SECURED PROMISSORY NOTE ACURA PHARMACEUTICALS, INC.
| $__________ | No. N-__ | |
| June 22, 2005 | ||
ACURA
PHARMACEUTICALS, INC., a corporation organized under the laws of the State
of
New York (the “Company”),
for
value received, hereby promises to pay to _______________, or
registered assigns (the “Payee”
or
“Holder”),
upon
due presentation and surrender of this Secured Promissory Note (this
“Note”),
on
the Maturity Date, the principal amount of _________________________________
($______________) and all accrued but unpaid interest thereon as hereinafter
provided. As used herein, the “Maturity
Date”
means
June 1, 2006.
This
Note
was issued by the Company pursuant to a certain Loan Agreement dated as of
June
22, 2005 among the Company and certain lenders identified therein, including
the
Payee (together with the Schedules and Exhibits thereto, the “Loan
Agreement”).
The
holders from time to time of the Notes issued under the Loan Agreement
(including the Holder) are referred to hereinafter as the “Holders”.
The
Holder is entitled to the benefits of the Loan Agreement, including, without
limitation, the rights upon the occurrence and during the continuance of an
Event of Default and the benefits of security interests and guaranties referred
to below. Reference is made to the Loan Agreement and the documents entered
into
pursuant thereto with respect to certain additional rights of the Holder and
obligations of the Company and its Subsidiaries not expressly set forth herein.
Capitalized terms used herein but not otherwise defined herein shall have the
meaning ascribed thereto in the Loan Agreement. All such rights and obligations
set forth in the Loan Agreement are incorporated herein by
reference.
ARTICLE
I
PAYMENT
OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT
1.1. Payment,
if any, of the principal and accrued interest on this Note shall be made in
cash, in immediately available funds, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts. Interest (computed on the basis of a
360-day year of twelve 30-day months) shall accrue on the unpaid portion of
said
principal amount from time to time outstanding at the Stated Interest Rate
(as
defined below), and shall be paid by the Company to the Payee in arrears on
the
last day of each calendar quarter unless required to be paid earlier by the
terms of the Loan Agreement. Both principal hereof and interest hereon are
payable at such address as the Holder shall designate from time to time by
written notice to the Company. The Company will pay or cause to be paid all
sums
becoming due hereon for principal and interest by check or wire transfer, at
the
Holder’s election, and, without any requirement for the presentation of this
Note or making any notation thereon, except that the Holder hereof agrees that
payment of the final amount due shall be made only upon surrender of this Note
to the Company for cancellation. Prior to any sale or other disposition of
this
instrument, the Holder hereof agrees to endorse hereon the amount of principal
paid hereon and the last date to which interest has been paid hereon and to
notify the Company of the name and address of the transferee. As used herein,
the “Stated Interest Rate” means the rate of (i) ten percent (10%) per annum
prior to the occurrence of an Event of Default, and (ii) thirteen percent (13%)
per annum after the occurrence of an Event of Default and during the continuance
thereof (regardless of whether the Loans have been accelerated), in each case
subject to the limitations of applicable law.
1.2. If
this
Note or any portion hereof becomes due and payable on a Saturday, Sunday or
public holiday under the laws of the State of New York, the due date hereof
shall be extended to the next succeeding full business day and interest shall
be
payable at the Stated Interest Rate per annum during such extension. All
payments received by the Holder shall be applied first to the payment of all
accrued interest payable hereunder.
1.3 The
Company shall have the right to prepay the principal amount of this Note, in
whole or in part, at any time without penalty or premium. Any prepayment of
principal shall be accompanied by a payment of all interest accrued and unpaid
on the portion of the principal amount being prepaid. In addition, this Note
is
subject to mandatory prepayment as provided in the Loan Agreement.
ARTICLE
II
SECURITY
2.1. The
obligations of the Company under this Note are secured pursuant to security
interests on and collateral assignments of, assets, tangible and intangible,
of
the Company granted by the Company to the Holder and the other Holders (or
their
agent) pursuant to a General Security Agreement of even date herewith, and
the
collateral assignments referred to in the Loan Agreement. In addition, each
of
Acura Pharmaceutical Technologies, Inc. (“APT”) and Axiom Pharmaceutical
Corporation, each a wholly owned subsidiary of the Company (individually a
“Guarantor” and collectively, the “Guarantors”), has executed and delivered in
favor of the Holder and the other Holders (or their agent) a Continuing
Unconditional Guaranty, dated an even date herewith (each a “Guarantee”),
guaranteeing the full and unconditional payment when due of the amounts payable
by the Company to the Holder and the other Holders pursuant to the terms of
their respective Notes. The obligations of each Guarantor under its Guaranty
are
secured pursuant to security interests on and collateral assignments of, assets,
tangible and intangible, of such Guarantor granted by the Guarantor to the
Holder and the other Holders (or their agent) pursuant to a security agreement
of even date herewith, and the collateral assignments referred to in the Loan
Agreement.
ARTICLE
III
MISCELLANEOUS
3.1. Default.
Subject to the terms of the Loan Agreement, upon the occurrence of any one
or
more of the Events of Default specified in the Loan Agreement all amounts then
remaining unpaid on this Note may be declared to be, or automatically become,
immediately due and payable as provided in the Loan Agreement.
3.2. Collection
Costs. In the event that this Note shall be placed in the hands of an attorney
for collection by reason of any event of default hereunder, the undersigned
agrees to pay reasonable attorney’s fees and disbursements and other reasonable
expenses incurred by the Holder or its agent in connection with the collection
of this Note. In addition, the undersigned shall be responsible for all other
expenses of the Holder and its agent to the extent provided by the Loan
Agreement.
3.3. Rights
Cumulative; Specific Performances. The rights, powers and remedies given to
the
Payee under this Note shall be in addition to all rights, powers and remedies
given to it by virtue of the Loan Agreement, any document or instrument executed
in connection therewith, or any statute or rule of law.
3.4. No
Waivers. Any forbearance, failure or delay by the Payee in exercising any right,
power or remedy under this Note, the Loan Agreement, any documents or
instruments executed in connection therewith or otherwise available to the
Payee
shall not be deemed to be a waiver of such right, power or remedy, nor shall
any
single or partial exercise of any right, power or remedy preclude the further
exercise thereof.
3.5. Amendments
in Writing. Subject to the terms of the Loan Agreement, no amendment,
modification or waiver of any provision of this Note shall be effective unless
it shall be in writing and signed by the Holder, and any such amendment,
modification or waiver shall apply only in the specific instance for which
given.
3.6. Governing
Law; Jurisdiction. (a) This
Note and the rights of the holders hereof shall be governed by, and construed
in
accordance with, the laws of the State of New York wherein the terms of this
Note were negotiated, excluding to the greatest extent permitted by law any
rule
of law that would cause the application of the laws of any jurisdiction other
than the State of New York.
(b) The
undersigned hereby irrevocably and unconditionally submits, for itself and
its
property, to the nonexclusive jurisdiction of any New York State court or United
States Federal court sitting in New York City, and any appellate court from
any
thereof, in any action or proceeding arising out of or relating to this Note
or
for recognition or enforcement of any judgment, and each of the parties hereto
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New York State
court or, to the fullest extent permitted by law, in such United States Federal
court. The undersigned agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or any other manner provided by law. Nothing in this Note
or any other Transaction Document shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Note or any
of
the other Transaction Documents in the courts of any jurisdiction.
(c) The
Company irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
in
relation to this Note or any other transaction document to which it is a party
in any such New York State or United States Federal Court. The Company hereby
irrevocably waives, to the fullest extent permitted by law, the defense of
an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
3.7. No
Counterclaims. The Company waives the right to interpose counterclaims or
set-offs of any kind and description in any litigation arising hereunder
(whether or not arising out of or relating to this Note).
3.8. Successors.
The term “Payee” and “Holder” as used herein shall be deemed to include the
Holder and its successors, endorsees and assigns.
3.9. Certain
Waivers. The Company hereby waives presentment, demand for payment, protest,
notice of protest and notice of non-payment hereof.
3.10. Mutilated,
Lost, Stolen or Destroyed Notes. In case this Note shall be mutilated, lost,
stolen or destroyed, the Company shall issue and deliver in exchange and
substitution for and upon cancellation of the mutilated Note, or in lieu of
and
substitution for the Note, mutilated, lost, stolen or destroyed, a new Note
of
like tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction and an indemnity, if requested, also reasonably satisfactory
to
it (but without requirement of posting any bond).
3.11. Maintenance
of Office. The Company covenants and agrees that so long as this Note shall
be
outstanding, it will maintain an office or agency in New York (or such other
place as the Company may designate in writing to the holder of this Note) where
notices, presentations and demands to or upon the Company in respect of this
Note may be given or made.
3.12. WAIVER
OF
JURY TRIAL. THE COMPANY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS DEBENTURE OR ANY OTHER TRANSACTION
DOCUMENT TO WHICH IT IS A PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR ENFORCEMENT THEREOF.
IN
WITNESS WHEREOF, Acura Pharmaceuticals, Inc. has caused this Note to be signed
by its President and to be dated the day and year first above
written.
| ATTEST [SEAL] | ACURA PHARMACEUTICALS, INC. | |
| ________________________________ | By:____________________________________ | |
| Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||
| Title: President Chief Executive Officer |
ATTACHMENT
I
Assignment
For
value
received, the undersigned hereby assigns subject to the provisions of the Loan
Agreement, to ________ $_________________ principal amount of the Secured
Promissory Note evidenced hereby and hereby irrevocably appoints _______________
attorney to transfer the Note on the books of the within named corporation
with
full power of substitution in the premises.
Dated:
In
the
presence of: