THIRD AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

THIS THIRD   AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this “ Amendment ”) made this 22 ^nd day of December, 2005 by and between ACURA PHARMACEUTICALS, INC. , (formerly Halsey Drug Co., Inc.), a New York corporation (the “ Corporation ”), with offices at 616 N. North Court, Suite 120, Palatine, Illinois 60067 and PETER A. CLEMENS, residing at 20860 Valley Road, Kideer, Illinois 60047 (the “ Employee ”).

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

1.      Section 2 of the Employment Agreement is hereby deleted in its entirety and the following is inserted in its place:

“The term of the Employee’s employment under this Agreement shall commence on the date of this Agreement and shall expire on December 31, 2006 (the “ Initial Term ”), unless sooner terminated pursuant to Section 7 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 Corporation or the Employee provides written notice of non-renewal of the Employee’s employment with the Corporation ninety (90) days prior to the expiration of the Initial Term or any Renewal Period.”

2.      Section 3(b) of the Employment Agreement is hereby deleted in its entirety and the following is inserted in its place:

“(b)   Annual Bonus . During the Term, the Employee will be eligible to receive from the Corporation an annual bonus (the “ Bonus ”) in the amount of up to one hundred percent (100%) of the Employee’s then current annual Base Salary during the fiscal year (or portion thereof) for which the Bonus may be awarded. The Bonus will be based upon the 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 Corporation within sixty (60) days of (before or after) the beginning of each fiscal year during the Term. The Bonus shall be paid at the same time as the bonuses are paid to other executive officers, but in any event within seventy five (75) days following the end of the Corporation’s fiscal year.

Notwithstanding the foregoing, with respect to the Corporation’s fiscal year ending December 31, 2006 (“ Fiscal 2006 ”), in the event the Corporation completes one or more Funding Transactions during Fiscal 2006 which results in the Corporation’s receipt of aggregate gross Funding Proceeds of at least Fifteen Million Dollars ($15,000,000)(the “ Minimum Funding Threshold ”), the Corporation shall pay the Employee a bonus in an amount equal to one hundred percent (100%) of the Employee’s then current annual Base Salary not later than thirty (30) calendar days following the Corporation’s receipt of Funding Proceeds satisfying the Minimum Funding Threshold. For purposes of this Section 3(b) “ Funding Transaction ” shall mean (a) any equity financing, and/or (b) any licensing or similar arrangement (including, by means of a joint venture, option or similar arrangement) whereby the Corporation licenses or otherwise grants any interest in or to any of the Corporation’s intellectual property rights, technology, know-how or similar property rights (whether existing now or hereafter) to a non-affiliated third party, or any similar transaction. “ Funding Proceeds ” shall mean and include (a) in the case of a Funding Transaction comprising an equity financing, the gross proceeds received by the Corporation from the issuance or sale of its equity securities, and (b) in the case of a Funding Transaction comprising a licensing or similar arrangement, the gross proceeds (consisting of signing fees, upfront fees, license fees, sublicense fees, milestone payments or any similar fees or payments, but expressly excluding any royalty payments, profit sharing payments or similar payments calculated based on the sale of products incorporating the Company’s technology) received by the Corporation with respect to such arrangement, and (c) in each case, the gross proceeds are received by the Corporation on or before March 31, 2007 with respect to a Funding Transaction pursuant to a definitive agreement executed on or before December 31, 2006 by the Corporation and the other party to such transaction.

In the event the Corporation does not satisfy the Minimum Funding Threshold, but receives Funding Proceeds of at least Eleven Million Dollars ($11,000,000) on or before March 31, 2007, the Corporation shall pay the Employee a Bonus in an amount equal to a percentage of the Employee’s then current annual Base Salary in an amount equal to the product of (x) 100%, multiplied by (y) the quotient of (A) the Funding Proceeds received by the Corporation on or before March 31, 2007, divided by (B) Fifteen Million Dollars ($15,000,000).”

3.      Section 5(b) of the Employment Agreement is hereby amended to add the following at the end of such Section:

The Corporation will promptly amend the Corporation’s 1998 Stock Option Plan to comply with Section 409A and prepare and issue to the Employee an amended and restated non-qualified stock option agreement conforming to the requirements of Section 409A with respect to the Post-409A Option Portion, in form and substance satisfactory to the parties in replacement of the Non-Qualified Stock Option Agreement granted to the Employee on August 13, 2004 (the ‘Existing Option”). The Corporation acknowledges and agrees that shareholder approval of the Existing Option has been obtained and that the shares underlying the Existing Option have been duly registered. All references in this Employment Agreement to the “Option” and “Option Shares” shall be deemed to include all stock options granted by the Corporation to the Employee during the term of this Agreement.”

4.      Section 5(c) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

“(c)   Restricted Stock Units . Simultaneously with the execution of the Third Amendment to Executive Employment Agreement dated December 22, 2005, the Corporation granted to the Employee a Restricted Stock Units Award Agreement which, subject to its terms and the terms of the Corporation’s 2005 Restricted Stock Unit Award Plan, provides for the Corporation’s issuance of up to Four Million Four Hundred Thousand (4,400,000) shares of the Corporation’s common stock, $.01 par value per share (the “Restricted Stock Units”). Notwithstanding anything to the contrary contained in this Employment Agreement, the grant, vesting and distribution relating to the Restrict