Document:

EXHIBIT 10.8

 

Amended
and Restated

Employment
Agreement

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”)
made effective as of the 13th day of November 2007 (the “Effective Date”),
by and between Advanced Life Sciences, Inc., an Illinois corporation (the “Company”),
and Michael J. Cogan (the “Executive”).

 

WHEREAS, the Company and the Executive previously entered into an
employment contract effective May 7, 2007 (the “Original Employment
Contract”); and

 

WHEREAS, the Company and the Executive desire to enter into this Amended
and Restated Agreement, effective as of the Effective Date, to amend and
restate the Original Employment Contract; and

 

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

 

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

 

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

 

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

 

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

 

3.                                       Place of Performance. In connection with the Executive’s employment
by the Company, the Executive shall be based at the principal executive offices
of the Company currently in Woodridge, Illinois, except for required travel on
the Company’s business.

 

4.                                       Compensation and Related Matters. During the Term of the Executive’s employment,
as compensation and consideration for the performance by the Executive of the
Executive’s duties, responsibilities and covenants pursuant to this Agreement,
the Company shall pay the Executive and the Executive agrees to accept in full
payment for such performance the amounts and benefits set forth below.

 

(a)                                  Salary. The Company shall pay to the Executive an annual base salary of
$180,000 (“Base Salary”), payable in substantially equal installments no less
frequently than monthly in accordance with the Company’s applicable payroll
practices. The Compensation Committee of the Board of Directors of the Company
(the “Compensation Committee”) shall review the Base Salary annually, at a
minimum, or at such other time as it deems a review necessary and may increase
the Base Salary on a prospective basis. Any such salary adjustment shall then
be considered Base Salary for the purposes of this Agreement. The Executive’s
Base Salary shall not be reduced after any increase, without the Executive’s
consent.

 

(b)                                 Bonus. The Executive shall be eligible to participate throughout the Term in
the Company’s annual bonus plan or any similar or successor bonus plan (“Bonus
Plan”) in accordance with the Company’s compensation practices and the terms
and provisions of the Bonus Plan. Each year, the Executive may be eligible
to

 

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receive a target performance bonus of twenty
five percent (25%) of Base Salary. The amount of the Executive’s target
performance bonus shall be reviewed annually and may be increased by the
Compensation Committee.

 

(c)                                  Stock Incentive Plan. The Executive shall be eligible to receive
additional awards of the Company’s common stock under the Company’s Stock
Incentive Plan or under any other equity plan of the Company as determined by
the Compensation Committee in its discretion.

 

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

 

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

 

(ii)  Vacation. The Executive
shall be entitled to not less than 20  days of paid
vacation in each calendar year, in accordance with the Company’s vacation
policy.

 

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

 

5.                                       Termination.

 

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

 

(i)                                     The death of the Executive;

 

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

 

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

 

(iv)                              By the Executive or the Company for any reason
other than as stated in Sections 5(a)(i) through 5(a)(iii) above,
upon providing a Notice of Termination (as defined in Section 5(b)).

 

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(b)                                 Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive (other than a termination pursuant to Section 5(a)(i) above)
shall be communicated by written Notice of Termination to the other party
hereto in accordance with Section 10. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice that shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

 

(c)                                  “Date of Termination” shall mean (i) if the
Executive’s employment is terminated pursuant to Section 5(a)(i) above,
the date of his death; (ii) if the Executive’s employment is terminated
pursuant to Section 5(a)(ii) or 5(a)(iv) above, the date such
Notice of Termination is given (or such later date as provided therein); (iii) if
the Executive’s employment is terminated pursuant to Section 5(a)(iii) above,
the date mutually agreed to by the parties; (iv) the date the Term of this
Agreement expires, if either the Company or the Executive provides notice in
accordance with Section 1; or (v) if the Executive terminates his
employment and fails to provide written notice to the Company of such
termination, the date of such termination.

 

6.                                       Compensation Upon Termination.

 

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

 

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

 

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

 

(d)                                 In addition to the payments made under Section 6(a),
if the Executive’s employment is terminated by the Company without Cause
pursuant to Section 5(a)(iv) above, and conditioned upon the
Executive’s execution of a valid and legally enforceable release of claims
against the Company, the Company shall, for a period of twelve (12) months
following the Date of Termination (the “Severance Period”):  (i) provide to the Executive salary
continuation paid in accordance with the Company’s applicable payroll
practices, at the Executive’s Base Salary rate in effect as of the Date of
Termination and (ii) continue the Executive’s coverage under the Company’s
health medical, dental, vision, disability, and life and accident benefit
plans, in which the Executive participated immediately prior to the Date of
Termination, provided, however, that if the Company cannot continue such
coverage, the Company shall provide or arrange to provide, at its expense,
similar coverage to the Executive and if such coverage cannot be arranged, the  Company will provide a cash equivalent payment to the
Executive. In addition, no later than two and one-half (21⁄2) months following
the end of the year in which the Executive’s employment is terminated, the
Company shall pay the Executive in a lump sum an amount equal to the Executive’s
target performance bonus multiplied by a fraction, the numerator of which is
the number of days in the calendar year in which the Executive’s employment is
terminated through the Date of Termination and the denominator of which is 365.
Notwithstanding the forgoing, vacation days shall not accrue during the
Severance Period.

 

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

 

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

 

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7.                                       Change in Control. Upon a Change in Control (as defined below), all
outstanding stock options and other equity awards under the Company’s Stock
Incentive Plan or other similar or successor plan held by the Executive will
immediately become fully vested and exercisable.

 

(a)                                  Payments and Benefits Upon Employment
Termination Upon a Change in Control. If, within twenty four (24) months after
a Change in Control, the Executive’s employment is terminated by the Company
other than for Cause or if the Executive terminates employment for Good Reason
(as defined below), the Company shall provide the following payments and
benefits to the Executive, in lieu of those payments and benefits provided
under Sections 6(d), but in addition to the amounts payable under Section 6(a):

 

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

 

(Base Salary + Target Performance Bonus)   x   2   =   lump
sum cash amount

 

(ii)                                  The Company shall continue the Executive’s
coverage under the Company’s health medical, dental, vision, disability, and
life and accident insurance benefit plans in which the Executive participated
immediately prior to the Executive’s termination of employment for a period of
twenty four (24) months, provided, however, that if the Company cannot continue
such coverage, the Company shall provide or arrange to provide, at its expense,
similar coverage to the Executive and if such coverage cannot be arranged, the  Company will provide a cash equivalent payment to the
Executive.

 

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

 

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

 

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

 

(A)                              any “person” (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
including a “group” (as defined in Section 13(d)(3) of the Exchange
Act), other than (I) the Company, (II) any wholly-owned subsidiary of the
Company, (III) any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its affiliates, or (IV) a “Permitted Holder”
(as defined below), becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
having fifty percent (50%) or more of the combined voting power of the
then-outstanding securities of the Company that may be cast for the
election of directors of the Company (other than as a result of an issuance of
securities initiated by the Company in the ordinary course of business) (the “Company
Voting Securities”); provided, however, that the event described in this Section 7(c)(i) shall
not be deemed to be a Change in Control by virtue of any underwriter
temporarily holding securities pursuant to an offering of such securities;

 

(B)                                individuals who, as of the date of this Agreement, constitute the Board
(the “Incumbent Directors”), together with any new director(s) whose election
or nomination for election by the Company’s stockholders subsequent to the date
hereof was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were Incumbent Directors or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof;

 

(C)                                the consummation by the Company of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), in each case, unless
immediately following such Business Combination:  (A) holders of the securities of the
Company entitled to vote generally in the election of directors of the Company
immediately prior to such Business Combination own or hold, in substantially
the

 

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same
proportions as their ownership immediately prior to such Business Combination,
more than 50% of the combined voting power of then outstanding voting
securities entitled to vote generally in the election of directors of (x) the
entity resulting from such Business Combination, or (y) if applicable, the
entity that as a result of such Business Combination owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries; or

 

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

 

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

 

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

 

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

 

(iii)                               “Good Reason” means any of the following conditions, without the
Executive’s consent, (A) a material diminution in the Executive’s Base
Salary, (B) a material diminution in the Executive’s authority, duties, or
responsibilities, (C) a material diminution in the authority, duties, or
responsibilities of the supervisor to whom the Executive is required to report,
including a requirement that the Executive report to a corporate officer or
employee instead of reporting directly to the Board (or other similar governing
body), (D) a material diminution in the budget over which the Executive
retains authority, (E) a material change in the geographic location at
which the Executive must perform services, and (F) any other action
or inaction that constitutes a material breach by the Company of this Agreement.
If one or more of the above conditions exists, the Executive must provide
notice to the Company within ninety (90) days of the initial existence of the
condition. Upon such notice, the Company shall have a period of thirty (30)
days during which it may remedy the condition.

 

(d)                                 Treatment of Parachute Payments.

 

(i)                                     Notwithstanding any other provisions of this
Agreement, and except as set forth below, in the event that any payment or
benefit received or to be received by the Executive in connection with a Change
in Control or the termination of the Executive’s employment (whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement with
the Company, any person whose actions result in a Change in Control or any
person affiliated with the Company or such person) (all such payments and
benefits, including payments under Section 7(a) above, being
hereinafter called “Total Payments”) is determined to be an “excess parachute
payment” pursuant to Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”), or any successor or substitute provision of the Code,
with the effect that the Executive is liable for the payment of the excise tax
described in Code Section 4999 or any successor or substitute provision of
the Code (the “Excise Tax”), then, after taking into account any reduction in
the Total Payments provided by reason of Code Section 280G in such other
plan, arrangement or agreement, the cash payments provided in Section 7(a)(i) of
this Agreement shall first be reduced, and the noncash payments and benefits
shall thereafter be reduced, to the extent necessary so that no portion of the
Total Payments is subject to the Excise Tax.

 

5

 

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

 

(iii)                               As a result of the uncertainty in the
application of Code Sections 280G and 4999 at the time of the initial
determination by the Accounting Firm hereunder, it is possible that the
Internal Revenue Service (the “IRS”) or other agency will claim that an Excise
Tax, or a greater Excise Tax, is due. If the Executive is required to make a
payment of any such Excise Tax, the Company will promptly pay the Executive an
additional amount equal to the amount, or greater amount, of Excise Tax the
Executive is required to pay (plus a gross up payment for any income taxes,
interest, penalties or additional Excise Tax payable by Executive with respect
to such Excise Tax or additional payment), as determined by the Accounting Firm.
The Executive will notify the Company in writing of any claim by the IRS or
other agency that, if successful, would require payment by the Company of the
additional payments under this paragraph. The Executive and the Company shall
each reasonably cooperate with the other in connection with any administrative
or judicial proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Total Payments. The Company shall pay all fees
and expenses of the Executive relating to a claim by the IRS or other agency. Payments
under this Section 7(d)(iii) will be made by the end of the Executive’s
taxable year next following the Executive’s taxable year in which the Executive
remits the related taxes, in accordance with Code Section 409A and Treas.
Reg. §1.409A-3(i)(1)(v) (or any similar or successor provisions).

 

8.                                       Code Section 409A.

 

(a)                                  This Agreement is intended to comply with Code Section 409A
and the interpretative guidance thereunder, including the exceptions for
short-term deferrals, separation pay arrangements, reimbursements, and in-kind
distributions, and shall be administered accordingly. The Agreement shall be
construed and interpreted with such intent.

 

(b)                                 To the extent payments under Section 6(d) are
subject to Code Section 409A and the Executive is a Specified Employee (as
defined below) as of the Date of Termination, distributions to the Executive may not
be made before the date that is six months after the date of the Date of
Termination or, if earlier, the date of the Executive’s death (the “Six Month
Delay Rule”). The term “Specified Employee” has the meaning given to that term
in Code Section 409A and Treas. Reg. §1.409A-1(c)(i) (or other
similar or successor provisions). Payments to which the Executive would
otherwise be entitled during the first six months following the Date of
Termination (the “Six Month Delay”) will be accumulated and paid on the first
day of the seventh month following the Date of Termination. Notwithstanding the
Six Month Delay Rule set forth in this Section 8(b), to the maximum
extent permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (or
any similar or successor provision), during the Six Month Delay, the Company
will provide the payments set forth in Section 6(d)(i) above, but in
no event will the amount of such payments exceed during the Six Month Delay an
amount equal to two times the lesser of (i) the maximum amount that may be
taken into account under a qualified plan pursuant to Code Section 401(a)(17)
for the year in which the Date of Termination occurs and (ii) the sum of
the Executive’s annualized compensation based upon the annual rate of pay for
services provided to the Company for the taxable year of the Executive
preceding the taxable year of the Executive in which the Executive’s Date of
Termination occurs (adjusted for any increase during that year that was
expected to continue indefinitely if the Executive had not had a Date of
Termination), provided that amounts paid under this sentence will count toward,
and will not be in addition to, the total payment amount required to be made to
the Executive by the Company under Section 6(d)(i) above. Notwithstanding
the Six Month Delay Rule set forth in this Section 8(b), to the
maximum extent permitted under Code Section 409A and Treas. Reg.
§1.409A-1(b)(9)(v) (or any similar or successor provision), the Company
will provide the payments set forth in Section 6(d)(ii), if not otherwise
excepted from Code Section 409A, to the extent such payments do not exceed
the applicable dollar amount under Code Section 402(g)(1)(B) for the
year in which the Date of Termination occurs; provided that amounts paid under
this sentence will count toward, and will not be in

 

6

 

addition to, the total payment
amount required to be made to the Executive by the Company under Section 6(d)(ii) above.

 

(c)                                  Payments under Section 7(a)(i) are
intended to qualify as short-term deferrals. However, if the Company reasonably
determines that a payment under Section 7(a)(i) above does not
qualify as a short-term deferral under Code Section 409A and Treas. Reg.
§1.409A-1(b)(4) (or any similar or successor provisions), or that other
benefits under Section 7(a) do not qualify for an exception from Code
Section 409A and the Executive is a Specified Employee as of the Date of
Termination, distributions to the Executive are subject to the Six Month Delay
Rule. Payments to which the Executive would otherwise be entitled during the
Six Month Delay will be accumulated and paid on the first day of the seventh
month following the Date of Termination. Notwithstanding the Six-Month Delay Rule set
forth in this Section 8(c):

 

(i)                                     To the maximum extent permitted under Code Section 409A
and Treas. Reg. §1.409A-1(b)(9)(iii) (or any similar or successor
provision), during the first month of the Six-Month Delay, the Company will pay
the Executive an amount equal to the lesser of: 
(i) the total lump sum severance provided under Section 7(a)(i) or
(ii) two times the lesser of (A) the maximum amount that may be
taken into account under a qualified plan pursuant to Code Section 401(a)(17)
for the year in which the Date of Termination occurs, and (B) the sum of
the Executive’s annualized compensation based upon the annual rate of pay for services
provided to the Company for the taxable year of the Executive preceding the
taxable year of the Executive in which the Executive’s Date of Termination
occurs (adjusted for any increase during that year that was expected to
continue indefinitely if the Executive had not had a Date of Termination);
provided that amounts paid under this sentence will count toward, and will not
be in addition to, the total payment amount required to be made to the
Executive by the Company under Section 7(a)(i) above.

 

(ii)                                  To the maximum extent permitted under Code Section 409A
and Treas. Reg. §1.409A-1(b)(9)(v) (or any similar or successor
provision), the Company will provide the payments set forth in Section 7(a)(ii),
if not otherwise excepted from Code Section 409A, to the extent such
payments do not exceed the applicable dollar amount under Code Section 402(g)(1)(B) for
the year in which the Date of Termination occurs; provided that amounts paid
under this sentence will count toward, and will not be in addition to, the
total payment amount required to be made to the Executive by the Company under Section 7(a)(ii) above.

 

9.                                       Restrictive Covenants.

 

(a)                                  Trade Secrets. The Executive acknowledges that
he has had and shall have access to confidential information of the Company,
whether or not reduced to writing and whether in paper, electronic, digital,
analog or other format (including, but not limited to, trade secrets, know-how,
Inventions (as defined below), new product and product development information,
research results, marketing and sales programs, customer and supplier
information, financial data, employee records, cost information, pricing
information, sales and marketing strategies, the identity of customers,
information received by the Company under an obligation of confidentiality to
customers, and all information generated by the Company for customers) relating
to the past, present or planned business, customers, clients, contacts,
prospects and assets of the Company that is unique, valuable and has not purposefully
been made generally known to the public by the Company (“Confidential
Information”). Confidential Information shall not include any information that:
(i) is now, or hereafter becomes, through no act or failure to act on the part of
the Executive that constitutes a breach of this Section 9, generally known
or available to the public; (ii) is hereafter furnished without
restriction on disclosure to the Executive by a third party, other than an
employee or agent of the Company, who is not under any obligation of
confidentiality to the Company; (iii) is disclosed with the written
approval of the Company; or (iv) is required to be disclosed or provided
by law, court order, or similar compulsion, including pursuant to or in
connection with any legal proceeding involving the parties hereto; provided,
however, that such disclosure shall be limited to the extent so required or
compelled; and provided further, however, that if the Executive is required to
disclose such Confidential Information, the Executive shall give the Company
notice of such disclosure and cooperate in seeking suitable protections. The
Executive acknowledges that all Confidential Information, and all documents,
files, reports, drawings, designs, specifications, formulae, samples, data,
writings, tools, equipment, memory devices or any other tangible objects that
incorporate, contain, refer to or embody any Confidential Information (“Items”),
acquired by the Executive in connection with the Executive’s employment with
the Company are the property of the Company. Other than in the course of
performing services for the Company or otherwise authorized in writing by the
Company, the Executive shall not, at any time, directly or indirectly use,
divulge, furnish or make accessible to any person any Confidential Information,
but instead shall keep all Confidential Information strictly and absolutely
confidential. The Executive shall deliver promptly to the Company,

 

7

 

at the termination of his employment or at any other time at the
request of the Company, without retaining any copies, all Items and any other
documents or materials in the Executive’s possession relating, directly or
indirectly, to any Confidential Information.

 

(b)                                 Non-competition. Beginning on the Effective Date
and for a period of twelve (12) months following Executive’s Date of
Termination (the “Restricted Period”), Executive shall not directly or
indirectly, alone or in conjunction with any other party, own any interest in,
operate, control, engage in or participate as a partner, director, principal,
officer, employee, independent contractor or agent of, act as a consultant to,
perform any services for, or assist in any way any company, person, or
entity in the United States that is engaged in “Competing Services” (as defined
herein). Competing Services shall mean chemistry and biology research and
development relating to, arising from, connected with, or competitive with or
intended to be competitive with, any product or research project as to which
the Executive performed services for the Company, or about which the Executive
received access to Confidential Information while employed by the Company. If
the Executive obtains other employment during the twelve-month period after the
Executive’s Date of Termination, the Executive agrees to notify the Company in
writing of the name and address of such employer.

 

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

 

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

 

(e)                                  Inventions. The Executive acknowledges all
inventions of the Company (including, but not limited to, procedures, systems,
machines, methods, processes, uses, apparatuses, compositions of matter,
designs, or configurations of any kind, discovered, conceived, reduced to
practice, developed, made or produced) (“Inventions”) that (i) relate to
the present or planned business of the Company or the work performed by the
Company for its customers, and (ii) are conceived or reduced to practice
by the Executive, either alone or with others, during the Executive’s
employment with the Company or during a period of 120 days after the Executive’s
Date of Termination, whether or not done during the Executive’s regular working
hours, are the sole property of the Company, including, without limitation, all
domestic and foreign patent rights, rights of registration or other protection
under the copyright laws, or other rights pertaining to the Inventions. For
purposes of this Agreement, Inventions shall include any improvements to an
Invention and shall not be limited to the definition of a patentable invention
or copyrightable work of authorship as contained in the United States patent or
copyright laws. The Executive shall disclose promptly and fully in writing to
the Company each Invention, whether or not reduced to practice, that the Executive
conceives or learns (either alone or jointly with others) during the Term of
Employment. The Executive hereby assigns to the Company, or its nominee, all of
the Executive’s right, title and interest, including international priority
rights, in and to all Inventions (other than any Invention that was developed
entirely on the Executive’s own time and for which no equipment, supplies,
facilities or trade secret information of the Company was used, unless such
Invention relates directly to the Company’s business or to the Company’s actual
or demonstrably anticipated research or development), and in and to all United
States or foreign patents, copyrights and other proprietary rights granted
thereon or resulting therefrom, and in and to all applications for United
States or foreign copyrights, patents and other proprietary rights. The
Executive shall execute all papers, perform all lawful acts or assist the
Company in any way the Company deems necessary or advisable (at the Company’s
expense) for the preparation, filing, prosecution, issuance, procurement,
maintenance or enforcement of patents applications and patents of the United
States and foreign countries, and for obtaining and enforcing copyright
protection and registration, of any Invention. To that end, the Executive shall
at the Company’s request and without limitation, testify in any suit or other
proceeding involving any of the Inventions, execute all documents that the
Company reasonably determines to be necessary or convenient for use in applying
for and obtaining patent or copyright protection and registration on any of the
Inventions and enforcement of that protection and registration, and execute all
necessary documents and papers required to vest title in and assign to the
Company (or its nominee) patent or copyright protection and registration. The
Executive’s obligation to assist the Company in obtaining and enforcing

 

8

 

patent
or copyright protection and registration for the Inventions shall continue
following termination of this Agreement, but Company shall compensate the
Executive following the expiration or termination of this Agreement at a rate
of $10 for the execution of each document and $150 per day for each day or
portion thereof spent at the Company’s request in rendering assistance, plus
reimbursement for the reasonable out-of-pocket expenses incurred by the
Executive for such assistance. The Executive hereby irrevocably appoints the
Company and its duly authorized officers and agents as his agent and
attorney-in-fact to act for and on behalf of the Executive in filing all patent
applications, applications for copyright protection and registration
amendments, renewals and all other appropriate documents in any way related to
the Inventions.

 

(f)                                    Survival. The provisions set forth in this Section 9
shall survive termination of this Agreement.

 

(g)                                 Scope Limitations. If the scope, period of time
or area of restriction specified in this Section 9 are or would be judged
to be unreasonable in any court proceeding, then the period of time, scope or
area of restriction shall be reduced or limited in the manner and to the extent
necessary to make the restriction reasonable, so that the restriction may be
enforced in those areas, during the period of time and in the scope that are or
would be judged to be reasonable.

 

10.                                 Binding Agreement; Successors. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Executive should die while
any amounts would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee or, if there be no such designee, to the Executive’s
estate. This Agreement shall be binding upon, and inure to the benefit of, any
successors or assigns of the Company. This Agreement is not intended to confer
upon any person other than the parties hereto (and the Executives’ Spouse and
dependents) any rights or remedies, except as specifically provided in this Section 10.

 

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

 

If to the
Executive:

 

Michael J.
Cogan

1440 Davey Road

Woodridge, Illinois 60517

 

If to the
Company:

 

Advanced Life
Sciences, Inc.

1440 Davey Road

Woodridge, Illinois 60517

Attn: Chief
Executive Officer

 

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

 

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

 

13.                                 Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. If
any provision of this Agreement is found to be invalid or unenforceable, in
whole or in part, then it shall be deemed to be modified or restricted to the
extent and in the manner necessary to render it valid and enforceable, or shall
be deemed excised

 

9

 

from
this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law, as if the provision
had been originally incorporated herein as so modified or restricted, or as if
it had not originally been incorporated herein, as the case may be.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  EXECUTIVE

  	
   

  	
  ADVANCED LIFE
  SCIENCES, INC.

  
	
   

  
	
  By:

  	
   /s/ Michael J. Cogan

  	
   

  	
  By:

  	
  /s/ Michael T. Flavin

  	
   

  
	
  Name: Michael J. Cogan

  	
   

  	
   

  	
  Name:

  	
  Michael T. Flavin, Ph.D.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
								

 

10EXHIBIT 10.9

 

FOURTH AMENDMENT TO LICENSE
AGREEMENT

 

This FOURTH
AMENDMENT TO LICENSE AGREEMENT (this “Amendment”) is entered into as of this
13th day of November, 2007 by and between Advanced Life Sciences Holdings, Inc.,
a Delaware corporation (“ALS”), and Abbott Laboratories, an Illinois
corporation (“Abbott”) to amend the terms of that certain License Agreement
dated December 13, 2004 between Abbott and ALS (the “Agreement”).

 

BACKGROUND

 

A.                                   Abbott and ALS entered into the Agreement on December 13,
2004.

 

B.                                     ALS has requested the right to practice several
Abbott patents related to the manufacture of Compound A.

 

C.                                   The parties wish to amend the Agreement to allow
ALS right to practice several Abbott patents related to the manufacture of
Compound A.

 

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

 

2.                                       Amendment of the Agreement.

 

a). Section 1.6 is hereby amended by
inserting the following sentence prior to the last sentence of Section 1.6:

 

“ALS shall hold in confidence and shall not
directly or indirectly disclose or provide to any third party Confidential
Information pertaining to the patents listed in Exhibit D without Abbott’s
prior written consent. Notwithstanding the forgoing, ALS may disseminate
Confidential Information pertaining to the patents listed in Exhibit D
without Abbott’s prior written consent to those of its employees, Affiliates,
contractors, agents and sublicensees (if any) who have a need therefore in
carrying out their functions; provided, however, that such employees,
Affiliates, contractors, agents and sublicensees are bound by confidentiality
obligations covering such Confidential Information at least as rigorous as
those set forth herein and that ALS shall be responsible for any breach of such
confidentiality obligations.”

 

b). Article 2 is hereby amended as
follows:

 

The original License Grant paragraph in the
Agreement and later Amended in the Second Amendment dated August 2, 2005,
shall become paragraph “(a)”.

 

The following paragraph “(b)” shall be added
as follows:

 

“(b) 
Subject to the terms and conditions of this Agreement, Abbott hereby grants to
ALS a non-exclusive license to the patents listed in Exhibit D, with a
right to grant sublicenses, to make, use, and manufacture Compound A and
Product(s) containing Compound A, in the Territory. In the event that ALS wants
to use a third party to make, use, and manufacture Compound A and Product(s)
containing Compound A on behalf of ALS, ALS will provide thirty (30) days prior
written notice to Abbott informing Abbott of ALS’s intent to sublicense the
patents listed on Exhibit D to such third party for the manufacture of
Compound A and Product(s) containing Compound A.

 

c). Section 10.2, paragraph (a) is
hereby amended to add subparagraph (iii).

 

Add Subparagraph (iii):

 

1

 

“(iii)  If
a third party infringes any patent listed in Exhibit D, Abbott has the
sole discretion, but not the obligation, to institute and prosecute an action,
lawsuit or other proceeding to abate or resolve such infringement by settlement
or otherwise. ALS, or its sublicensees, have no rights to enforce any of the
patents listed in Exhibit D. In the event that Abbott does institute an action,
lawsuit or other proceeding against a third party, ALS shall cooperate fully if
reasonably requested to do so by Abbott.”

 

d). Section 12.2 is hereby amended.

 

The original
paragraph in Section 12.2 of the Agreement shall become paragraph “(a)”.

 

The following paragraph “(b)” shall be added
as follows:

 

“(b) 
Abbott has the sole discretion as to the prosecution and maintenance of all
patents listed in Exhibit D. In the event that Abbott determines to
abandon any patent application that is included in Exhibit D or to no
longer maintain any patent that is included within Exhibit D, Abbott shall
give ALS ninety (90) days prior written notice before taking any action or
inaction in furtherance of such determination during which time ALS shall have
the right but not the obligation to assume the prosecution of such patent
application or the maintenance of such patent. Abbott and ALS shall consult and
cooperate with each other, and Abbott shall keep ALS reasonably informed, with
respect to the prosecution and maintenance of the patents listed in Exhibit D
hereunder. Abbott will provide ALS with copies of all material correspondence
sent to or received from the United States Patent and Trademark Office in
connection with the prosecution and maintenance of the patents listed in Exhibit D.

 

3.                                       Effectuation. The amendment to the Agreement contemplated by this Amendment shall be
deemed effective as of the date first written above upon the full execution of
this Amendment and without any further action required by the parties hereto. There
are no conditions precedent or subsequent to the effectiveness of this
Amendment.

 

4.                                       Counterparts. This Amendment may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. One or more counterparts of this
Amendment may be delivered by facsimile, with the intention that delivery
by such means shall have the same effect as delivery of an original counterpart thereof.

 

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

 

 

	
  ABBOTT

  	
   

  	
  ADVANCED LIFE 

  
	
  LABORATORIES

  	
  SCIENCES
  HOLDINGS, INC.

  
	
   

  	
   

  

 

	
  By:  

  	
  /s/ John Poulos

  	
   

  	
  By: 

  	
  /s/ Michael T. Flavin

  	
   

  
	
  Name:  John Poulos

  	
  Name:

  	
  Michael T. Flavin, Ph.D.

  
	
  Its:       Group Vice
  President, Global Licensing and New 

  Business
  Development

  	
  Its:

  	
  Chairman and Chief Executive
  Officer

  

 

2

 

EXHIBIT D

 

U.S. Patent No. 6,028,181  (Claims 8 and 9 only)

 

U.S. Patent No. 6,437106

 

U.S. Patent No. 6,579986

 

U.S. Patent No. 6,417,366

 

3

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