Exhibit 10.2

 

CONSENT AND THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS CONSENT AND THIRD AMENDMENT to Loan and Security Agreement (this
“Amendment”) is entered into as of 15th March, 2017 (the “Third Amendment
Date”), by and among OXFORD FINANCE LLC, a Delaware limited liability company
with an office located at 133 North Fairfax Street, Alexandria, Virginia 22314
(in its individual capacity, “Oxford”; and in its capacity as Collateral Agent,
“Collateral Agent”), the Lenders listed on Schedule 1.1 thereof from time to
time including Oxford in its capacity as a Lender (each a “Lender” and
collectively, the “Lenders”) and ACURA PHARMACEUTICALS, INC., a New York
corporation with offices located at 616 N. North Court, Suite 120, Palatine,
Illinois (“Parent”) and ACURA PHARMACEUTICAL TECHNOLOGIES, INC., an Indiana
corporation with offices locates at 16235 State Road 17, Culver, IN 46511
(“APT”, and along with Parent, individually and collectively, jointly and
severally, “Borrower”).

 

WHEREAS, Collateral Agent, Borrower and Lenders party thereto from time to time
have entered into that certain Loan and Security Agreement, dated as of December
27, 2013 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) pursuant to which Lenders have provided to Borrower certain
loans in accordance with the terms and conditions thereof;

 

WHEREAS, Borrower anticipates entering into a License, Commercialization and
Option Agreement on or about March 15th, 2017 with MainPointe Pharmaceuticals,
LLC, (“MainPointe”), in the form provided to Collateral Agent prior to the
execution hereof (the “License Agreement”);

 

WHEREAS, Loan Agreement requires Borrower to obtain the consent of Required
Lenders prior to granting certain licenses and consummating the Transfers
contemplated in the License Agreement;

 

WHEREAS, Borrower has requested that Collateral Agent and Lenders consent to
grant of certain licenses and Transfers by Borrower to MainPointe, pursuant to
the License Agreement, as described herein below; and

 

WHEREAS, in connection with and in consideration for providing the
aforementioned consent, Borrower, Lenders and Collateral Agent desire to amend
certain provisions of the Loan Agreement as provided herein and subject to the
terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower, Lenders and Collateral
Agent hereby agree as follows:

 

1.Capitalized terms used herein but not otherwise defined shall have the
respective meanings given to them in the Loan Agreement.

 

2.Subject to the terms and conditions hereof, the Collateral Agent and the
Required Lenders hereby consent to the Borrower’s entry into the License
Agreement in the form, and only in the form, provided to Collateral Agent prior
to the execution hereof, and consummation of the transactions contemplated
therein; provided, however, Borrower may enter into and deliver any amendment to
the License Agreement and consummate the transactions as contemplated by the
License Agreement after giving effect to such amendment if, and only if, such
amendments to the terms of the License Agreement: (i) would not require the
consent of the Required Lenders under Section 7 of the Loan Agreement, (ii) are
not be adverse to the interests of Borrower, (iii) do not reduce the amount or
change the form of consideration due to Borrower under the License Agreement and
(iv) do not postpone any payment due to Borrower under the License Agreement.
Concurrently with the execution of the Mainpointe Agreement, Collateral Agent
shall have been deemed to release its Lien (granted to it under the Loan
Agreement) only on the Collateral described on Exhibit C (“Described
Collateral”); provided, however, all proceeds of the Described Collateral are
and shall be included in the Collateral in which Collateral Agent has a
continuing Lien and perfected security interest under the Loan Agreement and
nothing herein shall be deemed to be a release of Collateral Agent’s Lien in the
proceeds of the Described Collateral or any other Collateral.

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

3.Borrower hereby reaffirms the security interest granted by Borrower previously
in Section 4.1 of the Agreement with respect to the Collateral (as defined
herein) and hereby grants Collateral Agent, for the ratable benefit of the
Lenders, to secure the payment and performance in full of all of the
Obligations, a continuing security interest in, and pledges to Collateral Agent,
for the ratable benefit of the Lenders, such part of the Collateral that was not
pledged previously or in which security interest was not granted prior to the
Third Amendment Date, wherever located, whether now owned or hereafter acquired
or arising, and all proceeds and products thereof. Furthermore, Borrower hereby
authorizes Collateral Agent to file financing statements or take any other
action required to perfect Collateral Agent’s security interests in the
Collateral, without notice to Borrower, with all appropriate jurisdictions to
perfect or protect Collateral Agent’s interest or rights under the Loan
Documents, including a notice that any disposition of the Collateral, except to
the extent permitted by the terms of this Agreement, by Borrower, or any other
Person, shall be deemed to violate the rights of Collateral Agent under the
Code.

 

4.Section 5.2(d) of the Loan Agreement is hereby amended and restated as
follows:

 

(d)           Borrower and each of its Subsidiaries is the sole owner of the
Intellectual Property each respectively purports to own, free and clear of all
Liens other than Permitted Liens. (i) No part of Borrower’s or its Subsidiaries’
Intellectual Property has been judged invalid or unenforceable, in whole or in
part, and to the best of Borrower’s knowledge, each of Borrower’s and its
Subsidiaries’ Copyrights, Trademarks and issued Patents are valid and
enforceable and, and (ii) to the best of Borrower’s knowledge, no claim has been
made that any part of the Intellectual Property or any practice by Borrower or
its Subsidiaries violates the rights of any third party except to the extent
such claim could not reasonably be expected to have a Material Adverse Change.
Except as noted on the Perfection Certificates, neither Borrower nor any of its
Subsidiaries is a party to, nor is bound by, any material license or other
material agreement with respect to which Borrower or such Subsidiary is the
licensee that (i) prohibits or otherwise restricts Borrower or its Subsidiaries
from granting a security interest in Borrower’s or such Subsidiaries’ interest
in such material license or material agreement or any other property, or (ii)
for which a default under or termination of could interfere with Collateral
Agent’s or any Lender’s right to sell any Collateral. Borrower shall provide
written notice to Collateral Agent and each Lender within ten (10) days of
Borrower or any of its Subsidiaries entering into or becoming bound by any
license or agreement with respect to which Borrower or any Subsidiary is the
licensee (other than over the counter software that is commercially available to
the public).

 

5.Section 6.2(a)(ii) of the Loan Agreement is hereby amended and restated in its
entirety as follows:

 

(ii)           as soon as available, but no later than one hundred twenty (120)
days after the last day of Borrower’s fiscal year or within five (5) days of
filing with the SEC, audited consolidated financial statements prepared under
GAAP, consistently applied, together with an unqualified opinion (provided,
however, that for the fiscal year 2016, such opinion may be qualified strictly
with respect to Borrower and its Subsidiary as a going concern and unqualified
otherwise) on the financial statements from an independent certified public
accounting firm acceptable to Collateral Agent in its reasonable discretion;

 

6.Section 6.2(a)(vii) of the Loan Agreement is hereby amended and restated in
its entirety as follows:

 

(vii)           prompt notice of (A) any material change in the composition of
the Intellectual Property, (B) the registration of any copyright, including any
subsequent ownership right of Borrower or any of its Subsidiaries in or to any
copyright, patent or trademark, including a copy of any such registration, and
(C) any event that could reasonably be expected to materially and adversely
affect the value of the Intellectual Property;

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

 2 

 

 

7.Section 6.7 of the Loan Agreement is hereby amended and restated in its
entirety as follows:

 

Protection of Intellectual Property Rights. Borrower and each of its
Subsidiaries shall: (a) use commercially reasonable efforts to protect, defend
and maintain the validity and enforceability of its Intellectual Property that
is material to Borrower’s business; (b) promptly advise Collateral Agent in
writing of material infringement by a third party of its Intellectual Property;
and (c) not allow any Intellectual Property material to Borrower’s business to
be abandoned, forfeited or dedicated to the public without Collateral Agent’s
prior written consent. If Borrower or any of its Subsidiaries (i) obtains any
patent, registered trademark or servicemark, registered copyright, registered
mask work, or any pending application for any of the foregoing, whether as
owner, licensee or otherwise, or (ii) applies for any patent or the registration
of any trademark or servicemark, then Borrower or such Subsidiary shall
substantially contemporaneously provide written notice thereof to Collateral
Agent and each Lender and shall execute such intellectual property security
agreements and other documents and take such other actions as Collateral Agent
shall reasonably request in its good faith business judgment to perfect and
maintain a first priority perfected security interest in favor of Collateral
Agent, for the ratable benefit of the Lenders, in such property. If Borrower or
any of its Subsidiaries decides to register any copyrights or mask works in the
United States Copyright Office, Borrower or such Subsidiary shall: (x) provide
Collateral Agent and each Lender with at least fifteen (15) days prior written
notice of Borrower’s or such Subsidiary’s intent to register such copyrights or
mask works together with a copy of the application it intends to file with the
United States Copyright Office (excluding exhibits thereto); (y) execute an
intellectual property security agreement and such other documents and take such
other actions as Collateral Agent may reasonably request in its good faith
business judgment to perfect and maintain a first priority perfected security
interest in favor of Collateral Agent, for the ratable benefit of the Lenders,
in the copyrights or mask works intended to be registered with the United States
Copyright Office; and (z) record such intellectual property security agreement
with the United States Copyright Office contemporaneously with filing the
copyright or mask work application(s) with the United States Copyright Office.
Borrower or such Subsidiary shall promptly provide to Collateral Agent and each
Lender with evidence of the recording of the intellectual property security
agreement necessary for Collateral Agent to perfect and maintain a first
priority perfected security interest in such property.

 

8.Section 13.1 of the Loan Agreement is hereby amended by amending and restating
the following definition therein as follows:

 

9.“Loan Documents” are, collectively, this Agreement, the Warrants, the
Perfection Certificates, each Compliance Certificate, each Disbursement Letter,
Mortgage, the Post Closing Letter and any subordination agreements, any note, or
notes or guaranties executed by Borrower or any other Person, and any other
present or future agreement entered into by Borrower, any Guarantor or any other
Person for the benefit of the Lenders and Collateral Agent in connection with
this Agreement; all as amended, restated, or otherwise modified.

 

10.Section 13.1 of the Loan Agreement is hereby further amended by adding the
following definitions thereto in alphabetical order:

 

“Third Amendment Date” is March 15th, 2017.

 

“IP Agreement” is that certain Intellectual Property Security Agreement entered
into by and between Borrower and Collateral Agent dated as of the Third
Amendment Date, as such may be amended from time to time.

 

11.Exhibit A to the Loan Agreement is hereby amended and restated in its
entirety as set forth on Exhibit A hereto.

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

 3 

 

 

12.Borrower hereby represents and warrants that a complete and accurate list of
its Copyright registrations, Patents, applications to register and registrations
of Trademarks, as of the Third Amendment Date is attached hereto as Exhibit B.

 

13.Borrower hereby authorizes Collateral Agent to file financing statements,
amendments to financing statements or take any other action required to perfect
Collateral Agent’s security interests in the Collateral (as such term has been
amended pursuant to this Amendment) , without notice to Borrower, with all
appropriate jurisdictions to perfect or protect Collateral Agent’s interest or
rights under the Loan Documents, including a notice that any disposition of the
Collateral, except to the extent permitted by the terms of this Agreement, by
Borrower, or any other Person, shall be deemed to violate the rights of
Collateral Agent under the Code.

 

14.Limitation of Amendment.

 

a.The amendments and the consent set forth in Sections 2 through 13 above are
effective for the purposes set forth herein and shall be limited precisely as
written and shall not be deemed to (a) be a consent to any amendment, waiver or
modification of any other term or condition of any Loan Document, or (b)
otherwise prejudice any right, remedy or obligation which Lenders or Borrower
may now have or may have in the future under or in connection with any Loan
Document, as amended hereby.

 

b.This Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.

 

15.To induce Collateral Agent and Lenders to enter into this Amendment, Borrower
hereby represents and warrants to Collateral Agent and Lenders as follows:

 

a.Immediately after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

 

b.Borrower has the power and due authority to execute and deliver this Amendment
and to perform its obligations under the Loan Agreement, as amended by this
Amendment;

 

c.The organizational documents of Borrower delivered to Collateral Agent on the
Effective Date, and updated pursuant to subsequent deliveries by the Borrower to
the Collateral Agent, remain true, accurate and complete and have not been
amended, supplemented or restated and are and continue to be in full force and
effect;

 

d.The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not and will not contravene (i) any law or regulation binding on
or affecting Borrower, (ii) any contractual restriction with a Person binding on
Borrower, (iii) any order, judgment or decree of any court or other governmental
or public body or authority, or subdivision thereof, binding on Borrower, or
(iv) the organizational documents of Borrower;

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

 4 

 

 

e.The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower, except as already has been obtained or made; and

 

f.This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’
rights.

 

16.Collateral Agent represents and warrants to Borrower that all Required
Lenders have executed this Amendment.

 

17.Except as expressly set forth herein, the Loan Agreement shall continue in
full force and effect without alteration or amendment. This Amendment and the
Loan Documents represent the entire agreement about this subject matter and
supersede prior negotiations or agreements.

 

18.This Amendment shall be deemed effective as of the Amendment Date upon (a)
the due execution and delivery to Collateral Agent of this Amendment by each
party hereto, (b) the due execution and delivery to Collateral Agent of the IP
Agreement by each party thereto, (c) Collateral Agent’s receipt of the fully
executed License Agreement and (d) Borrower’s payment of all Lenders’ Expenses
incurred through the date hereof (not to exceed $7,500.00), which may be debited
from any of Borrower’s accounts with Lenders.

 

19.This Amendment may be executed in any number of counterparts, each of which
shall be deemed an original, and all of which, taken together, shall constitute
one and the same instrument.

 

20.This Amendment and the rights and obligations of the parties hereto shall be
governed by and construed in accordance with the laws of the State of New York.

 

[Balance of Page Intentionally Left Blank]

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

 5 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Consent and Third
Amendment to Loan and Security Agreement to be executed as of the Third
Amendment Date.

 

BORROWER:           ACURA PHARMACEUTICALS, INC.           By /s/ Robert B. Jones
    Name:  Robert B. Jones     Title:   President and CEO           BORROWER:  
        ACURA PHARMACEUTICAL TECHNOLOGIES, INC.           By  /s/ Robert B.
Jones     Name: Robert B. Jones     Title:   President    

 

COLLATERAL AGENT AND LENDER:           OXFORD FINANCE LLC           By /s/ Mark
Davis     Name: Mark Davis     Title: /s/ Vice President – Finance, Secretary &
Treasurer    

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

EXHIBIT A

 

Description of Collateral

 

The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:

 

All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights, rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles (including Intellectual Property),
commercial tort claims, documents, instruments (including any promissory notes),
chattel paper (whether tangible or electronic), cash, deposit accounts and other
Collateral Accounts, all certificates of deposit, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing),
securities, and all other investment property, supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and

 

All Borrower’s Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

 

Notwithstanding the foregoing, the Collateral does not include any license or
contract, in each case if the granting of a Lien in such license or contract is
prohibited by or would constitute a default under the agreement governing such
license or contract (but (A) only to the extent such prohibition is enforceable
under applicable law and (B) other than to the extent that any such term would
be rendered ineffective pursuant to Sections 9-406, 9-408 or 9-409 (or any other
Section) of Division 9 of the Code); provided that upon the termination, lapsing
or expiration of any such prohibition, such license or contract, as applicable,
shall automatically be subject to the security interest granted in favor of
Collateral Agent hereunder and become part of the “Collateral.”

 

Pursuant to the terms of a certain negative pledge arrangement with Collateral
Agent and the Lenders, Borrower has agreed not to encumber any of its
Intellectual Property (excluding Permitted Licenses).

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

EXHIBIT B

 

Intellectual Property

 

Registered Copyrights

 

None

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

Patents

  

Description  

Registration/

Application

Number

 

Registration/

Application

Date

Methods and compositions for deterring abuse of opioid containing dosage forms  
US 7,201,920
US 7,476,402
US 7,510,726
US 7,981,439
US 8,409,616
US 8,822,489
US 8,637,540
US 9,492,443
AU 2004294953
AU 2010200979
CA 2,547,334
IL 175863
IL 221018

[*****]
AU 2010200979
AU 2013206525
EP 04812083.6
EP 11158284.7
HK 12106471.1   4/10/2007
1/13/2009
3/31/2009
7/19/2011
4/2/2013
7/24/2014
1/28/2014
11/15/2016
4/1/2010
11/23/2004
8/10/2010
11/23/2004
11/23/2004

[*****]
3/15/2010
11/23/2004
11/23/2004
11/23/2011
11/23/2004 Process to manufacture oxycodone   US 6,864,370   3/8/2005 Process
for manufacturing thebaine   US 6,790,959   9/14/2004 Process for manufacturing
codeine   US 6,972,332   12/6/2005 Process for manufacturing codeine   US
6,949,645   9/27/2005 Process for preparing dihydrocodeine from codeine   US
6,887,999   5/3/2005 Preparation of opioid analgesics by a one-pot process   US
6,946,556   9/20/2005 Preparation of oxycodone   US 7,071,336   7/4/2006
Preparation of a 4,5-epoxymorphinan   US 7,348,430   3/25/2008 Methods and
compositions for deterring abuse   US 8,901,113
AU 2010300641
CA 2,775,890
EP 2,488,029
HK 13102020.5
IL 218533

US 14/552,067
[*****]
CA 2,775,890
AU 2016204065
EP 16161681.8
HK 13102020.5
IL 245734   12/2/[2014]
6/3/2016
6/21/2016
3/23/2016
10/14/2016
9/29/2016

11/24/2014
[*****]
9/29/2010
9/29/2010
9/29/2010
9/29/2010
9/29/2010 Methods and compositions for self-regulated release of active
pharmaceutical ingredient   US 9,101,636
US 9,320,796
CA 2,892,908
JP 5,922,851

[*****]
WO PCT/US13/72249
RU 2015124694   8/11/2015
4/26/2016
4/12/2016
4/22/2016

[*****]
11/27/2013
6/23/2015 Methods and Compositions for Deterring Abuse   US 14/322,596
CA 2,916,973
AU 2014284333
EP 14820721.0
IL 242880
CH 201480037082.5
NZ 716482   7/2/2014
7/2/2014
7/2/2014
7/2/2014
7/2/2014
7/2/2014
7/2/2014 Methods and compositions for interfering with extraction or conversion
of a drug susceptible to abuse   US 14/734,364
CA 2,951,563
AU 2015274936
EP 15807096.1
CH 201580030318.7   6/9/2015
6/9/2015
6/9/2015
6/9/2015
6/9/2015 Methods and compositions for self-regulated release of active
pharmaceutical   [*****]   [*****] Methods and compositions of self-regulating
the conversion of pro-drugs to active pharmaceutical ingredients22   [*****]  
[*****] Pharmaceutical Compositions for Deterring Misuse, Abuse, and Diversion  
WO PCT/US2010/061331   12/20/2010

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

Trademark Registrations and Applications

  

Description  

Registration/

Application

Number

 

Registration/

Application

Date

          US- ACURA PHARMACEUTICALS   3114970   7/11/2006           US- OXAYDO  
4847742   11/3/2015           US- NEXAFED   4151083   4/24/2012           US-
IMPEDE   4289295   2/12/2013           US- AVERSION   3059542   2/14/2006      
    MEX- ACURACET   1087322   2/26/2009           MEX- IMPEDE   1130279  
11/13/2009           MEX- ACUROX   1070309   11/4/2008           MEX- AVERSION  
1182320
1087323   9/30/2010
2/26/2009           MEX- VYCAVERT   1109785   7/9/2009           CAN- OXAYDO  
1724857   5/23/2016           CAN- AVERSION   832700   9/25/2012           CAN-
ACUROX   757997   2/17/2010           CAN- VYCAVERT   825294   6/1/2012        
  EU- OXAYDO   13955935   8/19/2015

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

Exhibit C

 

Schedule of Deleted Collateral

 

Inventory Warehouse: [*****]             Item Lot Description     Qty Exp Date
Alt Product UOI UOM [*****]                  

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

Equipment

      Location: [*****] Item Asset Class Description

  

[*****]

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.

 

   

 

 

Contracts and POS

 

Contracts

 

[*****]

 

Purchase Orders

 

Purchase Order #1048 to Patheon Pharmaceuticals, Inc. for Nexafed Sinus 30/325
mg Tablets.

 

[*****]

 

Other

 

All domain names, brochures, promotional and printed materials, tradeshow
materials (including displays), videos, advertising materials, marketing
materials, package inserts and packaging materials (in all cases, in any form or
medium) if any, owned by Acura Pharmaceuticals, Inc. or Acura Pharmaceutical
Technologies, Inc. related exclusively to the commercialization of the Nexafed
products.

 

*****Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission; omitted portions
have been separately filed with the Commission.