8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 18, 2005

ADVANCED LIFE SCIENCES HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-51436	30-0296543
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
1440 Davey Road
Woodridge, Illinois 60517		60517
(Address of principal executive offices)		(Zip Code)
(630) 739-6744
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Entry into Agreement with Quintiles, Inc.

On November 21, 2005, Advanced Life Sciences, Inc., entered into a Master Service Agreement (the “Master Agreement”) with Quintiles, Inc.  Under the terms of the Master Agreement, Quintiles will provide clinical trial services relating to the phase III clinical studies of cethromycin, Advanced Life Sciences’ ketolide antibiotic.  Services will be provided according to individual Work Orders specifying the details of the services and the related terms and conditions.  In exchange, Advanced Life Sciences will pay Quintiles in accordance with the budget and payment schedule contained in each individual Work Order.

The term of the Master Agreement begins as of November 21, 2005 and continues until November 21, 2010.  The Agreement will automatically renew each year thereafter for a period of one year, unless either party notifies the other party in writing at least thirty days prior to the renewal date that it does not want to renew the Master Agreement.  Either party may terminate the Master Agreement or any Work Order without cause at any time during the term of the Master Agreement on sixty days’ prior written notice unless there is a material breach in which case the Master Agreement may be terminated on thirty days’ prior written notice if not substantially cured.

The Master Agreement requires that Advanced Life Sciences shall indemnify, defend and hold harmless Quintiles except to the extent that any losses are determined to have resulted solely from the negligence or intentional misconduct of Quintiles.  The Master Agreement also provides for confidentiality with respect to the data being exchanged between the two parties. The Master Agreement further requires Advanced Life Sciences to maintain general liability insurance with coverage of no less than $3,000,000.00 and clinical trial insurance in an amount of no less than $5,000,000.00.

A copy of this Master Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by this reference.

Advanced Life Sciences, Inc., also entered into an Authorization to Proceed Agreement (“ATP Agreement”) with Quintiles, Inc. simultaneously with the Master Agreement.  The services to be performed by Quintiles under the ATP Agreement will be carried out pursuant to the terms and conditions of the Master Agreement, which are incorporated by reference in the ATP Agreement.

The terms of the ATP Agreement permit Advanced Life Sciences to terminate the ATP Agreement upon thirty days’ written notice for any reason.  Quintiles may terminate the ATP Agreement upon thirty days’ written notice only if: a) Advanced Life Sciences breaches the ATP Agreement; b) a Work Order is not executed within four months of the date of the ATP Agreement; or, c) the services performed under the ATP Agreement exceed $600,000 in total fees and costs without execution of a Work Order.

Advanced Life Sciences agreed to pay Quintiles an advance of $90,000 upon execution of the ATP Agreement, which shall be credited to Advanced Life Sciences on the final invoice.  If the ATP Agreement is terminated prior to the execution of a Work Order, then any unearned portion of this advance will be refunded, less a thirty-percent retention to offset the costs of reallocating project staff.

A copy of this ATP Agreement is attached hereto as Exhibit 10.2 and is incorporated herein by this reference.

Entry into Agreement with Covance Central

On November 22, 2005, Advanced Life Sciences, Inc., entered into a Laboratory Service Agreement (the “Lab Agreement”) with Covance Central Laboratory Services LP (“Covance Central”).  Under the terms of the Lab Agreement, Covance Central will provide laboratory testing, data

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management and protocol management services relating to the phase III clinical studies of cethromycin, Advanced Life Sciences’ ketolide antibiotic.  Statements of Work will be executed specifying the details of the services and the related terms and conditions of each project under the Lab Agreement.  In exchange, Advanced Life Sciences will pay Covance Central in accordance with the budget contained in each Statement of Work.

The Lab Agreement requires Advanced Life Sciences to make an advance payment equal to ten percent of the project budget contained in each Statement of Work.  Thereafter, Covance will invoice Advanced Life Sciences for all fees due and expenses incurred while providing services during the previous month.  After invoices have reached ninety percent of the budget, Covance will apply the advance payment funds to the final invoice and refund any remaining balance.

The term of the Lab Agreement begins as of November 22, 2005 and continues until terminated by either party.  Advanced Life Sciences may terminate the Lab Agreement at any time for any reason upon thirty days’ prior written notice, except for when the reason for termination is safety of the patients, then it can be terminated immediately.

A copy of this Lab Agreement is attached hereto as Exhibit 10.3 and is incorporated herein by this reference.

Entry into Agreement with Covance Cardiac

On November 22, 2005, Advanced Life Sciences, Inc., entered into an ECG Service Agreement (the “ECG Agreement”) with Covance Cardiac Safety Services Inc. (“Covance Cardiac”).  Under the terms of the ECG Agreement, Covance Cardiac will provide electrocardiogram analysisservices and data management relating to the phase III clinical studies of cethromycin, Advanced Life Sciences’ ketolide antibiotic.  In exchange, Advanced Life Sciences will pay Covance Cardiac in accordance with the budget and payment schedule contained in each individual Exhibit to the ECG Agreement, which may include a non-refundable project start-up fee.

Advanced Life Sciences shall own all information and materials prepared or developed by Covance pursuant to the ECG Agreement, except for Covance procedural manuals, development processes or data, personnel data and Covance developed know-how, technology and software.  The ECG Agreement also provides for confidentiality with respect to the data being exchanged between the two parties.

A copy of this ECG Agreement is attached hereto as Exhibit 10.4 and is incorporated herein by this reference.

Amendment to Employment Agreements

On November 18, 2005, Advanced Life Sciences, Inc., entered into a First Amendment to Employment Agreement with its Chief Scientific Officer, Dr. Ze-Qi Xu.  Under the terms of the Amendment, Dr. Xu’s base salary increased from $130,000 to $180,000 per year effective November 1, 2005.  The Amendment also provides that Dr. Xu may be awarded a maximum bonus of $75,000 during the fiscal year 2006, which is an increase over the maximum award in fiscal year 2005 of $50,000.

A copy of this Amendment is attached hereto as Exhibit 10.5 and is incorporated herein by this reference.

On November 18, 2005, Advanced Life Sciences, Inc., entered into a First Amendment to Employment Agreement with its Vice President of Biological Sciences, Dr. David Eiznhamer.  Under the terms of the Amendment, Dr. Eiznhamer’s base salary increased from $125,000 to $180,000 per year effective November 1, 2005.  The Amendment also provides that Dr. Eiznhamer may be awarded a

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maximum bonus of $75,000 during the fiscal year 2006, which is an increase over the maximum award in fiscal year 2005 of $35,000.

A copy of this Amendment and the related Employment Agreement is attached hereto as Exhibit 10.6 and is incorporated herein by this reference.

(c)Exhibits:

Exhibit No.	Description
10.1	Master Services Agreement between Advanced Life Sciences, Inc., and Quintiles, Inc., entered into November 21, 2005.
10.2	Authorization to Proceed Agreement between Advanced Life Sciences, Inc., and Quintiles, Inc., entered into November 21, 2005.
10.3	Laboratory Service Agreement between Advanced Life Sciences, Inc., and Covance Central Laboratory Services LP, entered into November 22, 2005.
10.4	ECG Service Agreement between Advanced Life Sciences, Inc., and Covance Cardiac Safety Services Inc., entered into November 22, 2005.
10.5	First Amendment to Employment Agreement between Advanced Life Sciences, Inc., and Dr. Ze-Qi Xu, entered into November 18, 2005.
10.6	Employment Agreement and First Amendment to Employment Agreement between Advanced Life Sciences, Inc., and Dr. David Eiznhamer, entered into November 18, 2005.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ADVANCED LIFE SCIENCES HOLDINGS, INC.
Date: November 23, 2005	By:	/s/ MICHAEL T. FLAVIN
	Name:	Michael T. Flavin
	Title:	Chairman and Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Master Services Agreement between Advanced Life Sciences, Inc., and Quintiles, Inc., entered into November 21, 2005.
10.2	Authorization to Proceed Agreement between Advanced Life Sciences, Inc., and Quintiles, Inc., entered into November 21, 2005.
10.3	Laboratory Service Agreement between Advanced Life Sciences, Inc., and Covance Central Laboratory Services LP, entered into November 22, 2005.
10.4	ECG Service Agreement between Advanced Life Sciences, Inc., and Covance Cardiac Safety Services Inc., entered into November 22, 2005.
10.5	First Amendment to Employment Agreement between Advanced Life Sciences, Inc., and Dr. Ze-Qi Xu, entered into November 18, 2005.
10.6	Employment Agreement and First Amendment to Employment Agreement between Advanced Life Sciences, Inc., and Dr. David Eiznhamer, entered into November 18, 2005.

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EX-10.1

Exhibit 10.1

MASTER SERVICES AGREEMENT

This Master Services Agreement (“Agreement”) is made between Advanced Life Sciences, Inc., an Illinois corporation, which has a place of business at 1440 Davey Road, Woodridge, Illinois 60517(hereinafter “Sponsor”), and Quintiles, Inc., a North Carolinacorporation having its principal place of business at 5927 South Miami Boulevard, Morrisville, North Carolina 27560(hereinafter “Quintiles”).  When signed by both parties, this Agreement will set forth the terms and conditions under which Quintiles agrees to provide certain services to Sponsor as set forth herein.

Recitals:

A.Sponsor is in the business of developing, manufacturing and/or distributing pharmaceutical products, medical devices and/or biotechnology products.  Quintiles is in the business of providing clinical trial services, research, and other services for the pharmaceutical, medical device and biotechnology industries and has made significant, up-front investments in technologies related to those industries, building on important inventions and web-based technologies.

B.Sponsor and Quintiles desire to enter into this Agreement to provide the terms and conditions upon which Sponsor may engage Quintiles from time-to-time to provide services for individual studies or projects by executing individual Work Orders (as defined below) specifying the details of the services and the related terms and conditions.

Agreement:

1.0Scope of the Agreement; Work Orders; Nature of Services.

(a)Scope of Agreement.  As a “master” form of contract, this Agreement allows the parties to contract for multiple projects through the issuance of multiple Work Orders (as discussed in Section 1(b) below), without having to re-negotiate the basic terms and conditions contained herein.  This Agreement covers the provision of services by Quintiles and Quintiles’ corporate affiliates (see Section 18) and, accordingly, this Agreement represents a vehicle by which Sponsor can efficiently contract with Quintiles and its corporate affiliates for a broad range of services.

(b)Work Orders.  The specific details of each project under this Agreement (each “Project”) shall be separately negotiated and specified in writing on terms and in a form acceptable to the parties (each such writing, a “Work Order”).  A sample Work Order is attached hereto as Exhibit A.  Each Work Order will include, as appropriate, the scope of work, time line, and budget and payment schedule. Each Work Order shall be subject to all of the terms and conditions of this Agreement, in addition to the specific details set forth in the Work Order.  To the extent any terms or provisions of a Work Order conflict with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall control, except to

the extent that the applicable Work Order expressly and specifically states an intent to supersede the Agreement on a specific matter. All Work Orders and other exhibits hereto shall be deemed to be incorporated herein by reference.

(c)Nature of Services.  The services covered by this Agreement may include strategic planning, expert consultation, clinical trial services, statistical programming and analysis, data processing, data management, regulatory, clerical, project management, central laboratory services, medical device services, and other research and development services requested by Sponsor and agreed to by Quintiles as set forth in the relevant Work Order (collectively, the “Services”).  Quintiles and Sponsor, where appropriate, shall cooperate in the completion of a Transfer of Obligations Form in conjunction with the relevant Work Order.  Any responsibilities not specifically transferred in the Transfer of Obligations Form shall remain the regulatory responsibility of Sponsor.  The Transfer of Obligations Form will be filed with the Food and Drug Administration (“FDA”) by Sponsor where appropriate, or as required by law or regulation.

2.0Payment of Fees and Expenses. Sponsor will pay Quintiles for fees, expenses and pass-through costs in accordance with the budget and payment schedule contained in each Work Order.  Based on the estimated cash flow of the Project, Sponsor agrees that a prepayment may be needed for Quintiles to maintain cash neutrality over the term of the Project taking into account the payment terms agreed to between the parties.  Unless otherwise agreed in a particular Work Order, the following shall apply: (a) Quintiles will invoice Sponsor in accordance with the budget and payment schedule for its fees, and monthly for its expenses and pass-through costs incurred in performing the Services; and, (b) with the exception of any prepayment or advances and investigator invoices, which are due and payable upon receipt, all other invoice payments shall be made to Quintiles within thirty (30) days of receipt.  Expenses and pass-through costs will be supported by a summary sheet. For Projects over multiple calendar years, the budget will include an annualization percentage. If any portion of an invoice is disputed, then Sponsor shall pay the undisputed amounts as set forth in the preceding sentence and the parties shall use good faith efforts to reconcile the disputed amount as soon as practicable.  Sponsor shall pay Quintiles interest in an amount equal to one percent (1%) per month (or the maximum lesser amount permitted by law) of all undisputedamounts owing hereunder and not paid within thirty (30) days of the date of the invoice.

3.0Term.  This Agreement shall commence on the date it has been signed by all parties and shall continue for a period of five (5) years from the date of execution, or until terminated by either party in accordance with Section 17 below.  The Agreement will automatically renew each year thereafter for a period of one year, unless either party notifies the other party in writing at least 30 days prior to the renewal date that it does not want to renew the Agreement.

4.0Change Orders.  Any change in the details of a Work Order or the assumptions upon which the Work Order is based (including, but not limited to, changes in an agreed starting date for a Project or suspension of the Project by Sponsor) may require changes in the budget and/or time lines, and shall require a written amendment to the Work Order

(a “Change Order”).  Each Change Order shall detail the requested changes to the applicable task, responsibility, duty, budget, time line or other matter.  The Change Order will become effective upon the execution of the Change Order by both parties, and Quintiles will be given a reasonable period of time within which to implement the changes.  Both parties agree to act in good faith and promptly when considering a Change Order requested by the other party.  Without limiting the foregoing, Sponsor agrees that it will not unreasonably withhold approval of a Change Order, even if it involves a fixed price contract, if the proposed changes in budgets or time lines result from, among other appropriate reasons, forces outside the reasonable control of Quintiles or changes in the assumptions upon which the initial budget or time lines were based, including, but not limited to, the assumptions set forth in the budget or timelines.  Quintiles reserves the right to postpone effecting material changes in the Project’s scope until such time as the parties agree to and execute the corresponding Change Order.   For any Change Order that affects the scope of the regulatory obligations that have been transferred to Quintiles, Quintiles and Sponsor shall execute a corresponding amendment to the Transfer of Obligations Form.  Sponsor shall file such amendment where appropriate, or as required by law or regulation.

5.0Confidentiality.  It is understood that during the course of this Agreement, Quintiles and its employees may be exposed to data and information that are confidential and proprietary to Sponsor.  All such data and information (hereinafter “Sponsor Confidential Information”) written or verbal, tangible or intangible, made available, disclosed, or otherwise made known to Quintiles and its employees as a result of Services under this Agreement shall be considered confidential and shall be considered the sole property of Sponsor.  All information regarding Quintiles’ operations, methods, and pricing and all Quintiles’ Property (as defined in Section 6.0 below), disclosed by Quintiles to Sponsor in connection with this Agreement is proprietary, confidential information belonging to Quintiles (the “Quintiles Confidential Information”, and together with the Sponsor Confidential Information, the “Confidential Information”).  The Confidential Information shall be used by the receiving party and its employees only for purposes of performing the receiving party’s obligations hereunder.  Each party agrees that it will not reveal, publish or otherwise disclose the Confidential Information of the other party to any third party without the prior written consent of the disclosing party.  Each party agrees that it will not disclose the terms of this Agreement or any Work Order to any third party without the written consent of the other party, which shall not unreasonably be withheld.These obligations of confidentiality and nondisclosure shall remain in effect for a period of ten (10) years after the completion or termination of the applicable Work Order.

The foregoing obligations shall not apply to Confidential Information to the extent that it: (a) is or becomes generally available to the public other than as a result of a disclosure by the receiving party;  (b) becomes available to the receiving party on a non-confidential basis from a source which is not prohibited from disclosing such information;  (c) was developed independently of any disclosure by the disclosing party or was known to the receiving party prior to its receipt from the disclosing party, as shown by contemporaneous written evidence; or, (d) is required by law or regulationto be disclosed.

6.0Ownership and Inventions.  All data and information generated or derived by Quintiles as the result of services performed by Quintiles under this Agreement shall be and remain the exclusive property of Sponsor.  Any inventions that may evolve from the data and information described above or as the result of services performed by Quintiles under this Agreement shall belong to Sponsor and Quintiles agrees to assign its rights in all such inventions and/or related patents to Sponsor.  Notwithstanding the foregoing, Sponsor acknowledges that Quintiles possesses certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties and other assets, including but not limited to analytical methods, procedures and techniques, procedure manuals, personnel data, financial information, computer technical expertise and software, which have been independently developed by Quintiles and which relate to its business or operations (collectively “Quintiles’ Property”).  Sponsor and Quintiles agree that any Quintiles’ Property or improvements thereto which are used, improved, modified or developed by Quintiles under or during the term of this Agreement are the sole and exclusive property of Quintiles.

7.0Records and Materials.  At the completion of the Services by Quintiles, all materials, information and all other data owned by Sponsor, regardless of the method of storage or retrieval, shall be delivered to Sponsor in such form as is then currently in the possession of Quintiles, subject to the payment obligations set forth in Section 2 herein.   Alternatively, at Sponsor’s written request, such materials and data may be retained by Quintiles for Sponsor foran agreed-upon time period, or disposed of pursuant to the written directions of Sponsor.  Sponsor shall pay the costs associated with any of the above options and shall pay a to-be-determined fee for storage by Quintiles of records and materials after completion or termination of the Services.  Quintiles, however, reserves the right to retain, at its own cost and subject to the confidentiality provisions herein, copies of all materials that may be neededto satisfy regulatory requirements or to resolve disputes regarding the Services.  Nothing in this Agreement shall be construed to transfer from Sponsor to Quintiles any FDA or regulatory record-keeping requirements unless such transfer is specifically provided for in the applicable Transfer of Obligations Form.

8.0Independent Contractor Relationship.  For the purposes of this Agreement, the parties hereto are independent contractors and nothing contained in this Agreement shall be construed to place them in the relationship of partners, principal and agent, employer/employee or joint venturers.  Neither party shall have the power or right to bind or obligate the other party, and neither party shall hold itself out as having such authority. If, however, Sponsor desires to conduct clinical trials in one or more countries that require a local sponsor or representative, and Sponsor requests that Quintiles or its affiliates serve as its agent for that purpose, then Quintiles may serve as Sponsor’s agent for the purpose of fulfilling local sponsor or representative duties.  Sponsor shall pay Quintiles for such local representative services at Quintiles’ standard daily rates, unless otherwise specified in the Work Order.

9.0a) Regulatory Compliance. Quintiles agrees that its Services will be conducted in compliance with all applicable laws, rules and regulations, including but not limited to the Federal Food, Drug, and Cosmetic Act and the regulations promulgated pursuant

thereto, and with the standard of care customary in the contract research organization industry. Regarding the FDA’s electronic records and signatures regulation, 21 CFR Part 11 (“Part 11”), Quintiles has a compliance plan in place as to its applicable database applications and electronic records systems and it is working diligently to implement its plan. Quintiles, however, is not responsible for the compliance or non-compliance of applications or systems used by third parties (including, but not limited to, investigative sites or third party laboratories), or any Part 11 audits or assessments thereof, unless such applications or systems are owned by Quintiles.  Quintiles’ standard operating procedures will be used in performance of the Services, unless otherwise specifically stated in the Scope of Work. Quintiles certifies that it has not been debarred under the Generic Drug Enforcement Act and that it will not knowingly employ any person or entity that has been so debarred to perform any Services under this Agreement.  Sponsor represents and certifies that it will not require Quintiles to perform any assignments or tasks in a manner that would violate any applicable law or regulation.  Sponsor further represents that it will cooperate with Quintiles in taking any actions that Quintiles reasonably believes are necessary to comply with the regulatory obligations that have been transferred to Quintiles.

b)  Inspections and Audits. Each party acknowledges that the other party may respond independently to any regulatory correspondence or inquiry in which such party or its affiliates is named.  Each party, however, shall notify the other party promptly of any FDA or other governmental or regulatory inspection or inquiry concerning any study or Project of Sponsor in which Quintiles is providing Services. During any such inspection or inquiry, the parties agree to make reasonable efforts to disclose only the information required to be disclosed.  During the term of this Agreement, Quintiles will permit Sponsor’s representatives (unless such representatives are competitors of Quintiles) to examineor auditthe work performed hereunder and the facilities at which the work is conducted upon reasonable advance notice during regular business hours to determine that the Project assignment is being conducted in accordance with the agreed task and that the facilities are adequate. Sponsor agrees that it shall not disclose to any third party any information ascertained by Sponsor in connection with any such audit or examination, except to the extent required by law or regulation.  Sponsor shall reimburse Quintiles for its time and expenses (including reasonable attorney fees and the costs of responding to findings) associated with any inspection, audit or investigation relating to the Services (“Inspection”) instigated by Sponsor or by a governmental authority, unless such Inspection finds that Quintiles breached this Agreement or any applicable law or regulation.

10.0Relationship with Investigators.  If a particular Work Order obligates Quintiles to contract with investigators or investigative sites (collectively, “Investigators”) then Quintiles will use its standard Clinical Trial Agreement (“Global CTA”) form, a copy of which is attached hereto as Attachment C, along with certain local CTA forms (“Local CTAs”) that have developed for use in certain countries based on local requirements with the benefit of local legal advice, which have been prepared in local language and English language where applicable.  Any applicable Local CTAs will be made available for inspection by the Sponsor upon request.   If the Global CTA form or a Local CTA is updated, Quintiles will use its then current Global CTA form (or Local CTA as

appropriate) as of the time of the Work Order.  If Sponsor insists that any CTA form other than the Global CTA and Local CTAs be used, then Sponsor shall pay all translation costs and additional negotiation time may be required.  If an Investigator insists upon any material changes to any provisions that directly affect Sponsor, then Quintiles shall submit the proposed material change to Sponsor, and Sponsor shall review, comment on and/or approve such proposed changes within five (5) working days.  If the Global CTA form (or Local CTA, where applicable), or any changes approved by Sponsor, differ from the terms of this Agreement or a Work Order (including, but not limited to, provisions allowing an Investigator to publish results or data that Quintiles is prohibited from revealing), then Quintiles shall have no liability for any such approved provisions or changes.  Unless otherwise stated in the applicable Work Order, the time incurred by Quintiles in negotiating CTA changes proposed by sites shall be billed at Quintiles’ Standard Rates. The parties acknowledge and agree that Investigators shall not be considered the employees, agents, or subcontractors of Quintiles or Sponsor and that Investigators shall exercise their own independent medical judgment.  Quintiles’ responsibilities with respect to Investigators shall be limited to those responsibilities specifically set forth in this Agreement and the applicable Work Order.

If Quintiles will be paying Investigators on behalf of Sponsor, the parties will agree in the applicable Work Orders as to a schedule of amounts to be paid to Investigators.  Sponsor acknowledges and agrees Quintiles will only pay Investigators from advances or pre-payments received from Sponsor for Investigators’ services, and that Quintiles will not make payments to Investigators prior to receipt of sufficient funds from Sponsor.  Sponsor acknowledges and agrees that Quintiles will not be responsible for delays in a study or Project to the extent that such delays are caused by Sponsor’s failure to make adequate pre-payment for Investigators’ services.  Sponsor further acknowledges and agrees that payments for Investigators’ services are pass-through payments to third parties and are separate from payments for Quintiles’ Services.  Sponsor agrees that it will not withhold Investigator payments except to the extent that it has reasonable questions about the services performed by a particular Investigator.

11.0Third Party Indemnifications and Agreements.  If any investigative sites or any other third parties, including, but not limited to, Data Safety Monitoring Boards, independent laboratories, Advisory Boards, or End Point Adjudication Committees (collectively, “Third Parties”), request an indemnification for loss or damage caused by the sponsor’s Project , then Sponsor shall provide such indemnification directly to the Third Party.  If Sponsor requests Quintiles’ assistance in negotiating the terms of such indemnities, Quintiles shall provide such negotiation services at its standard daily rates, unless otherwise agreed in the Work Order.  Quintiles shall not sign such indemnifications on Sponsor’s behalf unless Sponsor has expressly authorized Quintiles to act as its agent for such purpose or has given Quintiles a written power of attorney to sign such indemnifications.  In countries in which local laws or local ethics committees require that a local company must sign such indemnifications and Sponsor has no local presence, Quintiles will sign such indemnities only if the parties have entered into an agreement regarding local representative duties containing the terms attached hereto as Attachment B, either as a part of a Work Order or as a separately signed agreement.

If Sponsor requests that Quintiles enter into agreements to retain Third Parties to perform services regarding the Project, such Third Parties shall be independent contractors and shall not be considered the employees, agents, or subcontractors of Quintiles or Sponsor.  Sponsor shall pay Quintiles for its reasonable time and expenses in negotiating and administering any such Third Party Agreements.

12.0Conflict of Agreements.  Quintiles represents to Sponsor that it is not a party to any agreement which would prevent it from fulfilling its obligations under this Agreement and that during the term of this Agreement, Quintiles agrees that it will not enter into any agreement to provide services which would in any way prevent it from providing the Services contemplated under this Agreement.  Sponsor agrees that it will not enter into an agreement with a third party that would alter or affect the regulatory obligations delegated to Quintiles in any study or Project without the written consent of Quintiles, which will not be unreasonably withheld.

13.0Publication.  Project results may not be published or referred to, in whole or in part, by Quintiles or its affiliates without the prior expressed written consent of Sponsor.  Neither party will use the other party’s name in connection with any publication or promotion without the other party’s prior, written consent.

14.0Limitation of Liability.

a)Neither Quintiles, nor its affiliates,directors, officers, employees, subcontractors or agents shall have any liability (including without limitation, contract, negligence and tort liability)for any loss of profits, opportunities or goodwill or any type of indirect or consequential damages in connection with this Agreement or any Work Order or the Services performed by Quintiles.

b)In no event shall the collective, aggregate liability (including without limitation, contract, negligence and tort liability) of Quintiles or its affiliates, directors, officers, employees, subcontractors or agents under this Agreement exceed the amount of fees actually received by Quintiles from Sponsor under the applicable Work Order.

15.0Indemnification.  Sponsor shall indemnify, defend and hold harmless Quintiles and its affiliates, and its and their directors, officers, employees and agents (each, a “Quintiles Indemnified Party”), from and against any and all losses, damages, liabilities, reasonable attorney fees, court costs, and expenses (collectively “Losses”), joint or several, resulting or arising from any third-party claims, actions, proceedings, investigations or litigation relating to or arising from or in connection with this Agreement, any Work Order, or the Services contemplated herein (including, without limitation, any Losses arising from or in connection with any study, test, device, product or potential product to which this Agreement or any Work Order relates), except to the extent such Losses are determined to have resulted solely from the negligence or intentional misconduct of the Quintiles Indemnified Party seeking indemnity hereunder.

16.0Indemnification Procedure. Quintiles shall give Sponsor prompt notice of any such claim or lawsuit (including a copy thereof) served upon it and shall fully cooperate with

Sponsor and its legal representatives in the investigation of any matter the subject of indemnification.  Quintiles shall not unreasonably withhold its approval of the settlement of any claim, liability, or action covered by this Indemnification provision.

17.0Termination.  Sponsor or Quintiles may terminate this Agreement or any Work Order without cause at any time during the term of the Agreement on sixty (60) day’s prior written notice to Quintiles or Sponsor, as appropriate.  Either party may terminate this Agreement or any Work Order for material breach upon thirty (30) days’ written notice specifying the nature of the breach, if such breach has not been substantially cured within the thirty (30) day period.  During the 30-day cure period for termination due to breach, each party will continue to perform its obligations under the Agreement.  If the termination notice is not due to a breach, or if the cure period has expired without a substantial cure of the breach, then the parties shall promptly meet to prepare a close-out schedule, and Quintiles shall cease performing all work not necessary for the orderly close-out of the Services or required by laws or regulations.   If Quintiles determines, in its sole discretion, that its continued performance of the Services contemplated by one or more Work Orders would constitute a potential or actual violation of regulatory or scientific standards of integrity, then Quintiles may terminate the applicable Work Order(s) by giving written notice stating the effective date (which may be less than thirty days from the notice date) of such termination.  Either party may terminate this Agreement or any Work Orders immediately upon provision of written notice if the other party becomes insolvent or files for bankruptcy.  Any written termination notice shall identify the specific Work Order or Work Orders that are being terminated.

If this Agreement or any Work Order is terminated, Sponsor shall pay Quintiles for all Services actually performed in accordance with this Agreement and any applicable Work Order and reimburse Quintiles for all costs and expenses incurred in performing those Services, including all non-cancelable costs incurred prior to termination but paid after the termination date. Sponsor shall pay for all the work actually performed in accordance with this Agreement and the applicable Work Order, even if the parties’ original payment schedule spreads-out payments for certain services or defers payments for certain services until the end of the Study.  If payments are unit or milestone based, and the Agreement or a Work Order is terminated after costs have been incurred toward achieving portions of one or more incomplete units or milestones, Sponsor will pay Quintiles’ standard fees for actual work performed toward those incomplete units or milestones up to the date of termination, in addition to paying for completed units or milestones.   Sponsor shall pay for all actual costs, including time spent by Quintiles personnel (which shall be billed at Quintiles’ standard daily rates in effect as of the date of the termination notice), incurred to complete activities associated with the termination and close-out of affected Projects, including the fulfillment of any regulatory requirements.  In addition, if the termination is by Sponsor without cause, or by Quintiles for cause, and the total fees for the Project are greater than one million U.S. dollars in value, then Sponsor shall pay to Quintiles an amount equal to twenty percent (20%) of the budget for the remainder of Services that have not yet been performed, to cover Quintiles’ costs associated with early termination.

18.0Relationship with Affiliates.  Sponsor agrees that Quintiles may use the services of its corporate affiliates as subcontractors to fulfill Quintiles’ obligations under this Agreement or any Work Order.  Quintiles shall remain responsible for all Services performed by its affiliates, and its affiliates shall be subject to all of the terms, conditions and rights applicable to Quintiles under this Agreement or any Work Order. Any affiliate of Quintiles or Sponsor may enter into a Work Order under this Agreement, and the terms, conditions and rights in this Agreement shall be incorporated into the Work Order and be binding on such affiliate.  The term “affiliate” shall mean all entities controlling, controlled by or under common control with Quintiles.  The term “control” shall mean the ability to vote fifty percent (50%) or more of the voting securities of any entity or otherwise having the ability to influence and direct the polices and direction of an entity.

19.0Cooperation; Sponsor Delays; Disclosure of Hazards. Sponsor shall forward to Quintiles in a timely manner all documents, materials and information in Sponsor’s possession or control necessary for Quintiles to conduct the Services.  Quintiles shall not be liable to Sponsor nor be deemed to have breached this Agreement for errors, delays or other consequences arising from Sponsor’s failure to timely provide documents, materials or information or to otherwise cooperate with Quintiles in order for Quintiles to timely and properly perform its obligations, and any such failure by Sponsor shall automatically extend any timelines affected by a time period reasonably commensurate to take into account such failure, unless Sponsor agrees in writing to pay any additional costs that would be required to meet the original timeline.  If Sponsor delays a project from its agreed starting date or suspends performance of the project then either: a) Sponsor will pay the standard daily rate of the Quintiles’ personnel assigned to the project, based on the percentage of their time allocated to the project, for the period of the delay, in order to keep the current team members; or, b) Quintiles may re-allocate the personnel at its discretion, and Sponsor will pay the costs of re-training new personnel. In addition, Sponsor will pay all non-cancelable costs and expenses incurred by Quintiles due to the delay and will adjust all timelines to reflect additional time required due to the delay.  Sponsor shall provide Quintiles with all information available to it regarding known or potential hazards associated with the use of any substances supplied to Quintiles by Sponsor, and Sponsor shall comply with all current legislation and regulations concerning the shipment of substances by the land, sea or air.

20.0Force Majeure.  In the event either party shall be delayed or hindered in or prevented from the performance of any act required hereunder by reasons of strike, lockouts, labor troubles, inability to procure materials or services, failure of power or restrictive government or judicial orders, or decrees, riots, insurrection, war, Acts of God, inclement weather or other reason or cause beyond that party’s control, then performance of such act (except for the payment of money owed) shall be excused for the period of such delay.

21.0Notices and Deliveries.  Any notice required or permitted to be given hereunder by either party hereunder shall be in writing and shall be deemed given on the date received if delivered personally or by a reputable overnight delivery service, or three (3) days after the date postmarked if sent by registered or certified mail, return receipt requested, postage prepaid to the following addresses:

If to Quintiles:	If to Sponsor:
Quintiles, Inc.	Advanced Life Sciences, Inc.
5927 South Miami Boulevard	1440 Davey Road
Morrisville, North Carolina 27560	Woodridge, IL 60517
Attention: Elena M. Mestre	Attn: Legal Department

With a copy to:

Quintiles Transnational Legal Department

P.O. Box 13979

Research Triangle Park, North Carolina

27709-3979

Attention: John Russell

If Sponsor delivers, ships, or mails materials or documents to Quintiles, or requests that Quintiles deliver, ship, or mail materials or documents to Sponsor or to third parties, then the expense and risk of loss for such deliveries, shipments, or mailings shall be borne by Sponsor.  Quintiles disclaims any liability for the actions or omissions of third-party delivery services or carriers.  All information transmitted by Quintiles pursuant to this Agreement will be sent by the standard transmission method selected by Quintiles (telephone, facsimile, mail, personal delivery or email).  Sponsor hereby consents and authorizes Quintiles to send facsimiles relating to the Services, or relating to potential future services, to any office of Sponsor or Sponsor’s affiliates.

22.0Insurance.  During the term of this Agreement to cover its obligations hereunder, each party shall maintain insurance coverage as follows: 1) (a) Professional Liability for Quintiles in an amount of at least US$5,000,000.00; (b) Clinical Trials and/or Product Liability for Sponsor in an amount of at least US$5,000,000.00; and 2) General Liability in amounts of at least US$3,000,000.00.  All insurance amounts may be obtained by full, individual primary policy amount; a primary amount of less than minimum requirement enhanced by a blanket excess umbrella policy; or a combination of either. Each party shall provide the other party with a certificate of insurance upon request. The insured shall provide the other party with at least thirty (30) days prior written notice of any material change, cancellation or expiration of the above-required insurance.

23.0Foreign Currency Exchange. The currency to be used for invoice and payment shall be the currency stated in the Budget or Table attached to the applicable Work Order (the “Contracted Currency”). If Quintiles incurs pass-through costs in a currency other than the Contracted Currency, then Sponsor shall reimburse Quintiles for Quintiles’ actual costs in the Contracted Currency based on the Oanda foreign currency exchange rate (Oanda.com) for the applicable currencies on the last business day of the month in which such pass-through costs are submitted. If a currency referenced within the Budget is replaced by the Euro or otherwise ceases to become legal tender, the applicable replacement currency will be substituted for such currency for purposes of this provision at an established conversion rate.  For Work Orders that involve the performance of Services by Quintiles or its affiliates in any countries that use currencies other than the

Contracted Currency, and the fees for such Services will exceed $500,000, then a currency exchange provision shall be included in the Work Order.

24.0Data Protection.  Quintiles and Sponsor agree to comply with all applicable privacy laws and regulations.  If the Project will involve the collection or processing of personal data (as defined by applicable data protection legislation) within the European Economic Area (“EEA”), then Sponsor shall serve as the controller of such data, as defined by the European Union (“EU”) Data Protection Directive (the “Directive”), and Quintiles shall act only under the instructions of the Sponsor in regard to personal data.  If Sponsor is not based in the EEA, but personal data will be gathered or processed in the EEA, Sponsor must appoint an EEA company to act as its local representative for data protection purposes in order to comply with the Directive, and such designation is attached hereto and incorporated by reference.  If Sponsor does not have an affiliate in the EEA and requests that a Quintiles affiliate in the EEA serve as its local representative, then the parties shall negotiate a fee for such representative duties and shall enter into a Data Transfer Agreement between the parties containing the Standard Contractual Clauses set forth by the EU Commission Decision of 15 June 2001 (Decision 2001/497/EC) before Quintiles will assume any such representative duties.  If Sponsor is not based in the EEA, Quintiles will not export any personal data from the EEA unless Sponsor has appointed a local representative.

25.0Binding Agreement and Assignment. This Agreement shall be binding upon and inure to the benefit of Sponsor and Quintiles and their respective successors and permitted assigns.  Except as stated above in Section 18, neither party may assign any of its rights or obligations under this Agreement to any party without the express, written consent of the other party.

26.0Choice of Law, Waiver and Enforceability. This Agreement shall be construed, governed, interpreted, and applied in accordance with the laws of the State of North Carolina, exclusive of its conflicts of law provisions. The failure to enforce any right or provision herein shall not constitute a waiver of that right or provision.  Any waiver of a breach of a provision shall not constitute a waiver of any subsequent breach of that provision.  If any provisions herein are found to be unenforceable on the grounds that they are overly broad or in conflict with applicable laws, it is the intent of the parties that such provisions be replaced, reformed or narrowed so that their original business purpose can be accomplished to the extent permitted by law, and that the remaining provisions shall not in any way be affected or impaired thereby.

27.0Survival.  The rights and obligations of Sponsor and Quintiles, which by intent or meaning have validity beyond such termination (including, but not limited to, rights with respect to inventions, confidentiality, discoveries and improvements, indemnification and liability limitations) shall survive the termination of this Agreement or any Work Order.

28.0Arbitration.  Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator shall be binding and may be entered in any court having

jurisdiction thereof.  Such arbitration shall be filed and conducted at the office of the AAA closest to the Quintiles office having responsibility for the Project, and shall be conducted in English by one arbitrator mutually acceptable to the parties selected in accordance with AAA Rules. The arbitrator shall not have the power to award any punitive damages or any damages excluded by this Agreement.

29.0Entire Agreement, Headings and Modification. This Agreement, together with the applicable Work Orders, contains the entire understandings of the parties with respect to the subject matter herein, and supersedes all previous agreements (oral and written), negotiations and discussions. The descriptive headings of the sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any provision hereof.  Any modifications to the provisions herein must be in writing and signed by the parties.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto through their duly authorized officers.

ACKNOWLEDGED, ACCEPTED AND AGREED TO:

Quintiles, Inc.			Advanced Life Sciences, Inc.
By:	/s/ Elena Mestre		By:	/s/ Michael T. Flavin
	(signature)			(signature)
Print Name:		Elena M. Mestre	Print Name: Michael T. Flavin, Ph.D.
Title:		Vice President	Title: Chief Executive Officer
Date: November 17, 2005			Date: November 21, 2005
FEDERAL ID # 56-1323952

EX-10.2

Exhibit 10.2

AUTHORIZATION TO PROCEED WITH:  PROTOCOL CL05-001

This Authorization to Proceed Agreement (“Agreement”) is between Advanced Life Sciences, Inc., an Illinois corporation located at 1440 Davey Road, Woodridge, IL 60517 (“Customer”) and Quintiles, Inc. located at 5927 South Miami Blvd, Morrisville, NC 27560(“Quintiles”).  The parties agree that, while the parties are attempting to negotiate a comprehensive agreement regarding the above-referenced project (the “Project”), Quintiles shall commence, or continue performing, the following activities relating to the Project (the “Services”):

Start-up Planning, Initial Clinical and Project Management

Case Report Form design and printing

Regulatory Document Review and Approval

Site Selection/Initiation Visits

Investigator Contract Negotiations and Advanced Payments

Biostatistics review of randomization

Enroll Subjects

Shipment of Study Drugs

The Services will be carried out pursuant to the terms and conditions of the Master Services Agreement dated November 21, 2005 between Customer and Quintiles, which are incorporated by reference herein.  Customer shall pay Quintiles at Quintiles’ Standard Daily Rates (a copy of which is attached hereto) for Quintiles’ actual time expended on the Services and shall reimburse Quintiles for all costs and expenses Quintiles reasonably incurs in performing the Services, within thirty days of receipt of an itemized invoice.  Quintiles’ costs and expenses will be supported by a summary sheet. If the parties enter into a Work Order regarding the Project, all monies paid under this Agreement will be applied toward, and reconciled with, the payments specified in the Work Order. Quintiles may provide such additional preliminary Services as Customer may request and Quintiles may agree in writing to perform.  Normally, Quintiles would not perform such activities as executing investigator agreements, shipping drugs, or enrolling or monitoring patients without a fully executed work order; however, in light of the unique circumstances pertaining to this Project, Quintiles will proceed with these activities upon execution of this Authorization to Proceed.  All regulatory obligations shall remain Customer’s responsibility.  Customer may terminate this Agreement upon thirty days’ written notice for any reason. Quintiles may terminate this Agreement upon thirty days’ written notice if: a) Customer breaches this Agreement; b) a final Work Order is not executed within four months of the date of this Agreement; or, c) the Services performed under this Agreement exceed $600,000 in total fees and costs without execution of a final Work Order.

Upon execution of this Agreement, Customer agrees to pay Quintiles an advance of $90,000, which shall be credited to Customer on the final invoice. If this Agreement is terminated prior to execution of a final Work Order, then any unearned portion of this advance will be refunded, less a thirty-percent retention to offset the costs of reallocating project staff.  If any additional money is due under the terms of this Agreement, Customer shall pay Quintiles the money owed within thirty days of receipt of an itemized invoice.

ACCEPTED AND AGREED TO AS OF THE DATE LAST SIGNED BELOW:

Quintiles, Inc.			Advanced Life Sciences, Inc.
By:	/s/ Elena Mestre		By:	/s/ Michael T. Flavin
	(signature)			(signature)
Print Name:		Elena M. Mestre	Print Name: Michael T. Flavin, Ph.D.
Title:		Vice President	Title: Chief Executive Officer
Date: November 17, 2005			Date: November 21, 2005

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Date: Date:

2005 Quintiles Americas CRO Services Group Standard Rate Schedule

Category	2005 Hourly Rate	2005 Daily Rate
Executive Medical & Technical Consultation, Senior Statistical Consultation	366	2,928
Executive Project Management, Senior Regulatory, Senior Medical, Senior Management, Medical Mgmt & Monitoring	296	2,368
Safety Review/Analysis	266	2,128
Senior Project Management, Statistical Design, Senior Statistical Planning and Analysis, Quality Assurance, Senior Scientists, Regulatory Consultation, Senior Management	236	1,888
Management, Scientist	196	1,568
Project Management, Monitoring Management, Site Selection, Statistical Interpretation, Senior Statistical Analysis, Regulatory Support	168	1,344
Senior Clinical Monitoring, Statistical Analysis, Statistical and Medical Writing , Regulatory Documentation Preparation	142	1,136
Clinical Monitoring, In-house Monitoring, Statistical Programming, Technical Writing, Biostatistics Quality Control, Data Management, Medical Coding	116	928
Data Support	102	816
Clinical Services Support, Medical Writing Support	85	680
IVRS Support	78	624
Data Processing, Administrative Support	64	512
Call Center Support	59	472

Confidential

Executive Consulting rates may exceed those listed above.

Billing rates are subject to change on January 1 of each calendar year, and the new rates will apply thereafter.

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EX-10.3

Exhibit 10.3

LABORATORY SERVICE AGREEMENT

This Laboratory Service Agreement (“Agreement”) is effective as of November 22, 2005 (“Effective Date”), by and between Covance Central Laboratory Services LP (“Covance”), an Indiana limited partnership, with offices at 8211 SciCor Drive, Indianapolis, Indiana 46214, and Advanced Life Sciences Inc. (“ALSI”), with offices at 1440 Davey Road, Woodridge, IL 60517.

Recitals

WHEREAS, Covance is engaged in the business of providing laboratory testing, data management, protocol management and information management services for pharmaceutical clinical trials (“Services”); and

WHEREAS, ALSI desires for Covance to perform such Services in accordance with and subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises and covenants contained herein, and each act done pursuant thereto, ALSI and Covance agree as follows:

1.DEFINITIONS AND INTERPRETATION

(a) Definitions - - The following terms, as used herein (unless a clear contrary interpretation appears), have the following meanings:

“Clinical Trial” means a Study or the scientific evaluation of a Drug or Medical Device on the terms and conditions of a Protocol.

 “Drug” means a new or existing drug provided by ALSI and which is the subject of a Clinical Trial or Study under this Agreement.

“FDA” means the United States Food and Drug Administration or any other government body or agency that succeeds it.

“Project” means a Study or Clinical Trial, or any other clinical trial, project or assignment between Covance and ALSI.

“Protocol” means the document which specifies the laboratory testing procedures as written by ALSI as applicable for the performance of a Study or Clinical Trial and is provided to Covance.

“Study” means a Clinical Trial or the scientific evaluation of a Drug or Medical Device on the terms and conditions of the Protocol.

(b)Interpretation - In this Agreement, unless a clear contrary intention appears:

i.the singular number includes the plural and vice versa;

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ii.reference to any person or entity includes such person’s or entity’s successors and assigns;

iii.reference to this Agreement means such agreement as amended, modified or supplemented from time to time in accordance with the terms hereof;

iv.reference to any law, rule, regulation, order, decree, requirement, policy, guideline, directive or interpretation means as amended, modified, codified, replaced or reenacted in whole or in part, and in effect on the determination date, including rules and regulations promulgated thereunder;

v.“hereunder”, “hereof”, “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;

vi.“including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; and

vii.relative to the determination of any period of time, “from” means “from and including to” and “to” means “to but excluding”.

2.SERVICES

Covance hereby agrees to perform Services for ALSI’s protocol                     , pursuant to the terms and conditions contained in this Agreement, the Protocol, the Statement of Work (“SOW”), the Quote for Services (“Budget”), and all other applicable documents.   

3.FEES AND BILLING

Fees for the Project are set forth in the attached Budget.  The Budget contains all of the applicable discounts and Services that will be provided for that Project.

ALSI agrees make an advance payment equal to 10% of the Budget (“Advance Payment”).  Covance will invoice the Advance Payment when this Agreement has been signed by both parties.  ALSI will pay the Advance Payment invoice within thirty (30) days after receipt. 

Each month, Covance will invoice ALSI for all fees due and expenses incurred while providing Services during the previous month.  Payment is due thirty (30) days from the date of the invoice.   After invoices have reached 90% of the Budget, Covance will begin applying funds from the Advance Payment to the monthly invoices.  Should the Study be terminated before the Advance Payment is exhausted, and assuming all prior invoices have been paid, Covance will apply Advance Payment funds to the final invoice and refund any remaining Advance Payment funds to ALSI within thirty (30) days. 

Upon written notification by ALSI that the Clinical Trial has been concluded or six months after the non-receipt of any kits (whichever comes first), Covance will issue a final invoice for any Services rendered to identify amounts due to Covance or refund due to ALSI.

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Covance will hold prices unchanged for twelve (12) months from Project start up.  Thereafter, fees may be adjusted annually by Covance upon thirty (30) days written notice to ALSI.  However, should global political, logistical or economic changes take place which increase Covance’s purchase prices, Covance may assess additional charges to ALSI upon thirty (30) days’ prior written notice.

If ALSI requests a material change to the Project at any time which would affect the Services, Covance will revise fees to reflect the change in the SOW and/or Budget. 

COVANCE will provide each Investigator site with project and visit specific specimen collection supplies needed to collect and ship specimens. The kits include test tubes, pipettes, collection needles, and other required materials, in addition to instructions for collection and shipment. The kits shall also have a test requisition form designated for the Project. Each kit and collection tube will be bar coded to ensure tracking and testing audit trails upon its return to Covance.  Should a kit be lost through no fault of Covance, or should a kit expire at the Investigator site, or should a kit otherwise need to be replaced through no fault of Covance, Covance will supply replacement kits for those that need to be replaced.  The charge for any replacement kit which is lost, expires, or otherwise needs to be replaced through no fault of Covance, will be an amount equal to the price listed in the Budget per kit for the same kit/visit as is being replaced.

4.PROPERTY OWNERSHIP

All materials, documents, information, programs and suggestions of every kind and description supplied to Covance by or on behalf of ALSI or prepared or developed by Covance pursuant to this Agreement (except for Covance procedural manuals, personnel data and Covance developed technology and software) shall be the sole and exclusive property of ALSI.  Strategic insight and proposed Project design and scope provided in any Covance proposal shall remain the property of Covance and may only be used by ALSI to assess whether it wishes to pursue such work with Covance.

5.PATENT RIGHTS

Covance will disclose promptly to ALSI or its nominee any and all patentable inventions, discoveries and improvements conceived or made by Covance in the course of the Clinical Trial and/or while providing Services to ALSI pursuant to this Agreement, and Covance agrees to assign all its interests therein to ALSI or its nominee; provided ALSI requests such assignment within one year of notification of such invention; provided, further, that Covance shall retain all rights to any data, processes, software (including codes), technology, means, know-how and delta flags developed by Covance relating to laboratory testing or data management.  When requested by ALSI, Covance will execute any and all applications, assignments or other instruments and give testimony which ALSI deems necessary to apply for and obtain any Letters of Patent of the United States of America or of any foreign country or to otherwise protect ALSI’s interest therein.  ALSI shall compensate Covance for the time devoted to said activities and reimburse Covance for expenses incurred.  These obligations shall continue beyond the termination of this Agreement with respect to patentable inventions, discoveries and improvements conceived or made by Covance while providing Services to ALSI pursuant to this Agreement, and shall be binding upon Covance’s assignees.

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6.CONFIDENTIAL INFORMATION/LEGAL PROCEEDINGS

Covance agrees that all materials, documents and information provided to it by ALSI and, except as provided in Section 4, all test information, data and records developed by Covance exclusively in connection with the performance of its Services pursuant to this Agreement is and shall be the sole property of ALSI and considered confidential (collectively, “Confidential Information”).  Covance agrees to hold Confidential Information in confidence and in a manner consistent with the way in which Covance maintains the confidentiality of its own proprietary information.  Covance shall disclose the Confidential Information to Investigators and Covance employees, officers, directors and representatives only on a need-to-know basis.  Covance agrees that, except as necessary to fulfill its obligations under this Agreement, it will not use or disclose to any other third party any Confidential Information; provided, however, that Covance has no obligations with respect to any Confidential Information that is:

(a)now or later becomes publicly available through no fault of Covance;

(b)obtained by Covance from a third party not under obligation to ALSI with respect to such Confidential Information;

(c)already in Covance’s possession as indicated in its written records; or

(d)required to be disclosed by any law, rule, regulation, order, decree or subpoena, in which event Covance will give ALSI, if practicable, advance written notice to permit ALSI to seek a protective order or other similar order with respect to such Confidential Information. 

The foregoing obligations of non-use and confidentiality will extend for five (5) years beyond the date of disclosure or generation of such Confidential Information.

Should Covance be obligated to provide testimony or records regarding any Study, Protocol or Clinical Trial in any legal or administrative proceeding, then ALSI shall reimburse Covance its out-of-pocket costs therefore plus an hourly fee for its employees or representatives equal to the internal fully burdened cost to Covance of such employee or representative.

Nothing contained in this Section 6 shall be interpreted to limit the rights and obligations of the parties under Section 4 hereof and to the extent that any conflict arises in applying the provisions of Sections 4 and 6, the provisions of Section 4 shall control.

7.COMPLIANCE

Performance - Covance will perform its Services in accordance with the current state of the laboratory art. All of Covance’s tests, assays and other activities undertaken under this Agreement shall comply in all material respects with College of American Pathologists (“CAP”).  CLIA (Clinical Laboratory Improvement Act) certification is obtained through compliance with CAP requirements.  This Agreement contains all the conditions under which Covance will provide Services. Covance makes no other express or implied commitments or warranties concerning the performance of the Clinical Trial.

Change in Requirements - Should government regulatory requirements be changed, Covance will make every reasonable effort to satisfy the new requirements.  In the event that compliance with such new regulatory requirements necessitates a change in this Agreement, Covance will submit to ALSI a revised technical and cost proposal for ALSI’s acceptance prior to performing Services.

Conflicts - In the event of a conflict in government regulation, ALSI will designate the applicable regulations to be followed by Covance in the performance of its Services.

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8.LABORATORY VISITS

ALSI’s representatives may visit Covance’s facility with reasonable frequency during normal business hours to observe the progress of a Clinical Trial. All such visits shall be scheduled in advance by ALSI. ALSI agrees that all confidential and proprietary information of Covance obtained or observed during such visits shall remain sole property of Covance and ALSI shall keep such information confidential and shall not use or disclose it to a third party without Covance’s prior written consent.

9.INDEMNIFICATION

A.ALSI shall indemnify Covance and its respective affiliates and their respective officers, directors, employees and agents (“Covance Group”) from any loss, damage, cost or expense (including reasonable attorney’s fees) (a “Loss”) arising from any claim, demand, assessment, action, suit or proceeding (a “Claim”) arising from or related to (i) personal injury to a participant in the Clinical Trial or any employee within the Covance Group directly or indirectly caused by the Study Drug, (ii) Covance’s performance of or involvement with the Clinical Trial or its obligations under this Agreement, (iii) this Agreement, the Clinical Trial or any aspect thereof, or the Protocol, which violates any applicable law, rule, regulation or ordinance, (iv) the Study Drug’s harmful or otherwise unsafe effect, including, without limitation, a Claim based upon ALSI’s or any other person’s use, consumption, sale, distribution or marketing of the Study Drug, or (v) the negligence, gross negligence or intentional misconduct or inaction of ALSI in the performance of its obligation under this Agreement or the Protocol related to any Clinical Trial; provided that if such Loss or Claim (other than a Loss or Claim described in clause (iv)) hereof arises in whole or in part from Covance’s negligence, gross negligence or intentional misconduct or inaction, then the amount of such Loss that ALSI shall indemnify the appropriate person or entity within the Covance Group pursuant to this Section 9 shall be reduced by an amount in proportion to the percentage of Covance’s responsibilities for such Loss as determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties. ALSI shall not indemnify the Covance Group from any Loss from any Claim described in clause (iv) hereof arising solely from the willful misconduct or inaction or gross negligence of Covance.

B.Covance shall indemnify ALSI and its officers, directors, employees and agents (“ALSI Group”) from any Loss arising from any Claim for personal injury to Study participants or personal injury to any employee within the ALSI Group or property damage arising or occurring during the conduct of the Clinical Trial as a result of Covance’s negligence, gross negligence or intentional misconduct or inaction; provided that if such Loss or Claim hereof arises in whole or part from the ALSI Group’s negligence, gross negligence or intentional misconduct or inaction, then the amount of the Loss that Covance shall indemnify the ALSI Group for pursuant to this Section 9 shall be reduced by an amount in proportion to the percentage of ALSI Group’s responsibilities for such Loss as determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties.

C.Upon receipt of notice of any Claim that may give rise to a right of indemnity from a party, a person or entity entitled to seek indemnification pursuant to the foregoing provisions (the “Indemnified Party”) shall give written notice thereof to the other party (the “Indemnifying Party”) with a Claim for indemnity. Such notice shall indicate the nature of the Claim and the basis therefor. Promptly after a Claim is made for which the Indemnified Party seeks indemnity, the Indemnified Party shall permit the Indemnifying Party, at its option and expense, to assume the complete defense of such Claim, provided, however, that (a) the Indemnified Party will have the right to participate in the defense of any such Claim at its own cost and expense, (b) the Indemnifying Party will conduct the defense of such Claim, with due

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regard for the business interest and potential related liability of the Indemnified Party and (c) the Indemnifying Party will, prior to making any settlement, consult with the Indemnified Party as to the terms of such settlement, with the Indemnified Party having the right, at its election, to release and hold harmless the Indemnifying Party from its obligations hereunder with respect to such Claim and assume a complete defense of the same in return for payment by the Indemnifying Party to the Indemnified Party of the amount of the Indemnifying Party’s settlement offer. The Indemnifying Party will not, in defense of such Claim, except with the consent of the Indemnified Party, consent to the entry of any judgment or enter into any settlement which does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to the Indemnified Party of a release from all liability in respect thereof.  After notice to the Indemnified Party of the Indemnifying Party’s election to assume the defense of such Claim, the Indemnifying Party shall be liable to the Indemnified Party for such legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof at the request of the Indemnifying Party. As to those Claims with respect to those which the Indemnifying Party does not elect to assume control of the defense, the Indemnified Party will afford the Indemnifying Party an opportunity to participate in such defense, at the Indemnifying Party’s own cost and expense, and will not settle or otherwise dispose of any of the same without the consent of the Indemnifying Party, which may not be unreasonably withheld or delayed. 

D.The obligations of the parties under this Section survive the termination of this Agreement.  Further, a breach by the Indemnified Party of its obligations under this Agreement shall not relieve the Indemnifying Party of its obligations under this Section unless such breach was solely responsible for the Loss or Claim as determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties.

10.DEFAULT

If Covance is in default of its material obligations under this Agreement, ALSI shall promptly notify Covance in writing of any such default.  Covance shall have a period of thirty (30) days from receipt of such notice within which to cure the default.  If Covance shall fail to so cause such cure, then this Agreement shall, at ALSI’s option and upon notice to Covance, immediately terminate.  In any event, ALSI’s sole remedy for any default by Covance under this Agreement shall be the refund of all money paid to Covance under this Agreement. Under no circumstances shall ALSI be entitled to, nor shall Covance be responsible for, any incidental, indirect, consequential or special damages (including, without limitation, lost profit) arising in connection with any default or breach by Covance of its obligations under this Agreement or any documents related thereto.

If ALSI is in default of its material obligations under this Agreement, then Covance shall promptly notify ALSI in writing of any such default. ALSI shall have a period of thirty (30) days from the date of receipt of such notice within which to cure the default.  If ALSI fails to cure within the specified time period, then this Agreement shall, at Covance’s option, immediately terminate.

After performing Services, Covance will store the Study specimens (hereinafter “Archival Specimens”) for the length of time and under storage conditions as described in the applicable Statement of Work.  Archival Specimens may subsequently be shipped to ALSI or another party as specified in the Statement of Work or as otherwise requested by ALSI.  In no event shall Covance’s liability for any breach or default with regard to storage of an Archival Specimen exceed the fee it has been paid for storage of that specimen for the prior twelve (12) months.   

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11.INSURANCE

Covance shall secure and maintain in full force and effect through the performance of its Services the necessary insurance coverage in amounts appropriate to the conduct of Covance’s business. Certificates evidencing such insurance will be made available for examination upon request by ALSI.

12.FORCE MAJEURE

No party shall be liable for a delay in performance or failure to perform its obligations under this Agreement if such delay or failure is due to acts of God or any other event beyond the control of the parties, including, without limitation, fire, explosion, weather, disease, war, insurrection, civil strife, riots, government action or power failure, provided, however, that the party who is unable to perform resumes performance as soon as possible following the end of the event causing delay or failure. Any deadline or time for performance which falls due during or subsequent to the occurrence of any of the events referred to above shall be automatically extended for a period of time equal to the period of delay caused by any such event.

Covance will promptly notify ALSI if, by reason of any of the events referred to above, Covance is unable to meet any deadline or time for performance specified in this Agreement.  In the event that any part of Covance’s Services is rendered invalid as a result of any such event, Covance will, upon written request from ALSI and at ALSI’s sole cost and expense, repeat that part of the Services affected by the event.

13.TERMINATION

ALSI may terminate this Agreement prior to completion of the Clinical Trial, at any time and for any reason, upon 30 days written notice to Covance, except when the reason for termination is the safety of patients, then it can be terminated immediately.  In the event of termination, Covance shall be entitled to full payment for work performed on the Clinical Trial up through the date work on such Clinical Trial is concluded, including, without limitation, all fees and other expenses of Covance for such Clinical Trial.  Covance shall use reasonable efforts to conclude or transfer the Clinical Trial as expeditiously as practicable and in accordance with all applicable laws, rules and regulations, including those of the FDA.  Further, Covance and ALSI shall cooperate with each other during such Clinical Trial termination to safeguard patient safety, continuity of patient treatment and to comply with applicable laws, rules and regulations.

The termination of this Agreement shall not relieve either party of its obligations to the other with respect to (a) maintaining the confidentiality of Confidential Information, (b) assignment of inventions and assistance with respect thereto, (c) indemnification, (d) compensation for Services performed, and (e) retention of records.

14.MISCELLANEOUS

A.Independent Contractor. It is understood and agreed that Covance shall perform its duties as an independent contractor and not as an agent, employee, partner or joint venture of ALSI.  Covance will have no authority to bind or commit ALSI in any manner whatsoever and will not, at any time, hold itself out to third parties as having authority to enter into or incur any commitments, expenses, liabilities or obligations of any nature on behalf of ALSI, except pursuant to this Agreement.

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B.Advertising.  Neither party shall use the name of the other party or the names of the employees of the other party in any advertising or sales promotional material or in any publication without the prior written permission of such party.

C.Modifications.  No amendments or modifications may be made to this Agreement without the mutual written agreement of ALSI and Covance.

D.Law.  This Agreement will be governed by Indiana law.  It is the intention of the parties that in the event disputes should arise between the parties over the interpretation and application of this Agreement, the parties will first attempt to settle such disputes by negotiation and consultation between the senior executives of ALSI and Covance and other parties familiar with this Agreement or the Study.

E.Costs of Litigation.  In the event that any party commences legal proceedings against the other party in connection with this Agreement, the party prevailing through a final non-appealable decision shall be entitled to recover its costs and expenses of litigation (including reasonable attorneys’ fees) from the other party.

F.Binding Effect.     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns; provided, however, that neither party shall have the right to assign this Agreement or any of the rights set forth herein or delegate any of the obligations hereunder without the prior written consent of the other party.

G.Entire Agreement.              This Agreement represent the entire understanding between the parties with respect to the subject matter hereof as of the Effective Date, and this Agreement supersedes all prior agreements, negotiations, understandings, representations, statements and writings between the parties relating thereto.

H.Waiver.No waiver of any term, provision, or condition of this Agreement whether by conduct or otherwise in any one or more instances shall be deemed to be or construed as a further or continuing waiver or estoppel of any such term, provision, or condition or of any other term, provision, or condition of this Agreement.

I.Severability.If any term or provision of this Agreement s hall be held invalid or unenforceable, the remaining terms hereof shall not be affected but shall be valid and enforced.

J.Notices. All notices required to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally or mailed first class, registered or certified mail, return receipt requested, postage paid:

If to ALSI to:	Advanced Life Sciences Inc.
	1440 Davey Road
	Woodridge, IL 60517
	Attention:
If to Covance to:	Covance Central Laboratory Services LP
	8211 SciCor Drive
	Indianapolis, Indiana 46214-2985
	UNITED STATES
	Attention: Vice President, Finance

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or at such other place as either party shall hereafter furnish to the other party in writing. Notices shall be deemed given on the date of personal delivery or deposit in the mail as specified above.

K.Captions. Any caption used in this Agreement is inserted for convenience and reference only and is to be ignored in the construction and interpretation of the provisions hereof.

IN WITNESS WHEREOF, the parties by their duly authorized officers have executed this Agreement on the dates set forth below, to be effective on the Effective Date set forth on the first page of this Agreement.

Advanced Life Sciences Inc.		Covance Central Laboratory Services LP
By:	/s/ Michael T. Flavin	By:	/s/ Deborah L. Tanner
Date:	November 22, 2005	Date:	November 22, 2005

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EX-10.4

Exhibit 10.4

ECG SERVICE AGREEMENT

THIS AGREEMENT is effective as of November 22, 2005 (the “Effective Date”), by and between Covance Cardiac Safety Services Inc., a Wisconsin corporation with offices at 9390 Gateway Drive, Reno, Nevada 89521 (“Covance”) and Advanced Life Sciences, Inc. an Illinois corporation, having its principal place of business at 1440 Davey Road, Woodridge, IL  60517 (“Company”) (this Agreement, as amended, modified or supplemented from time to time being, this “Agreement”).

RECITALS

A.  Covance is engaged in the business of providing electrocardiogram (“ECG”) analysisservices and data management for the Study as defined below.

B.  Company desires for Covance to perform such services for Protocol CL05-001.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises and covenants contained herein, and each act done pursuant thereto, Company and Covance agree as follows:

Definitions And Interpretation

(a)Definitions - - The following terms, as used herein (unless a clear contrary interpretation appears), have the following meanings:

 “Clinical Trial” means a Study or the scientific evaluation of a Drug on the terms and conditions of the Protocol.

“Drug” means a new or existing drug provided by Company and which is the subject of a Clinical Trial or Study under this Agreement.

 “FDA” means the United States Food and Drug Administration or any other government body or agency that succeeds it.

“Investigator” with respect to any Study or Clinical Trial shall mean a licensed physician who is a qualified clinical investigator willing and able, and engaged by the Company, to conduct a clinical investigation of a Drug on the terms and conditions of the Protocol and any applicable agreement between the Investigator and Company.

“Project” means a Study or Clinical Trial, or any other clinical trial, project or assignment between Covance and Company.

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“Protocol” means the document which specifies the clinical trial procedures as written by Company as applicable for the performance of a Study or Clinical Trial and is provided to Covance.

“Study” means a Clinical Trial or the scientific evaluation of a Drug on the terms and conditions of the Protocol.

A.  SERVICES

Covance hereby agrees to perform ECG analysis and data management services  (“Services”) for Company with respect to the Clinical Trial.  The Services shall be performed pursuant to the terms and conditions contained herein and in the attached Exhibit A.

Services – Covance will provide operator assisted ECG acquisition, real-time quality evaluation and a fax containing ECG waveform and cardiologist interpretation within the agreed upon timeframe according to trial requirements. If needed, preliminary computer interpreted ECG reports are available within one hour, 24 hours per day. The final ECG waveform report is sent within 24 hours of cardiologist review, to the investigator site, via US Mail.

Interpretation Services – Covance will provide reading of ECGs including review of each test by a Qualified Cardiologist.  Interpretation will include standard interval measurements, Covance interpretation codes with corresponding criteria and diagnostic statements and a severity code corresponding to the probable clinical relevance of ECG findings.

Support – Covance will provide timely consultation as required for cardiac questions which may arise from the ECG, but it is understood that neither this data nor Covance comments will be used for clinical management of the subject.  Cardiologist consultation is available by phone appointment.  Emergency review of ECGs will be accomplished upon request by the investigator.  Technical support will include a trial specific Investigator’s ECG procedure manual, training presentation at one investigator meeting and telephone support for technical/procedural questions.

Data Collection Services – Covance will design and structure a specific database and establish electronic report formats.  A Covance Data Control Card will be initialized and provided to the investigator for assignment to each subject screened in the trial.  A validation process will  be initiated by Covance for demographic confirmation by the site and/or trial monitor following the subject’s first ECG.

Reporting – At regularly scheduled intervals, as agreed to by Covance and Company in advance, Covance will provide Company with an electronic report.  Each ECG record will be identified by a Covance identification number and will include subject demographic data specific to each trial.  Each ECG record will also contain ECG results as described above.  Covance’s standard file format is ASCII.

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Language – All ECG report data, including demographics, measurements and interpretation will be delivered in English.  Procedure manuals and other supplemental documentation may be converted to another language for an additional fee.  Interpreter services are available for operator assisted ECG transmission on an as-needed basis and are included in the fees described in the IPA.

Equipment – Covance will deliver one MTX-2 ECG device to each investigator site with all supplies necessary to perform the tests.  Additional supply items are available from Covance ECG Client Services Center and will be supplied at no additional charge as the trial progresses.  Equipment and supplies are to be used only for trial subjects and are to be returned to Covance within sixty (60) days of trial completion. Defective equipment is to be returned to Covance within 60 days to avoid being invoiced at the replacement cost of $1495 for each defective device.    It is the responsibility of the investigator to verify the quality of lead placement and proper equipment usage and to promptly transmit ECGs to the Covance Data Center.

Equipment Repair/Loss – Covance will repair the MTX-2s at no charge to Company if such repair is the result of normal wear and tear as determined by Covance in its reasonable discretion; and (a) if the damage is not due to normal wear and tear, Covance shall invoice Company for the cost of the repair up to a maximum of $1495 per MTX-2.  Company shall pay such invoiced amounts within thirty (30) days of receipt of the applicable invoice; and (b) in the event of MTX-2 loss, Company shall notify Covance of such loss and pay $1495 per MTX-2, within thirty (30) days of notification.

Relocation/Re-assignment – Covance will relocate an MTX-2 for a fee of $200 per relocation.  Each relocation requires written notification and must be agreed to by both parties.

Site/Unit Increases – Upon thirty (30) days prior written notice and agreement upon required adjustments to the fees payable hereunder, Company may increase the number of sites to be authorized under this Agreement or may request additional MTX-2 units for existing sites.

B.  FEES AND BILLINGS

Company will pay Covance for Services according to the Fees listed in Exhibit A.

If Company requests a material change to the Protocol at any time, which would affect service costs, Covance will revise fees to reflect the increase or decrease in costs.

B.1  Project Start Up Fee.Upon contract signature a non-refundable project start-up fee, as listed in Exhibit A, will be invoiced.  This fee may be adjusted upward if Company makes any revisions to the Clinical Trial database after it has been established but in no event shall this fee be adjusted without the prior consent of the Company.  However, this fee will not be adjusted downward after the database has been completed, as the scope of the original work will have been fulfilled.

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B.2  Invoice and Billing.An invoice for all testing reported during the prior period and monthly maintenance will be issued to Company on a monthly basis and will consist of a summary invoice. Supporting detail of visits, by Investigator, is available upon request. Invoices from Covance are due thirty (30) days from the date of the invoice.  VAT will be detailed separately.

Funds are to be paid in lawful money of the United States. Payments may be made by wire transfer to: PNC Bank NA ABA 0312-07607 for further credit to Covance Cardiac Safety Services Inc. account number 8011578621 or by courier service to Covance Cardiac Safety Services Inc, P.O. Box 828247, Philadelphia PA 19182-8247. All payments will be made without deduction or offset.

If Company pays, or Covance otherwise receives, less than the full amount then owing, Company’s payment will not constitute or be construed less than as on account of the earliest compensation due. Covance may accept any check or payment in any amount without prejudice to Covance’s right to recover the balance of the amount due or to pursue any other right or remedy. No endorsement or statement on any check or payment or in any letter accompanying any check or payment or elsewhere will be construed as an accord or satisfaction.

C.  PROPERTY OWNERSHIP

All materials, documents, information, programs and suggestions of every kind and description supplied to Covance by or on behalf of Company or prepared or developed by Covance pursuant to this Agreement (except for Covance procedural manuals, development processes or data, personnel data and Covance developed know-how, technology and software) shall be the sole and exclusive property of Company.

D.  PATENT RIGHTS

Covance will disclose promptly to Company or its nominee any and all patentable inventions, discoveries and improvements conceived or made by Covance in the course of providing services to Company pursuant to this Agreement and relating to such services, and Covance agrees to assign all its interests therein to Company or its nominee; provided Company requests such assignment within one year of notification of such invention and agrees to grant Covance and its affiliates a royalty free, non-exclusive license to use any such patentable invention, discovery or improvement; provided, further, that Covance shall retain all rights to any data, processes, software (including codes), technology, means, know-how and delta flags developed by Covance including, but not limited to, those which relate to laboratory testing or data collection or data management.  Whenever requested to do so by Company, Covance will execute any and all applications, assignments or other instruments and give testimony which Company shall deem reasonably necessary to apply for and obtain any Letters of Patent of the United States of America or of any foreign country or to otherwise protect Company’s interest therein, and Company shall compensate Covance for the time devoted to said activities and reimburse it for expenses incurred.  These obligations shall continue beyond the termination of this Agreement with respect to patentable inventions, discoveries and improvements conceived or made by

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Covance while providing services to Company pursuant to this Agreement, and shall be binding upon Covance’s  assignees.

E.  CONFIDENTIAL INFORMATION/LEGAL PROCEEDINGS

Covance agrees that all materials, documents and information provided to it by Company and, except as provided in Section C, all test information, data and records developed by Covance exclusively in connection with the performance of its services pursuant to this Agreement is and shall be the sole property of Company and considered as confidential information (collectively, the “Confidential Information”).  Covance agrees to hold the Confidential Information in strict confidence and in a manner consistent with the way in which Covance maintains the confidentiality of its own proprietary information and Covance shall disclose the Confidential Information to Investigators and Covance employees, officers, directors and representatives only on a need-to-know basis.  Covance agrees that, except as necessary to fulfill its obligations under this Agreement, Covance will not use or disclose to any other third party any of the Confidential Information; provided, however, that Covance will have no obligation to not use or maintain as confidential any information which otherwise would be treated as Confidential Information if such information:  (a) now or later becomes publicly available through no fault of Covance; (b) is obtained by Covance from a third party not under obligation to Company with respect to such Confidential Information; (c) is already in Covance’s possession as indicated in its written records; or (d) is required to be disclosed by any law, rule, regulation, order, decree or subpoena or other legal process, in which event Covance will give Company, if practicable, advance written notice to permit Company to seek a protective order or other similar order with respect to such Confidential Information.  The foregoing obligations of non-use and confidentiality will extend for five years beyond the date of disclosure or generation of such Confidential Information.

If Covance shall be obligated to provide testimony or records regarding any  Clinical Trial in any legal or administrative proceeding, then Company shall reimburse Covance its out-of-pocket costs therefor plus an hourly fee for its employees or representatives equal to the internal fully burdened cost to Covance of such employee or representative.

Nothing contained in this Section E shall be interpreted to limit the rights and obligations of the parties under Section C hereof and to the extent that any conflict arises in applying the provisions of Sections C and E, the provisions of Section C shall control.

F.  COMPLIANCE

Performance - Covance will perform its services in accordance with the current state of the electrocardiographicart and the terms of this Agreement. COVANCE MAKES NO OTHER EXPRESS OR IMPLIED COMMITMENTS OR WARRANTIES CONCERNING THE PERFORMANCE OF ITS SERVICES.

The parties acknowledge and agree that Basic Services are provided solely as diagnostic aids and are only to be used by treating physicians in reaching any diagnosis or clinical decision.  Covance

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makes no warranties concerning the Basic Services hereunder, express or implied, and therefore disclaims any liability for any and all direct or indirect damages arising out of, or in any manner related to physician diagnosis, clinical decisions, or any other use of work product generated by the provision of the Basic Services.  Additionally, Company shall not be entitled to claim consequential, indirect or special damages or loss of profit for non-conforming services, for late completion of services or for breach of this agreement.

Change in Requirements - Should such government regulatory requirements be changed, Covance will make every reasonable effort to satisfy the new requirements.  In the event that compliance with such new regulatory requirements necessitates a change in this Agreement,  Covance will submit to Company a revised technical and cost proposal for Company’s acceptance prior to performing services.

Conflicts - In the event of a conflict in government regulation, Company will designate the applicable regulations to be followed by Covance in the performance of its services.

G.  DATA CENTER VISITS

Company’s representatives may visit Covance’s  facility at reasonable times and with reasonable frequency during normal business hours to observe the progress of a Clinical Trial.  All such visits shall be scheduled in advance by Company.  Company acknowledges that Company representatives granted access to Covance’s  facilities during any such visits may have access to confidential and proprietary information of Covance. Company agrees that all such confidential and proprietary information of Covance obtained or observed by Company during such visits shall remain the sole property of Covance and Company shall keep such information confidential and shall not use or disclose it to any third party without Covance prior written consent.

H.  INDEMNIFICATION

Company shall indemnify Covance and its respective affiliates and their respective officers, directors, employees and agents (“Covance Group”) from any loss, damage, cost or expense (including reasonable attorney’s fees) (a “Loss”) arising from any claim, demand, assessment, action, suit or proceeding (a “Claim”) arising from or related to (i) personal injury to a participant in the Clinical Trial directly or indirectly caused by the Drug, (ii) Covance’s performance of or involvement with the Clinical Trial or its obligations under this Agreement, (iii) this Agreement, the Clinical Trial or any aspect thereof set forth in the Protocol violating any applicable law, rule, regulation or ordinance, (iv) the Drug’s harmful or otherwise unsafe effect, including, without limitation, a Claim based upon Company’s or any other person’s use, consumption, sale, distribution or marketing of any substance, including the Drug, or (v) the negligence, gross negligence or intentional misconduct or inaction of Company in the performance of its obligation under this Agreement or the Protocols related to any Clinical Trial; provided that if such Loss or Claim (other than a Loss or Claim described in clause (iv)) hereof arises in whole or in part from Covance’s negligence, gross negligence or intentional misconduct or inaction, then the amount of such Loss that Company shall indemnify the appropriate person or entity within the Covance Group pursuant to this Section H shall be reduced by an amount in proportion to the percentage

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of Covance’s responsibilities for such Loss as determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties.  Company shall not indemnify the Covance Group from any Loss from any Claim described in clause (iv) hereof arising solely from the willful misconduct or inaction or gross negligence of Covance.

Covance shall indemnify Company and its officers, directors, employees and agents (“Company Group”) from any Loss arising from any Claim for personal injury to Clinical Trial participants or personal injury to any employee within the Company Group or property damage arising or occurring during the conduct of the Clinical Trial as a result of Covance’s negligence, gross negligence or intentional misconduct or inaction; provided that if such Loss or Claim hereof arises in whole or part from the Company Group’s negligence, gross negligence or intentional misconduct or inaction, then the amount of the Loss that Covance shall indemnify the Company Group for pursuant to this Section H shall be reduced by an amount in proportion to the percentage of Company Group’s responsibilities for such Loss as determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties.

Upon receipt of notice of any Claim which may give rise to a right of indemnity from a party, a person or entity entitled to seek indemnification pursuant to the foregoing provisions (the “Indemnified Party”) shall give written notice thereof to the other party (the “Indemnifying Party”) with a Claim for indemnity.  Such notice shall indicate the nature of the Claim and the basis therefor.  Promptly after a Claim is made for which the Indemnified Party seeks indemnity, the Indemnified Party shall permit the Indemnifying Party, at its option and expense, to assume the complete defense of such Claim, provided, however, that (a) the Indemnified Party will have the right to participate in the defense of any such Claim at its own cost and expense, (b) the Indemnifying Party will conduct the defense of such Claim, with due regard for the business interest and potential related liability of the Indemnified Party and (c) the Indemnifying Party will, prior to making any settlement, consult with the Indemnified Party as to the terms of such settlement.  The Indemnified Party shall have the right, at its election, to release and hold harmless the Indemnifying Party from its obligations hereunder with respect to such Claim and assume a complete defense of the same in return for payment by the Indemnifying Party to the Indemnified Party of the amount of the Indemnifying Party’s settlement offer.  The Indemnifying Party will not, in defense of such Claim, except with the consent of the Indemnified Party, consent to the entry of any judgment or enter into any settlement which does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to the Indemnified Party of a release from all liability in respect thereof.  After notice to the Indemnified Party of the Indemnifying Party’s election to assume the defense of such Claim, the Indemnifying Party shall be liable to the Indemnified Party for such legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof at the request of the Indemnifying Party.  As to those Claims with respect to those which the Indemnifying Party does not elect to assume control of the defense, the Indemnified Party will afford the Indemnifying Party an opportunity to participate in such defense, at the Indemnifying Party’s own cost and expense, and will not settle or otherwise dispose of any of the same without the consent of the Indemnifying Party, which may not be unreasonably withheld or delayed.

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The obligations of the parties under Section H shall survive the termination of this Agreement.  Further, a breach by the Indemnified Party of its obligations under this Agreement shall not relieve the Indemnifying Party of its obligations under this Section unless such breach was solely responsible for the Loss or Claim as determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties.

I.  DEFAULT

If Covance shall be in default of its material obligations under this Agreement, then Company shall promptly notify Covance in writing of any such default.  Covance shall have a period of thirty (30) days from the date of receipt of such notice within which to cause the cure of such default.  If Covance shall fail to so cause such cure, then this Agreement shall, at Company’s option and upon notice to Covance, immediately terminate.  In any event, Company’s sole remedy for any default by Covance under this Agreement shall be the refund of all money paid to Covance with respect to any such affected Clinical Trial.  UNDER NO CIRCUMSTANCES SHALL COMPANY BE ENTITLED TO, NOR SHALL COVANCE BE RESPONSIBLE FOR, ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING IN CONNECTION WITH COVANCE’S DEFAULT OR BREACH OF THEIR OBLIGATIONS UNDER THIS AGREEMENT, EXHIBIT A, OR ANY DOCUMENTS RELATED THERETO.

J.  INSURANCE

Covance shall secure and maintain in full force and effect through the performance of its services insurance coverage for (a) Worker’s Compensation, (b) General Liability, and (c) Automobile Liability in amounts appropriate to the conduct of Covance’s business.  Certificates evidencing such insurance will be made available for examination upon request by Company.

K.  DATA RETENTION

Covance will maintain all data collected during a Clinical Trial in an immediately retrievable format at all times during the Clinical Trial and for a period of three months after the completion of the Clinical Trial.  Thereafter, all data will be retained in archive files for at least two years after FDA approval of the new drug application according to Company communication to Covance, but not later than five years after the submission of the new drug application.

L.  FORCE MAJEURE

No party shall be liable for a delay in performance or failure to perform this Agreement if such delay or failure is due to acts of God or any other event beyond the control of the parties, including, without limitation, fire, explosion, weather, disease, war, insurrection, civil strife, riots, government action or power failure, provided, however, that the party who is unable to perform resumes performance as soon as possible following the end of the event causing delay or failure.  Any deadline or time for performance specified in this Agreement which falls due during

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or subsequent to the occurrence of any of the events referred to above shall be automatically extended for a period of time equal to the period of delay caused by any such event.

Covance will promptly notify Company if, by reason of any of the events referred to above, Covance is unable to meet any deadline or time for performance specified in this Agreement.  In the event that any part of Covance’s services are rendered invalid as a result of any such event, Covance will, upon written request from Company and at Company’s sole cost and expense, repeat that part of the services affected by the event.

M.  TERMINATION

Company may terminate this Agreement at any time for any reason upon thirty (30) days written notice to Covance, except when the reason for termination is the safety of patients, then it can be terminated immediately.  In the event of such termination, Covance shall be entitled to full payment for work performed on the Clinical Trial up through the date work on such Clinical Trial is concluded, as calculated in accordance with the provisions of this Agreement, including, without limitation, all fees and other out-of-pocket expenses of Covance for such Clinical Trial.  Covance shall use reasonable efforts to conclude or transfer the Clinical Trial as expeditiously as practicable and in accordance with all applicable laws, rules and regulations, including those of the FDA.  Further, Covance and Company shall cooperate with each other during such Clinical Trial termination to safeguard patient safety, continuity of patient treatment and to comply with applicable laws, rules and regulations.

N.  OBLIGATIONS NOTWITHSTANDING TERMINATION

The termination of this Agreement shall not relieve either party of its obligations to the other with respect to (a) maintaining the confidentiality of Confidential Information, (b) assignment of inventions and assistance with respect thereto, (c) indemnification, (d) compensation for services performed, and (e) retention of records.

O.  INDEPENDENT CONTRACTOR

It is understood and agreed that Covance shall perform its duties as an independent contractor and not as an agent, employee, partner or joint venture of Company.  Covance will have no authority to bind or commit Company in any manner whatsoever and will not, at any time, hold itself out to third parties as having authority to enter into or incur any commitments, expenses, liabilities or obligations of any nature on behalf of Company, except pursuant to this Agreement.

P.  ADVERTISING

Neither party shall use the name of the other party or the names of the employees of the other party in any advertising or sales promotional material or in any publication without the prior written permission of such party.

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Q.  MODIFICATIONS

No amendments or modifications to this Agreement may be made without the written Agreement of Company and Covance as to this Agreement.

R.  LAW

This Agreement shall be interpreted in accordance with the laws of the State of Illinois. It is the intention of the parties that in the event disputes should arise between the parties over the interpretation and application of this Agreement, the parties will first attempt to settle such disputes by negotiation and consultation between the senior executives of Company and Covance and other parties familiar with this Agreement,  Clinical Trial or Protocol.

S.  COSTS OF LITIGATION

In the event that any party commences legal proceedings against the other party in connection with this Agreement, the party prevailing through a final non-appealable decision of the court of competent jurisdiction shall be entitled to recover its costs and expenses of litigation (including reasonable attorneys’ fees) from the other party.

T.  BINDING EFFECT

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns; provided, however, that neither party shall have the right to assign this Agreement or any of the rights set forth herein or delegate any of the obligations hereunder without the prior written consent of the other party.

U.  ENTIRE AGREEMENT

This Agreement represents the entire understanding between the parties with respect to the subject matter hereof as of the Effective Date, and this Agreement supersedes all prior agreements, negotiations, understandings, representations, statements and writings between the parties relating thereto.

V.  WAIVER

No waiver of any term, provision, or condition of this Agreement whether by conduct or otherwise in any one or more instances shall be deemed to be or construed as a further or continuing waiver or estoppel of any such term, provision, or condition or of any other term, provision, or condition of this Agreement.

W.  SEVERABILITY

If any term or provision of this Agreement shall be held invalid or unenforceable, the remaining terms hereof shall not be affected but shall be valid and enforced.

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X.  CONTACT

Until further notice Company’s contact with Covance will be the Project Manager, or such persons as said person shall designate and Covance’s contact within Company will be David A. Eiznhamer, Ph.D.or such persons as said person shall designate, for purposes of this Agreement.

Y.  NOTICES

All notices required to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally or mailed first class, registered or certified mail, return receipt requested,  postage paid:

a.  If to Company to:	Advanced Life Sciences, Inc.
	1440 Davey Road
	Woodridge, IL 60517
	Attention: David A. Eiznhamer, Ph.D.
With a copy to:	Advanced Life Sciences, Inc.
	1440 Davey Road
	Woodridge, IL 60517
	Attention: Chief Legal Counsel
b.  If to COVANCE to:	Covance Cardiac Safety Services Inc.
	9390 Gateway Drive
	Reno, Nevada 89521 USA
	Attention: Director/Controller

or at such other place as either party shall hereafter furnish to the other party in writing.   Notices shall be deemed given on the date of personal delivery or deposit in the mail as specified above.

Z.  CAPTIONS

Any caption used in this Agreement is inserted for convenience and reference only and is to be ignored in the construction and interpretation of the provisions hereof.

[Signature page follows]

11

[Signature page to ECG Service Agreement]

IN WITNESS WHEREOF, the parties by their duly authorized officers have executed this Agreement on the dates set forth below, to be effective on the Effective Date set forth on the first page of this Agreement.

Advanced Life Sciences, Inc.		Covance Cardiac Safety Services Inc.
By:	/s/ John L. Flavin	By:	/s/ Trenton L. Harris
Name:	John L. Flavin	Name:	Trenton L. Harris
Title:	President	Title:	Director/Controller
Date:	November 22, 2005	Date:	November 18, 2005

12

EX-10.5

Exhibit 10.5

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is entered into as of this 18th day of November, 2005 by and between Advanced Life Sciences, Inc., an Illinois corporation (“ALS”), and Ze-Qi Xu, Ph.D. (the “Executive”) to amend the terms of that certain Employment Agreement dated April 11, 2005 between ALS and the Executive (the “Agreement”).

WHEREAS, ALS and the Executive entered into the Agreement on April 11, 2005;

WHEREAS, the parties wish to amend the Agreement as provided herein.

NOW, THEREFORE, in consideration of the foregoing recitals, the parties hereto, intending to be legally bound, agree as follows:

1.Incorporation of the 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 amendments 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.  The Agreement is hereby amended as follows:

a.Section 4(a) of the Agreement shall be deleted in its entirety and replaced with the following language:

“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 amount of Base Salary shall be reviewed annually by the Chief Executive Officer to determine whether to increase the Base Salary on a prospective basis.  The Executive’s Base Salary shall not be reduced after any increase, without the Executive’s consent.”

b.Section 4(b) of the Agreement shall be deleted in its entirety and replaced with the following language:

“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.  During the 2006 fiscal year of the Company, the maximum bonus that the Executive may receive is $75,000.”

3.Effectuation.  Except as amended by this Amendment, the provisions of the Agreement shall continue for all purposes without interruption and the Agreement shall remain in full force and effect. The amendment to the Agreement contemplated by this Amendment shall be deemed effective as of November 1, 2005.

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.

[Signature Page Follows]

[Signature Page to First Amendment to Employment Agreement]

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

EXECUTIVE		ADVANCED LIFE SCIENCES, INC.
By:	/s/ Ze-Qi Xu	By:	/s/ Michael T. Flavin
Name:	Ze-Qi Xu, Ph.D.	Name:	Michael T. Flavin, Ph.D.
		Its:	Chief Executive Officer

EX-10.6

Exhibit 10.6

Employment Agreement

THIS EMPLOYMENT AGREEMENT (this “Agreement”) made effective as of the 11th day of April 2005(the “Effective Date”), by and between Advanced Life Sciences, Inc., an Illinois corporation (the “Company”), and David A Eiznhamer, Ph.D. (the “Executive”).

WHEREAS, the Company and the Executive previously entered into an employment contract (the “Existing Employment Contract”); and

WHEREAS, the Company and the Executive desire to enter into this Agreement, effective as of the Effective Date, to replace the Existing 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 Biological Sciences of the Company, and shall have such responsibilities, duties and authority as are assigned by the Chief Scientific Officer of the Company and are customarily associated with such position, including but not limited to, those he may have as of the Effective Date.  The Executive shall report to the Chief Scientific Officer of the Company.  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 $125,000 (“Base Salary”), payable in substantially equal installments no less frequently than monthly in accordance with the Company’s applicable payroll practices.  The amount of Base Salary shall be reviewed annually by the Chief Executive Officer (with the first review to occur prior to the first anniversary of the Effective Date) to determine whether to increase the Base Salary on a prospective basis.  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.  During the 2005 fiscal year of the Company, the maximum bonus that the Executive may receive under the Bonus Plan is $35,000.

(c)Stock Incentive Plan.  As of the Effective Date, the Executive shall be shall be eligible to receive additional awards of the Company’s common stock under the Stock Incentive Plan or under any other equity plan of the Company as determined by the Board of Directors of the Company (the “Board”) 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 15 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)).

(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); and (iv) any amounts payable under any of the Company’s Benefit Plans in accordance with the terms of those plans.  All amounts under clauses (i) through (iii) 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 the Executive’s employment is terminated pursuant to Sections 5(a)(i) or 5(a)(ii), or by the Executive for any reasonpursuant 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, the Company shall, for a period of six (6) months following the Date of Termination, (i) provide to Executive salary continuation, at Executive’s Base Salary rate then in effect, and (ii) continue the Executive’s coverage under the 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.  Notwithstanding the forgoing, vacation days shall not accrue during the six (6) month period of severance.

(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.

7.Change in Control.

(a)Payments and Benefits Upon Employment Termination Upon a Change in Control.  If the Executive’s employment is terminated other than for Cause within 24 months after a Change in Control (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 two (2) times the sum of (A) the Executive’s Base Salary as in effect on the date of the Executive’s termination of employment and (B) the Executive’s target bonus amount for the fiscal year in which the Executive’s employment is terminated OR an amount equal to the annual bonus paid to the Executive during the fiscal year immediately preceding the Executive’s termination of employment.

(ii)The Company shall continue the Executive’s coverage under the Benefit Plans in which the Executive participated immediately prior to the Executive’s termination of employment for a period of 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.

(b)Timing of Payment.  All payments under Section 7(a) 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)During any period of two consecutive years, individuals who at the beginning of any such period constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, unless the election, or the nomination for election by the stockholders of the Company, of each new director of the Company during such period was approved by a vote of at least two-thirds of the Incumbent Directors then still in office;

(C)As the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of all or substantially all of the Company’s assets or contested election, or any combination of the foregoing transactions, less than a majority of the combined voting power of the then-outstanding securities of the Company or any successor corporation or entity entitled to vote generally in the election of the directors of the Company or such other corporation or entity after such transaction is held in the aggregate by the holders of the securities of the Company entitled to vote generally in the election of directors of the Company immediately prior to such transaction; 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).

(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; provided, however, that the Executive may elect (at any time prior to the payment of any Total Payment under this Agreement) to have the noncash payments and benefits reduced (or eliminated) prior to any reduction of the cash payments under this Agreement.

(b)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 (c) below.

(c)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.

8.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 8, 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, 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.  The Executive understands, and the Company agrees, that the Company shall pay to the Executive a monthly amount equal to one month of the Executive’s final Base Salary if the Executive is unable to secure other employment as a direct result of this Section 8(b).  The Executive agrees and acknowledges that (i) the Company shall be obligated to make such payment only upon a written request by the Executive containing sufficient information for the Company to make a determination that this Section 8(b) caused the Executive’s inability to secure other employment, and (ii) the Company shall be released from the obligation to make such payment if the Company provides the Executive a written release from this Section 8(b).  The Company’s obligation to make payments under this Section 8(b) shall be made only for the period beginning with the Executive’s inability to secure other employment as a result of this Section 8(b) and ending no later than the expiration of the twelve-month period following the Executive’s Date of Termination.

(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 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 8 shall survive termination of this Agreement.

(g)Scope Limitations.  If the scope, period of time or area of restriction specified in this Section 8 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.

9.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 9.

10.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:

David A. Eizenhamer, Ph.D.

112 North Bristol Drive

Bloomingdale, IL  60108

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.

11.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.

12.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 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.

13.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.

14.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 supercede the Existing Employment Contract and govern the relationship of the parties.

15.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.

16.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.

17.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.

18.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/ David A. Eizenhamer, Ph.D.	By:	/s/ Michael T. Flavin
Name: David A. Eizenhamer, Ph.D.		Name:		Michael T. Flavin
		Title:		Chief Executive Officer

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is entered into as of this 18th day of November, 2005 by and between Advanced Life Sciences, Inc., an Illinois corporation (“ALS”), and David A. Eiznhamer, Ph.D. (the “Executive”) to amend the terms of that certain Employment Agreement dated April 11, 2005 between ALS and the Executive (the “Agreement”).

WHEREAS, ALS and the Executive entered into the Agreement on April 11, 2005;

WHEREAS, the parties wish to amend the Agreement as provided herein.

NOW, THEREFORE, in consideration of the foregoing recitals, the parties hereto, intending to be legally bound, agree as follows:

1.Incorporation of the 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 amendments 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.  The Agreement is hereby amended as follows:

a.Section 4(a) of the Agreement shall be deleted in its entirety and replaced with the following language:

“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 amount of Base Salary shall be reviewed annually by the Chief Executive Officer to determine whether to increase the Base Salary on a prospective basis.  The Executive’s Base Salary shall not be reduced after any increase, without the Executive’s consent.”

b.Section 4(b) of the Agreement shall be deleted in its entirety and replaced with the following language:

“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.  During the 2006 fiscal year of the Company, the maximum bonus that the Executive may receive is $75,000.”

3.Effectuation.  Except as amended by this Amendment, the provisions of the Agreement shall continue for all purposes without interruption and the Agreement shall remain in full force and effect. The amendment to the Agreement contemplated by this Amendment shall be deemed effective as of November 1, 2005.

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.

[Signature Page Follows]

[Signature Page to First Amendment to Employment Agreement]

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

EXECUTIVE		ADVANCED LIFE SCIENCES, INC.
By:	/s/ David A. Eizenhamer, Ph.D.	By:	/s/ Michael T. Flavin
Name: David A. Eizenhamer, Ph.D.		Name:		Michael T. Flavin
		Title:		Chief Executive Officer