Document:

Exhibit 10.7

 

INTELLECTUAL
PROPERTY SECURITY AGREEMENT

 

THIS INTELLECTUAL
PROPERTY SECURITY AGREEMENT (this “Agreement”), is made and entered into
as of October 23, 2008, by ADVANCED
LIFE SCIENCES, INC., an Illinois corporation (the “Grantor”), in
favor of THE LEADERS BANK (in such capacity, the “Lender”).

 

RECITALS

 

A.            The Grantor has entered into that certain Amended and
Restated Business Loan Agreement dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”) with Lender, pursuant to which Lender has agreed to make loans
to Grantor and/or its affiliates and pursuant to which certain obligations owed
to the Lender are secured.

 

B.            Pursuant to the terms of the Loan Agreement and that
certain Amended and Restated Commercial Security Agreement, dated as of even
date herewith, by and between the Grantor and the Lender (the “Security
Agreement”), Grantor has granted to the Lender a security interest in
substantially all the assets of the Grantor, which includes all right, title
and interest of the Grantor in, to and under all now owned and hereafter
acquired patents, patent applications, patent licenses and all products and
proceeds thereof, to secure the payment of all amounts owing by the Grantor
under the Loan Agreement.

 

C.            Pursuant to the terms of the Security Agreement, the
Grantor is required to execute and deliver this Agreement to the Lender.

 

In consideration of the
mutual agreements set forth herein and in the Loan Agreement, the Grantor does
hereby grant to the Lenders a continuing security interest in all of Grantor’s
right, title and interest in, to and under the following, whether presently
existing or hereafter created or acquired:

 

(1)           each patent and patent application,
including, without limitation, each patent and patent application referred to
in Schedule 1 attached hereto and incorporated herein, together with any
reissues, continuations or extensions thereof and all goodwill associated
therewith;

 

(2)           each patent license, including, without
limitation, each patent license listed on Schedule 1, together with all
goodwill associated therewith;

 

(3)           all products and proceeds of the foregoing,
including, without limitation, any claim by the Grantor against third parties
for past, present or future infringement of any patent, including, without
limitation, any patent referred to in Schedule 1, any patent issued
pursuant to a patent application referred to in Schedule 1 and any
patent licensed under any patent license listed on Schedule 1, (items 1
through 3 being herein collectively referred to as the “Patent Collateral”).

 

This security interest is granted in conjunction with
the security interests granted to the Lender pursuant to the Loan Agreement and
the Security Agreement, and is subject to limitations set 

 

 

forth therein. 
The Grantor hereby acknowledges and affirms that the rights and remedies
of the Lender with respect to the security interest in the Patent Collateral
made and granted hereby are more fully set forth in the Loan Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein, and Grantor represents, warrants and agrees that it is the
exclusive owner of the Patent Collateral free of all encumbrances, security interests,
liens and interests of third parties whatsoever (except Lender’s security
interest and Authorized Security Interests). 
Grantor authorizes Lender to file Uniform Commercial Code financing
statements, any amendments thereto, and/or a copy of this Agreement to perfect
Lender’s security interest with any and all applicable governmental
authorities.  Capitalized terms used but
not defined herein have the respective meanings ascribed thereto in the Loan
Agreement.

 

[Signature
Page Follows]

 

2

 

The Grantor has caused
this Patent Security Agreement to be duly executed by its duly authorized
officer thereunto as of the date first set forth above.

 

 

	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVANCED LIFE SCIENCES,
  INC.,

  
	
   

  	
  an Illinois corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John L. Flavin

  
	
   

  	
   

  	
  John L. Flavin,
  President

  

 

Acknowledged
and agreed:

 

LENDER:

 

THE LEADERS BANK

 

	
  By:

  	
  /s/
  John Prosia

  	
   

  
	
   

  	
  John
  Prosia, Executive Vice President

  	
   

  

 

 

[Signature Page to
Intellectual Property Security Agreement]

 

 

	
  STATE OF ILLINOIS

  	
  )

  
	
   

  	
  ) ss

  
	
  COUNTY OF DUPAGE   )

  	
   

  

 

On this 23rd day of
October, 2008, before me personally appeared the person whose signature is set
forth above, to me known, who, being duly sworn, did depose and say that he is
the above-indicated officer of the Grantor, and which executed the above
instrument; and that he signed his name thereto by authority of the board of
directors or similar governing of said entity.

 

 

	
   

  	
  /s/ Irene M. Driscoll

  
	
   

  	
  Notary Public

  

 

 

[Signature Page to
Intellectual Property Security Agreement]

 

 

SCHEDULE 1

 

Patents,
Patent Applications and Patent Licenses

 

	
  Patent Number

  	
   

  	
  Patent Application

  Number

  	
   

  	
  Date Patent Issued

  	
   

  	
  Date of Patent

  Application

  
	
  6,677,350

  	
   

  	
  09/667,131

  	
   

  	
  January 13, 2004

  	
   

  	
  September 21, 2000

  
	
  6,670,383

  	
   

  	
  10/099,726

  	
   

  	
  December 30, 2003

  	
   

  	
  March 15, 2002

  
	
  6,605,596

  	
   

  	
  10/057,260

  	
   

  	
  August 12, 2003

  	
   

  	
  October 29, 2001

  
	
  6,399,654

  	
   

  	
  09/060,839

  	
   

  	
  June 4, 2002

  	
   

  	
  April 15, 1998

  
	
  6,225,481

  	
   

  	
  09/137,767

  	
   

  	
  May 1, 2001

  	
   

  	
  August 21, 1998

  
	
  6,175,816

  	
   

  	
  09/443,987

  	
   

  	
  January 16, 2001

  	
   

  	
  November 19, 1999

  
	
  6,044,212

  	
   

  	
  08/862,840

  	
   

  	
  March 28, 2000

  	
   

  	
  May 23, 1997

  
	
  n/a

  	
   

  	
  11/728,284

  	
   

  	
  n/a

  	
   

  	
  March 23, 2007

  
	
  n/a

  	
   

  	
  10/765,582

  	
   

  	
  n/a

  	
   

  	
  January 12, 2004

  
	
  n/a

  	
   

  	
  10/610,290

  	
   

  	
  n/a

  	
   

  	
  June 30, 2003Exhibit 10.8

 

COMMERCIAL
GUARANTY

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  
	
  $

  	
  10,000,000.00

  	
   

  	
  10-23-2008

  	
   

  	
  01-01-2011

  	
   

  	
  1001234

  	
   

  	
  4A/415

  	
   

  	
   

  	
   

  	
  JPP

  	
   

  	
   

  
																

 

References in the boxes above are for Lender’s
use only and do not limit the applicability of this document to any particular
loan or item.  Any item above containing
“***” has been omitted due to text length limitations.

 

	
  Borrower:

  	
  Advanced
  Life Sciences, Inc.

  1440 Davey Road

  Woodridge, IL 60517

  	
  Lender:

  	
  THE
  LEADERS BANK

  2001 YORK ROAD, SUITE 150

  OAK BROOK, IL 60523

  
	
   

  	
   

  	
   

  	
   

  
	
  Guarantor:

  	
  Advanced
  Life Sciences Holdings, Inc.

  1440 Davey Road

  Woodridge, IL 60517

  	
   

  	
   

  

 

CONTINUING
GUARANTEE OF PAYMENT AND PERFORMANCE.  For good and valuable consideration,
Guarantor absolutely and unconditionally guarantees full and punctual payment
and satisfaction of the Indebtedness of Borrower to Lender, and the performance
and discharge of all Borrower’s obligations under the Note and the Related
Documents.  This Guaranty is being
entered into in connection with that certain Amended and Restated Business Loan
Agreement, dated as of even date herewith, by and between the Lender and the
Borrower, whereby the Lender has agreed to provide a loan of Ten Million
Dollars and 00/100 ($10,000,000.00) to Borrower (“Loan Agreement”).  The Guarantor acknowledges and agrees that
the Lender would not have entered into the Loan Agreement but for the Guarantor’s
agreement to enter into this Guaranty. 
This is a guaranty of payment and performance and not of collection, so
Lender can enforce this Guaranty against Guarantor even when Lender has not
exhausted Lender’s remedies against anyone else obligated to pay the
Indebtedness or against any collateral securing the Indebtedness, this Guaranty
or any other guaranty of the Indebtedness. 
Guarantor will make any payments to Lender or its order, on demand, in
legal tender of the United States of America, in same-day funds, without
set-off or deduction or counterclaim, and will otherwise perform Borrower’s
obligations under the Note and Related Documents.  Under this Guaranty, Guarantor’s liability is
unlimited and Guarantor’s obligations are continuing.

 

INDEBTEDNESS.  The word “Indebtedness” as used in this
Guaranty means all of the principal amount outstanding from time to time and at
any one or more times, accrued unpaid interest thereon and all collection costs
and legal expenses related thereto permitted by law, attorneys’ fees, arising
from any and all debts, liabilities and obligations of every nature or form,
now existing or hereafter arising or acquired, that Borrower individually or
collectively or interchangeably with others, owes or will owe Lender.  “Indebtedness” includes, without limitation,
loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, liabilities and obligations under any interest rate protection
agreements or foreign currency exchange agreements or commodity price
protection agreements, other obligations, and liabilities of Borrower, and any
present or future judgments against Borrower, future advances, loans or
transactions that renew, extend, modify, refinance, consolidate or substitute
these debts, liabilities and obligations whether:  (1) voluntarily or involuntarily
incurred; (2) due or to become due by their terms or acceleration; (3) absolute
or contingent; (4) liquidated or unliquidated; (5) determined or
undetermined; (6) direct or indirect; (7) primary or secondary in
nature or arising from a guaranty or surety; (8) secured or unsecured; (9) joint
or several or joint and several; (10) evidenced by a negotiable or
non-negotiable instrument or writing; (11) originated by Lender or another or
others; (12) barred or unenforceable against Borrower for any reason
whatsoever; (13) for any transactions that may be voidable for any reason (such
as infancy, insanity, ultra vires or otherwise); and (14) originated then
reduced or extinguished and then afterwards increased or reinstated.

 

If Lender
presently holds one or more guaranties, or hereafter receives additional guaranties
from Guarantor, Lender’s rights under all guaranties shall be cumulative.  This Guaranty shall not (unless specifically
provided below to the contrary) affect or invalidate any such other
guaranties.  Guarantor’s liability will
be Guarantor’s aggregate liability under the terms of this Guaranty and any
such other unterminated guaranties.

 

CONTINUING
GUARANTY. 
THIS IS A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO
GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE
INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR 

 

1

 

HEREAFTER
ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS.  ACCORDINGLY, ANY PAYMENTS MADE ON THE
INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR’S OBLIGATIONS AND
LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS
EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO
BALANCE FROM TIME TO TIME.

 

DURATION
OF GUARANTY.  This Guaranty will take effect when received
by Lender without the necessity of any acceptance by Lender, or any notice to
Guarantor or to Borrower, and will continue in full force until all the
Indebtedness incurred or contracted before receipt by Lender of any notice of
revocation shall have been fully and finally paid and satisfied, and all of
Guarantor’s other obligations under this Guaranty shall have been performed in
full.  If Guarantor elects to revoke this
Guaranty, Guarantor may only do so in writing. 
Guarantor’s written notice of revocation must be mailed to Lender, by
certified mail, at Lender’s address listed above or such other place as Lender
may designate in writing.  Written
revocation of this Guaranty will apply only to New Indebtedness created after
actual receipt by Lender of Guarantor’s written revocation.  For this purpose and without limitation, the
term “New Indebtedness” does not include the Indebtedness which at the time of
notice of revocation is contingent, unliquidated, undetermined or not due and
which later becomes absolute, liquidated, determined or due.  For this purpose and without limitation, “New
Indebtedness” does not include all or part of the Indebtedness that is:  (1) incurred by Borrower prior to
revocation; (2) incurred under a commitment that became binding before
revocation; and (3) incurred under any renewals, extensions,
substitutions, and modifications of the Indebtedness.  This Guaranty shall bind Guarantor’s estate
as to the Indebtedness created both before and after Guarantor’s death or incapacity,
regardless of Lender’s actual notice of Guarantor’s death.  Subject to the foregoing, Guarantor’s
executor or administrator or other legal representative may terminate this
Guaranty in the same manner in which Guarantor might have terminated it and with
the same effect.  Release of any other
guarantor or termination of any other guaranty of the Indebtedness shall not
affect the liability of Guarantor under this Guaranty.  Any revocation Lender receives from any one
or more Guarantors shall not affect the liability of any remaining Guarantors
under this Guaranty.  It is anticipated
that fluctuations may occur in the aggregate amount of the Indebtedness covered
by this Guaranty, and Guarantor specifically acknowledges and agrees that
reductions in the amount of the Indebtedness, even to Zero Dollars ($0.00),
shall not constitute a termination of this Guaranty.  This Guaranty is binding upon Guarantor and
Guarantor’s heirs, successors and assigns so long as any of the Indebtedness
remains unpaid and even though the Indebtedness may from time to time be Zero
Dollars ($0.00).

 

GUARANTOR’S
AUTHORIZATION TO LENDER.  Guarantor authorizes Lender, either before or
after any revocation hereof, without notice or demand and without lessening
Guarantor’s liability under this Guaranty, from time to time:  (1) prior to revocation as set forth
above, to make one or more additional secured or unsecured loans to Borrower,
to lease equipment or other goods to Borrower, or otherwise to extend
additional credit to Borrower; (2) to alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms of the Indebtedness or any part of the Indebtedness, including increases
and decreases of the rate of interest on the Indebtedness (extensions may be
repeated and may be for longer than the original loan term); (3) to take
and hold security for the payment of this Guaranty or the Indebtedness, and
exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any such security, with or without the substitution of new collateral; (4) to
release, substitute, agree not to sue, or deal with anyone or more of Borrower’s
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; (5) to determine how, when and what application of payments
and credits shall be made on the Indebtedness; (6) to apply such security
and direct the order or manner of sale thereof, including without limitation,
any non judicial sale permitted by the terms of the controlling security
agreement or deed of trust, as Lender in its discretion may determine; (7) to
sell, transfer, assign or grant participations in all or any part of the
Indebtedness; and (8) to assign or transfer this Guaranty in whole or in
part.

 

GUARANTOR’S
REPRESENTATIONS AND WARRANTIES.  Guarantor represents and warrants to Lender
that (1) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty; (2) this
Guaranty is executed at Borrower’s request and not at the request of Lender; (3) Guarantor
has full power, right and authority to enter into this Guaranty; (4) the
provisions of this Guaranty do not conflict with or result in a default under
any agreement or other instrument binding upon Guarantor and do not result in a
violation of any law, regulation, court decree or order applicable to
Guarantor; (5) Guarantor has not and will not, without the prior written
consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or
otherwise dispose of all or substantially all of Guarantor’s assets, or any
interest therein; (6) upon Lender’s 

 

2

 

request,
Guarantor will provide to Lender financial and credit information in form
acceptable to Lender, and all such financial information which currently has
been, and all future financial information which will be provided to Lender is
and will be true and correct in all material respects and fairly present
Guarantor’s financial condition as of the dates the financial information is
provided; (7) no material adverse change has occurred in Guarantor’s
financial condition since the date of the most recent financial statements
provided to Lender and no event has occurred which may materially adversely
affect Guarantor’s financial condition; (8) no litigation, claim,
investigation, administrative proceeding or similar action (including those for
unpaid taxes against Guarantor) is pending or threatened; (9) Lender has
made no representation to Guarantor as to the creditworthiness of Borrower; and
(10) Guarantor has established adequate means of obtaining from Borrower
on a continuing basis information regarding Borrower’s financial
condition.  Guarantor agrees to keep
adequately informed from such means of any facts, events, or circumstances
which might in any way affect Guarantor’s risks under this Guaranty, and
Guarantor further agrees that, absent a request for information, Lender shall
have no Obligation to disclose to Guarantor any information or documents
acquired by Lender in the course of its relationship with Borrower. Guarantor
further represents, warrants and covenants to Lender that all of the
information and reports filed by the Guarantor with the United States
Securities and Exchange Commission and/or any other governmental authority will
be true and accurate and not misleading in any material respect; and that the
Guarantor will comply with all applicable securities laws and rules.  Guarantor agrees that all of the Borrower’s
representations and warranties set forth in the Loan Agreement shall be
incorporated herein as though the Guarantor had expressly made such
representations and warranties herein.

 

GUARANTOR’S
WAIVERS. 
Except as prohibited by applicable law, Guarantor waives any right to
require Lender (1) to continue lending money or to extend other credit to
Borrower; (2) to make any presentment, protest, demand, or notice of any
kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (3) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (4) to proceed directly against or exhaust any collateral held
by Lender from Borrower, any other guarantor, or any other person; (5) to
give notice of the terms, time, and place of any public or private sale of
personal property security held by Lender from Borrower or to comply with any
other applicable provisions of the Uniform Commercial Code of the State of
Illinois, as amended (“UCC”); (6) to pursue any other remedy within Lender’s
power; or (7) to commit any act or omission of any kind, or at any time,
with respect to any matter whatsoever.

 

Guarantor also
waives any and all rights or defenses based on suretyship or impairment of
collateral including, but not limited to, any rights or defenses arising by
reason of (A) any “one action” or “anti-deficiency” law or any other law
which may prevent Lender from bringing any action, including a claim for
deficiency, against Guarantor, before or after Lender’s commencement or
completion of any foreclosure action, either judicially or by exercise of a
power of sale; (B) any election of remedies by Lender which destroys or
otherwise adversely affects Guarantor’s subrogation rights or Guarantor’s
rights to proceed against Borrower for reimbursement, including without
limitation, any loss of rights Guarantor may suffer by reason of any law
limiting, qualifying, or discharging the Indebtedness; (C) any disability
or other defense of Borrower, of any other guarantor, or of any other person,
or by reason of the cessation of Borrower’s liability from any cause
whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any
right to claim discharge of the Indebtedness on the basis of unjustified
impairment of any collateral for the Indebtedness; (E) any statute of
limitations, if at any time any action or suit brought by Lender against
Guarantor is commenced, there is outstanding Indebtedness which is not barred
by any applicable statute of limitations; or (F) any defenses given to
guarantors at law or in equity other than actual payment and performance of the
Indebtedness.  If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness
and thereafter Lender is forced to remit the amount of that payment to Borrower’s
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose of the enforcement of this Guaranty.

 

Guarantor
further waives and agrees not to assert or claim at any time any deductions to
the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.

 

GUARANTOR’S
UNDERSTANDING WITH RESPECT TO WAIVERS.  Guarantor warrants and agrees that each of
the waivers set forth above is made with Guarantor’s full knowledge of its
significance and consequences 

 

3

 

and that, under
the circumstances, the waivers are reasonable and not contrary to public policy
or law.  If any such waiver is determined
to be contrary to any applicable law or public policy, such waiver shall be
effective only to the extent permitted by law or public policy.

 

SUBORDINATION
OF BORROWER’S DEBTS TO GUARANTOR.  Guarantor agrees that the Indebtedness,
whether now existing or hereafter created, shall be superior to any claim that
Guarantor may now have or hereafter acquire against Borrower, whether or not
Borrower becomes insolvent.  Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower, upon
any account whatsoever, to any claim that Lender may now or hereafter have
against Borrower.  In the event of
insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment of
the claims of both Lender and Guarantor shall be paid to Lender and shall be
first applied by Lender to the Indebtedness. 
Guarantor does hereby assign to Lender all claims which it may have or
acquire against Borrower or against any assignee or trustee in bankruptcy of
Borrower; provided, however, that such assignment shall be
effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness.  If Lender so
requests, any notes or credit agreements now or hereafter evidencing any debts
or obligations of Borrower to Guarantor shall be marked with a legend that the
same are subject to this Guaranty and shall be delivered to Lender.  Guarantor agrees, and Lender is hereby
authorized, in the name of Guarantor, from time to time to file financing
statements and continuation statements and to execute documents and to take
such other actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.

 

CONFESSION
OF JUDGMENT.  Guarantor hereby irrevocably authorizes and
empowers any attorney-at-law to appear in any court of record and to confess
judgment against Guarantor for the unpaid amount of this Guaranty as evidenced
by an affidavit signed by an officer of Lender setting forth the amount then
due, attorneys’ fees plus costs of suit, and to release all errors, and waive
all rights of appeal.  If a copy of this
Guaranty, verified by an affidavit, shall have been filed in the proceeding, it
will not be necessary to file the original as a warrant of attorney. Guarantor
waives the right to any stay of execution and the benefit of all exemption laws
now or hereafter in effect.  No single
exercise of the foregoing warrant and power to confess judgment will be deemed
to exhaust the power, whether or not any such exercise shall be held by any
court to be invalid, voidable, or void; but the power will continue
undiminished and may be exercised from time to time as Lender may elect until
all amounts owing on this Guaranty have been paid in full.  Guarantor hereby waives and releases any and
all claims or causes of action which Guarantor might have against any attorney
acting under the terms of authority which Guarantor has granted herein arising
out of or connected with the confession of judgment hereunder.

 

MISCELLANEOUS
PROVISIONS.  The following miscellaneous provisions are a
part of this Guaranty:

 

Amendments.  This Guaranty, together with any Related
Documents, constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Guaranty. 
No alteration of or amendment to this Guaranty shall be effective unless
given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.

 

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

 

Caption Headings.  Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Guaranty.

 

Governing Law. This Guaranty
will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of Illinois without regard to
its conflicts of law provisions.

 

4

 

Choice of Venue.  If there is a lawsuit, Guarantor agrees upon
Lender’s request to submit to the jurisdiction of the courts of DuPage County,
State of Illinois.

 

Integration.  Guarantor further agrees that (1) Guarantor
has read and fully understands the terms of this Guaranty; (2) Guarantor
has had the opportunity to be advised by Guarantor’s attorney with respect to
this Guaranty; and (3) the Guaranty fully reflects Guarantor’s intentions
and parol evidence is not required to interpret the terms of this
Guaranty.  Guarantor hereby indemnifies
and holds Lender harmless from all losses, claims, damages, and costs
(including Lender’s attorneys’ fees) suffered or incurred by Lender as a result
of any breach by Guarantor of the warranties, representations and agreements of
this paragraph.

 

Interpretation.  In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty in the singular
shall be deemed to have been used in the plural where the context and
construction so require, and where there is more than one Borrower named in
this Guaranty or when this Guaranty is executed by more than one Guarantor, the
words “Borrower” and “Guarantor” respectively shall mean all and anyone or more
of them.  The words “Guarantor,” “Borrower,”
and “Lender” include the heirs, successors, assigns, and transferees of each of
them.  If a court finds that any
provision of this Guaranty is not valid or should not be enforced, that fact by
itself will not mean that the rest of this Guaranty will not be valid or
enforced; therefore, a court will enforce the rest of the provisions of this
Guaranty even if a provision of this Guaranty may be found to be invalid or
unenforceable.  If any one or more of
Borrower or Guarantor are corporations, partnerships, limited liability
companies, or similar entities, it is not necessary for Lender to inquire into
the powers of Borrower or Guarantor or of the officers, directors, partners,
managers, or other agents acting or purporting to act on their behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty.

 

Notices.  Any notice required to be given under this
Guaranty shall be given in writing, and, except for revocation notices by
Guarantor, shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this
Guaranty.  All revocation notices by
Guarantor shall be in writing and shall be effective upon delivery to Lender as
provided in the section of this Guaranty entitled “DURATION OF GUARANTY.”  Any party may change its address for notices
under this Guaranty by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party’s
address.  For notice purposes, Guarantor
agrees to keep Lender informed at all times of Guarantor’s current
address.  Unless otherwise provided or
required by law, if there is more than one Guarantor, any notice given by
Lender to any Guarantor is deemed to be notice given to all Guarantors.

 

No Waiver by Lender.  Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in writing and signed by
Lender.  No delay or omission on the part
of Lender in exercising any right shall operate as a waiver of such right or
any other right.  Any waiver by Lender of
a provision of this Guaranty shall not prejudice or constitute a waiver of
Lender’s right otherwise to demand strict compliance with that provision or any
other provision of this Guaranty.  No
prior waiver by Lender, nor any course of dealing between Lender and Guarantor,
shall constitute a waiver of any of Lender’s rights or of any of Guarantor’s
obligations as to any future transactions. 
Whenever the consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sale discretion of
Lender.

 

Successors and Assigns.  Subject to any limitations stated in this
Guaranty on transfer of Guarantor’s interest, this Guaranty shall be binding
upon and inure to the benefit of the parties, their successors and assigns.

 

Waive Jury.  Lender and Guarantor hereby waive the right
to any jury trial in any action, proceeding, or counterclaim brought by either
Lender or Guarantor against the other.

 

5

 

THE FOLLOWING
NOTICE IS REQUIRED BY ILLINOIS LAW: Unless Guarantor provides Lender with
evidence of the insurance coverage required by Guarantor’s agreement with
Lender, Lender may purchase Insurance at Guarantor’s expense to protect Lender’s
interests in the collateral.  This
insurance may, but need not, protect Guarantor’s interests.  The coverage that Lender purchases may not
pay any claim that Guarantor makes or any claim that is made against Guarantor
in connection with the collateral. 
Guarantor may later cancel any insurance purchased by Lender, but only
after providing Lender with evidence that Guarantor has obtained insurance as
required by their agreement.  If Lender
purchases insurance for the collateral, Guarantor will be responsible for the
costs of that insurance, including interest and any other charges Lender may
impose in connection with the placement of the insurance, until the effective
date of the cancellation or expiration of the insurance.  The costs of the insurance may be added to
Guarantor’s total outstanding balance or obligation.  The costs of the insurance may be more than
the cost of insurance Guarantor may be able to obtain on Guarantor’s own.

 

DEFINITIONS.  The following capitalized words and terms
shall have the following meanings when used in this Guaranty.  Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America.  Words and
terms used in the singular shall include the plural, and the plural shall
include the singular, as the context may require. Words and terms not otherwise
defined in this Guaranty shall have the meanings attributed to such terms in
the UCC:

 

Borrower. The word “Borrower”
means Advanced Life Sciences, Inc., and includes all co-signers and
co-makers signing the Note and all their successors and assigns.

 

Guarantor. The word “Guarantor”
means everyone signing this Guaranty, including without limitation Advanced
Life Sciences Holdings, Inc., and in each case, any signer’s successors
and assigns.

 

Guaranty.  The word “Guaranty” means this guaranty from
Guarantor to Lender.

 

Indebtedness.  The word “Indebtedness” means Borrower’s
indebtedness to Lender as more particularly described in this Guaranty.

 

Lender. The word “Lender”
means THE LEADERS BANK, its successors and assigns.

 

Note.  The word “Note” means and includes without
limitation all of Borrower’s promissory notes and/or credit agreements
evidencing Borrower’s loan obligations in favor of Lender, together with all
renewals of, extensions of, modifications of, refinancing of, consolidations of
and substitutions for promissory notes or credit agreements.

 

Related Documents. The words “Related
Documents” mean all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in
connection with the Indebtedness.

 

UCC. The word “UCC”
means the Uniform Commercial Code of the State of Illinois, as amended.

 

[SIGNATURE
PAGE FOLLOWS]

 

6

 

EACH
UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS.  IN
ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S
EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL
CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION
OF GUARANTY”.  NO FORMAL ACCEPTANCE BY
LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.  THIS GUARANTY IS DATED OCTOBER 23, 2008.

 

	
  GUARANTOR:

  	
   

  
	
   

  	
   

  
	
  ADVANCED
  LIFE SCIENCES HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/
  John L. Flavin

  	
   

  
	
   

  	
   

  	
  John
  L. Flavin, President and CFO

  	
   

  

 

[Signature Page to Commercial Guaranty]

 

 

INDIVIDUAL
ACKNOWLEDGMENT

 

	
  STATE
  OF ILLINOIS

  	
  )

  
	
   

  	
  )ss

  
	
  COUNTY
  OF DUPAGE

  	
  )

  

 

On this day
before me, the undersigned Notary Public, personally appeared John L. Flavin,
to me known to be the individual described in and who executed the Commercial
Guaranty, and acknowledged that he or she signed the Guaranty as his or her
free and voluntary act and deed, for the uses and purposes therein mentioned.

 

Given under my
hand and official seal this 23rd day of October, 2008.

 

	
  By

  	
  /s/ Irene M. Driscoll

  	
   

  	
  Residing
  atCook County

  
	
   

  	
   

  	
   

  
	
  Notary
  Public in and for the State of  Illinois

  	
   

  
	
   

  	
   

  	
   

  
	
  My
  commission expires  May 24, 2010

  	
   

  

 

[Acknowledgment to Commercial Guaranty]

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