectiveness of
the Company’s disclosure controls and procedures and presented in the Company’s
filings under the Exchange Act their conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the periods covered by
such filings under the Exchange Act based on such evaluation.  In addition, since the last evaluation date
referred to in (b) above, there has been no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting (as such term is defined in the Exchange Act) or, to the
Company’s knowledge, in other factors that could significantly affect the
Company’s internal control over financial reporting.

 

2.20           Transactions
With Affiliates.  There are no
business relationships or related-party transactions involving the Company or
any other person required to be described in the SEC Documents that have not
been described as required.

 

6

 

2.21           Company
Acknowledgement of Investor Representation. 
The Company acknowledges and agrees that the Investor does not make or
has not made any representations or warranties with respect to the purchase and
sale of the Shares other than those specifically set forth in Article III.

 

2.22           Regulatory
Matters.  The Company does not have
knowledge of any actual or threatened enforcement action by the United States
Food and Drug Administration (“FDA”) or any other governmental authority which
has jurisdiction over the operations of the Company, and has not received
notice of any pending or threatened claim by the FDA or any other governmental
authority which has jurisdiction over the operations of the Company, against
the Company or any of its subsidiaries, and the Company has no knowledge or
reason to believe that any governmental authority is considering such action.  All permits, licenses and other material
reports, documents, claims and notices required to be filed, maintained or
furnished to the FDA or any governmental authority by the Company have been so
filed, maintained or furnished and were complete and correct in all material
respects on the date filed (or were corrected in or supplemented by a
subsequent filing) such that no liability exists with respect to the
completeness or accuracy of any such filing. 
All studies, tests and preclinical and clinical trials conducted by, or
on behalf of, the Company have been conducted in material compliance with
experimental protocols, procedures and controls pursuant to accepted
professional scientific standards and applicable local, state and federal laws,
rules, regulations and guidances, including, but not limited to the applicable
requirements of Good Laboratory Practices or Good Clinical Practices, as
applicable.  To the knowledge of the
Company, there are no studies, tests or trials the results of which call into
question the clinical results described or referred to in the SEC
Documents.  The Company has not received
any notices, correspondence or other communication from the FDA or any other
governmental authority requiring the termination, suspension or material
modification of any ongoing or planned clinical trials conducted by, or on
behalf of, the Company, or in which the Company has participated, and the
Company has no knowledge or reason to believe that the FDA or any other
governmental authority is considering such action.  Neither the Company nor, to the knowledge of
the Company, any officer, employee or agent of the Company has been convicted
of any crime or engaged in any conduct that would reasonably be expected to
result in debarment under 21 U.S.C. Section 335a or any similar law or regulation.

 

2.23           Insurance.  The Company is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as prudent and customary for similarly situated companies in the
businesses in which the Company and its subsidiaries are engaged.  The Company has no reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect.

 

2.24           Off-Balance
Sheet Arrangements.  There is no
transaction, arrangement or other relationship between the Company, on the one
hand, and an unconsolidated or other off-balance sheet entity, on the other
hand, that may create contingencies or liabilities for the Company.

 

2.25           No Manipulation
of Stock.  The Company has not taken
and will not, in violation of applicable law, take any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of any of the Shares.

 

2.26           Disclosure.  The representations and warranties of the
Company contained in this Article II, as of the date hereof and as of the
Closing Date, do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

 

7

 

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE INVESTOR

 

3.1             The Investor
represents and warrants to, and covenants with, the Company that: (i) the
Investor is an “accredited investor” as defined in Regulation D under the
Securities Act and the Investor is also knowledgeable, sophisticated and
experienced in making decisions with respect to investments in securities
presenting an investment decision like that involved in the purchase of the
Shares, and has requested, received, reviewed and considered all information it
deemed relevant in making an informed decision to purchase the Shares; (ii) the
Investor is acquiring the Shares in the ordinary course of its business and for
its own account for investment only and with no present intention of
distributing any of the Shares or any arrangement or understanding with any
other persons regarding the distribution of the Shares; and (iii) the
Investor will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except in compliance with the
Securities Act, applicable state securities laws and the respective rules and
regulations promulgated thereunder.

 

3.2             The Investor
understands that the Shares that it is acquiring are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being
acquired in a transaction not involving a public offering, and that under such
laws and applicable regulations such Shares may be resold without registration
under the Securities Act only in certain limited circumstances. In this
connection, the Investor represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed thereby
and by the Securities Act.  The Investor
hereby covenants with the Company not to make any sale of the Shares without
complying with the provisions of this Agreement.

 

3.3             The Investor
further represents and warrants to, and covenants with, the Company that (i) the
Investor has the requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement, and (ii) this Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally, except as enforceability may be subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Investor herein may be legally unenforceable.

 

3.4             The Investor
understands that nothing in the SEC Documents, this Agreement or any other materials
presented to the Investor in connection with the purchase and sale of the
Shares constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares.

 

ARTICLE IV

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS

 

4.1             Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Investor
herein shall survive the execution of this Agreement and the delivery to the
Investor of the Shares being purchased; provided that the representations and
warranties contained herein shall expire on the one-year anniversary of the
Closing Date.

 

8

 

ARTICLE V

LEGEND; RESTRICTIONS ON TRANSFER

 

5.1           The certificates for the Shares (and any securities issued
in respect of or exchange for the Shares) shall be subject to a legend or
legends restricting transfer under the Securities Act and referring to
restrictions on transfer herein, such legend to be substantially as follows:

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE BEEN ISSUED
AND SOLD IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “1933 ACT”), AND APPROPRIATE EXEMPTIONS FROM
REGISTRATION UNDER THE SECURITIES LAWS OF OTHER APPLICABLE JURISDICTIONS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LAWS
OF ANY OTHER JURISDICTION.  THE ISSUER
SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
IT WITH RESPECT TO COMPLIANCE OF THE PROPOSED SALE OR TRANSFER WITH THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT OR EXEMPTION THEREFROM.

 

ARTICLE VI

REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT

 

6.1           Piggyback Registration Rights.  The Company shall notify the Investor in
writing at least twenty (20) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145
of the Securities Act) (each, a “Registration Statement”) and will afford the
Investor or its permitted assignees an opportunity to include in such
Registration Statement all or part of the Shares (“Registrable Securities”)
held by such holder (each, a “Holder”). 
Each Holder desiring to include in any such Registration Statement all
or any part of the Registrable Securities held by it shall, within twenty (20)
days after the above-described notice from the Company, so notify the Company
in writing.  Such notice shall state the
intended method of disposition of the Registrable Securities by such
Holder.  The Company shall use its best
efforts to cause all Registrable Securities which the Company has been
requested by Holders to register to be registered under the Securities Act to
the extent necessary to permit their sale in accordance with the intended
method of distribution.  If a Holder
decides not to include all of its Registrable Securities in any Registration
Statement thereafter filed by the Company, such Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent Registration Statement or Registration Statements as may be filed by
the Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.

 

If
a Registration Statement under which the Company gives notice under this Section 6.1
is for an underwritten offering, the Company shall so advise the Holders.  In such event, the right of any such Holder
to be included in a registration pursuant to this Section 6.1 shall be
conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein.  All Holders
proposing to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.

 

9

 

Notwithstanding
any other provision of the Agreement, in connection with a registration
statement that involves the primary offer and sale of securities by the Company
for cash, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company and second, to all selling securityholders proposing to participate
in the offering through the exercise of registration rights (the “Participating
Sellers”) on a pro rata basis based on the total number of shares subject to
registration rights held by such Participating Sellers.  No such reduction shall reduce the securities
being offered by the Company for its own account to be included in the
registration and underwriting.  In no
event will shares of any other selling stockholder be included in such
registration that would reduce the number of shares that may be included by the
Participating Sellers without the written consent of Participating Sellers
holding not less than a majority of the shares subject to registration rights
proposed to be sold in the offering.

 

6.2           Registration
Procedures and Other Matters.  In
connection with any Registration Statement under which Registrable Securities
are included pursuant to Section 6.1, the Company shall:

 

                (a)           use its best efforts to prepare and
file with the SEC such amendments and supplements to the Registration Statement
in compliance with applicable laws, and the prospectus used in connection
therewith (the “Prospectus”), as may be necessary to keep the Registration
Statement current, effective and free from any material misstatement or
omission to state a material fact for a period not exceeding (i) the
second anniversary of the date of filing of the Registration Statement, or (ii) such
time as all of the Registrable Securities have been sold;

 

                (b)           furnish to each Holder participating
in such registration (each, a “Participating Holder”) such number of copies of
the Registration Statement, Prospectus and preliminary Prospectus in conformity
with the requirements of the Securities Act and such other documents as the
Holder may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Registrable Securities by the Holder;

 

                (c)           file documents required of the
Company for blue sky clearance in states specified in writing by the
Participating Holders and use its commercially reasonable efforts to maintain
such blue sky qualifications during the period the Company is required to
maintain the effectiveness of the Registration Statement pursuant to Section 6.2(a);
provided, however, that the Company shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented;

 

                (d)           bear all expenses in connection with
this Section 6.2 and the registration of the Registrable Securities
pursuant to the Registration Statement (other than underwriting discounts or
commissions, brokers’ fees and similar selling expenses and any other fees or
expenses incurred by a Holder, including attorneys’ fees);

 

                (e)           advise the Participating Holders,
promptly after the Company shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of the Registration Statement or of the initiation or threat of any proceeding
for that purpose; and the Company shall promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal as promptly as possible if such stop order should be issued; and

 

                (f)            within one (1) business day
following the effectiveness date of the Registration Statement, give notice to
the Participating Holders of such effectiveness and, within two (2) business
days following such effectiveness, use its commercially reasonable efforts to
cause its counsel to issue an appropriate opinion or opinions to the transfer
agent substantially to the effect that the Registrable 

 

10

 

Securities included under the Registration Statement are subject to an
effective registration statement and can be reissued free of restrictive legend
in accordance with provisions of Section 6.7.

 

6.3           Transfer of the
Shares after Registration; Suspension.

 

                (a)           Except in the event that paragraph (b) below
applies, the Company shall (i) if deemed necessary by the Company, prepare
and file from time to time with the SEC a post-effective amendment to the
applicable Registration Statement or a supplement to the related Prospectus or
a supplement or amendment to any document incorporated therein by reference or
file any other required document so that such Registration Statement will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to purchasers of the
Registrable Securities being sold thereunder, such Prospectus will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; (ii) provide
each Participating Holder with copies of any documents filed pursuant to Section 6.3(a)(i) as
it reasonably requests; and (iii) inform each Participating Holder that
the Company has complied with its obligations in Section 6.3(a)(i) (or
that, if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company shall notify
each Participating Holder to that effect, use its best efforts to secure the
effectiveness of such post-effective amendment as promptly as reasonably
possible and promptly notify each Participating Holder when the amendment has
become effective).

 

                (b)           Subject to paragraph (c) below,
in the event (i) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness of the applicable
Registration Statement for amendments or supplements to such Registration
Statement or related Prospectus or for additional information, (ii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iii) of the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose or (iv) of any event or circumstance which,
upon the good faith judgment of the Company’s Board of Directors based on the
advice of its counsel, necessitates the making of any changes in a Registration
Statement or Prospectus, or any document incorporated or deemed to be incorporated
therein by reference, so that, in the case of such Registration Statement, it
will not contain any untrue statement of a material fact or any omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or any omission to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, the Company shall deliver a certificate in writing to
each Participating Holder (the “Suspension Notice”) to the effect of the
foregoing and, upon receipt of such Suspension Notice, each Participating
Holder shall refrain from selling any of the Registrable Securities pursuant to
the Registration Statement (a “Suspension”) until a supplemented or amended
Prospectus is prepared and filed by the Company, or until it is advised in
writing by the Company that the current Prospectus may be used.  In the event of any Suspension, the Company
shall use its best efforts to cause the use of the Prospectus so suspended to
be resumed as soon as reasonably practicable after the delivery of a Suspension
Notice to each Participating Holder.

 

                (c)           Notwithstanding the foregoing
paragraphs of this Section 6.3, a Participating Holder shall not be
prohibited from selling any of the Registrable Securities under the applicable
Registration Statement as a result of Suspensions on more than two (2) occasions
of not more than thirty (30) days each in any twelve (12) month period, unless,
in the good faith judgment of the Company’s Board of Directors based on the
advice of its counsel, the sale of the Registrable Securities 

 

11

 

under such Registration Statement in reliance on this Section 6.3(c) would
be reasonably likely to cause a violation of the Securities Act or the Exchange
Act and result in liability to the Company.

 

                (d)           Provided that a Suspension is not
then in effect, a Participating Holder may sell any of the Registrable
Securities under the applicable Registration Statement.  Upon receipt of a request therefor, the
Company has agreed to provide an adequate number of current Prospectuses to the
Participating Holders and to supply copies to any other parties requiring such
Prospectuses pursuant to the Securities Act.

 

6.4           Indemnification.

 

                (a)           For the purpose of this Section 6.4:

 

                                (i)            the term “Selling Stockholder” means
the Investor and any affiliate of the Investor;

 

                                (ii)           the term “Registration Statement”
shall include the Prospectus in the form first filed with the SEC pursuant to Rule 424(b) of
the Securities Act or filed as part of the applicable Registration Statement at
the time of effectiveness if no Rule 424(b) filing is required, and
any exhibit, supplement or amendment included in or relating to such
Registration Statement referred to in Section 6.1; and

 

                                (iii)          the term “untrue statement” for
purposes of Section 6.4(e) hereof shall include any untrue statement
or alleged untrue statement, or any omission or alleged omission to state in
the Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

                (b)           The Company agrees to indemnify and
hold harmless each Selling Stockholder from and against any losses, claims,
damages or liabilities to which such Selling Stockholder may become subject
(under the Securities Act or otherwise) insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of or
are based upon (i) any breach of any of the representations or warranties
of the Company contained herein or failure to comply with any of the covenants
and agreements of the Company contained herein, (ii) any untrue statement
of a material fact contained in the applicable Registration Statement as
amended at the time of effectiveness or any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any failure by the Company to fulfill any undertaking
included in such Registration Statement as amended at the time of effectiveness,
and the Company will reimburse such Selling Stockholder for any reasonable
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim, or preparing to
defend any such action, proceeding or claim; provided, however, that the
Company shall not be liable to a Selling Stockholder to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an untrue
statement made in such Registration Statement or any omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in preparation of such Registration Statement, or the
failure of such Selling Stockholder to comply with its covenants and agreements
contained in Section 6.3 hereof respecting sale of the Registrable
Securities or any statement or omission in any Prospectus that is corrected in
any subsequent Prospectus that was delivered to the Selling Stockholder prior
to the pertinent sale or sales by the Selling Stockholder.  The Company shall reimburse each Selling
Stockholder for the amounts provided for herein on demand as such expenses are
incurred as reasonably documented by the Selling Stockholder.

 

                (c)           The Investor agrees to indemnify and
hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each 

 

12

 

officer of the Company who signs the applicable
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure by the Investor to comply with the covenants
and agreements contained in Section 6.3 hereof respecting sale of the
Registrable Securities or (ii) any untrue statement of a material fact
contained in such Registration Statement or any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such untrue statement or omission was made in reliance upon and
in conformity with written information furnished by or on behalf of the Investor
specifically for use in preparation of such Registration Statement, and the
Investor will reimburse the Company (or such officer, director or controlling
person, as the case may be) for any legal or other expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim; provided, however, that the Investor’s obligation to indemnify the
Company shall be limited to the net amount received by the Investor from the
sale of Registrable Securities by the Investor pursuant to such Registration
Statement.

 

                (d)           Promptly after receipt by any
indemnified person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 6.4, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, but the omission to so notify the indemnifying person will not relieve
it from any liability which it may have to any indemnified person under this Section 6.4
(except to the extent that such omission materially and adversely affects the
indemnifying person’s ability to defend such action) or from any liability
otherwise than under this Section 6.4. 
Subject to the provisions hereinafter stated, in case any such action
shall be brought against an indemnified person, the indemnifying person shall
be entitled to participate therein, and, to the extent that it shall elect by
written notice delivered to the indemnified person promptly after receiving the
aforesaid notice from such indemnified person, shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
person.  After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the
fees and expenses of more than one separate counsel (together with appropriate
local counsel) for all indemnified parties hereunder.  In no event shall any indemnifying person be
liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided
that such consent shall not be unreasonably withheld.  No indemnifying person shall, without the
prior written consent of the indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified person is
or could have been a party and indemnification could have been sought hereunder
by such indemnified person, unless such settlement includes an unconditional
release of such indemnified person from all liability on claims that are the
subject matter of such proceeding.

 

                (e)           If the indemnification provided for
in this Section 6.4 is unavailable to or insufficient to hold harmless an
indemnified person under subsection (b) or (c) above in respect of
any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each indemnifying person shall
contribute to the amount paid or payable by such indemnified person as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Investor, as well as any other Selling
Stockholders under the applicable Registration Statement, on the other in
connection with the statements or omissions or other matters which resulted in
such losses, claims, damages or liabilities (or 

 

13

 

actions in respect thereof), as well as any
other relevant equitable considerations. 
The relative fault shall be determined by reference to, among other
things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or the Investor
or other Selling Stockholder on the other and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement.  The Company and the
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (e) were determined by pro rata allocation (even if the
Investor and other Selling Stockholders were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (e).  The amount paid or payable by an indemnified
person as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (e) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
person in connection with investigating or defending any such action or
claim.  Notwithstanding the provisions of
this subsection (e), the Investor shall not be required to contribute any amount
in excess of the amount by which the net amount received by the Investor from
the sale of Registrable Securities to which such loss relates exceeds the
amount of any damages which the Investor has otherwise been required to pay by
reason of such untrue statement.  No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.  The Investor’s obligations in this subsection (e) to contribute shall
be in proportion to its sale of the Registrable Securities to which such loss
relates and shall not be joint with any other Selling Stockholders.

 

                (f)            The parties to the Agreement hereby
acknowledge that they are sophisticated business persons who were represented
by counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 6.4, and are fully
informed regarding said provisions.  They
further acknowledge that the provisions of this Section 6.4 fairly
allocate the risks in light of the ability of the parties to investigate the
Company and its business in order to assure that adequate disclosure is made in
the applicable Registration Statement as required by the Securities Act and the
Exchange Act.  The parties are advised
that federal or state public policy as interpreted by the courts in certain
jurisdictions may be contrary to certain of the provisions of this Section 6.4,
and the parties hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this Section 6.4
and further agree not to attempt to assert any such defense.

 

6.5           Termination
of Conditions and Obligations.  The
conditions precedent imposed by Section 3 or this Section 6 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in accordance with a
Registration Statement covering such Shares or at such time as an opinion of
counsel reasonably satisfactory to the Company shall have been rendered to the
effect that such conditions are not necessary in order to comply with the
Securities Act.

 

6.6           Information
Available.  So long as the applicable
Registration Statement is effective covering the resale of any of the Shares
owned by the Investor, the Company shall furnish to the Investor:

 

                (a)           as soon as practicable after it is
available, one copy of (i) its Annual Report to Stockholders (which Annual
Report shall contain financial statements audited in accordance with GAAP by a
national firm of certified public accountants), (ii) its Annual Report on Form 10-K
and (iii) its Quarterly Reports on Form 10-Q (the foregoing, in each
case, excluding exhibits);

 

                (b)           upon the reasonable request of the
Investor, all exhibits excluded by the parenthetical to subsection (a) of
this Section 6.6 as filed with the SEC and all other information that is
made available to stockholders; and

 

14

 

                (c)           upon the reasonable request of the
Investor, an adequate number of copies of the Prospectuses to supply to any
other party requiring such Prospectuses.

 

6.7           Restrictions
on Transfer.  The Investor expressly
agrees that any sale by such Investor of any Shares pursuant to the applicable
Registration Statement shall be sold in a manner described under the caption “Plan
of Distribution” in such Registration Statement.  The Investor further agrees that such Shares
shall only be sold while such Registration Statement is effective, unless
exemption from registration is available. 
On the basis of compliance by the Investor with the foregoing covenants,
upon effectiveness of such Registration Statement, the Company shall as soon as
practicable (but not later than three (3) business days after surrender of
the legended certificates to the Company) cause certificates evidencing such
Shares previously issued to be replaced with certificates which do not bear the
restrictive legends specified above in Section 5.1.  The Investor acknowledges that the removal of
the restrictive legends from certificates representing such Shares as provided
in this Section 6.7 is predicated upon the Company’s reliance on the
Investor’s compliance with its covenants in this Section 6.7.  In addition, upon request by the Investor at
least six (6) months after the Closing Date, the Company shall as soon as
practicable (but not later than three (3) business days after surrender of
the legended certificates to the Company) cause certificates evidencing any
Shares previously issued to be replaced with certificates which do not bear the
restrictive legends specified above in Section 5.1, subject to compliance
with Rule 144 under the Securities Act.

 

ARTICLE VII

MISCELLANEOUS

 

7.1           Notices.  All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered and
addressed as set forth in the License Agreement.

 

7.2           Changes.  This Agreement may be modified, amended or
waived only pursuant to a written instrument signed by the Company and the
Investor.

 

7.3           Headings.  The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

 

7.4           Severability.  In case any provision contained in this
Agreement should be held by a court of competent jurisdiction to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.

 

7.5           Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the principles of conflicts of law.

 

7.6           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other party.

 

7.7           Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto with respect to the purchase and sale of
the Shares, and supersedes any prior understandings or agreements concerning
the purchase and sale of the Shares.

 

15

 

7.8           Rule 144.  For three years from the Closing Date, the
Company covenants that it will timely file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required
to file such reports, it will, upon the request of the Investor for so long as
the Investor holds any of the Shares purchased hereunder, make publicly
available such information as necessary to permit sales pursuant to Rule 144
under the Securities Act), and it will take such further action as the Investor
may reasonably request, all to the extent required from time to time to enable
the Investor to sell such Shares without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time,
or (b) any similar rule or regulation hereafter adopted by the
SEC.  Upon the request of the Investor,
the Company will deliver a written statement as to whether it has complied with
such information and requirements.

 

7.9           No Third-Party
Beneficiaries.  Except as may
otherwise be expressly set forth herein, this Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

7.10         Expenses.  The parties shall pay their own legal and
other expenses in connection with the preparation, negotiation and execution of
this Agreement and the consummation of the transactions contemplated herein.

 

7.11         Assignment.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the parties hereto and shall
inure to the benefit of and be enforceable by each person who shall be a holder
of Registrable Securities from time to time; provided, however, that prior to
the receipt by the Company of adequate written notice of the transfer of any
Registrable Securities specifying the full name and address of the transferee and
providing the transferee’s agreement to be bound by the terms and conditions of
this Agreement, the Company may deem and treat the person listed as the holder
of such shares in its records as the absolute owner and holder of such shares
for all purposes.  Neither party may
assign its rights or delegate its duties under this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, conditioned or delayed; provided, however, that following the Closing
Date, (i) the Investor may assign all of its rights and delegate all of
its duties under this Agreement without the Company’s consent to an Affiliate
(as defined in the License Agreement) or to a successor to all or substantially
all of the business to which the License Agreement relates, whether by merger,
sale of stock, sale of assets or other transaction, (ii) the Company may
assign all of its rights and delegate all of its duties under this Agreement
without the Investor’s consent to its successor, whether by merger, sale of
stock, sale of assets or other transaction and (iii) subject to the
foregoing notice provisions, each person who shall be a holder of Registrable
Securities from time to time shall be assigned the rights, and delegated the
duties, applicable to such Registrable Securities.  The name of a party appearing herein shall be
deemed to include the names of such party’s successors and permitted assigns to
the extent necessary to carry out the intent of this Agreement.  Notwithstanding any other provision of this
Agreement, the rights to cause the Company to register Registrable Securities
granted to a Holder by the Company under Article VI may be transferred or
assigned by a Holder only to a transferee or assignee acquiring at least
200,000 shares of Registrable Securities (as presently constituted and subject
to subsequent adjustments for stock splits, stock dividends, reverse stock
splits and the like).

 

[signature
page follows]

 

16

 

IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase Agreement as of
the date first written above.

 

	
   

  	
  ADVANCED
  LIFE SCIENCES HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Michael T. Flavin

  
	
   

  	
       Name: Michael
  T. Flavin, Ph.D

  
	
   

  	
       Title: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WYETH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas Hofstaetter

  
	
   

  	
       Name: Thomas Hofstaetter

  
	
   

  	
       Title: Senior VP,
  Corporate Business Development

  

 

 

Signature Page Stock Stock
Purchase Agreement

 

 

EXHIBIT A

 

Matters to be Covered by Legal Opinion

 

1.             The Company is a
corporation validly existing under Delaware law and in good standing with the
Secretary of the State of Delaware and has the corporate power to execute and
deliver the Agreement and to perform its obligations thereunder.

 

2.             The Company has
duly authorized, executed and delivered the Agreement, and the Agreement
constitutes the Company’s valid and binding agreement enforceable against the
Company in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors’ rights generally or by general equitable principles.

 

3.             No consent,
approval, authorization or order of, or any filing or declaration with, any
court or governmental agency or body is required in connection with the
execution, delivery and performance of the Agreement by the Company or in
connection with the taking by the Company of any action contemplated thereby,
other than as indicated in the Agreement or such as have been obtained and made
and such as may be required under federal and state securities laws.

 

4.             The execution,
delivery and performance of the Agreement by the Company, and the consummation
by the Company of the transactions contemplated therein, do not and will not (a) violate
the certificate of incorporation or byaws of the Company, (b) materially
violate any judgment, ruling, decree or order known to such counsel, (c) materially
violate any statute or regulation applicable to the business or properties of
the Company or (d) result in a material breach or violation of any of the
terms or provisions of, or constitute a default or result in the acceleration
of any obligation under, any material contract to which the Company is a party
or bound.

 

5.             The Shares
delivered on the date hereof have been duly authorized and, upon receipt of the
agreed upon consideration therefor, will be validly issued, fully paid and
non-assessable shares of the Company, free of any preemptive rights.Exhibit 10.1

 

[LEADERS BANK LETTERHEAD]

 

Michael
T. Flavin, PhD

Chief
Executive Officer

Advanced
Life Sciences, Inc.

1440
Davey Rd.

Woodridge,
IL.  60517

 

September 29,
2008

 

Dear
Dr. Flavin:

 

The
Leaders Bank has reviewed your loan application and hereby offers to amend and
increase the existing line of credit extended to Advanced Life Sciences, Inc under
the following terms and conditions:

 

	
  Amount:

  	
   

  	
  $10,000,000
  (an increase of $6,000,000)

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  27
  Months. Principal shall be due and payable in one lump sum on Maturity Date
  (see below). The line of credit will include a revolving feature to it. In
  addition, the Leaders Bank hereby agrees to waive all rights to call this
  debt upon Demand except if an event of default exists as described in the
  loan documents.

  
	
   

  	
   

  	
   

  
	
  Maturity
  Date:

  	
   

  	
  January 1,
  2011 (formerly January 1, 2010)

  
	
   

  	
   

  	
   

  
	
  Interest
  Rate:

  	
   

  	
  8.5%
  Fixed

  
	
   

  	
   

  	
   

  
	
  Collateral:

  	
   

  	
  All
  Business Assets of Advanced Life Sciences, Inc., as defined in the
  current commercial security agreement of April 18, 2006, the pledge by
  ALS Ventures of 2,540,000 shares of Advanced Life Sciences Holdings, Inc
  Common Stock

  
	
   

  	
   

  	
   

  
	
  Repayment:

  	
   

  	
  Interest
  Only Monthly, Principal due at maturity

  
	
   

  	
   

  	
   

  
	
  Closing
  Fee:

  	
   

  	
  Warrants
  for 65,000 shares of Advanced Life Sciences, Inc Common Stock with a strike
  price of $1/ share.

  
	
   

  	
   

  	
   

  
	
  Covenants:

  	
   

  	
  Any
  cumulative sales exceeding $9 million under the $15 million Standby Equity
  Distribution Agreement (SEDA) currently in place between the Company and YA
  Global Investments, L.P. will not be utilized without the prior written
  consent of The Leaders Bank.

  

 

 

	
  Other:

  	
   

  	
  All
  other terms and conditions shall remain substantially the same as the terms
  agreed to in the current loan agreement scheduled to mature on 1-1-2010.

  
	
   

  	
   

  	
   

  
	
  Commitment

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
  This
  Commitment expires on 10-31-08. Subject to the terms and conditions of this
  Commitment, the loan will be documented and closed in a timely manner after
  all conditions of the Commitment have been satisfied. Funding shall also be
  conditioned upon the continuing accuracy of the facts and representations of
  the loan application of submission upon which this Commitment is based and
  the fulfillment of all of the terms and conditions herein. Lender reserves
  the right to terminate this commitment at any time prior to the closing of
  the loan in the event of an adverse change in the financial status of the
  Borrower and/or Guarantor, or if the collateral is damaged or destroyed.

  
	
   

  	
   

  	
   

  
	
  Commitment

  	
   

  	
   

  
	
  &
  Acceptance:

  	
   

  	
  Subject
  to the terms and conditions stated herein, the Commitment is an offer that
  may be accepted by you until 10-7-08. Acceptance shall be signified by
  executing and returning to Lender a copy of this Commitment. No other form of
  acceptance will be effective.

  

 

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  /s/
  John J. Prosia

  	
   

  
	
   

  	
   

  
	
  John
  J. Prosia

  	
   

  
	
  Executive
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted
  this 29 day of September, 2008

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
      /s/
  Michael T. Flavin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
      Chief Executive Officer

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