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
June
28,
2007
Date
of
Report (Date of earliest event reported)
ACURA
PHARMACEUTICALS, INC.
(Exact
Name of Registrant as Specified in Charter)
|
State
of New York
|
1-10113
|
11-0853640
|
|
(State
of Other Jurisdiction
|
(Commission
File Number)
|
(I.R.S.
Employer
|
|
of
Incorporation)
|
Identification
Number)
|
616
N. North Court, Suite 120
Palatine,
Illinois 60067
(Address
of principal executive offices) (Zip Code)
(847)
705-7709
(Registrant’s
telephone number, including area code)
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 (see General Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d- 2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR
240.13e- 4(c))
Item
1.01 Entry
Into a Material Definitive Agreement
On
June
28, 2007, the Registrant amended its Loan Agreement dated as of March
29,
2000, as previously amended, with
Essex Woodlands Health Venture V, L.P., Care Capital Investments II, L.P.,
Care
Capital Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P. and Galen Employee Fund III, L.P. (collectively, the
“VC
Lenders”) and certain individual lenders (with the VC Lenders, the “Lenders”)
and its $5,000,000 note (the “Note”) held by such Lenders, dated as of December
20, 2002 to extend the maturity of such note to September 30, 2007 from June
30,
2007. In conjunction therewith the Lenders entered into a Consent and Amendment
dated as of June 28, 2007 to Noteholders Agreement dated as of February 6,
2004,
pursuant to which the consent of holders of not less than 98.38% of the
interests in the Note may further extend the maturity or change the interest
rate on the Note.
GCE
Holdings, LLC, which is controlled by the VC Lenders, beneficially owns
approximately 78% of the Registrant's outstanding common stock and has the
right
to designate four directors (of which it has exercised the right with respect
to
three directors) to the Registrant’s Board of Directors.
Item
9.01 Financial
Statements and Exhibits
|
Exhibit
Number
|
Description
|
|
|
10.1
|
Fourth
Amendment, Waiver and Consent dated as of June 28, 2007 to Loan Agreement
dated as of February 6, 2004.
|
|
|
10.2
|
Consent
and Amendment dated as of June 28, 2007 to Noteholders Agreement
dated as
of February 6, 2004.
|
|
|
10.3
|
Amended
and Restated $5,000,000 Senior Note
|
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 thereunto
duly authorized.
|
ACURA
PHARMACEUTICALS, INC.
|
||
| |
|
|
| By: | /s/ Peter Clemens | |
|
Peter A. Clemens |
||
| Senior Vice President & Chief Financial Officer | ||
Date: June
28,
2007
Exhibit
Index
|
Description
|
||
|
10.1
|
Fourth
Amendment, Waiver and Consent dated as of June 28, 2007 to Loan Agreement
dated as of February 6, 2004.
|
|
|
10.2
|
Consent
and Amendment dated as of June 28, 2007 to Noteholders Agreement
dated as
of February 6, 2004.
|
|
|
10.3
|
Amended
and Restated $5,000,000 Senior Note
|
FOURTH
AMENDMENT, WAIVER AND CONSENT
TO
LOAN
AGREEMENT
THIS
FOURTH AMENDMENT, WAIVER AND CONSENT TO LOAN AGREEMENT, dated as of June 28,
2007 (the “Fourth
Amendment”),
is
made and entered into by and between Acura Pharmaceuticals, Inc., a New York
corporation (“Borrower”),
and
Galen
Partners III, L.P., a Delaware limited partnership, as Agent under that certain
Noteholders Agreement dated as of February 6, 2004 (“Lender”).
Capitalized terms used herein and not otherwise defined shall have the meaning
provided in the Loan Agreement (as defined below).
RECITALS
WHEREAS,
Borrower
and Lender (as assignee of Watson Pharmaceuticals, Inc. (“Watson”)) are parties
to that certain Loan Agreement, dated as of March 29, 2000, as amended by a
certain Amendment to Loan Agreement dated as of March 31, 2000, as further
amended by a certain Second Amendment to Loan Agreement dated as of December
20,
2002 and as further amended by a certain Third Amendment, Waiver and Consent
to
Loan Agreement dated as of February 6, 2004 (the “Third Amendment”) (as so
amended, the "Loan Agreement"); and
WHEREAS,
in
accordance with the terms of the Loan Agreement, Borrower previously issued
to
Watson two Promissory Notes, the first dated December 20, 2002 in the principal
amount of $17,500,000 (the "Replacement Note"), and the second dated December
20, 2002 in the principal amount of $3,901,331 (the "$3.9 Million Note", and
together with the Replacement Note, collectively, the "Old Notes"); and
WHEREAS,
in order
to allow the Borrower to complete each of the transactions contemplated pursuant
to that certain Term Sheet dated December 19, 2003 between the Borrower and
the
other signatories thereto (the "Term Sheet Transactions"), at Borrower’s request
and in accordance with the Third Amendment, Lender consented to the Term Sheet
Transactions and waived certain restrictions contained in the Loan Agreement;
and
WHEREAS,
pursuant
to a certain Umbrella Agreement dated as of February 6, 2004 (the "Umbrella
Agreement") by and among Borrower, Watson, Care Capital Investment II, L.P.,
Essex Woodlands Health Ventures V, LP, Galen Partners III, L.P. and the other
signatories thereto (collectively, but excluding the Borrower and Watson, the
"Investor Group"), in consideration of Borrower's payment to Watson of
$4,000,000, Watson (i) cancelled and discharged in full the $3.9 Million Note,
(ii) forgave $12,500,000 in principal amount of the Replacement Note and amended
and restated the Replacement Note as provided in the Third Amendment, and (iii)
amended the Loan Agreement as provided in the Third Amendment (collectively,
the
"2004 Note and Loan Agreement Amendments"); and
WHEREAS,
pursuant
to the terms of the Umbrella Agreement, Watson transferred and conveyed to
the
Investor Group all of its right, title and interest in and to the Loan Agreement
and Replacement Note after giving effect to the 2004 Note and Loan Agreement
Amendments;
WHEREAS,
simultaneous with the completion of the transactions contemplated in the
Umbrella Agreement, the Replacement Note was amended and restated in the form
of
Exhibit A to the Third Amendment to Loan Agreement (the “2004 Replacement
Note”); and
WHEREAS,
the
Borrower and the Investor Group desire to further amend the Loan Agreement
pursuant to this Fourth Amendment to amend and restate the 2004 Replacement
Note
to provide for the extension of the Maturity Date of the 2004 Replacement Note
from June 30, 2007 to September 30, 2007.
NOW,
THEREFORE,
the
parties hereto agree as follows:
AGREEMENT
1. Article
One of the Loan Agreement is hereby amended in its entirety to read as
follows:
"1.
AMOUNT AND TERMS OF LOANS.
"1.1
Term
Loans.
Subject
to the terms herein, Watson Pharmaceuticals, Inc. (“Watson”) has previously
loaned to Borrower the aggregate principal amount of Twenty One Million Four
Hundred One Thousand Three Hundred Thirty One Dollars ($21,401,331) (the
"Original Loan"). Effective the date of the Third Amendment to the Loan
Agreement, (i) Watson forever forgave, discharged, cancelled and rendered null
and void Borrower's obligation to repay Sixteen Million Four Hundred One
Thousand Three Hundred Thirty One Dollars ($16,401,331) in principal amount,
plus accrued and unpaid interest on such principal amount, of the Original
Loan,
resulting in a remaining principal balance of the Original Loan of Five Million
Dollars ($5,000,000) (the "Loan"), and (ii) Watson forever forgave and
discharged Borrower's obligation to pay interest under the Original Loan, as
evidenced by the Old Notes, to the extent accrued and unpaid through and
including the date of the Third Amendment to the Loan Agreement. The Old Notes
previously issued by Borrower to Watson hereunder were amended or cancelled,
as
appropriate, in accordance with Section 1.2 below. Notwithstanding any
prepayment of the Loan by Borrower, sums repaid may not be
re-borrowed.
1.2
Promissory
Notes.
Borrower’s obligation to pay the principal of, and interest on, the Loan shall
be evidenced by a promissory note dated as of December 20, 2002 duly executed
and delivered by Borrower in the form attached as Exhibit A to the Fourth
Amendment to the Loan Agreement and representing the $5,000,000 principal
balance of the Loan (the “Note”), which Note shall be an amendment and
restatement of the 2004 Replacement Note. Upon execution and delivery of the
Note, the 2004 Replacement Note shall be null and void and of no further legal
force or effect. Lender agrees to promptly return to Borrower the 2004
Replacement Note after receipt of the Fourth Amendment to the Loan Agreement
and
the Note."
2. Section
12.1 of the Loan Agreement is hereby amended by adding the following definitions
in alphabetical order:
“2004
Note and Loan Agreement Amendments” shall mean the amendments to the Note and
the Loan Agreement effected pursuant to the Third Amendment to Loan
Agreement.”
“2004
Replacement Note” shall mean the Replacement Note in the principal amount of $5
million issued to Watson (and simultaneously assigned to Lender) pursuant to
the
Third Amendment to Loan Agreement.”
3. Limitation
of Amendment.
Except
as amended above, the terms of the Loan Agreement shall remain in full force
and
effect.
4. Governing
Law.
This
Fourth Amendment and the rights of the parties hereunder shall be governed
in
all respects by the laws of the State of New York wherein the terms of this
Fourth Amendment were negotiated.
5. Counterparts.
This
Fourth Amendment may be executed in any number of counterparts, including by
facsimile, each of which shall be an original, but all of which together shall
constitute one instrument.
IN
WITNESS WHEREOF, Borrower and Lender have caused this Fourth Amendment to be
duly executed by their duly authorized officers all as of the day and year
first
above written.
| "BORROWER" | "LENDER" | ||
| ACURA PHARMACEUTICALS, INC. | GALEN PARTNERS III, L.P., as Agent | ||
| By: /s/ Peter Clemens | By: /s/ Bruce F. Wesson | ||
|
|
|
||
|
Title:
Senior Vice President
and
Chief Financial Officer
|
Title: Managing Director |
EXHIBIT
A
Note
CONSENT
AND AMENDMENT TO NOTEHOLDERS AGREEMENT
This
Consent and Amendment (the “Amendment”)
to
Noteholders Agreement (“Agreement”)
dated
as of February 6, 2004 by and among Essex Woodlands Health Ventures V, L.P.,
a
Delaware limited partnership (“Essex”),
Galen
Partners III, L.P., a Delaware limited partnership (“Galen”),
acting in its capacity as a Holder (as defined herein) and as agent for the
Holders (“Agent”)
and
Care Capital Investments II, L.P., a Delaware limited partnership (“Care
Capital”),
certain of the affiliates of Care Capital and Galen and certain other
participants in the Senior Note (such affiliates and participants, together
with
Galen, Care and Essex, the “Holders”),
is
dated as of June 28, 2007. Capitalized terms appearing in this Amendment without
definition will have the meanings ascribed to such terms in the
Agreement.
PRELIMINARY
STATEMENTS
The
parties thereto wish to amend the Agreement to allow the Agent with the consent
of holders of not less than 98.38% of the aggregate Participation Percentage
to
amend the Senior Note and the Loan (as defined in the Loan Agreement, as amended
through the date hereof) with respect to the maturity date and interest rate
applicable thereto. In addition, the parties hereto wish to consent to extension
of the maturity date of the Senior Note and the Loan to September 30, 2007.
Previously said Loan and Senior Note were due to mature on June 30,
2007.
AMENDMENT
AND CONSENT
In
consideration of the mutual covenants contained in this Amendment and other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE
1
CONSENT
The
parties hereto hereby irrevocably consent to the extension of the maturity
date
of the Loan and the Senior Note to September 30, 2007.
ARTICLE
2
AMENDMENT
OF NOTEHOLDERS AGREEMENT
2.1
The
Agreement is hereby amended as follows:
A. Section
2.1 of the Agreement is amended by adding a new subsection (f) as follows:
(f)
“Notwithstanding the foregoing the Agent is authorized to amend the Senior Note
and the Loan (as defined in the Loan Agreement, as amended through the date
of
Amendment of the Agreement dated as of June 28, 2007) to modify the interest
rate applicable thereto and to extend the maturity thereof, with the consent
of
the holders
of not less than 98.38% of the aggregate Participation Percentage.”
B. Section
5.6 of the Agreement is replaced in its entirety with the following:
“No
modification or amendment to this Agreement may be made except by a written
instrument signed by the Agent and the Requisite Holders; provided,
that
any amendment to Article 4 shall require the written consent of each Claimant;
and further
provided
that any
modification to Section 2.1(f) shall require the approval of holders of not
less
than 98.38% of the aggregate Participation Percentage.”
ARTICLE
3
MISCELLANEOUS
3.1 GOVERNING
LAW
This
Amendment and the rights of the parties hereunder shall be governed in all
respects by the laws of the State of New York wherein the terms of this
Amendment were negotiated, excluding to the greatest extent permitted by law
any
rule of law that would cause the application of the laws of any jurisdiction
other than the State of New York.
3.2 SEVERABILITY
If
any
provision or portion of any provision of this Amendment is held to be
unenforceable or invalid by any court of competent jurisdiction, the remaining
portions of any such provision and the remaining provisions hereof shall remain
in effect.
3.3 COUNTERPARTS
This
Amendment may be executed simultaneously in one or more counterparts, including
by facsimile copy, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have executed this Consent and Amendment
to
Noteholders Agreement as of the date first written above.
|
LENDER
AND AGENT:
GALEN
PARTNERS III, L.P.
By:
Claudius, L.L.C., General Partner
610
Fifth Avenue, 5th
Fl.
New
York, New York 10019
|
LENDER:
CARE
CAPITAL OFFSHORE INVESTMENTS II, LP
By:
Care Capital II, LLC, as general partner
47
Hulfish Street, Suite 310
Princeton,
NJ 08542
|
||
| /s/ Bruce Wesson | By: | /s/ David Ramsay | |
|
By:
Bruce Wesson
|
By: David R. Ramsay |
||
|
Its:
General Partner
|
Its:
Authorized Signatory
|
||
|
LENDER:
GALEN
PARTNERS INTERNATIONAL, III, L.P.
By:
Claudius, L.L.C., General Partner
610
Fifth Avenue, 5th
Floor
New
York, New York 10020
|
LENDER:
CARE
CAPITAL INVESTMENTS II, LP
By:
Care Capital II, LLC, as general partner
47
Hulfish St., Suite 310
Princeton,
NJ 08542
|
||
| /s/ Bruce Wesson | By: | /s/ David Ramsay | |
|
By:
Bruce Wesson
|
Name: David R. Ramsay |
||
| Its: General Partner |
Title:
Authorized Signatory
|
||
|
LENDER:
GALEN
EMPLOYEE FUND III, L.P.
By:
Wesson Enterprises, Inc.
610
Fifth Avenue, 5th
Floor
New
York, New York 10020
|
LENDER:
ESSEX
WOODLANDS HEALTH
VENTURES
V, L.P.
190
South LaSalle Street, Suite 2800
Chicago,
IL 60603
|
||
| /s/ Bruce Wesson | /s/ Immanuel Tharangaj | ||
|
By: Bruce F. Wesson |
By: Immanuel Thangaraj |
||
|
Its:
General Partner
|
Its:
Managing Director
|
||
|
LENDER:
MICHAEL
WEISBROT
1136
Rock Creek Road
Gladwyne,
Pennsylvania 19035
|
LENDER:
SUSAN
WEISBROT
1136
Rock Creek Road
Gladwyne,
Pennsylvania 19035
|
||
|
/s/
Michael Weisbrot
|
/s/ Susan Weisbrot | ||
|
|
|
||
|
LENDER:
DENNIS
ADAMS
120
Kynlyn Road
Radnor,
Pennsylvania 19312
|
LENDER:
GEORGE
E. BOUDREAU
222
Elbow Lane
Haverford,
PA 19041
|
||
|
/s/
Dennis Adams
|
/s/
George Boudreau
|
||
|
|
|
||
|
LENDER:
PETER
STIEGLITZ
RJ
Palmer LLC
156
West 56th Street, 5th Floor
New
York, New York 10019
|
LENDER:
JOHN
E. HEPPE, JR.
237
W. Montgomery Avenue
Haverford,
Pennsylvania 19041
|
||
|
/s/
Peter Stieglitz
|
/s/ John Heppe | ||
|
|
|
||
SECURED
PROMISSORY NOTE
|
As
of December 20, 2002
|
|
|
Corona,
California
|
1. Promise
to Pay.
For
good and valuable consideration, the receipt of which is hereby acknowledged,
ACURA PHARMACEUTICALS, INC., a New York corporation (“Maker”),
promises to pay to GALEN PARTNERS III, L.P., a Delaware limited partnership,
as
Agent under that certain Noteholders Agreement dated as of February 6, 2004,
as
amended (“Galen”), or order (either, the “Holder”),
on
the Maturity Date (as defined below), unless sooner paid as provided in
Section 5
hereof,
the principal sum of Five Million Dollars ($5,000,000), plus accrued unpaid
interest thereon. The outstanding principal balance of this Note shall bear
interest at a variable rate equal to the prime rate announced from time to
time
by Bank of America (the “Prime
Rate”)
plus
four and one half percent (4.5%) per annum (the “Interest
Rate”)
from
February 6, 2004 to the date the principal sum is paid in full. Interest
payments shall be made as provided in Section
2
below.
All payments under this Note shall be made to the order of the Holder at the
address Holder may designate in writing to Maker. All payments of principal
under this Note shall be made in U.S. dollars.
2. Payment
of Interest.
Interest shall be paid on each March 31, June 30, September 30 and December
31
during the term of this Note, commencing March 31, 2004 (each such date being
an
"Interest
Payment Date").
The
payment of accrued interest on this Note shall be made in the form of Maker's
common stock, par value $.01 per share (the "Common
Stock")
with
the number of shares of Maker's Common Stock equal to the quotient of (x) the
interest payment amount, divided by (y) the average of the closing bid and
asked
prices for Maker's Common Stock as reported in the Over-The-Counter Bulletin
Board ("OTC
Bulletin Board")
(or
such other over-the-counter market or exchange on which the Maker's Common
Stock
may then be traded or admitted for trading) for the twenty (20) trading days
immediately preceding such Interest Payment Date, rounded up to the nearest
whole share of Maker's Common Stock. No cash interest payments shall be made
on
this Note.
3. Maturity
Date.
The
date that this Note shall mature, and the principal amount outstanding
hereunder, plus accrued unpaid interest thereon and any charges pertaining
thereto, shall become due and payable (the “Maturity
Date”)
shall
be September 30, 2007.
4. Loan
and Security Agreements.
Maker
and Galen, as assignee of Watson Pharmaceuticals, Inc., are parties to that
certain Loan Agreement, dated as of March 29, 2000, as amended by that certain
Amendment to Loan Agreement dated as of March 31, 2000, as further amended
by
that certain Second Amendment to Loan Agreement dated as of December 20, 2002,
as further amended by that certain Third Amendment, Waiver and Consent to Loan
Agreement dated as of February 6, 2004, and as further amended by that certain
Fourth Amendment, Waiver and Consent to Loan Agreement dated as of June __,
2007
(as so amended, the “Loan
Agreement”).
The
full and punctual payment and performance of this Note by Maker are secured
and
guaranteed by the Company General Security Agreement, the Company Collateral
Assignments, the Stock Pledge Agreement, the Guaranties, the Guarantors Security
Agreement, the Guarantor Collateral Assignments and the Mortgage, as those
terms
are defined in the Loan Agreement (the “Security
Agreements”).
The
security interest granted to Holder under the Security Agreements extends to
the
proceeds of any sale or other transfer or disposition of such assets, whether
by
Maker, its affiliates, the Holder or any other person, that occurs prior to
the
payment in full of this Note. Copies of the Loan Agreement and the Security
Agreements may be obtained from Maker without charge.
5. Prepayments.
Maker
may voluntarily prepay this Note either in whole or in part without penalty
or
premium.
6. Waivers.
Maker
hereby waives diligence, presentment for payment, demand, protest, notice of
non-payment, notice of dishonor, notice of protest, and any and all other
notices and demands whatsoever. Maker shall remain bound under this Note until
all principal and interest and any other amounts that are payable hereunder
or
under the Loan Agreement or the Security Agreements have been paid in full,
notwithstanding any extensions or renewals granted with respect to this Note
or
the release of any party liable hereunder or any security for the payment of
this Note. Maker, and any and all endorsers hereof, also waive the right to
plead any and all statutes of limitations as a defense to any demand on this
Note or any and all obligations or liabilities arising out of or in connection
with this Note, the Loan Agreement or the Security Agreements, to the fullest
extent permitted by law.
7. Events
of Default.
Any of
the following events shall constitute an event of default by Maker under this
Note (an “Event
of Default”):
(a) the
failure of Maker to pay to Holder, on the Maturity Date, any and all principal
amounts due and owing under this Note;
(b) the
failure of Maker to pay to Holder interest payments when due; or
(c) there
occurs any other event or circumstance that constitutes an “Event of Default” as
defined in Section 9.1
of the
Loan Agreement.
Subject
to the forbearance provisions contained in Section 9.4 of the Loan Agreement,
upon the occurrence of any Event of Default, as defined herein above, at
Holder’s option, Holder may declare immediately due and payable, and on any such
declaration there shall become immediately due and payable, the entire unpaid
principal balance of this Note, together with all accrued and unpaid interest
under this Note and any other sums owing at the time of such declaration
pursuant to this Note, the Loan Agreement or the Security Agreements, and Holder
shall be entitled to exercise all rights and remedies available to Holder under
this Note, under the Loan Agreement and the Security Agreements and under
applicable law, all of which rights and remedies shall be cumulative. Without
limiting the generality of the foregoing, upon the occurrence of an Event of
Default, the interest rate at which interest shall accrue on the principal
sum
and any other amounts that are due under this Note shall increase to the lower
of (i) the Prime Rate plus six and one-half percent (6.5%) per annum or (ii)
the
maximum interest rate permitted under applicable law (the “Default
Rate”),
until
all such amounts have been paid in full.
8. No
Waiver by Holder.
Subject
to the forbearance provisions contained in Section 9.4 of the Loan Agreement,
any delay or omission on the part of Holder to exercise any of Holder’s rights
or remedies hereunder, under the Loan Agreement or the Security Agreements
or
under applicable law, including, without limitation, the right to accelerate
amounts owing under this Note, shall not be deemed a waiver of that right or
remedy or of any other right or remedy of Holder in respect thereof. The
acceptance by Holder of any payment pursuant to the terms of this Note which
is
less than payment in full of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to exercise any of the
Holder’s rights or remedies under this Note, the Loan Agreement, the Security
Agreements or under applicable law at that time or at any subsequent time or
nullify any prior exercise of any such rights or remedies without the express
written consent of Holder, except as and to the extent provided to the contrary
by applicable law.
9. Governing
Law.
This
Note shall be governed by and construed according to and enforced under the
internal laws of the State of New York without giving effect to its choice
of
laws rules.
10. Enforcement
of the Note.
Maker
agrees that the Superior Court in and for the County of New York, New York
shall
have exclusive jurisdiction over any disputes, between the Maker and Holder
and
any action, suit or other proceeding brought by Maker or Holder relating to
the
interpretation or enforcement of this Note, and Maker agrees as follows: (a)
Maker shall accept and not contest the personal or subject matter jurisdiction
of such Court; (b) Maker shall accept and not object to or challenge the venue
of such Court or assert the doctrine of forum non conveniens with respect to
such Court; (c) Maker shall accept and not contest the validity or effectiveness
of service of process in any such action, suit or other proceeding by registered
or certified first class mail; and (d) TO THE MAXIMUM EXTENT PERMITTED BY LAW,
MAKER WAIVES AND SHALL WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
OTHER
PROCEEDING BROUGHT WITH RESPECT TO THIS NOTE OR ITS ENFORCEMENT OR
INTERPRETATION. If Maker fails to pay any amounts due hereunder when due, then
Maker shall pay all costs of enforcement and collection, including, without
limitation, reasonable attorneys’ fees and costs incurred by Holder, whether or
not enforcement and collection includes the filing of a lawsuit, and whether
or
not that lawsuit is prosecuted to judgment. The costs of enforcement and
collection shall be added to the principal amount of the Note and shall accrue
interest at the Default Rate from the Date incurred until the date paid by
Maker.
11. Binding
Nature.
The
provisions of this Note shall be binding on Maker and shall inure to the benefit
of Holder.
12. Usury
Savings Provisions.
In the
event Holder receives any sums under this Note which constitute interest in
an
amount in excess of that permitted by any applicable law, then, all such sums
constituting interest in excess of that permitted to be paid under applicable
law shall, at Holder’s option, either be credited to the payment of principal
owing hereunder or returned to Maker. The provisions of this Section 12
control
the other provisions of this Note and any other agreement between Maker and
Holder.
13. Severability.
If, but
only to the extent that, any provision of this Note shall be invalid or
unenforceable, then, such offending provision shall be deleted from this Note,
but only to the extent necessary to preserve the validity and effectiveness
of
this Note to the fullest extent permitted by applicable law.
14. Interpretation.
No
provision of this Note shall be interpreted for or against Maker or Holder
because that person or that person’s legal representative drafted such
provision. Unless otherwise indicated elsewhere in this Note, (a) the term
“or”
shall not be exclusive, (b) the term “including” shall mean “including, but not
limited to,” and (c) the terms “below,” “above,” “herein,” “hereof,” “hereto,”
“hereunder” and other terms similar to such terms shall refer to this Note as a
whole and not merely to the specific section, subsection, paragraph or clause
where such terms may appear. The section and sub-section headings in this Note
are included for convenience of reference only and shall be ignored in the
construction or interpretation of this Note.
15. Amended
and Restated Note.
This
Note is issued in accordance with that certain Fourth Amendment to Loan
Agreement dated as of June __, 2007, between Maker and Galen (the "Fourth
Amendment"),
and
is issued by Maker as an amendment and restatement of that certain Secured
Promissory Note issued by Maker to Watson Pharmaceuticals, Inc. (and
subsequently assigned to Galen, as Agent) in the principal amount of $5,000,000
dated December 20, 2002 (the "Original
Note").
Upon
execution and delivery of this Note to Galen, the Original Note shall be null
and void and of no further legal force or effect.
[SIGNATURE
PAGE TO FOLLOW]
| “MAKER” | |||
| ACURA PHARMACEUTICALS, INC. | |||
|
|
|||
| /s/ Peter A. Clemens | |||
|
By: Peter A. Clemens |
|||
|
Its: Senior Vice President and Chief
Financial
Officer
|