Document:

Unassociated Document

    

     

    
      215 N.
Pine St.

      P. O. Box
3508

      Spartanburg,
SC  29304

       (864)
948-9001

    

     

     

     

    April 30,
2009

    

    

    Mr.
Linwood Gill

    Vice
President

    Federal
Reserve Bank of Richmond

    P.O. Box
27622

    Richmond,
VA 23261

    

    Dear Mr.
Gill:

    

    Our subsidiary bank, First National
Bank of the South, executed a consent order with its primary regulator, the OCC,
on April 27, 2009.  Included in this consent order is an article that
does not allow the bank to be classified as “well-capitalized,” regardless of
its capital levels while the bank is subject to the terms of the
order.  As a result, we understand that we are not in compliance with
the requirements to maintain our status as a financial holding
company.  Therefore, we are writing you this letter to decertify First
National Bancshares as a financial holding company.

    

    The
nonbanking activities that we are involved in are limited to ownership of common
securities of our three statutory trust subsidiaries, FNSC Capital Trust I, FNSC
Statutory Trust II and FNSC Statutory Trust III.  It is our
understanding that our participation in these Trusts is permissible for a bank
holding company and that no changes to our role in these Trusts will be required
as a result of our request to decertify.  We also understand that our
ownership of other debt and equity securities is permissible as a bank holding
company and that no changes to this ownership will be required.

    

    Please do not hesitate to contact me
should you require additional information with regard to our decertification
request.  Please confirm your receipt of this request by signing this
letter below and returning in the enclosed envelope.

    

    Sincerely,

    

            /s/ Jerry
L. Calvert_________

    Jerry L. Calvert

    President and Chief Executive
Officer

    First National Bancshares

    

    Received
by:

    

    

    _________________________

    Name

    

    _________________________

    DateUnassociated Document

     

    EMPLOYMENT
AGREEMENT

    

    This EMPLOYMENT AGREEMENT (the
"Agreement") made as of
the 23th day of
March, 2009 by and between ACURA PHARMACEUTICALS, INC., a
New York corporation (the "Company"), with an
administrative office at 616 N. North Court, Suite 120, Palatine,
IL  60067 and GARTH
BOEHM, Ph.D., residing at 530 Mountain Avenue, Westfield, NJ 07090 (the
"Employee").

     

    WITNESSETH

    

    WHEREAS, the Company desires
to employ the Employee to engage in such activities and to render such services
as are required under the terms and conditions hereof and the Company's Board of
Directors has authorized and approved the execution of this Agreement;
and

     

    WHEREAS, the Employee desires
to be employed by the Company under the terms and conditions hereinafter
provided.

     

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

     

    
      1.     Employment, Duties,
Responsibilities, Office Location, Travel, and Acceptance.

       

    

    1.1           Duties and
Responsibilities.  Commencing on the Commencement Date (as
defined below) the Company shall employ the Employee for the Term (as herein
defined), to render exclusive and full-time paid services (as herein defined) as
the Company's Vice President of Modified Release Dosage Form
Development.  The Employee's duties and responsibilities shall include
(i) in conjunction with Company's outside patent counsel, evaluating the
Company's issued patents and filed patent applications; (ii) developing,
authoring, and/or co-authoring new patent applications intended to encompass and
protect commercially viable pharmaceutical products with abuse deterrent
features and benefits; (iii) reviewing draft patent applications authored by
other Company staff; (iv) in conjunction with Company patent counsel, evaluating
competitive patents and published patent applications for freedom to operate and
other relevant considerations; (v) evaluating technical aspects of competitive
and potentially competitive products in development with abuse deterrent
features and benefits; and (vi) collaborating with the Company's technical staff
regarding development of new modified-release oral solid dosage forms with abuse
deterrent features using previously approved active and inactive pharmaceutical
ingredients.  In connection therewith, commencing on the Commencement
Date the Employee shall perform the duties and responsibilities set forth
here-in and others as may be further reasonably and customarily requested by the
Chief Executive Officer (CEO) (collectively, the "Services"), to whom the
Employee shall report and to use his commercially reasonable best efforts, skill
and abilities to promote the interests of the Company and its
subsidiaries.  For purposes hereof, “Commencement Date” shall mean
May 4th, 2009, unless the Company and the Employee expressly agree in writing to
another date, in which case such other date shall be deemed the Commencement
Date.

    
      
         

      

      
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    1.2           Office Location and
Travel.  The Employee shall perform the Services from his home
office.  In addition, the Employee may be required to travel from
time-to-time to the Company's Culver, IN research, development, and
manufacturing facility, and Palatine, IL administrative office, offices of the
Company's existing and potentially new legal counsel currently located in
Newark, NJ (general and SEC counsel), Philadelphia, PA (patent counsel),
Washington, DC (regulatory counsel), existing and potentially new licensees
(currently including King Pharmaceuticals, Inc.) Bridgewater, NJ, RTP, NC, and
Bristol, TN, existing and potentially new contract research organizations,
contract manufacturing organizations, and contract laboratory service providers,
Company board of directors and staff meetings and such other locations as shall
be required as the CEO shall determine to be in the best business interests of
the Company.

     

    1.3           Acceptance.  The
Employee hereby accepts such employment and agrees to render the Services
described in Section 1 hereof.

     

    2.     Term of
Employment.   The term of the Employee’s employment under
this Agreement shall commence on the Commencement Date of this Agreement and
shall expire twenty-four months thereafter (the “Initial Term”), unless sooner
terminated pursuant to Section 6 of this Agreement; provided, however, that the
term of the Employee’s employment hereunder shall automatically be extended for
successive one (1) year periods (each, a “Renewal Period” and together
with the Initial Term, the “Term”) unless either the
Company or the Employee provides written notice of non-renewal of the Employee’s
employment with the Company ninety (90) days prior to the expiration of the
Initial Term or any Renewal Period.

    
      
         

      

      
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    3.     Compensation.  In
consideration of the services to be rendered by the Employee pursuant to this
Agreement, the Employee shall receive from the Company the following
compensation:

     

    (a)           Base
Salary.  The Company shall pay the Employee an aggregate base
salary at the initial annual rate of Two Hundred Sixty-Five Thousand Dollars
($265,000) (the "Base
Salary"), commencing on the Commencement Date and payable in equal weekly
installments, or other periods at the Company's discretion, less such deductions
or amounts to be withheld as shall be required by applicable laws and
regulations.  The Employee’s Base Salary shall be reviewed at least
annually and be subject to increase by the Board of Directors of the Company in
its sole and absolute discretion.

     

    (b)           Annual
Bonus.  The Employee will be eligible to receive from the
Company an annual bonus (the “Bonus”) in the amount of up to
thirty-five percent (35%) of the Employee’s then current annual Base Salary
during such calendar year (with eligibility prorated for calendar year 2009 from
the Commencement Date to December 31, 2009).  The Bonus will be based
upon the relative achievement of such targets, conditions or parameters (the
“Bonus Criteria”) as
will be agreed upon by the Employee and the Board of Directors or the
Compensation Committee of the Board of Directors of the Company.  The
Bonus shall be paid at the same time as the bonuses are paid to other executive
officers of the Company, but in any event within seventy five (75) days
following the end of each calendar year for which the Employee is awarded a
Bonus which has been approved and authorized by the Board of Directors to be
paid.  Except as provided in Section 7, Employee must be actively
employed by the Company on the date that the Bonus is paid to be eligible for
such Bonus.

     

    (c)           Business
Expenses.  The Company shall pay or reimburse the Employee for
all reasonable expenses which are in accordance with the Company’s expense
policy in force from time to time and which are actually incurred or paid by the
Employee during the Term in the performance of his Services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as the Company may reasonably require.  Such
expenses shall include, but not be limited to, business travel, related meals
and lodging for overnight stays, home office supplies, cell phone and home
telephone line, internet service provider, laptop computer and associated
software, and home printer and associated supplies.

    
      
         

      

      
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              4.

            	
              Additional
      Benefits.

            

    

     

    (a)           Insurance and Retirement
Plans.  The Employee shall be entitled to medical, dental,
disability, and life insurance and retirement plan benefits for which he may be
eligible as adopted from time to time by the Company's Board of Directors in its
sole and absolute discretion for the benefit of employees of the
Company.

     

    (b)           Stock
Options.  Upon the Commencement Date, the Employee shall be
granted stock options to purchase 96,000 shares of the Company’s common stock
(the "Commencement Date
Option") at an exercise price per share equal to the last sale price as
reported by the NASDAQ Capital Market of the Company’s common stock on the
trading day immediately preceding the Commencement Date.  The
Commencement Date Option shall vest and be exercisable at the rate of 4,000
shares on the last day of each calendar month during the Initial
Term.  The Commencement Date Option shall be evidenced by the Stock
Option Agreement substantially in the form of Exhibit
A attached hereto and governed by the Company’s 2008 Stock Option
Plan.  The Employee will also be eligible in the future to receive
stock option grants based on performance or on achievement milestones as
determined by the Board of Directors or the Compensation
Committee.  The Commencement Date Option and any other stock option
granted to the Employee by the Company during the Term are referred to herein
collectively as the “Options”.

     

    (c)  Restricted Stock
Units.  Upon the Commencement Date, the Company shall grant to
the Employee a Restricted Stock Unit Award for 24,000 shares of the Company’s
common stock (the “Commencement
Date Restricted Stock
Units”).  The Commencement Date Restricted Stock Units shall
vest at the rate of 1,000 restricted stock units on the last day of each
calendar month during the Initial Term.  The Commencement Date
Restricted Stock Units shall be evidenced by the Restricted Stock Unit Award
Agreement substantially in the form of Exhibit
B attached hereto and governed by the Company’s 2005 Restricted Stock
Unit Award Plan.  The Commencement Date Restricted Stock Units and any
other restricted stock units granted to the Employee by the Company during the
Term are referred to herein collectively as “Restricted Stock
Units”.

    
      
         

      

      
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    5.      Vacation.  The
Employee shall be entitled to four weeks of vacation during each calendar year
of the Term (pro-rated for calendar year 2009) to be taken at a time or times
mutually agreed upon by the Employee and the Company; provided, however, that
not more than one week of accrued but unused vacation period may be carried over
to the calendar year immediately following the calendar year in which such
vacation was to be taken, unless otherwise required by applicable
law.  The Company acknowledges the Employee will be travelling to
South East Asia for two (2) weeks in June 2009.

     

    
      	
               
      

            	
              6.

            	
              Termination.

            

    

     

    6.1           Death.  If
during the Term the Employee shall die, the Employee’s employment under this
Agreement shall terminate as of the date of the Employee's
death.  Upon such termination under this Section 6.1 the Company shall
pay to or for the benefit of the Employee to such person or persons as the
Employee shall designate by notice to the Company from time to time or, in the
absence of such designation, the Employee’s spouse (the “Employee’s Designees”), in a
lump sum in cash within thirty (30) days from the date of the Employee's death
the accrued but unpaid portion of the Base Salary payable hereunder through the
date of death, and any accrued and unpaid vacation.  Except as set
forth in any Stock Option Agreements and Restricted Stock Unit Award Agreements,
the Company shall not have any further obligations to provide the Employee with
any further payments, benefits, or remuneration upon a termination under this
Section 6.1.

     

    6.2           Disability.  In
the event of the Employee’s "mental or physical disability" (as defined herein)
which continues for (i) a period of longer than sixty (60) consecutive days,
(ii) such periods aggregating one hundred twenty (120) days during any 365
consecutive days, or (iii) such additional period as may be required by law,
such that the Employee is unable to substantively perform the essential
functions of his position for said periods even with reasonable accommodation if
necessary, the determination of which shall be confirmed by the Board of
Directors in the manner hereinafter provided, this Agreement shall terminate
upon thirty (30) days' prior written notice to the Employee from the Company
(the "Disability Termination
Date").  The Company shall continue to pay to the Employee
during the period of his mental or physical disability the Base Salary provided
in Section 3 of this Agreement and provide the benefits described herein;
provided, however, that the Base Salary shall be reduced by any disability
insurance payments paid to the Employee by a policy paid for by the
Company.  On the Disability Termination Date, (a) the Employee’s Base
Salary shall cease, and (b) the Company shall pay to the Employee, in a lump sum
in cash, any accrued and unpaid vacation.  As used herein, the term
"mentally or physically
disabled" shall mean any mental or physical condition that precludes the
Employee from being able to perform the essential functions of his duties and
responsibilities even with reasonable accommodation if necessary.  The
Company may require the Employee to undergo an independent medical examination
by a reputable health care professional of the Company’s selection as part of
its determination of whether the Employee is mentally or physically
disabled.  The Employee hereby consents to, and agrees to make himself
available for, such examination.  Except as set forth in any Stock
Option Agreements and Restricted Stock Unit Award Agreements, the Company shall
not have any further obligations to provide the Employee with any further
payments, benefits, or remuneration upon a termination under this Section
6.2.

    
      
         

      

      
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    6.3           Termination for
Cause.  The Company may at any time during the Term, by written
notice, and after affording the Employee the opportunity to be heard in person
by the Board of Directors, terminate this Agreement and discharge the Employee
for "Cause", whereupon the Company's obligation to pay compensation or any other
amounts payable hereunder to or for the benefit of the Employee shall terminate
on the date of such discharge except for accrued and unpaid Base Salary and
expenses to the date of discharge.  For purposes of this Agreement,
the term "Cause" shall mean:  (i) any act of the Employee’s
constituting willful misconduct which is materially detrimental to the Company’s
best interests, including misappropriation of, or intentional damage to, the
funds, property, business or reputation of the Company; (ii) conviction of a
felony or of a crime involving moral turpitude or conviction of any crime
involving dishonesty or fraud;; (iii) material failure of the Employee to
perform his duties in accordance with this Agreement after written notice to the
Employee by the Board of Directors specifying such failure and giving the
Employee fourteen (14) days to correct the defects in performance; or (iv)
breach by the Employee of any material provision hereof which, if capable of
remedy, remains unremedied for more than fourteen (14) days after written
notice.  In the event the Employee is terminated by the Company for
Cause or if the Employee resigns other than for Good Reason (as defined in
Section 6.5), the Employee shall be entitled to exercise the vested portion of
the Options within forty (40) days of such termination or
resignation.  At the expiration of such forty (40) day exercise
period, the unexercised Options shall terminate.  Except as set forth
in any Stock Option Agreements and Restricted Stock Unit Award Agreements, the
Company shall not have any further obligations to provide the Employee with any
further payments, benefits, or remuneration upon a termination under this
Section 6.3.

    
      
         

      

      
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    6.4           Termination Without
Cause.  The Company may terminate the Employee's employment
with the Company at any time "without Cause", upon thirty (30) days' written
notice to the Employee.  A termination "without Cause" shall mean a
termination of the Employee's employment other than due to death, disability or
for Cause as provided in Sections 6.1, 6.2, and 6.3, respectively.

     

    6.5           Termination by the Employee
for Good Reason.  The Employee may terminate his employment for
"Good Reason", upon
thirty (30) days' written notice to Company.  "Good Reason" shall mean a
termination of employment by the Employee following, without the Employee's
express prior written consent:  (i) any material diminution in the
Employee's duties, status, offices, reporting requirements, or job title, except
in connection with termination of the Employee's employment for Cause as
provided in Section 6.3 or death or disability as provided in Sections 6.1 and
6.2 provided that the Employee has given the Company written notice of the
alleged basis for Good Reason and such basis remains uncured after twenty (20)
day following the Company's receipt of the notice; (ii) the failure of the
Company timely to pay the Employee's salary, bonus or benefits due the Employee
or any material breach by the Company of this Agreement, provided that the
Employee has given the Company written notice of the alleged basis for Good
Reason and such basis remains uncured after twenty (20) day following the
Company's receipt of the notice; (iii) any change in the Company's pay plan or
employment agreement with the Employee that results in a material diminution of
the Employee's annual Base Salary or eligible Bonus amounts provided that the
Employee has given the Company written notice of the alleged basis for Good
Reason and such basis remains uncured after twenty (20) day following the
Company's receipt of the notice; (iv) notice by the Company to not renew this
Agreement pursuant to Section 2, or (v) the failure of the Company to obtain an
agreement from any successor to the Company to assume and agree to perform this
Agreement.  Employee must provide notice of termination for Good
Reason within thirty (30) days of the date Employee becomes aware of grounds for
such termination.

    

    
      
         

      

      
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    6.6           Payment Upon Termination
Without Cause or for Good Reason.

     

    (a)           Cash Payments and
Severance.  In the event of a termination without Cause or for
Good Reason the Company shall pay the Employee, subject to applicable
withholdings and deductions:

     

    (i) each of the following amounts (x)
the Employee’s accrued and unpaid Base Salary through and including the date of
termination; (y) the Employee’s then accrued and unused vacation through and
including the date of termination; and; (z) the Employee’s then accrued and
unpaid Bonus for such year, calculated by pro-rating the annual Bonus, which
would have been payable to the Employee but for his termination and assuming
full achievement of the Bonus Criteria for such year, based on the number of
days that the Employee remained in the employ of the Company during the year for
which the Bonus is due.  The payments provided in subsections (x), (y)
and (z) shall be paid in a single lump sum in cash within thirty (30) days after
the date of termination; and

     

    (ii) one (1) year of the Employee's
Base Salary in effect immediately prior to the date of termination (”Severance Pay”). The amount of
such Severance Pay together with the payment under 6.6(a)(i)(z) that does not
exceed the Applicable Limit, shall be paid in equal monthly installments over
the Severance Period (as defined in Section 6.6(b)).  To the extent
the Severance Pay together with the payment under Section 6.6(a)(i)(z) exceeds
the Applicable Limit, (A) one-half of the amount exceeding the Applicable Limit
shall be paid six months and one day after the date of termination, and (B)
one-half of the amount exceeding the Applicable Limit shall be paid in six equal
monthly installments commencing with the seventh month after the date of
termination.  The Applicable Limit is the amount which may not be
exceeded as specified in Treasury Regulation 1-.409A-1(b)(iii)(A) (generally the
lesser of  $490,000 (for 2009) and two times Employee’s
compensation).

    
      
         

      

      
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    (b)           Insurance
Benefits.  In the event of a termination without Cause or for
Good Reason, for twelve (12) months from the date of such termination (the
“Severance Period”), the
Employee will, at the Employee’s option, (i) continue to receive all insurance
benefits to which he was entitled pursuant to Section 4(a) of this Agreement as
of the date of termination including continued medical, dental, disability, and
life insurance coverage on terms substantially as in effect on the date of
termination, subject to the payment by the Employee of all applicable employee
contributions, or (ii) receive a payment in cash following his termination
without Cause or for Good Reason representing the value of such continued
benefits, plus any income tax payable by the Employee on such
value.  The amount provided in subsection (ii) shall be paid (A) in a
single lump sum payment within thirty (30) days of the date of termination if
such termination is by the Company without Cause, and (B) in a single lump sum
payment six months and one day following the date of termination if such
termination is by the Employee for Good Reason.  If the Employee
elects option (i) above and for any reason at any time the Company is unable to
treat the Employee as being or having been an employee of the Company under any
benefits plan in which he is entitled to participate and as a result thereof the
Employee receives reduced benefits under such plan during the period that the
Employee is continuing to receive payments pursuant to this Section 6.6(b), then
the Company shall provide the Employee with such benefits by direct payment or,
at the Company’s option, by making available equivalent benefits from other
sources.  During the Severance Period, the Employee shall not be
entitled to receive salary and/or benefits except as provided herein and shall
not be entitled to participate in any employee benefit plan of, or receive any
other benefit from, the Company that is introduced after the date of
termination, except that an appropriate adjustment shall be made if such new
employee benefit or employee benefit plan is a replacement for or amendment to
an employee benefit or employee benefit plan in effect as of the date of
termination.

     

    (c)           Stock
Options.  In the event of a termination without Cause or for
Good Reason, the Company shall accelerate fully the vesting of any outstanding
Options granted to the Employee and the Employee shall be entitled to exercise
his vested Options for twelve (12) months following the date of termination
without Cause or resignation for Good Reason.  At the expiration of
such twelve (12) month period, all Options shall terminate.

     

    (d)           Restricted Stock
Units.  In the event of a termination without Cause or for Good
Reason, the terms of the Company’s 2005 Restricted Stock Unit Award Plan and the
Restricted Stock Unit Award Agreement(s) between the Company and the Employee
issued pursuant to the 2005 Restricted Stock Unit Award Plan shall govern the
vesting and distribution relating to any Restricted Stock Units.

     

    (e)           The
Company shall not have any further obligations to provide the Employee with any
further payments, benefits, or remuneration upon a termination without Cause of
for Good Reason.

    
      
         

      

      
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    6.7           Change of
Control.  In the event that (i) a Change of Control (as
hereinafter defined) occurs during the Term and (ii) the
Employee's employment with the Company is terminated without Cause or for Good
Reason, the Employee shall be entitled to the accrued salary, unused vacation,
bonus, Severance Pay, benefits, and stock option treatment as are provided in
Sections 6.6(a), (b), and (c) above, except, that the
Severance Pay shall be payable in a lump sum in cash (x) within thirty-one (31)
days after the date of such termination; provided such termination occurs within
two years after the Change of Control and such Change of Control meets the
requirements for a “change of control” under Section 409A of the Code, or (y)
six months and one day after such termination if the requirements of subsection
(x) are not met.  The Employee shall give the Company not less than
sixty (60) days' prior written notice of a termination of employment with the
Company following a Change of Control transaction if the Employee is terminating
for Good Reason.  Notwithstanding any language to the contrary
contained in any Option agreement with the Employee, the Employee shall be
entitled to exercise his vested Option shares for twelve (12) months following
the date of termination without Cause or resignation for Good
Reason.  At the expiration of such twelve (12) month period, all
Options shall terminate.  For purposes of this Section 7.7, the term
"Change of Control"
means the occurrence of any of the following, in one or a series of related
transactions: (v) the sale or transfer of fifty percent (50%) or more of the
Outstanding Shares of the Company to any person or entity other than (i) a
transfer to a wholly-owned subsidiary of the Company, or (ii) a transfer by a
holder or holders of the Company's common stock or convertible securities as of
the date hereof to Affiliates (as defined below); or (w) the sale, lease or
other transfer of all or substantially all of the assets or earning power of the
Company to any person or entity other than (i) to a
wholly-owned subsidiary of the Company, (ii) to an Affiliate whereby the purpose
or effect of such transfer is to provide for the transfer by a holder or holders
of the Company’s common stock or convertible securities as of the date hereof of
such holders’ direct or indirect interests in the assets of the Company to
Affiliates and so long as such transfer does not result in a transaction
described by one of the other clauses of this paragraph of Section 6.7, or (iii)
the license of all or any portion of the Company’s Aversion® Technology and
product related assets, in one or more transactions; or (x) merger,
consolidation, reorganization, recapitalization, share exchange, business
combination or a similar transaction which results in any person or entity
(other than the persons who are shareholders or security holders of the Company
immediately prior to such transaction (or their Affiliates as of the date of
such transaction)) owning fifty percent (50%) or more of the Outstanding Shares
or combined voting power of the Company; or (y) merger, consolidation,
reorganization, business combination or a similar transaction in which the
Company is not the surviving entity; or (z) a transaction commonly known as
“going private” whereby the Company engages one or a series of transactions
which results in the Company not being required to file periodic reports with
the Securities and Exchange Commission, unless the Employee is a participant in
such transaction. "Outstanding
Shares" shall mean the total number of common shares and common share
equivalents of the Company outstanding at the time the Change of Control,
including, without limitation, shares of common stock underlying debentures,
preferred stock, options, warrants and other convertible
securities.  "Affiliate" shall mean (i) any
person or entity controlling, controlled by or under the common control of the
existing holders of common stock or convertible securities of the Company and
(ii) any partner, shareholder or member of the existing holders of common stock
or convertible securities of the Company.  For the purposes hereof,
“control” shall mean the
direct or indirect ownership of at least fifty (50%) percent of the outstanding
shares or other voting rights of the subject entity or if it possesses, directly
or indirectly, the power to direct or cause the direction of management and
policies of such other entity.  In the event that the Employee resigns
or terminates his employment following a Change of Control as described above,
the Employee acknowledges and agrees that upon the request of the Company, he
will execute and deliver a release in customary form releasing all claims of the
Employee arising out of his employment with the Company except for the
obligations of the Company under this Agreement.

    
      
         

      

      
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    7.      Protection of Confidential
Information.  In view of the fact that the Employee's work for
the Company will bring him into close contact with all the confidential affairs
thereof, and plans for future developments, the Employee agrees to the
following:

    
      
         

      

      
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    7.1           Secrecy.  During
the Term and after the date of termination of the Employee’s employment, to
preserve the confidential nature of, and not use, disclose, reveal, or make
accessible to anyone other than the Company’s officers, directors, employees,
consultants or agents, otherwise than within the scope of his employment duties
and responsibilities hereunder, any and all documents, information, knowledge or
data of or pertaining to the Company, its subsidiaries or affiliates, including,
without limitation, the Aversion® Technology, or pertaining to any other
individual, firm, corporation, partnership, joint venture, business,
organization, entity or other person with which the Company or any of its
subsidiaries or affiliates may do business during the Term (including licensees,
licensors, manufacturers, suppliers and customers of the Company or any of its
subsidiaries or affiliates) and which is not in the public domain, including
trade secrets, "know how", names and lists of licensees, licensors,
manufacturers, suppliers and customers, development plans or programs,
statistics, manufacturing and production methods, processes, techniques,
pricing, marketing methods and plans, specifications, advertising plans and
campaigns or any other matters, and all other confidential information of the
Company, its subsidiaries and affiliates (hereinafter referred to as "Confidential
Information").  The restrictions on the disclosure of
Confidential Information imposed by this Section 7.1 shall not apply to any
Confidential Information that was part of the public domain at the time of its
receipt by the Employee or becomes part of the public domain in any manner and
for any reason other than an act by the Employee, unless the Employee is legally
compelled (by applicable law, deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process) to disclose such
Confidential Information, in which event the Employee shall provide the Company
with prompt notice of such requirement so that the Company may seek a protective
order or other appropriate remedy, and if such protective order or other remedy
is not obtained, the Employee shall exercise reasonable efforts in good faith to
obtain assurance that confidential treatment will be accorded such Confidential
Information.

     

    7.2           Return Memoranda,
etc.  The Employee hereby agrees to deliver promptly to the
Company on termination of his employment, or at any other time the Company may
so request, all memoranda, notes, records, email records, reports, manuals,
drawings, blueprints and other documents (and all hard and soft copies thereof)
relating to the Company's business and all property associated therewith, which
the Employee may then possess or have under his control.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    7.3           Non-competition.  Provided
that this Agreement has not been breached by the Company, the Employee agrees
that he shall not at any time prior to one (1) year after the expiration or
termination of his employment with the Company for any reason, whether voluntary
or involuntary own, manage, operate, be a director or an employee of, or a
consultant to or provide any services, consultation or advice to any person,
business, corporation, partnership, trust, limited liability company or other
firm or enterprise ("Person") which is engaged in
marketing, selling or distributing products or in developing product candidates
in the United States which contain technology meant to achieve all or some of
the same effects as the Company’s Aversion® Technology or are potentially
competitive with: (a) the Company’s products or product candidates in
development or (b) its licensee’s products or product candidates in development
that contain Aversion® Technology or any similar abuse deterrent
technology.  For avoidance of doubt, product candidates are as
evidenced by the current written product development plan and/or business plan
of the Company at the time of termination of the Employee's employment and/or
described in the Company’s most recent filing on Form 8-K, Form 10-K or Form
10-Q with the Securities and Exchange Commission as of the date of the
termination of the Employee’s employment.  If any of the provisions of
this section, or any part thereof, is hereinafter construed to be invalid or
unenforceable, the same shall not affect the remainder of such provision or
provisions, which shall be given full effect, without regard to the invalid
portions.  If any of the provisions of this section, or any part
thereof, is held to be unenforceable because of the duration of such provision,
the area covered thereby or the type of conduct restricted therein, the parties
agree that the court making such determination shall have the power to modify
the duration, geographic area and/or other terms of such provision and, as so
modified, said provision shall then be enforceable.  In the
event  that the courts of any one or more jurisdictions shall hold
such provisions wholly or partially unenforceable by reason of the scope thereof
or otherwise, it is the intention of the parties hereto that such determination
not bar or in any way affect the Company's right to the relief provided for
herein in the courts of  any other jurisdictions as to breaches or
threatened breaches of such provisions in such other jurisdictions, the above
provisions as they relate to each jurisdiction being, for this purpose,
severable into diverse and independent covenants.

     

    7.4           Injunctive
Relief.  The Employee acknowledges and agrees that, because of
the unique and extraordinary nature of his services, any breach or threatened
breach of the provisions of Sections 7.1, 7.2, or 7.3 hereof will cause
irreparable injury and incalculable harm to the Company, and the Company shall,
accordingly, be entitled to injunctive and other equitable relief for such
breach or threatened breach and that resort by the Company to such injunctive or
other equitable relief shall not be deemed to waive or to limit in any respect
any right or remedy which the Company may have with respect to such breach or
threatened breach.

     

    7.5           Expenses of Enforcement of
Covenants.  In the event that any action, suit or proceeding at
law or in equity is brought to enforce the covenants contained in Section 7.1,
7.2 or 7.3, hereof or to obtain money damages for the breach thereof, the party
prevailing in any such action, suit or other proceeding shall be entitled upon
demand to reimbursement from the other party for all expenses (including,
without limitation, reasonable attorneys' fees and disbursements) incurred in
connection therewith.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    7.6           Non-Solicitation.  The
Employee covenants and agrees not to (and not to cause or direct any Person to)
hire or solicit for employment any employee of the Company or any of its
subsidiaries or affiliates.  The prohibitions of this Section 7.6
shall apply (i) for six (6) months following the termination of the Employee’s
employment by the Company without Cause or by the Employee for Good Reason,
prior to a Change of Control, (ii) for twelve (12) months following the
termination of the Employee’s employment for Cause, prior to a Change of
Control, or (iii) for twenty-four (24) months following a Change of
Control.

     

    7.7           Assignment of
Inventions.  All discoveries, inventions, improvements and
innovations, whether patentable or not (including all data and records
pertaining thereto), which Employee may invent, discover, originate or conceive
during the Term of this Agreement and which directly relate to the business of
the Company or any of its subsidiaries as described in the Company’s filings
with the Securities and Exchange Commission, shall be the sole and exclusive
property of the Company.  Employee shall promptly and fully disclose
each and all such discoveries, inventions, improvements or innovations to the
Company.  Employee shall assign and hereby does assign to the Company
his entire right, title and interest in and to all of his discoveries,
inventions, improvements and innovation described in this Section 7.7 and any
related U.S. or foreign patent and patent applications, shall execute any
instruments reasonably necessary to convey or perfect the Company’s ownership
thereof, and shall assist the Company in obtaining, defending and enforcing its
rights therein.  The Company shall bear all expenses it authorizes to
be incurred in connection with such activity and shall pay the Employee
reasonable compensation for time spent by the Employee in performing such duties
at the request of the Company after the termination of his employment, for a
period not to exceed three (3) years.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    8.         Indemnification.  Except
as provided below, the Company will defend, indemnify and hold harmless the
Employee, to the maximum extent permitted by applicable law and the by-laws of
the Company, against all claims, costs, charges and expenses incurred or
sustained by him in connection with any action, suit or other proceeding to
which he may be made a party by reason of his being an officer, director or
employee of the Company or of any subsidiary or affiliate
thereof.  Furthermore, the Company hereby represents that it will
maintain during the Term, Directors and Officers insurance coverage in the
amount of at least Ten Million Dollars ($10,000,000), provided that such ten
million dollars is payable exclusively for claims against the directors and
officers of the Company and not for claims against the
Company.  Nothing herein shall require the Company to defend,
indemnify and/or hold harmless, or maintain insurance coverage for, the Employee
against any claims by former employers or companies to whom Employee previously
provided services, consultation, or advice,  including, without
limitation, the Consulting Agreement discussed in Section 9 below, alleging that
Employee's performance under this Agreement violates any contractual, legal, or
other duties allegedly owed by Employee to them.

     

    9.         Warranties and
Covenants.  The Employee hereby warrants that except for a
certain consulting agreement between the Employee and Alpharma as described by
the Employee to the CEO, (the “Consulting Agreement”), as of
the date hereof the Employee is not a party to any other employment contract,
express or implied and as of the Commencement Date will not be employed by or
acting as a consultant to any person or entity (other than the
Company).  The Employee warrants that he has no obligation,
contractual, legal, or otherwise, which would prevent him from accepting the
Company’s offer of employment under the terms of this Agreement, from complying
with its provisions, or from fully performing the duties and responsibilities of
his position under this Agreement.  The Employee warrants that he will
not utilize or disclose during his employment hereunder any confidential or
other proprietary information obtained through or in connection with his prior
employment or consulting services.  The Employee warrants that he
knows of no reason why he would not be able to perform his obligations under
this Agreement.  The Employee warrants that he has duly executed and
delivered this Agreement and it is valid, binding and enforceable against the
Employee in accordance with its terms. The Employee covenants that (i) he will
promptly terminate the Consulting Agreement in accordance with the termination
and notice provisions contained therein, and in any event complete the
termination of the Consulting Agreement not later than ninety (90) days from the
date of this Agreement, and (ii) he will not act as an employee or consultant to
any person or entity during the Term, except for any transitional consulting
services provided under the Consulting Agreement pending its termination or
(iii) as authorized by the CEO.  The Company warrants to the Employee
that this Agreement has been duly approved and authorized by its Board of
Directors, that this Agreement has been duly executed and delivered on behalf of
the Company and that this Agreement is valid, binding and enforceable against
the Company in accordance with its terms.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    10.        
      Notices.  All
notices, requests, consents and other communications required or permitted to be
given hereunder, shall be in writing and shall be deemed to have been duly given
if delivered personally, or transmitted via facsimile, or transmitted via a pdf
copy attached to an email, with confirmation of facsimile or pdf copies
delivered by overnight delivery via FedEx or similar carriers, to the parties at
their respective addresses herein above set forth or to such other address as
either party shall designate by notice in writing to the other in accordance
herewith.

     

    
      11. 
General.

       

    

    11.1           Governing
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the local laws of the State of New York applicable
to agreements made and to be performed entirely in New York.

     

    11.2           Captions.  The
section headings contained herein are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.

     

    11.3           Entire
Agreement.  This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof.  No representation,
promise or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.

     

    11.4           Assignability.  This
Agreement, and the Employee's rights and obligations hereunder, may not be
assigned by the Employee.  The Company may assign its rights, together
with its obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets; in any event
the rights and obligations of the Company hereunder shall be binding on its
successors or assigns, whether by merger, consolidation or acquisition of all or
substantially all of its business or assets.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    11.5           Amendment.  This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived, only by a written instrument
executed by both of the parties hereto, or in the case of a waiver, by the party
waiving compliance.  No superseding instrument, amendment,
modification, cancellation, renewal or extension hereof shall require the
consent or approval of any person other than the parties hereto.  The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same.  No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.

     

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

     

    11.7           Severability.  The
provisions of this Agreement shall be deemed severable, and if any part of any
provision is held illegal, void or invalid under applicable law, such provision
may be changed to the extent reasonably necessary to make the provision, as so
changed, legal, valid and binding.  If any provision of this Agreement
is held illegal, void or invalid in its entirety, the remaining provisions of
this Agreement shall not in any way be affected or impaired but shall
remain  binding in accordance with their terms.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

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

    

    
      
        
          
            
              
                
                  
                    	
                            ATTEST:

                          	 
      	
                            ACURA
      PHARMACEUTICALS, INC.

                          
	 
      	 
      	 
      	 
      
	
                             

                          	 
      	
                            By:

                          	
                            /s/ Andrew D. Reddick

                          
	 
      	 
      	 
      	
                            Andrew
      D Reddick

                          
	 
      	 
      	 
      	
                            President
      and Chief Executive Officer

                          
	 
      	 
      	 
      	 
      
	
                            WITNESS:

                          	 
      	
                            EMPLOYEE

                          
	 
      	 
      	 
      	 
      
	
                             

                          	 
      	
                            By:

                          	
                            /s/ Garth Boehm

                          
	 
      	 
      	 
      	
                            Garth
      Boehm, Ph.D.

                          
	 
      	 
      	 
      	
                            530
      Mountain Avenue

                          
	 
      	 
      	 
      	
                            Westfield,
      NJ  07090

                          

                  

                

              

            

          

        

      

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    ACURA
PHARMACEUTICALS, INC.

    STOCK
OPTION AGREEMENT

    

    ACURA PHARMACEUTICALS, INC., a New York
corporation (the "Company"), hereby grants Garth Boehm, Ph.D. (the "Optionee"), an option (the
“Option”) to purchase
Ninety-Six Thousand (96,000) shares (the "Shares") of the Company's
common stock,$.01 par value per share ("Common Stock"), at the
exercise price set forth in Paragraph 2 hereof, and in all respects subject to
the terms, definitions and provisions of the Company’s 2008 Stock Option Plan,
as amended (the "Plan"),
and incorporated herein by reference.  Terms not defined herein shall
have the meanings set forth in the Plan.  In the event of any
conflict, between the terms of this Agreement and the Plan, the terms of the
Plan shall control.

    

    1.      NATURE
OF OPTION.  This Option is intended to qualify as an Incentive Stock
Option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").  To the
extent the limits of Code Section 422(d) are exceeded, this Option shall be
deemed a non-Incentive Stock Option.

    

    2.      EXERCISE
PRICE.  The exercise price of the Shares shall be $_______ per share
of Common Stock subject to this Option, which is equal to the last sale price as
reported by the NASDAQ Capital Market of the Common Stock on the trading day
immediately preceding the Commencement Date (as defined in the Employment
Agreement between the Optionee and the Company dated _________).

    

    3.      VESTING
AND EXERCISE OF OPTION.  This Option shall vest and be exercisable to
the extent of Four Thousand (4,000) Shares on the last day of each calendar
month commencing April 30, 2009.  This Option shall be exercisable by
written notice as set forth in the Plan.

    

    4.      RESTRICTIONS
ON EXERCISE.  This Option may not be exercised if the issuance of such
Shares upon such exercise or the method of payment of consideration for such
Shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated
by the Federal Reserve Board.  As a condition to the exercise of this
Option, the Company may require the Optionee to make any representation and
warranty to the Company as may be required by any applicable law or
regulation.

    

    5.      TERMINATION
OF STATUS AS AN EMPLOYEE.  Except in the case of Optionee’s
termination of employment due to disability (in which case Section 6 below shall
govern) or due to death (in which case Section 9(e) of the Plan shall govern),
if the Optionee ceases to serve as an Employee, he may, but only within the
applicable time periods provided in his Employment Agreement with the Company,
exercise this Option to the extent that he was entitled to exercise it at the
date of such termination.  To the extent that he was not entitled to
exercise this Option at the date of such termination, or if he does not exercise
this Option within the time specified herein, this Option shall
terminate.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    6.      DISABILITY OF
OPTIONEE.  Notwithstanding the provisions of Section 5 above,
if the Optionee is unable to continue his employment with the Company as a
result of his total and permanent disability (within the meaning of Section
22(e)(3) of the Code), he may, but only within twelve (12) months from the date
of termination of employment due to such disability, exercise this Option to the
extent he was entitled to exercise it at the date of such
termination.  If he does not exercise this Option (which he was
entitled to exercise) within the time specified herein, this Option shall
terminate.

    

    7.      TERM
OF OPTION.  This Option may not be exercised more than ten (10) years
from the Grant Date of this Option, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.

    

    8.      ACCEPTANCE
OF PROVISIONS.  The execution of this Option Agreement by Optionee
shall constitute Optionee’s acceptance of and agreement to all of the terms and
conditions of the Plan and this Option Agreement.

    

    9.      NOTICES.  All
notices and other communications required or permitted under the Plan and this
Agreement shall be in writing and shall be given either by (i) personal delivery
or regular mail, in each case against receipt, or (ii) first class registered or
certified mail, return receipt requested.  All such notices or
communications to the Company shall be addressed to the attention of its Chief
Financial Officer, at its then administrative office, and to Optionee at his
last address appearing on the records of the Company or, in each case, to such
other person or address as may be designated by like notice
hereunder.

    

    10.    GOVERNING
LAW.  This Option shall be governed by and construed in accordance
with the laws of the State of New York, except to the extent pre-empted by
federal law.

    

    11.    MISCELLANEOUS.  This
Agreement and the Plan contain a complete statement of all the arrangements
between the parties with respect to their subject matter, and this Agreement
cannot be changed except by a writing executed by both parties.  All
pronouns and any variations thereof used herein refer to the masculine, feminine
or neuter, singular or plural, as the identity of the person or persons may
require.  The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.

    

    DATE OF
GRANT:  [May
4, 2009]

    

    ACURA
PHAMACEUTICALS, INC.

    

    
      
        
          
            	
                    By:

                  	 
      
	 
      	
                    Peter
      A. Clemens

                  
	 
      	
                    SVP
      and Chief Financial
Officer

                  

          

        

      

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    Acknowledgment
and Acceptance of Optionee

    

    The
Optionee acknowledges receipt of a copy of the Plan and represents that he is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions of the Plan.  The Optionee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions or disputes arising under the
Plan.

    

    
      
        
          	 
      
	
                  Garth
      Boehm, Ph.D.

                
	
                  530
      Mountain Avenue

                
	
                  Westfield,
      NJ  07090

                

        

      

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    ACURA
PHARMACEUTICALS, INC.

    RESTRICTED
STOCK UNIT AWARD AGREEMENT

    

    
      
        
          
            
              
                	
                        Participant

                      	 
      	
                        Garth
      Boehm, Ph.D.

                      
	
                        RSUs
      Granted

                      	 
      	
                        Twenty-Four
      Thousand (24,000)

                      
	
                        Award
      Date

                      	 
      	
                        [May 4, 2009]

                      
	
                        Vesting

                        Schedule

                      	 
      	
                        One
      Thousand (1,000) RSUs shall vest on the last day of each calendar month
      beginning April 30,
2009

                      

              

            

          

        

      

    

    

    This agreement (the “RSU Agreement”) is between
ACURA PHARMACEUTICALS,
INC., a New York corporation (the “Company”) and the participate
named above (the “Participant”), and is made in
accordance with the Company's 2005 Restricted Stock Unit Award Plan as amended
(the “Plan”).

    

    WITNESSETH

    

    WHEREAS, pursuant to the Plan,
the Company has granted to the Participant for services to be rendered to the
Company, effective as of the Award Date, a restricted stock unit award (the
“Award”), upon the terms
and conditions set forth herein and in the Plan.

    

    NOW, THEREFORE, in
consideration of services to be rendered by the Participant and the mutual
promises made herein and the mutual benefits to be derived therefrom, the
parties agree as follows:

    

    1.  Defined
Terms.  Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned to such terms in the Plan.

    

    2.  Grant.  Subject
to the terms of this RSU Agreement and the Plan, the Company hereby grants to
the Participant an Award for the aggregate number of Restricted Stock Units (the
“RSUs”) set forth above.

    

    3.  Vesting.  The
Award shall vest and become nonforfeitable with respect to the applicable
portion of the total number of RSUs comprising the Award (subject to adjustment
under Section 10 of the Plan), as described in the Vesting Schedule above,
subject to earlier acceleration or termination as provided in Sections 5 and 7
of the Plan.  In addition to acceleration of vesting of the Award upon
the occurrence of any events providing for acceleration of vesting under Section
5(c) of the Plan, the Award shall fully and immediately vest and become
nonforfeitable if the Participant terminates his employment with the Company for
“Good Reason” as such term is defined in the Participant’s Employment Agreement
with the Company dated March _____, 2009.  Except as provided in this
Section and in Section 5(c) of the Plan, the Participant’s RSUs shall be
forfeited to the extent such RSUs have not become vested upon the date the
Participant’s services as an employee terminates.  Except as otherwise
provided in the Plan, the Vesting Schedule above requires the Participant’s full
time continued service through each applicable vesting date as a condition to
the vesting of the applicable installment and rights and benefits under this
Agreement.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    4.  Plan.  The
Award and all rights of the Participant with respect thereto are subject to, and
the Participant agrees to be bound by, all of the terms and conditions of the
provisions of the Plan, incorporated herein by reference.  Unless
otherwise expressly provided in this Agreement, provisions of the Plan that
confer discretionary authority on the Board or the Committee do not (and shall
not be deemed to) create any additional rights in the Participant not expressly
set forth in this Agreement.  If there is any conflict or
inconsistency between the terms and conditions of this Agreement and of the
Plan, the terms and conditions of the Plan shall govern.  The
Participant acknowledges receipt of a copy of the Plan and agrees to be bound by
its terms.

    

    IN WITNESS WHEREOF, the
parties have executed this RSU Agreement as of the Award Date first above
written.  By the Participant’s execution of this RSU Agreement, the
Participant agrees to the terms and conditions of this RSU Agreement and of the
Plan.

    

    
      
        
          
            
              
                	
                        ACURA
      PHARMACEUTICALS, INC.

                      	 	
                        PARTICIPANT

                      
	 
      	 
      	 	 
      	 
      
	
                        By:

                      	 
      	 	
                        By:

                      	 
      
	 
      	
                        Peter
      A. Clemens

                      	 	 
      	
                        Garth
      Boehm, Ph.D.

                      
	 
      	
                        SVP
      and Chief Financial Officer

                      	 	 
      	
                        530
      Mountain Avenue

                      
	 
      	 
      	 	 
      	
                        Westfield,
      NJ  07090

                      

              

            

          

        

      

    

    
      
         

      

      
        23

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