Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Agreement”) is dated as of July 24, 2017,
between Acura Pharmaceuticals, Inc., a New York corporation (the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an exemption from the registration requirements of Section 5 of the
Securities Act contained in Section 4(a)(2) thereof and/or Regulation D
thereunder, the Company is offering sell to each Purchaser, subject to
acceptance of this Subscription Agreement from such Purchaser by the Company,
and each Purchaser, severally and not jointly, desires to purchase from the
Company, securities of the Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1           Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

 

“Closing Date” means the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Securities, in each
case, have been satisfied or waived.

 

“Commission” means the United States Securities and Exchange Commission.

 

 1 

 

 

“Common Stock” means the common stock of the Company, par value $0.01 per share,
and any other class of the Company’s securities into which such securities may
hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

 

“Company Counsel” means LeClairRyan, with offices located at One Riverfront
Plaza, 1037 Raymond Boulevard, Sixteenth Floor, Newark, New Jersey 07102.

 

“Current Trading Market” shall have the meaning ascribed to such term in Section
4.4.

 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.

 

“Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(s).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

“FDA” shall have the meaning ascribed to such term in Section 3.1(a)(a).

 

“FDCA” shall have the meaning ascribed to such term in Section 3.1(a)(a).

 

“Fundamental Transaction” means any of the following: (i) the Company, directly
or indirectly, in one or more related transactions effects any merger or
consolidation of the Company with or into another Person and the Company is not
the surviving entity; (ii) the Company, directly or indirectly, effects any
sale, lease, license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of related
transactions; (iii) any, direct or indirect, purchase offer, tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted by the
holders of 50% or more of the outstanding Common Stock; (iv) the Company,
directly or indirectly, in one or more related transactions effects any
reclassification, reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property, or (v) the
Company, directly or indirectly, in one or more related transactions consummates
a stock or share purchase agreement or other business combination (including,
without limitation, a merger, reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding shares of Common
Stock.

 

 2 

 

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Hazardous Materials” shall have the meaning assigned to such term in Section
3.1(m).

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(p).

 

“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).

 

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

 

“Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).

 

“Material Permits” shall have the meaning ascribed to such term in Section
3.1(n).”

 

“NY BCL” shall have the meaning ascribed to such term in Section 3.1(v).

 

“Per Share Purchase Price” equals $0.4488, (which is the average of the last
price of the Company’s Common Stock for the five Trading Days preceding the date
of acceptance of Purchaser’s subscription by the Company), subject to adjustment
for reverse and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the date of this
Agreement and prior to the Closing Date. Per Share Purchase Price includes the
price of one share of Common Stock and a warrant to purchase 20% of a share of
Common Stock.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition).

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.3.

 

“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).

 

“Resale Registration Statement” shall have the meaning set forth in Section
4.1(d).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

 3 

 

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities” means the Shares, Warrants and Warrant Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Shares” means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock). 

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for Shares and Warrants purchased hereunder as specified below such
Purchaser’s name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
funds.

 

“Subsidiary” means any subsidiary of the Company as set forth in Section 3.1(a),
and shall, where applicable, also include any direct or indirect subsidiary of
the Company formed or acquired after the date hereof.

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“Trading Market” means the OTCQB (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, the Warrants, and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.

 

“Transfer Agent” means Broadridge Corporate Issuer Solutions, the current
transfer agent of the Company, with a mailing address of PO Box 1342, Brentwood,
NY 11717 and a facsimile number of 215-553-5402, and any successor transfer
agent of the Company.

 

“Warrants” means, collectively, the Common Stock purchase warrants delivered to
the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which
Warrants shall be exercisable commencing on the date of issuance and have a term
of exercise equal to five (5) years from the initial exercise date, in the form
of Exhibit C attached hereto.

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

 

 4 

 

 

ARTICLE II.

PURCHASE AND SALE

 

2.1          Closing. On the Closing Date, upon the terms and subject to the
conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell,
and the Purchasers, severally and not jointly, agree to purchase, an aggregate
of $4.0 million of Shares and Warrants. Each Purchaser’s Subscription Amount as
set forth on the signature page hereto executed by such Purchaser shall be made
available for “Delivery Versus Payment” settlement with the Company. The Company
shall deliver to each Purchaser its respective Shares and a Warrant as
determined pursuant to Section 2.2(a), and the Company and each Purchaser shall
deliver the other items set forth in Section 2.2 deliverable at the Closing.

 

2.2          Deliveries.

 

(a)          On or prior to the Closing Date, or on the dates indicated below
the Company shall deliver or cause to be delivered to each Purchaser the
following:

 

(i)          this Agreement duly executed by the Company;

 

(ii)         a legal opinion of Company Counsel, substantially in the form of
Exhibit B attached hereto;

 

(iii)        the Company shall have provided each Purchaser with the Company’s
wire instructions, on Company letterhead and executed by the Chief Executive
Officer or Chief Financial Officer;

 

(iv)        a legended certificate representing the Shares purchased (such
number being the number of Shares equal to such Purchaser’s Subscription Amount
divided by the Per Share Purchase Price, registered in the name of such
Purchaser), such certificate to be delivered with three (3) Trading Days of the
Closing Date; and

 

(v)         a Warrant registered in the name of such Purchaser to purchase up to
a number of shares of Common Stock equal to twenty percent (20%) of such
Purchaser’s Shares, with an exercise price equal to the average of the last
price of the Company’s common Stock for the five Trading Days preceding the date
of acceptance of Purchaser’s subscription by the Company, subject to adjustment
therein, such Warrant may be delivered within three (3) Trading Days of the
Closing Date.

 

(b)          On or prior to the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company the following:

 

(i)          this Agreement duly executed by such Purchaser;

 

(ii)         such Purchaser’s Subscription Amount; and

 

 5 

 

 

(iii)        such Purchaser’s accredited investor questionnaire, which is
appended to this Agreement.

 

2.3          Closing Conditions.

 

(a)          The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:

 

(i)          the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);

 

(ii)         all obligations, covenants and agreements of all Purchasers
required to be performed at or prior to the Closing Date shall have been
performed; and

 

(iii)        the delivery by all Purchasers of the items set forth in Section
2.2(b) of this Agreement.

 

(b)          The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being met:

 

(i)          the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of such date);

 

(ii)         all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been performed;

 

(iii)        the delivery by the Company of the items set forth in Section
2.2(a)(i), (ii) and (iii) of this Agreement;

 

(iv)        there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and

 

(v)         from the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission or the Company’s principal
Trading Market, and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg L.P. shall not have been suspended
or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Securities at the Closing.

 

 6 

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1          Representations and Warranties of the Company. Except as set forth
in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein to the
extent of the disclosure contained in the corresponding section of the
Disclosure Schedules or in such other section as is readily apparent from the
disclosure, the Company hereby makes the following representations and
warranties to each Purchaser:

 

(a)          Subsidiaries. The only the direct and indirect subsidiary of the
Company is Acura Pharmaceutical Technologies, Inc., an Indiana corporation. The
Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. If the Company has no subsidiaries, all
other references to the Subsidiaries or any of them in the Transaction Documents
shall be disregarded.

 

(b)          Organization and Qualification. The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation nor default of
any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not have or reasonably be expected to result
in: (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”); provided that none of the following alone shall be
deemed, in and of itself, to constitute a Material Adverse Effect under this
Agreement: (x) a change in the market price or trading volume of the Common
Stock or (y) changes in general economic conditions or changes affecting the
industry in which the Company operates generally (as opposed to Company-specific
changes) so long as such changes do not have a materially disproportionate
effect on the Company. No Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 

 7 

 

 

(c)          Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement and each of the other Transaction Documents by
the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company’s stockholders in connection herewith or therewith other than in
connection with the Required Approvals. This Agreement and each other
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

(d)          No Conflicts. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to which it is a
party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as would not have or reasonably be expected to
result in a Material Adverse Effect.

 

 8 

 

 

(e)          Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.3 of this Agreement,
(ii) application(s) to each applicable Trading Market for the listing of the
Shares and Warrant Shares for trading thereon in the time and manner required
thereby, and (iii) the filing of Form D with the Commission and such filings as
are required to be made under applicable state securities laws (collectively,
the “Required Approvals”).

 

(f)          Issuance of the Securities; Registration. The Securities are duly
authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company. The Warrant
Shares, when issued in accordance with the terms of the Warrants, will be
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to
this Agreement and the Warrants. The Shares and Warrants have not been
registered under the Securities Act and are being issued in reliance on an
exemption under the Securities Act.

 

(g)          Capitalization. The capitalization of the Company is as set forth
on Schedule 3.1(g). Except as set forth on Schedule 3.1(g), the Company has not
issued any capital stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock option or
vesting of restricted stock units under the Company’s equity incentive plans,
and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the
Exchange Act. No Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities or otherwise disclosed in the SEC Reports, there are
no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock or the
capital stock of any Subsidiary, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents or capital
stock of any Subsidiary. All of the outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Securities.

 

 9 

 

 

(h)          SEC Reports; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by the Company under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”) on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of the later of their respective dates or the most recent
amendment to a respective SEC Report, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as
applicable, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(i)           Material Changes; Undisclosed Events, Liabilities or Developments.
Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof, (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option, restricted stock unit or other equity incentive plans.

 

(j)           Litigation. Except as set forth in the SEC Reports, there is no
action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company. The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act.

 

 10 

 

 

(k)          Labor Relations. No labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None
of the Company’s or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or such Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. The Company and its Subsidiaries
are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

(l)           Compliance. Neither the Company nor any Subsidiary: (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received written notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any judgment, decree or order of any court, arbitrator or other
governmental authority or (iii) is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as would not have
or reasonably be expected to result in a Material Adverse Effect.

 

(m)         Environmental Laws. The Company and its Subsidiaries are in
compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata), including laws relating
to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands, or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”).

 

 11 

 

 

(n)          Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary
has received any written notice of proceedings relating to the revocation or
modification of any Material Permit.

 

(o)          Title to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries, (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and, the payment of which is neither
delinquent nor subject to penalties, and (iii) Liens disclosed in SEC Reports.

 

(p)          Intellectual Property. To the Company’s knowledge, the Company and
the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and
similar rights necessary or required for use in connection with their respective
businesses as described in the SEC Reports and which the failure to so have
would have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(q)          Insurance. The Company and the Subsidiaries are insured by insurers
against such losses and risks and in such amounts (including, but not limited
to, directors and officers insurance coverage) as the Company and its
Subsidiaries reasonably believe are adequate for the conduct of their business
and is customary for companies of similar size engaged in similar businesses in
similar industries.

 

(r)          Transactions With Affiliates and Employees. Except as set forth in
the SEC Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or lending of
money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock option or restricted
stock unit agreements under any stock option or other equity incentive plan of
the Company.

 

 12 

 

 

(s)          Sarbanes-Oxley; Internal Accounting Controls. The Company and the
Subsidiaries are in compliance in all material respects with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of
the Closing Date. The Company and the Subsidiaries maintain a system of internal
accounting controls designed to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure
that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms.
The Company’s certifying officers have evaluated the effectiveness of the
disclosure controls and procedures of the Company and the Subsidiaries as of the
end of the period covered by the most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”).

 

(t)          Registration Rights. No Person has any right to cause the Company
or any Subsidiary to effect the registration under the Securities Act of any
securities of the Company or any Subsidiary.

 

(u)          Listing and Maintenance Requirements. The Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. Except as disclosed in the SEC
Reports, the Company has not, in the two months preceding the date hereof,
received written notice from any Trading Market on which the Common Stock is or
has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market.

 

 13 

 

 

(v)         Application of Takeover Protections. To the extent a Purchaser will
become an “interested shareholder” under Section 912 of the New York Business
Corporation Law (the “NY BCL”) upon the purchase of the Shares contemplated by
this Agreement, the Company and the Board of Directors have taken all necessary
action (excluding amending the charter or bylaws), if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Purchasers’ ownership of the Securities
provided no representation is made to the extent that such Purchaser does not
become an “interested shareholder” under Section 912 of the NY BCL upon
Purchaser’s purchase of Securities pursuant to the Transaction Documents.

 

(w)          Disclosure. All of the disclosure furnished by or on behalf of the
Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the
Disclosure Schedules to this Agreement, is true and correct in all material
respects and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.

 

(x)          Tax Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim.

 

(y)          Foreign Corrupt Practices. Neither the Company nor any Subsidiary,
nor to the knowledge of the Company or any Subsidiary, any agent or other person
acting on behalf of the Company or any Subsidiary, has (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any
material respect any provision of FCPA.

 

(z)          Accountants. The Company’s accounting firm is BDO USA, LLP. To the
knowledge and belief of the Company, such accounting firm (i) is a registered
public accounting firm as required by the Exchange Act and (ii) shall express
its opinion with respect to the financial statements to be included in the
Company’s Annual Report for the fiscal year ending December 31, 2017.

 

 14 

 

 

(aa)        FDA. As to each product subject to the jurisdiction of the U.S. Food
and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act,
as amended, and the regulations thereunder (“FDCA”) that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the Company or
any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such
Pharmaceutical Product is being manufactured, packaged, labeled, tested,
distributed, sold and/or marketed by the Company in compliance with all
applicable requirements under FDCA and similar laws, rules and regulations
relating to registration, investigational use, premarket clearance, licensure,
or application approval, good manufacturing practices, good laboratory
practices, good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports, except where the failure to
be in compliance would not have a Material Adverse Effect. Except as disclosed
in the SEC Reports, there is no pending, completed or, to the Company's
knowledge, threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its Subsidiaries by the FDA or any other
governmental entity, and none of the Company or any of its Subsidiaries has
received any written notice, warning letter or other written communication from
the FDA or any other governmental entity. The properties, business and
operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the
FDA.

 

(bb)        Private Placement. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Shares, Warrants
and Warrant Shares by the Company to the Purchasers as contemplated hereby. The
Company has offered the Shares, Warrant or Warrant Shares for sale only to the
Purchasers and certain other “accredited investors” within the meaning of Rule
501 under the Securities Act.

 

3.2          Representations and Warranties of the Purchasers. Each Purchaser,
for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a
specific date therein, in which case they shall be accurate as of such date):

 

(a)          Organization; Authority. Such Purchaser is either an individual or
an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full
right, corporate, partnership limited liability company or similar power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have
been duly authorized by all necessary corporate, partnership, limited liability
company or similar action, as applicable, on the part of such Purchaser. Each
Transaction Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except: (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

 15 

 

 

(b)          Understandings or Arrangements. Such Purchaser is acquiring the
Securities as principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such Securities. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such Purchaser understands
that the Shares, Warrants and the Warrant Shares are “restricted securities” and
have not been registered under the Securities Act or any applicable state
securities law and is acquiring such Securities as principal for his, her or its
own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
in violation of the Securities Act or any applicable state securities law.

 

(c)          Purchaser Status. At the time such Purchaser was offered the
Securities, it was, as of the date hereof it is, and on each date on which it
exercises any Warrants, it will be an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

(d)          Experience of Such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.

 

(e)          Access to Information. Such Purchaser acknowledges that it has had
the opportunity to review the Transaction Documents (including all exhibits and
schedules thereto) and the SEC Reports and has been afforded, (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (iii) the opportunity to
obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment.

 

 16 

 

 

(f)           Certain Transactions and Confidentiality. Other than consummating
the transactions contemplated hereunder, such Purchaser has not, nor has any
Person acting on behalf of or pursuant to any understanding with such Purchaser,
directly or indirectly executed any purchases or sales, including Short
Sales, of the securities of the Company during the period commencing as of the
time that such Purchaser first received a term sheet (written or oral) from the
Company or any other Person representing the Company setting forth the material
pricing terms of the transactions contemplated hereunder and ending immediately
prior to the execution hereof. Other than to other Persons party to this
Agreement or to such Purchaser’s representatives, including, without limitation,
its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

 

(g)          General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

 

The Company acknowledges and agrees that the representations contained in this
Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated hereby.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1         Removal of Legends.

 

(a)          The Shares, Warrants and Warrant Shares may only be disposed of in
compliance with state and federal securities laws. In connection with any
transfer of Shares, Warrants or Warrant Shares other than pursuant to an
effective registration statement or Rule 144, to the Company or to an Affiliate
of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b),
the Company may require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares, Warrants or Warrant Shares under the
Securities Act. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights and
obligations of a Purchaser under this Agreement.

 

(b)          The Purchasers agree to the imprinting, so long as is required by
this Section 4.1, of a legend on any of the Shares, Warrants or Warrant Shares
in the following form:

 

 17 

 

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

 

The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Shares, Warrants or Warrant
Shares to a financial institution that is an “accredited investor” as defined in
Rule 501(a) under the Securities Act and who agrees to be bound by the
provisions of this Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Shares, Warrants or
Warrant Shares to the pledgees or secured parties. Such a pledge or transfer
would not be subject to approval of the Company and no legal opinion of legal
counsel of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the
appropriate Purchaser’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Shares, Warrants and
Warrant Shares may reasonably request in connection with a pledge or transfer of
the Shares, Warrants or Warrant Shares.

 

(c)          Certificates evidencing the Shares or the Warrant Shares shall not
contain any legend (including the legend set forth in Section 4.1(b) hereof):
(i) while a registration statement covering the resale of such security is
effective under the Securities Act, (ii) following any sale of such Shares or
Warrant Shares pursuant to Rule 144, (iii) if such Shares or Warrant Shares are
eligible for sale under Rule 144, without volume or limitations or other
restrictions, or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). If all or any portion of
a Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Warrant Shares, or if Shares or such
Warrant Shares may be sold under Rule 144, without volume or other limitations
or if such legend is not otherwise required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission) then such Shares and Warrant Shares shall be issued
free of all legends. The Company agrees that following such time as such legend
is no longer required under this Section 4.1(c), it will, no later than three
Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent of a certificate representing Shares or Warrant Shares, as
applicable, issued with a restrictive legend (such third Trading Day, the
“Legend Removal Date”), deliver or cause to be delivered to such Purchaser a
certificate representing such shares that is free from all restrictive and other
legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4.

 

 18 

 

 

(d)          Notwithstanding anything to the contrary contained in this
Agreement, if the Company elects in its discretion to file a registration
statement under the Securities Act covering the resale of the Shares or the
Warrant Shares by the Purchasers (and to seek to have such registration
statement become effective) (such registration statement, a “Resale Registration
Statement”), each Purchaser, severally and not jointly, agrees to reasonably
cooperate with the Company in connection therewith, sell Securities only in
compliance with the plan of distribution set forth therein, including, without
limitation, providing such information and entering into such agreements with
respect thereto as are reasonably requested by the Company or customary in
connection with such resale registration statements.

 

4.2         Securities Laws Disclosure; Publicity. The Company shall (a) by 9:00
a.m. (New York City time) on the third Trading Day immediately following the
date hereof, issue a press release disclosing the material terms of the
transactions contemplated hereby, and (b) file a Current Report on Form 8-K with
the Commission within the time required by the Exchange Act.

 

4.3         Indemnification of Purchasers. Subject to the provisions of this
Section 4.3, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any material breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with
any such stockholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement (y)
for any settlement by a Purchaser Party effected without the Company’s prior
written consent, which shall not be unreasonably withheld or delayed; or (z) to
the extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents. The indemnification required by
this Section 4.3 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
are incurred.

 

 19 

 

 

4.4         Listing of Common Stock. The Company hereby agrees to use its best
efforts to maintain the listing or quotation of the Common Stock on its current
Trading Market and concurrently with the Closing, the Company shall apply to
list or quote all of the Shares and Warrant Shares on the Trading Market on
which it is currently listed (the “Current Trading Market”) and promptly secure
the listing of all of the Shares and Warrant Shares on such Current Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any Trading Market other than the Current Trading Market, it
will then include in such application all of the Shares and Warrant Shares, and
will take such other action as is necessary to cause all of the Shares and
Warrant Shares to be listed or quoted on such other Trading Market as promptly
as possible. The Company will then take all action reasonably necessary to
continue the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. Notwithstanding the
foregoing or anything else to the contrary contained herein, the Company shall
have no further obligations under this Section 4.4 if there has been a
Fundamental Transaction and the Company’s Common Stock is no longer registered
under the Exchange Act or its obligation to file periodic reports thereunder has
otherwise been suspended.

 

4.5         Furnishing of Information; Public Information. Until the earlier of
(i) the time that no Purchaser owns Securities, (ii) the Company consummates a
Fundamental Transaction which results in the Common Stock of the Company no
longer being registered under Section 12(b) or 12(g) of the Exchange Act, or
(iii) two years after the date of this Agreement, the Company covenants to use
its best efforts to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act even if the Company
is not then subject to the reporting requirements of the Exchange Act.

 

 20 

 

 

4.6         Certain Transactions and Confidentiality. Each Purchaser, severally
and not jointly with the other Purchasers, covenants that neither it nor any
Affiliate acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales of any of the Company’s
securities during the period commencing with the execution of this Agreement and
ending at such time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.2.  Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company pursuant to the initial
press release as described in Section 4.2, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Disclosure Schedules. 

 

4.7         Form D; Blue Sky Filings. The Company agrees to timely file a Form D
with respect to the Shares, Warrants and Warrant Shares as required under
Regulation D and to provide a copy thereof, promptly upon request of any
Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the
Shares, Warrants and Warrant Shares for, sale to the Purchasers at the Closing
under applicable securities or “Blue Sky” laws of the states of the United
States, and shall provide evidence of such actions promptly upon request of any
Purchaser.

 

ARTICLE V.

MISCELLANEOUS

 

5.1         Termination.  This Agreement may be terminated by any Purchaser, as
to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written
notice to the other parties, if the Closing has not been consummated on or
before July 31, 2017; provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or parties).

 

5.2         Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and any exercise
notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.

 

5.3         Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.

 

 21 

 

 

5.4         Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of transmission, if
such notice or communication is delivered via facsimile or email attachment at
the facsimile number or email address as set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the facsimile
number or email address as set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (c) the second (2nd)Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service or (d) upon
actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as set forth on the
signature pages attached hereto.

 

5.5         Amendments; Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers who purchased at least
51% of the Shares based on the initial Subscription Amounts hereunder or, in the
case of a waiver, by the party against whom enforcement of any such waived
provision is sought, provided that if any amendment, modification or waiver
disproportionately and adversely impacts a Purchaser (or group of Purchasers),
the consent of such disproportionately impacted Purchaser (or group of
Purchasers) shall also be required. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right. Any proposed amendment or waiver that
disproportionately, materially and adversely affects the rights and obligations
of any Purchaser relative to the comparable rights and obligations of the other
Purchasers shall require the prior written consent of such adversely affected
Purchaser, Any amendment effected in accordance with accordance with this
Section 5.5 shall be binding upon each Purchaser and holder of Securities and
the Company.

 

5.6         Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

5.7         Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided that such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
“Purchasers.”

 

5.8         No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

 22 

 

 

5.9         Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is
an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
Action or Proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If any party shall commence an
Action or Proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company under Section 4.3, the
prevailing party in such Action or Proceeding shall be reimbursed by the
non-prevailing party for its reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Action or Proceeding.

 

5.10       Survival. The representations and warranties contained herein shall
survive the Closing and the delivery of the Securities.

 

5.11       Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

5.12       Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

 23 

 

 

5.13       Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, within five (5) Business Days, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights ; provided, however, that in the case of a rescission of an
exercise of a Warrant, the applicable Purchaser shall be required to return any
shares of Common Stock subject to any such rescinded exercise notice
concurrently with the return to such Purchaser of the aggregate exercise price
paid to the Company for such shares and the restoration of such Purchaser’s
right to acquire such shares pursuant to such Purchaser’s Warrant (including,
issuance of a replacement warrant certificate evidencing such restored right).

 

5.14       Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

 

5.15       Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any Action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

 

5.16       Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

 

 24 

 

 

5.17       Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser
pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
Proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in its review and negotiation of the Transaction
Documents. The Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it
was required or requested to do so by any of the Purchasers. It is expressly
understood and agreed that each provision contained in this Agreement and in
each other Transaction Document is between the Company and a Purchaser, solely,
and not between the Company and the Purchasers collectively and not between and
among the Purchasers.

 

5.18       Saturdays, Sundays, Holidays, etc.  If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.

 

5.19       Construction. The parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement and prior to the Closing Date.

 

5.20       WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

 

(Signature Pages Follow)

 

 25 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

 

ACURA PHARMACEUTICALS, INC.   Address for Notice:         By: /s/ Peter A.
Clemens   Acura Pharmaceuticals Inc.   Name: Peter Clemens   616 N. North Court,
Suite 120   Title: Sr. VP & CFO   Palatine, IL 60067       Fax: 847-705-5399

 

NO SUBSCRIPTION IS VALID UNLESS ACCEPTED

BY THE COMPANY ON PURCHASER’S SIGNATURE

PAGE

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 26 

 

 

SIGNATURE PAGE FOR INDIVIDUAL INVESTOR

 

IN WITNESS WHEREOF, this Subscription Agreement has been executed by Purchaser
and by the Company on the respective dates set forth below.

 

/s/ John Schutte     Signature   Signature (If Shares/Warrants Purchased
Jointly)       Name: John Schutte   Name     Please Print       Address  
Address                   Telephone #   Telephone #       Fax #   Fax #      
Email:   Email:       Social Security #   Social Security #       Date:   Date:

 

Subscription Amount: $ 4.0 million                   

 

Shares: 8,912,655                             

 

Warrant Shares: 1,782,531             

 

Form of joint ownership of securities (if applicable): ¨ JTTEN ¨ JTWROS ¨ JTTIC

 

Exact Name in Which Securities are to be Registered: John
Schutte                                

 

Subscription Accepted:

 

ACURA PHARMACEUTICALS, INC.

 

By:    

  Name:       Title:    

 

Date: July 24, 2017  

 

 27 

 

 

ACCREDITED INVESTOR PROSPECTIVE PARTICIPANT QUESTIONNAIRE

 

_______________________

 

**ALL INFORMATION WILL BE HELD IN STRICTEST CONFIDENCE**

 

INSTRUCTIONS TO THE PROSPECTIVE INVESTOR: This Questionnaire is being provided
to each prospective participant that has indicated an interest in purchasing
securities of Acura Pharmaceuticals, Inc. (the “Company”). The purpose of this
Questionnaire is to assure the Company that each prospective purchaser to its
securities (“Purchaser”) will meet the standards imposed by Regulation D,
promulgated under the Securities Act of 1933, as amended, the National
Securities Markets Improvement Act of 1966, similar exemptions provided by the
applicable state securities laws and regulations promulgated there under (the
“Securities Laws”). Since the securities will not be registered, each subscriber
must complete the following Questionnaire.

 

The information provided will be used to determine whether the prospective
purchaser’s Subscription Agreement to purchase securities will be accepted by
the Company in light of the requirements of Securities Laws. In subscribing for
securities and furnishing the information requested in this Questionnaire, the
prospective Purchaser understands that the Company will rely on the information
provided herein for purposes of such determinations. The prospective Purchaser
understands that a false representation may constitute a violation of law and
that any person who suffers damage as a result of a false representation may
have a claim against the prospective Purchaser for damages.

 

The information provided herein by prospective Purchasers will be kept
confidential. However, by signing this Questionnaire, the prospective Purchaser
agrees that the Company may present the completed document to such parties as it
deems appropriate if called upon to establish the availability under any
Securities Laws.

 

In accordance with the foregoing, the following representations are hereby made
and the following information is furnished by the undersigned subscriber.

 

PART A. GENERAL INFORMATION

  

NAME(S) OF PROSPECTIVE PURCHASER:         Social Security Number or Tax I.D.
No.:  

 

 28 

 

 

PART B. INVESTOR INFORMATION

 

1.If the prospective Purchaser is an individual:

 

(a)Do you have an individual net worth, or joint net worth with your spouse
(including home, automobiles and furnishings) in excess of $1,000,000?

 

Yes _______ No _______

(b)(i) Did you have individual income in excess of $200,000 in each of the two
most recent years or joint income with your spouse in excess of $300,000 for
each of those years?

 

Yes _______ No _______

(ii) Do you anticipate for this tax year having individual income in excess of
$200,000, or joint income with your spouse in excess of $300,000?

 

Yes _______ No _______

2.If the prospective Purchaser is a corporation, partnership, limited liability
company, trust or other entity:

 

(a)Is the entity an accredited investor within the meaning of Regulation D of
the Securities Act?

 

Yes _______ No _______

(b)Does the entity, by reason of its own, or of its management’s business or
financial experience, have the capacity to protect its own interests in
connection with an investment in the securities?

 

Yes _______ No _______

(c)Does the entity have substantial experience in evaluating and investing in
private placement transactions of securities in entities similar to the Company
so that it is capable of evaluating the merits and risks of its investment in
the securities?

 

Yes _______ No _______

3.Have you purchased the securities for investment purposes and not with a view
toward resale or distribution, and will, prior to any sale or attempted sale of
any of the securities, comply with all requirements of the state and federal
securities acts?

 

Yes _______ No _______

4.Do you understand that securities cannot be readily sold because there will be
no public market for them, that the securities are not suitable for any investor
unless he or she has available personal liquid assets to provide for financial
contingencies and that a condition to any sale would be the registration of such
interests or the availability of an exception to such registration requirements?

 

Yes _______ No _______

 

 29 

 

 

5.Is your principal investment objective to secure an economic profit,
determined without regard to any tax benefits which you may receive?

 

Yes _______ No _______

6.Do you understand that the securities encompass substantial risks?

 

Yes _______ No _______

7.Do you acknowledge that no independent due diligence has been undertaken
except for that performed by yourself and your purchaser representative, if
applicable?

 

Yes _______ No _______

8.Do you understand that no attorney-client relationship has arisen in
connection with this offering between any prospective Purchaser and counsel to
the Company or between any prospective Subscriber and counsel to any other
Investor?

 

Yes _______ No _______

9.(a) Do you plan to use a “Purchaser Representative” to assist you in analyzing
this investment?

 

Yes _______ No _______

If “Yes”, please provide Purchaser Representative’s name and address:

 

 

 

 

 

 

 

(b) If “No”, do you have such knowledge and experience in financial and business
matters that you are capable of evaluating the merits and risks of this
investment?

 

Yes _______ No _______

 

I REPRESENT THAT THE ABOVE INFORMATION IS CORRECT. I HEREBY AUTHORIZE THE
COMPANY TO VERIFY SUCH INFORMATION WITH MY ATTORNEY, BANKER, ACCOUNTANT OR OTHER
ADVISORS(S).

 

Date:                

 

 30 

 

 

SCHEDULE 3.1(g) – CAPITALIZATION

 

Acura Pharmaceuticals, Inc.              Capitalization at July 24, 2017      
       Beneficial Owner  Common
Stock
Outstanding   Restricted
Stock Units   Common
Stock
Warrants   Common
Stock
Options   Fully Diluted
Shares  Galen Partners III, L.P.   2,006,538         -    -    2,006,538  Galen
Partners International III, L.P.   180,930         -    -    180,930  Galen
Employee Fund III, L.P.   8,265         -    -    8,265  Essex Woodlands Health
Ventures V   1,956,396         -    -    1,956,396  Robert Jones   12,555       
 -    348,900    361,455  Peter A. Clemens   55,182         -    204,000  
 259,182  Robert Seiser   22,490         -    107,734    130,224  James Emigh 
 39,660         -    102,500    142,160  Albert Brzeczko   5,200         -  
 175,400    180,600  William Skelly   28,345    59,523    -    18,000  
 105,868  Bruce Wesson   58,670    59,523    -    18,000    136,193  George
Ross   11,565    82,774    -    18,000    112,339  Immanuel Thangaraj   23,812  
 59,523    -    18,000    101,335  Brad Rivet   400         -    87,200  
 87,600  Other employees   68,247         -    295,415    363,662  Non-insiders 
 7,405,084         59,560    3,000    7,467,644                            
Totals   11,883,339    261,343    59,560    1,396,149    13,600,391  Percent of
Total   87.4%   1.9%   0.4%   10.3%   100.0%

 

 

 31 

 

 

Exhibit B

Form of Legal Opinion

 

July 24, 2017

 

[Addressee]

 

Gentlemen:

 

We have acted as counsel to Acura Pharmaceuticals, Inc. (the "Company"), in
connection with the execution and delivery by the Company of the Subscription
Agreement dated as of July 24, 2017 (the "Agreement"), by and among the Company
and the Purchasers identified on the signature pages thereto (the “Investors”).
This opinion is given to you pursuant to Section 2.2(a)(ii) of the Agreement.
Capitalized terms not otherwise defined herein are defined as set forth in the
Agreement.

 

In connection with this opinion letter, we have examined executed copies of the
Agreement and the Warrants dated of even date (collectively, the "Transaction
Documents"); a certificate of a public official from the State of New York; the
certificate of incorporation and by-laws of the Company, as amended to date; and
records of proceedings of the Board of Directors of the Company during or by
which resolutions were adopted relating to matters covered by this opinion.

 

In our examination we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, and the authenticity of the originals of
such copies. We have also assumed that the each Investor has duly and validly
executed and delivered each of the agreements to which it is a signatory, and
its obligations set forth in such agreements are its legal, valid and binding
obligations, enforceable in accordance with their respective terms and that it
is duly authorized to do so. With your consent we have also assumed that the
representations and warranties as to factual matters made by the Company in the
Transaction Documents are true and correct and have made no independent
investigation thereof, except as indicated herein, and are not aware of any
facts inconsistent therewith. When, in this opinion, we have used the phrase "of
which we have knowledge", "to our knowledge" or "of which we are aware", we have
not made any independent investigation of the applicable facts, but have relied
on the representations made by the Company in and pursuant to the Transaction
Documents and are not aware of any facts inconsistent therewith.

 

 32 

 

 

The opinions herein are subject to the following qualifications:

 

(1)We express no opinion as to the enforceability of any provision of the
Transaction Documents to the extent such provision may be subject to, and
affected by, applicable bankruptcy, insolvency, moratorium or state or federal
laws affecting the rights and remedies of creditors generally (including,
without limitation, fraudulent transfer laws).

 

(2)The enforceability of provisions in the Transaction Documents providing for
(i) specific performance, injunctive relief or other equitable remedies,
regardless of whether such enforceability is sought in a proceeding in equity or
at law and (ii) indemnification against securities law liabilities, the
enforceability of which may be limited by applicable federal and state
securities laws and general principles of public policy, shall be subject to
limitations imposed under applicable law on the availability and extent of
equitable remedies and relief.

 

(3)We express no opinion concerning any law other than the laws of the State of
New York and the Federal law of the United States of America in effect on the
date hereof.

 

(4)We have assumed there was no misrepresentation, omission or deceit by any
person in connection with the execution, delivery or performance of any of the
Transaction Documents or any of the transactions contemplated by the Transaction
Documents.

 

(5)We express no opinion as to compliance with applicable antifraud or antitrust
statutes, rules or regulations of applicable state and federal law.

 

(6)For purposes of rendering the opinion provided in the first sentence of
Paragraph 1 below, we have relied solely upon a certificate of good standing
dated as of a date not later than thirty (30) days from the date of this letter
issued by the Secretary of State of the State of New York, and our opinion is
limited accordingly.

 

(7)We have assumed that the terms and conditions of the instruments as reflected
in the Transaction Documents have not been amended, modified or supplemented by
any other agreement or understanding of the parties or waiver of any of the
material provisions of the Transaction Documents.

 

Based on, and subject to, the above, and subject to the qualifications below, it
is our opinion that:

 

1.            The Company is duly incorporated, validly existing and in good
standing under the New York Business Corporation Law and has the corporate power
to own and lease the properties it purports to own and lease, to conduct the
business in which it is engaged and to execute and deliver, and to perform its
obligations under, the Agreement, including to issue and deliver the Shares and
the Warrants thereunder.

 

 33 

 

 

2.            This Agreement has been duly authorized, executed and delivered by
the Company.

 

3.            The Shares have been duly authorized and, upon issuance and
delivery thereof and payment therefor pursuant to this Agreement, will be
validly issued, fully paid and non-assessable and free of any pre-emptive or
similar rights. The Warrants have been duly authorized and upon issuance and
delivery thereof and payment therefor pursuant to this Agreement, will be
validly issued, fully paid and nonassessable and free of any pre-emptive or
similar rights. The Warrant Shares have been duly authorized, and if issued upon
the exercise of the Warrants on the Closing Date in accordance with the terms of
the Warrants, the Warrant Shares would be validly issued, outstanding, fully
paid and nonassessable and free of any pre-emptive or similar rights.

 

4.            All corporate action on the part of the Company, its directors and
stockholders necessary for the authorization, sale, issuance and delivery of the
Shares and the Warrants has been taken.

 

5.            Neither the execution and delivery of, nor the performance of the
Company’s obligations under, this Agreement, including the issuance and delivery
of the Shares and the Warrants, by the Company will violate or conflict with,
result in a breach of, or constitute a default under, (a) the Restated
Certificate of Incorporation or the Restated By-Laws of the Company or (b) or
any provision of any applicable federal or state law, rule or regulation that in
our experience is generally applicable to transactions of the type contemplated
by this Agreement.

 

6.            Except as identified in the Agreement, and as disclosed in the
Company’s filings with the Securities and Exchange Commission, to our knowledge
there are no actions, suits, proceedings or investigations pending against the
Company or its properties before any court or governmental agency nor, to our
knowledge, has the Company received any written threat thereof.

 

7.            Except for compliance with the securities or blue sky laws of the
various states, as to which we express no opinion, and registration of the
Shares under the Securities Act, no approval, authorization or other action by
any governmental authority or filing with any such authority (other than any
filing solely for information purposes or to obtain action that is not the
subject of governmental discretion) that has not been obtained or accomplished
is required by the Company for the valid execution and delivery of, or the
performance of its obligations under, the Agreement, by the Company, including
the issuance and delivery of the Shares and the Warrants by the Company
thereunder.

 

8.            Based in part on the representations and warranties and covenants
of the Investors set forth in Sections 3.2 and 4.1 of the Agreement, the offer
and sale of the Shares and the Warrants pursuant to the terms of the Agreement
are exempt from the registration requirements of the Securities Act.

 

 34 

 

 

This opinion is solely for the information of the addressees hereof, and is not
to be quoted in whole or in part or otherwise referred to (except in a list of
closing documents), nor is it to be filed with any governmental agency or other
person without our prior written consent. Other than the addressees hereof and
such other parties, no one is entitled to rely on this opinion. This opinion is
based on our knowledge of the law and facts as of the date hereof. We assume no
duty to communicate with you with respect to any matter which comes to our
attention hereafter.

 

  Very truly yours,       LECLAIRRYAN PC       By:              Vice President

 

 35 

 

 

Exhibit C

 

Form of Warrant

 

 36 

 

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AS SET FORTH IN SECTION 5.3 BELOW, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID
ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS
EXEMPT FROM SUCH REGISTRATION.

 

COMMON STOCK PURCHASE WARRANT

 

Company: ACURA PHARMACEUTICALS, INC., a New York corporation     Number of
Shares: 1,782,531     Type/Series of Stock: Common Stock     Warrant Price:
$0.528 per share (which represents the average closing price of the Company’s
common stock for the previous five days of trading, calculated on the day before
the issuance of this Warrant)     Issue Date: July 24, 2017     Expiration Date:
July 23, 2022  

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, ______________
(“Investor” and, together with any successor or permitted assignee or transferee
of this Warrant or of any shares issued upon exercise hereof, “Holder”) is
entitled to purchase the number of fully paid and non-assessable shares (the
“Shares”) of the above-stated Type/Series of Stock (the “Class”) of the
above-named company (the “Company”) at the above-stated Warrant Price, all as
set forth above and as adjusted pursuant to Section 2 of this Warrant, subject
to the provisions and upon the terms and conditions set forth in this Warrant.

 

SECTION 1.  EXERCISE.

 

1.1           Method of Exercise. Holder may at any time and from time to time
exercise this Warrant, in whole or in part, by delivering to the Company the
original of this Warrant together with a duly executed Notice of Exercise in
substantially the form attached hereto as Appendix 1 and a check, wire transfer
of same-day funds (to an account designated by the Company), or other form of
payment acceptable to the Company for the aggregate Warrant Price for the Shares
being purchased.

 

 37 

 

 

1.2           Fair Market Value. If the Company’s common stock is then traded or
quoted on a nationally recognized securities exchange, inter-dealer quotation
system or over-the-counter market (a “Trading Market”) and the Class is common
stock, the fair market value of a Share shall be the closing price or last sale
price of a share of common stock reported for the Business Day immediately
before the date on which Holder delivers this Warrant together with its Notice
of Exercise to the Company. If the Company’s common stock is not traded in a
Trading Market, the Board of Directors of the Company shall determine the fair
market value of a Share in its reasonable good faith judgment.

 

1.3           Delivery of Certificate and New Warrant. Within a reasonable time
after Holder exercises this Warrant in the manner set forth in Section 1.1
above, the Company shall deliver to Holder a certificate representing the Shares
issued to Holder upon such exercise and, if this Warrant has not been fully
exercised and has not expired, a new warrant of like tenor representing the
Shares not so acquired.

 

1.4           Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form, substance and amount to the
Company or, in the case of mutilation, on surrender of this Warrant to the
Company for cancellation, the Company shall, within a reasonable time, execute
and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and
amount.

 

1.5           Treatment of Warrant Upon Acquisition of Company.

 

(a)           Acquisition. For the purpose of this Warrant, “Acquisition” means
any transaction or series of related transactions involving: (i) the sale,
lease, exclusive license, or other disposition of all or substantially all of
the assets of the Company (ii) any merger of the Company into or consolidation
of the Company with another person or entity (other than a merger or
consolidation effected exclusively to change the Company’s domicile), or any
other corporate reorganization, in which the stockholders of the Company in
their capacity as such immediately prior to such merger, consolidation or
reorganization, own less than a majority of the Company’s (or the surviving or
successor entity’s) outstanding voting power immediately after such merger,
consolidation or reorganization (or, if such Company stockholders beneficially
own a majority of the outstanding voting power of the surviving or successor
entity as of immediately after such merger, consolidation or reorganization,
such surviving or successor entity is not the Company); or (iii) any sale or
other transfer by the stockholders of the Company of shares representing at
least a majority of the Company’s then-total outstanding combined voting power.

 

(b)           Treatment of Warrant at Acquisition. In the event of an
Acquisition in which the consideration to be received by the Company’s
stockholders consists solely of cash, solely of Marketable Securities or a
combination of cash and Marketable Securities (a “Cash/Public Acquisition”),
either (i) Holder shall exercise this Warrant pursuant to Section 1.1 and such
exercise will be deemed effective immediately prior to and contingent upon the
consummation of such Acquisition or (ii) if Holder elects not to exercise the
Warrant, this Warrant will expire immediately prior to the consummation of such
Acquisition.

 

 38 

 

 

(c)           The Company shall provide Holder with written notice of its
request relating to the Cash/Public Acquisition (together with such reasonable
information as Holder may reasonably require regarding the treatment of this
Warrant in connection with such contemplated Cash/Public Acquisition giving rise
to such notice), which is to be delivered to Holder not less than seven (7)
Business Days prior to the closing of the proposed Cash/Public Acquisition.

 

(d)           Upon the closing of any Acquisition other than a Cash/Public
Acquisition defined above, the acquiring, surviving or successor entity shall
assume the obligations of this Warrant, and this Warrant shall thereafter be
exercisable for the same securities and/or other property as would have been
paid for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on and as of the closing of such
Acquisition, subject to further adjustment from time to time in accordance with
the provisions of this Warrant.

 

(e)           As used in this Warrant, “Marketable Securities” means securities
meeting all of the following requirements: (i) the issuer thereof is then
subject to the reporting requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then
current in its filing of all required reports and other information under the
Act and the Exchange Act; (ii) the class and series of shares or other security
of the issuer that would be received by Holder in connection with the
Acquisition were Holder to exercise this Warrant on or prior to the closing
thereof is then traded in Trading Market, and (iii) following the closing of
such Acquisition, Holder would not be restricted from publicly re-selling all of
the issuer’s shares and/or other securities that would be received by Holder in
such Acquisition were Holder to exercise or convert this Warrant in full on or
prior to the closing of such Acquisition, except to the extent that any such
restriction (x) arises solely under federal or state securities laws, rules or
regulations, and (y) does not extend beyond six (6) months from the closing of
such Acquisition.

 

SECTION 2.  ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.

 

2.1          Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend or distribution on the outstanding shares of the Class payable in
common stock or other securities or property (other than cash), then upon
exercise of this Warrant, for each Share acquired, Holder shall receive, without
additional cost to Holder, the total number and kind of securities and property
which Holder would have received had Holder owned the Shares of record as of the
date the dividend or distribution occurred. If the Company subdivides the
outstanding shares of the Class by reclassification or otherwise into a greater
number of shares, the number of Shares purchasable hereunder shall be
proportionately increased and the Warrant Price shall be proportionately
decreased. If the outstanding shares of the Class are combined or consolidated,
by reclassification or otherwise, into a lesser number of shares, the Warrant
Price shall be proportionately increased and the number of Shares shall be
proportionately decreased.

 

 39 

 

 

2.2          Reclassification, Exchange, Combinations or Substitution. Upon any
event whereby all of the outstanding shares of the Class are reclassified,
exchanged, combined, substituted, or replaced for, into, with or by Company
securities of a different class and/or series, then from and after the
consummation of such event, this Warrant will be exercisable for the number,
class and series of Company securities that Holder would have received had the
Shares been outstanding on and as of the consummation of such event, and subject
to further adjustment thereafter from time to time in accordance with the
provisions of this Warrant. The provisions of this Section 2.2 shall similarly
apply to successive reclassifications, exchanges, combinations substitutions,
replacements or other similar events.

 

2.3           Adjustments for Diluting Issuances. Without duplication of any
adjustment otherwise provided for in this Section 2, the number of shares of
common stock issuable upon conversion of the Shares shall be subject to
anti-dilution adjustment from time to time in the manner set forth in the
Company’s Articles or Certificate of Incorporation as if the Shares were issued
and outstanding on and as of the date of any such required adjustment.

 

2.4           No Fractional Share. No fractional Share shall be issuable upon
exercise of this Warrant and the number of Shares to be issued shall be rounded
down to the nearest whole Share. If a fractional Share interest arises upon any
exercise of the Warrant, the Company shall eliminate such fractional Share
interest by paying Holder in cash the amount computed by multiplying the
fractional interest by (i) the fair market value (as determined in accordance
with Section 1.2 above) of a full Share, less (ii) the then-effective Warrant
Price.

 

2.5           Notice/Certificate as to Adjustments. Upon each adjustment of the
Warrant Price, Class and/or number of Shares, the Company, at the Company’s
expense, shall notify Holder in writing within a reasonable time setting forth
the adjustments to the Warrant Price, Class and/or number of Shares and facts
upon which such adjustment is based. The Company shall, upon written request
from Holder, furnish Holder with a certificate of its Chief Financial Officer,
including computations of such adjustment and the Warrant Price, Class and
number of Shares in effect upon the date of such adjustment.

 

SECTION 3.  REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

3.1           Representations and Warranties. The Company represents and
warrants to, and agrees with, the Holder that all Shares which may be issued
upon the exercise of this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws. The Company covenants that it shall at all
times cause to be reserved and kept available out of its authorized and unissued
capital stock such number of shares of the Class, common stock and other
securities as will be sufficient to permit the exercise in full of this Warrant
and the conversion of the Shares into common stock or such other securities.

 

3.2           Notice of Certain Events. If the Company proposes at any time to:

 

(a)           declare any dividend or distribution upon the outstanding shares
of the Class or common stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend;

 

 40 

 

 

(b)           offer for subscription or sale pro rata to the holders of the
outstanding shares of the Class any additional shares of any class or series of
the Company’s stock (other than pursuant to contractual pre-emptive rights);

 

(c)           effect any reclassification, exchange, combination, substitution,
reorganization or recapitalization of the outstanding shares of the Class; or

 

(d)           effect an Acquisition or to liquidate, dissolve or wind up;

 

then, in connection with each such event, the Company shall give Holder:

 

(1)         at least seven (7) Business Days prior written notice of the date on
which a record will be taken for such dividend, distribution, or subscription
rights (and specifying the date on which the holders of outstanding shares of
the Class will be entitled thereto) or for determining rights to vote, if any,
in respect of the matters referred to in (a) and (b) above; and

 

(2)         in the case of the matters referred to in (c) and (d) above at least
seven (7) Business Days prior written notice of the date when the same will take
place (and specifying the date on which the holders of outstanding shares of the
Class will be entitled to exchange their shares for the securities or other
property deliverable upon the occurrence of such event).

 

SECTION 4.  REPRESENTATIONS, WARRANTIES OF THE HOLDER.

 

The Holder represents and warrants to the Company as follows:

 

4.1           Purchase for Own Account. This Warrant and the securities to be
acquired upon exercise of this Warrant by Holder are being acquired for
investment for Holder’s account, not as a nominee or agent, and not with a view
to the public resale or distribution within the meaning of the Act. Holder also
represents that it has not been formed for the specific purpose of acquiring
this Warrant or the Shares.

 

4.2           Disclosure of Information. Holder is aware of the Company’s
business affairs and financial condition and has received or has had full access
to all the information it considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this Warrant and its
underlying securities. Holder further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of this Warrant and its underlying securities and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify any
information furnished to Holder or to which Holder has access.

 

 41 

 

 

4.3           Investment Experience. Holder understands that the purchase of
this Warrant and its underlying securities involves substantial risk. Holder has
experience as an investor in securities of companies in the development stage
and acknowledges that Holder can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has such knowledge
and experience in financial or business matters that Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or has a preexisting personal or business relationship
with the Company and certain of its officers, directors or controlling persons
of a nature and duration that enables Holder to be aware of the character,
business acumen and financial circumstances of such persons.

 

4.4           Accredited Investor Status. Holder is an “accredited investor”
within the meaning of Regulation D promulgated under the Act.

 

4.5           The Act. Holder understands that this Warrant and the Shares
issuable upon exercise hereof have not been registered under the Act in reliance
upon a specific exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of the Holder’s investment intent as expressed
herein. Holder understands that this Warrant and the Shares issued upon any
exercise hereof must be held indefinitely unless subsequently registered under
the Act and qualified under applicable state securities laws, or unless
exemption from such registration and qualification are otherwise available.
Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

4.6           No Voting Rights. Holder, as a Holder of this Warrant, will not
have any voting rights until the exercise of this Warrant.

 

SECTION 5.  MISCELLANEOUS.

 

5.1           Term.

 

Term. Subject to the provisions of Section 1.5 above, this Warrant is
exercisable in whole or in part at any time and from time to time on or before
6:00 PM, Eastern time, on the Expiration Date and shall be void thereafter.

 

5.2           Legends. Each certificate evidencing Shares (and each certificate
evidencing the securities issued upon conversion of any Shares, if any) shall be
imprinted with a legend in substantially the following form:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED
BY THE ISSUER TO INVESTOR DATED July 24, 2017, MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR,
IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH
REGISTRATION.

 

 42 

 

 

5.3           Compliance with Securities Laws on Transfer. This Warrant and the
Shares issued upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part except in compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder, provided that
any such transferee is an “accredited investor” as defined in Regulation D
promulgated under the Act. Additionally, the Company shall also not require an
opinion of counsel if there is no material question as to the availability of
Rule 144 promulgated under the Act.

 

5.4           Transfer Procedure. After receipt by Investor of the executed
Warrant, Investor may transfer all or part of this Warrant to one or more of
Investor’s affiliates (each, an “Investor Affiliate”), by execution of an
Assignment substantially in the form of Appendix 2. Subject to the provisions of
Article 5.3 and upon providing the Company with written notice, Investor, any
such Investor Affiliate and any subsequent Holder, may transfer all or part of
this Warrant or the Shares issuable upon exercise of this Warrant (or the Shares
issuable directly or indirectly, upon conversion of the Shares, if any) to any
other transferee, provided, however, in connection with any such transfer, the
Investor Affiliate(s) or any subsequent Holder will give the Company notice of
the portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).

 

5.5           Notices. All notices and other communications hereunder from the
Company to the Holder, or vice versa, shall be deemed delivered and effective
(i) when given personally, (ii) on the third (3rd) Business Day after being
mailed by first-class registered or certified mail, postage prepaid, (iii) upon
actual receipt if given by facsimile or electronic mail and such receipt is
confirmed in writing by the recipient, or (iv) on the first Business Day
following delivery to a reliable overnight courier service, courier fee prepaid,
in any case at such address as may have been furnished to the Company or Holder,
as the case may be, in writing by the Company or such Holder from time to time
in accordance with the provisions of this Section 5.5. All notices to Holder
shall be addressed as follows until the Company receives notice of a change of
address in connection with a transfer or otherwise:

 

______________

______________

______________

Email: ______________

 

Notice to the Company shall be addressed as follows until Holder receives notice
of a change in address:

 

ACURA PHARMACEUTICALS, INC.

616 N. North Court, Suite 120

 

 43 

 

 

Palatine, Illinois

Attn: Peter A. Clemens

Fax: (847) 705-5399

Email: pclemens@acurapharm.com

 

With a copy (which shall not constitute notice) to:

 

LeClairRyan

One Riverfront Plaza
1037 Raymond Boulevard

Sixteenth Floor

Newark, New Jersey 07102

Attn: John P. Reilly

Fax: (973) 491-3511

Email: John.Reilly@leclairryan.com

 

5.6           Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated (either generally or in a particular instance and
either retroactively or prospectively) only by an instrument in writing signed
by the party against which enforcement of such change, waiver, discharge or
termination is sought.

 

5.7           Attorneys’ Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys’ fees.

 

5.8           Counterparts; Facsimile/Electronic Signatures. This Warrant may be
executed in counterparts, all of which together shall constitute one and the
same agreement. Any signature page delivered electronically or by facsimile
shall be binding to the same extent as an original signature page with regards
to any agreement subject to the terms hereof or any amendment thereto.

 

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

 

5.10         Headings. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.

 

5.11         Business Days. “Business Day” is any day that is not a Saturday,
Sunday or a day which banks in the State of New York or Commonwealth of Virginia
are closed.

 

[Remainder of page left blank intentionally]

 

[Signature page follows]

 

 44 

 

 

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be
executed by their duly authorized representatives effective as of the Issue Date
written above.

 

“COMPANY”           ACURA PHARMACEUTICALS, INC.           By:              
Name:         (Print)     Title:             “HOLDER”           By:            
Name:          (Print)    

 

[Signature Page to Warrant to Purchase Stock-A3]

 

 

 

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

The undersigned Holder hereby exercises its right purchase ___________ shares of
the Common Stock of ACURA PHARMACEUTICALS, INC. (the “Company”) in accordance
with the attached Warrant To Purchase Stock, and tenders payment of the
aggregate Warrant Price for such shares as follows:

 

☐   check in the amount of $________ payable to order of the Company enclosed
herewith

 

☐   Wire transfer of immediately available funds to the Company’s account

 

☐   Other [Describe] __________________________________________

 

Please issue a certificate or certificates representing the Shares in the name
specified below:

 

    Holder’s Name                   (Address)  

 

By its execution below and for the benefit of the Company, Holder hereby
restates each of the representations and warranties in Section 4 of the Warrant
to Purchase Stock as of the date hereof.

 

    HOLDER:                       By:               Name:               Title:  
            Date:  

 

 Appendix 1 

 

 

APPENDIX 2

 

ASSIGNMENT

 

For value received, Holder hereby sells, assigns and transfers unto

 

Name: [HOLDER TRANSFEREE]     Address:       Tax ID:  

 

that certain Warrant to Purchase Stock issued by ACURA PHARMACEUTICALS, INC.
(the “Company”), on [_____] (the “Warrant”) together with all rights, title and
interest therein.

 

    HOLDER           By:               Name:               Title:          
Date:                  

By its execution below, and for the benefit of the Company, [HOLDER TRANSFEREE]
makes each of the representations and warranties set forth in Article 4 of the
Warrant and agrees to all other provisions of the Warrant as of the date hereof.

 

     [HOLDER TRANSFEREE]            By:                Name:              
 Title:                                              ]

 

 Appendix 2