Document:

Exhibit 10.4 - FIRST AMENDMENT TO NINTH AR CREDIT AGREEMENT

Exhibit 10.4

FIRST AMENDMENT 
to 
NINTH AMENDED AND RESTATED 
REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT (this “Amendment”) TO NINTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated effective June 20, 2013 (as amended, the “Credit Agreement”), which Amendment is dated effective as of May 13, 2014 (the “Effective Date”), is entered into among GROUP 1 AUTOMOTIVE, INC., a Delaware corporation (the “Company”), each of the Subsidiaries of the Company listed on the signature pages hereof and such other Subsidiaries of the Company which hereafter shall become parties to the Credit Agreement (the Company and the Subsidiaries are sometimes referred to herein as, individually, a “Borrower,” and collectively, the “Borrowers”), the lenders listed on the signature pages hereof (the “Lenders”), JPMORGAN CHASE BANK, N.A., as Administrative Agent for the Lenders (in such capacity, together with any successor, the “Agent”), COMERICA BANK, as Floor Plan Agent for the Lenders (in such capacity, together with any successor, the “Floor Plan Agent”), BANK OF AMERICA, N.A., as Syndication Agent (in such capacity, together with any successor, the “Syndication Agent”), U.S. BANK, N.A. and WELLS FARGO BANK, N.A., as Co-Documentation Agents and CAPITAL ONE, NATIONAL ASSOCIATION and COMPASS BANK, as Managing Agents (together with the Agent, the Floor Plan Agent, the Syndication Agent and the Co-Documentation Agents, the “Agents”).
R E C I T A L S:
The Company, each of the other Borrowers, the Agents and the Lenders are parties to the Credit Agreement, pursuant to which the Lenders agreed to make loans to and extensions of credit on behalf of the Borrowers; and
The Company, the Borrowers, the Agents and the Lenders desire to amend the Credit Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I.  DEFINITIONS
Section 1.1    Terms Defined Above.  As used in this Amendment, each of the terms defined in the opening paragraph shall have the meaning assigned to such terms therein.
Section 1.2    Terms Defined in Credit Agreement.  Each term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Credit Agreement, unless expressly provided to the contrary.

Exhibit 10.4

Section 1.3    Other Definitional Provisions.
(a)    The words “hereby”, “herein”, “hereinafter”, “hereof”, “hereto” and “hereunder” when used in this Amendment shall refer to this Amendment as a whole and not to any particular Article, Section, subsection or provision of this Amendment.
(b)    Section, subsection and Exhibit references herein are to such Sections, subsections and Exhibits to this Amendment unless otherwise specified.
ARTICLE II.      AMENDMENT TO CREDIT AGREEMENT
Section 2.1    Amendment to Section 10.1.  Section 10.1 of the Credit Agreement is hereby amended to restate the clause (p) thereof in its entirety as follows:
“(p)    Unsecured debt of the Company and Guarantees of such debt by the Restricted Subsidiaries in an aggregate amount not to exceed Six Hundred Million and No/100 Dollars ($600,000,000) outstanding at any time, on terms acceptable to the Administrative Agent, provided that no more than One Hundred Million and No/100 Dollars ($100,000,000) of such debt may have a scheduled maturity prior to the Maturity Date as of the date such Indebtedness is incurred;”. 
ARTICLE III.      CONDITIONS
The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent:
Section 3.1    Loan Documents.  The Agent shall have received counterparts of this Amendment executed and delivered by a duly authorized officer of the Company and each of the Borrowers and the Required Lenders.
Section 3.2    Representations and Warranties.  Except as affected by the transactions contemplated in the Credit Agreement and this Amendment, each of the representations and warranties made by the Company and the other Borrowers in or pursuant to the Loan Documents shall be true and correct in all material respects as of the Effective Date, as if made on and as of such date, except to the extent that such representations and warranties are limited to an earlier date or period in which case they shall be limited to such earlier date or period.
ARTICLE IV.      MISCELLANEOUS
Section 4.1    Adoption, Ratification and Confirmation of Credit Agreement.  The Company, each of the Borrowers, the Agents and the Lenders do hereby adopt, ratify and confirm the Credit Agreement, as amended hereby, and the Security Documents, and acknowledges and agrees that the Credit Agreement, as amended hereby, and each of the Security Documents, are and remain in full force and effect.
Section 4.2    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.

2

Exhibit 10.4

Section 4.3    Counterparts.  This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and may be delivered in original or facsimile form, and all of such counterparts taken together shall be deemed to constitute one and the same instrument and shall be enforceable as of the Effective Date upon the execution of one or more counterparts hereof by the Company, the other Borrowers, the Agents and the Required Lenders.  In this regard, each of the parties hereto acknowledges that a counterpart of this Amendment containing a set of counterpart execution pages reflecting the execution of each party hereto shall be sufficient to reflect the execution of this Amendment by each necessary party hereto and shall constitute one instrument.
Section 4.4    Number and Gender.  Whenever the context requires, reference herein made to the single number shall be understood to include the plural; and likewise, the plural shall be understood to include the singular.  Words denoting sex shall be construed to include the masculine, feminine and neuter, when such construction is appropriate; and specific enumeration shall not exclude the general but shall be construed as cumulative.  Definitions of terms defined in the singular or plural shall be equally applicable to the plural or singular, as the case may be, unless otherwise indicated.
Section 4.5    Invalidity.  In the event that any one or more of the provisions contained in this Amendment shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Amendment.
Section 4.6    Titles of Articles, Sections and Subsections.  All titles or headings to Articles, Sections, subsections or other divisions of this Amendment or the exhibits hereto, if any, are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of such Articles, Sections, subsections, other divisions or exhibits, such other content being controlling as the agreement among the parties hereto.
Section 4.7    Indemnity.  The Company and each of the other Borrowers hereby ratify the indemnification provisions contained in the Loan Documents, including, without limitation, Section 13.14(b) of the Credit Agreement, and agrees that this Amendment and all losses, claims, damages, liabilities, costs and expenses related thereof shall be covered by such indemnities
Section 4.8    Governing Law.  This Amendment shall be deemed to be a contract made under and shall be governed by and construed in accordance with the internal laws of the State of Texas.
Section 4.9    Entire Agreement.  The Credit Agreement, as amended by this Amendment and the other Loan Documents, constitute the entire agreement among the parties hereto with respect to the subject thereof.  All prior understandings, statements and agreements, whether written or oral, relating to the subject thereof are superseded by the Credit Agreement, as amended by this Amendment, and the other Loan Documents.
[END OF TEXT]

3

Exhibit 10.4

IN WITNESS HEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the Effective Date.

BORROWERS:    GROUP 1 AUTOMOTIVE, INC., 
a Delaware corporation

By:    /s/ John C. Rickel___________________________
John C. Rickel
Senior Vice President and Chief Financial Officer

Advantagecars.com, Inc.,
a Delaware corporation
Amarillo Motors-F, Inc.,
a Delaware corporation
Bob Howard Automotive-East, Inc.,
an Oklahoma corporation
Bob Howard Chevrolet, Inc.,
an Oklahoma corporation
Bob Howard Dodge, Inc.,
an Oklahoma corporation
Bob Howard Motors, Inc.,
an Oklahoma corporation
Bob Howard Nissan, Inc.,
an Oklahoma corporation
Bohn Holdings, Inc.,
a Delaware corporation
Chaperral Dodge, Inc.,
a Delaware corporation
Danvers-S, Inc.,
a Delaware corporation
Danvers-SB, Inc.,
a Delaware corporation
Danvers-T, Inc.,
a Delaware corporation
Danvers-TII, Inc.,
a Delaware corporation
Danvers-TIII, Inc.,
a Delaware corporation
Danvers-TL, Inc.,
a Delaware corporation

By:    /s/ John C. Rickel___________________________
John C. Rickel, Vice President

4

Exhibit 10.4

GPI AL-N, Inc.,
a Delaware corporation
GPI CA-DMII, Inc.,
a Delaware corporation
GPI CA-F, Inc.,
a Nevada corporation
GPI CA-SH, Inc.,
a Nevada corporation
GPI CA-SV, Inc.,
a Delaware corporation
GPI CA-TII, Inc.,
a Delaware corporation
GPI GA Holdings, Inc.,
a Delaware corporation
GPI KS Motors, Inc.,
a Delaware corporation
GPI KS-SB, Inc.,
a Delaware corporation
GPI KS-SH, Inc.,
a Delaware corporation
GPI KS-SK, Inc.,
a Delaware corporation
GPI MD-SB, Inc.,
a Delaware corporation
GPI MS-H, Inc.,
a Delaware corporation
GPI MS-N, Inc.,
a Delaware corporation
GPI MS-SK, Inc.,
a Delaware corporation
GPI NH-T, Inc.,
a Delaware corporation
GPI NH-TL, Inc.,
a Delaware corporation
GPI NY Holdings, Inc.,
a Nevada corporation
GPI OK-HII, Inc.,
a Nevada corporation
GPI OK-SH, Inc.,
a Delaware corporation
GPI SAC-T, Inc.,
a Delaware corporation

By:    /s/ John C. Rickel___________________________
John C. Rickel, Vice President

5

Exhibit 10.4

GPI SC, Inc.,
a Delaware corporation 
GPI SC Holdings, Inc.,
a Delaware corporation
GPI SD-DC, Inc.,
a Delaware corporation
GPI TX-ARGMIII, Inc.,
a Nevada corporation
GPI TX-DMII, Inc.,
a Nevada corporation
GPI TX-EPGM, Inc.,
a Delaware corporation
GPI TX-F, Inc.,
a Delaware corporation
GPI TX-HGM, Inc.,
a Delaware corporation
GPI TX-HGMII, Inc.,
a Nevada corporation
GPI TX-NVI, Inc.,
a Nevada corporation
GPI TX-SBII, Inc.,
a Delaware corporation
GPI TX-SBIII, Inc.,
a Nevada corporation
GPI TX-SHII, Inc.,
a Delaware corporation
GPI TX-SK, Inc.,
a Delaware corporation
GPI TX-SKII, Inc.,
a Nevada corporation
GPI TX-SV, Inc.,
a Delaware corporation
GPI TX-SVII, Inc.,
a Delaware corporation
GPI TX-SVIII, Inc.,
a Delaware corporation
Group 1 Associates, Inc.,
a Delaware corporation 
Group 1 FL Holdings, Inc.,
a Delaware corporation
Howard-GM II, Inc.,
a Delaware corporation

By:    /s/ John C. Rickel___________________________    John C. Rickel, Vice President

6

Exhibit 10.4

Howard-GM, Inc.,
a Delaware corporation
Howard-H, Inc.,
a Delaware corporation
Howard-HA, Inc.,
a Delaware corporation
Howard-SB, Inc.,
a Delaware corporation
Kutz-N, Inc.,
a Delaware corporation
Lubbock Motors, Inc.,
a Delaware corporation
Lubbock Motors-F, Inc.,
a Delaware corporation
Lubbock Motors-GM, Inc.,
a Delaware corporation
Lubbock Motors-S, Inc., 
a Delaware corporation
Lubbock Motors-SH, Inc.,
a Delaware corporation
Lubbock Motors-T, Inc.,
a Delaware corporation
Maxwell Ford, Inc.,
a Delaware corporation
Maxwell-GMII, Inc.,
a Delaware corporation
Maxwell-N, Inc.,
a Delaware corporation
Maxwell-NII, Inc.,
a Delaware corporation
McCall-F, Inc.,
a Delaware corporation
McCall-H, Inc.,
a Delaware corporation
McCall-HA, Inc.,
a Delaware corporation
McCall-N, Inc.,
a Delaware corporation
McCall-SB Inc.,
a Delaware corporation
McCall-T, Inc.,
a Delaware corporation

By:    /s/ John C. Rickel___________________________    John C. Rickel, Vice President

7

Exhibit 10.4

McCall-TII, Inc.,
a Delaware corporation
McCall-TL, Inc.,
a Delaware corporation
Mike Smith Automotive-H, Inc.,
a Delaware corporation
Mike Smith Automotive-N, Inc.,
a Texas corporation
Mike Smith Autoplaza, Inc.,
a Texas corporation
Mike Smith Autoplex Dodge, Inc.,
a Texas corporation
Mike Smith Autoplex, Inc.,
a Texas corporation
Mike Smith Autoplex-German Imports, Inc.,
a Texas corporation
Mike Smith Imports, Inc.,
a Texas corporation
Miller Automotive Group, Inc.,
a California corporation
Miller Family Company, Inc.,
a California corporation
Miller-DM, Inc.,
a Delaware corporation
NJ-DM, Inc.,
a Delaware corporation
NJ-H, Inc.,
a Delaware corporation
NJ-HA, Inc.,
a Delaware corporation
NJ-HAII, Inc.,
a Delaware corporation
NJ-HII, Inc.,
a Delaware corporation
NJ-SB, Inc.,
a Delaware corporation
NJ-SV, Inc.,
a Delaware corporation
Rockwall Automotive-F, Inc.,
a Delaware corporation

By:    /s/ John C. Rickel___________________________    John C. Rickel, Vice President

8

Exhibit 10.4

Casa Chevrolet Inc.,
a New Mexico corporation
Casa Chrysler Plymouth Jeep Inc.,
a New Mexico corporation
Danvers-N, Inc.,
a Delaware corporation
Danvers-NII, Inc.,
a Delaware corporation
FMM, Inc.,
a California corporation
GPI CA-NIII, Inc.,
a Delaware corporation
GPI CC, Inc.,
a Delaware corporation
GPI TX-FII, Inc.,
a Delaware corporation
Group 1 Funding, Inc.,
a Delaware corporation

By:    /s/ John C. Rickel___________________________    John C. Rickel, President

Group 1 LP Interests-DC, Inc.,
a Delaware corporation
Group 1 Realty, Inc.,
a Delaware corporation
Millbro, Inc.,
a California corporation
Miller Infiniti, Inc.,
a California corporation
Miller Nissan, Inc.,
a California corporation
NY-SBII, Inc.,
a Delaware corporation
Sunshine Buick Pontiac GMC Truck, Inc.,
a New Mexico corporation

By:    /s/ John C. Rickel___________________________
John C. Rickel, President

9

Exhibit 10.4

Baron Development Company, LLC,
a Kansas limited liability company
Baron Leasehold, LLC,
a Kansas limited liability company
By:    Baron Development Company, LLC,
a Kansas limited liability company, its Sole Member
G1R Florida, LLC,
a Delaware limited liability company
G1R Mass, LLC,
a Delaware limited liability company
Ivory Auto Properties of South Carolina, LLC,
a South Carolina limited liability company
Tate CG, L.L.C.,
a Maryland limited liability company

By:    Group 1 Realty, Inc., 
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, President

Bohn Holdings, LLC,
a Delaware limited liability company

By:    Bohn Holdings, Inc.,
a Delaware corporation,  its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Vice President

10

Exhibit 10.4

Bohn-FII, LLC,
a Delaware limited liability company
GPI LA-FII, LLC,
a Delaware limited liability company
GPI LA-SH, LLC,
a Delaware limited liability company
Harvey GM, LLC,
a Delaware limited liability company
Harvey Operations-T, LLC,
a Delaware limited liability company

By:    Bohn Holdings, LLC,
a Delaware limited liability company, its Sole Member
By:    Bohn Holdings, Inc.,
a Delaware corporation,  its Sole Member

By:    /s/ John C. Rickel_______________
John C. Rickel, Vice President
                    

Harvey Ford, LLC,
a Delaware limited liability company

By:    Bohn-FII, LLC,
a Delaware limited liability company, its Sole Member
By:    Bohn Holdings, LLC,
a Delaware limited liability company, its Sole Member
By:    Bohn Holdings, Inc.,
a Delaware corporation,  its Sole Member

By:    /s/ John C. Rickel_________
John C. Rickel, Vice President
    
GPI AL-SB, LLC,
a Delaware limited liability company

By:    GPI AL-N, Inc.
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Vice President

11

Exhibit 10.4

GPI GA Liquidation, LLC,
a Delaware limited liability company
GPI GA-CGM, LLC,
a Nevada limited liability company
GPI GA-DM, LLC,
a Delaware limited liability company
GPI GA-F, LLC,
a Delaware limited liability company
GPI GA-FII, LLC,
a Delaware limited liability company
GPI GA-FIII, LLC,
a Delaware limited liability company
GPI GA-FM, LLC,
a Nevada limited liability company
GPI GA-FV, LLC,
a Nevada limited liability company
GPI GA-SU, LLC,
a Nevada limited liability company
GPI GA-T, LLC,
a Delaware limited liability company
GPI GA-TII, LLC,
a Nevada limited liability company

By:    GPI GA Holdings, Inc.
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Vice President

GPI NY-DM, LLC, 
a Nevada limited liability company
GPI NY-FV, LLC, 
a Nevada limited liability company
GPI NY-SB, LLC,
a Nevada limited liability company

By:    GPI NY Holdings, Inc.
a Nevada corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Vice President

12

Exhibit 10.4

GPI SC-A, LLC,
a Delaware limited liability company
GPI SC-SB, LLC,
a Delaware limited liability company
GPI SC-SBII, LLC,
a Delaware limited liability company
GPI SC-T, LLC,
a Delaware limited liability company

By:    GPI SC Holdings, Inc.
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel____________________
John C. Rickel, Vice President

Courtesy Ford, LLC,
a Delaware limited liability company
GPI FL-A, LLC,
a Nevada limited liability company
GPI FL-H, LLC,
a Delaware limited liability company
GPI FL-VW, LLC,
a Delaware limited liability company
GPI FL-VWII, LLC,
a Delaware limited liability company
Key Ford, LLC,
a Delaware limited liability company
Koons Ford, LLC,
a Delaware limited liability company

By:    Group 1 FL Holdings, Inc.,
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Vice President

13

Exhibit 10.4

Danvers-SU, LLC,
a Delaware limited liability company
By:    Group 1 Holdings-S, L.L.C.,
a Delaware corporation, its Sole Member
Group 1 Holdings-DC, L.L.C.,
a Delaware limited liability company
Group 1 Holdings-F, L.L.C.,
a Delaware limited liability company
Group 1 Holdings-GM, L.L.C., 
a Delaware limited liability company
Group 1 Holdings-H, L.L.C.,
a Delaware limited liability company
Group 1 Holdings-N, L.L.C.,
a Delaware limited liability company
Group 1 Holdings-S, L.L.C.,
a Delaware limited liability company
Group 1 Holdings-T, L.L.C.,
a Delaware limited liability company
Howard-DCIII, LLC,
a Delaware limited liability company

By:    Group 1 Automotive, Inc.,
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Senior Vice President

Group 1 Associates Holdings, LLC,
a Delaware limited liability company

By:    Group 1 Associates, Inc.,
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Vice President

Ira Automotive Group, LLC,
a Delaware limited liability company

By:    Danvers-T, Inc.,
a Delaware corporation, its Sole Member

By:    /s/ John C. Rickel_____________________
John C. Rickel, Vice President

14

Exhibit 10.4

GPI, Ltd.,
a Texas limited partnership
Rockwall Automotive-DCD, Ltd.,
a Texas limited partnership

By:    Group 1 LP Interests-DC, Inc.,
a Delaware corporation, its General Partner

By:    /s/ John C. Rickel_____________________
John C. Rickel, President

15

Exhibit 10.4

AGENT, ISSUING BANK AND    JPMORGAN CHASE BANK, N.A. 
LENDER:

By:    /s/ John Kushnerick    
Name:    John Kushnerick
Title:    Vice President
 

16

Exhibit 10.4

FLOOR PLAN AGENT, SWING    COMERICA BANK
LINE BANK AND LENDER:

By:    /s/ W. Cody Brackeen    
Name:    W. Cody Brackeen
Title:    Assistant Vice President

17

Exhibit 10.4

SYNDICATION AGENT    BANK OF AMERICA, N.A.
AND LENDER:

By:    /s/ K. W. Winston, III    
Name:    K. W. Winston, III
Title:    Senior Vice President

18

Exhibit 10.4

CO-DOCUMENTATION AGENT    U.S. BANK, N.A.
AND LENDER:

By:    /s/ Mark Landsem    
Name:    Mark Landsem
Title:    Vice President

19

Exhibit 10.4

CO-DOCUMENTATION AGENT    WELLS FARGO BANK, N.A.
AND LENDER:

By:    /s/ Chad McNeill    
Name:    Chad McNeill
Title:    Vice President

20

Exhibit 10.4

 
MANAGING AGENT AND     CAPITAL ONE, N.A.
LENDER:    

By:    /s/ Jeff Edge    
Name:    Jeff Edge
Title:    Vice President

21

Exhibit 10.4

MANAGING AGENT AND     COMPASS BANK, d/b/a BBVA COMPASS
LENDER:    

By:    /s/ Collis Sanders    
Name:    Collis Sanders
Title:    Executive Vice President

22

Exhibit 10.4

LENDER:    TOYOTA MOTOR CREDIT CORPORATION

By:    /s/ Willemien Steensma    
Name:    Willemien Steensma
Title:    National Accounts Manager

23

Exhibit 10.4

LENDER:    BMW FINANCIAL SERVICES NA, LLC

By:    /s/ Scott Bargar    
Name:    Scott Bargar
Title:    Commercial Finance, Credit Manager

By:    /s/ Patrick Sullivan    
Name:    Patrick Sullivan
Title:    GM, Commercial Finance

24

Exhibit 10.4

 
		
	LENDER:
	MERCEDES-BENZ FINANCIAL SERVICES USA LLC

By:    /s/ Michele Nowak    
Name:    Michele Nowak
Title:    Credit Director, National Accounts

25

Exhibit 10.4

LENDER:    AMEGY BANK, N.A.

By:    /s/ Kelly Nash    
Name:    Kelly Nash
Title:    Vice President

26

Exhibit 10.4

LENDER:    BARCLAYS BANK PLC

By:    /s/ Christopher R. Lee    
Name:    Christopher R. Lee
Title:    Assistant Vice President

27

Exhibit 10.4

 
LENDER:    MASS MUTUAL ASSET FINANCE LLC

By:    /s/Don Butler    
Name:    Don Butler
Title:    Senior Vice President

28

Exhibit 10.4

 
LENDER:    BRANCH BANKING & TRUST COMPANY

By:    /s/ Elizabeth Willis    
Name:    Elizabeth Willis
Title:    Vice President

29

Exhibit 10.4

LENDER:    TD BANK, N.A.

By:    /s/ Anne M. Kline    
Name:    Anne M. Kline
Title:    Senior Vice President, Business
Development and Major Accounts

30

Exhibit 10.4

 
		
	LENDER:
	NYCB SPECIALTY FINANCE COMPANY, LLC, A WHOLLY OWNED SUBSIDIARY OF NEW YORK COMMUNITY BANK

By:    /s/ Mark C. Mazmanian    
Name:    Mark C. Mazmanian 
Title:    Senior Vice President

31

Exhibit 10.4

LENDER:    CADENCE BANK, N.A.

By:    /s/ Melinda N. Jackson    
Name:    Melinda N. Jackson
Title:    Senior Vice President

32Exhibit 10.1

 

 

April 9, 2014

 

Robert Jones

CEO

Acura Pharmaceuticals, Inc.

616 N. North Court

Suite 120

Palatine, IL 60067

 

		Re:	License, Development and Commercialization Agreement, dated October 30, 2007, by and between Acura Pharmaceuticals, Inc. (“Acura”)
and King Pharmaceuticals Research and Development, Inc. (“King”) (the “License Agreement”)

 

Dear Bob:

 

The purpose of this letter agreement (“Letter
Agreement”) is to memorialize the Parties’ (i) termination of the License Agreement, (ii) King’s conveyance
and assignment to Acura of all rights relating to the Product (as defined below) and (iii) agreement to certain post-termination
provisions as set forth below in Section 4. All capitalized terms used but not defined herein shall have the meanings set forth
in the License Agreement.

 

The Parties hereby acknowledge and agree as follows:

 

		1.	Termination of License Agreement. The Parties acknowledge and agree that, by mutual agreement, with effect from April
9, 2014 (the “Termination Effective Date”), the License Agreement is terminated in its entirety and shall have no further
force or effect. Upon the Termination Effective Date all obligations of each Party under the License Agreement shall be deemed
fully and completely discharged and each Party hereby releases, acquits, and forever discharges the other Party from any and all
rights, actions, claims, debts, demands, costs, contracts, liabilities, obligations, damages and causes of action whether known,
suspected or unknown, whether in law or in equity, which the releasing party had or now have or may claim to have by reason of
those matters set forth in the License Agreement, and any other matters which may have been raised in connection to the License
Agreement, in each case other than claims and obligations under this Letter Agreement or under those sections of the License Agreement
that survive termination as listed in Section 7 of this Letter Agreement.

 

 

		***	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.	Waiver of Non-Compete. Notwithstanding any provision of the License Agreement, the Parties acknowledge and agree that
the provisions of the covenant not to compete set forth in Section 13.1 (a)(i) and (ii) of the License Agreement is terminated
as of the Termination Effective Date and shall have no further force and effect.

 

		3.	Trademarks. Except as provided in Section 4, the Parties acknowledge
and agree that with effect from the Termination Effective Date, King and its Affiliates shall have the exclusive right to the OXECTA
mark, trade dress, brand names, logos, slogans and to any internet domain names incorporating or utilizing the OXECTA mark.

 

		4.	Transition. In connection with the termination of the License Agreement, the Parties acknowledge and agree that Section
16.7 of the License Agreement shall not apply to such termination and the following provisions in this Section 4 shall be applicable
instead.

 

Consequences of Termination.

 

		a.	Termination by King and Acura by Mutual Consent.

 

		i.	Any and all licenses granted by Acura to King or by King to Acura under the License Agreement shall terminate in their entirety
with effect from the Termination Effective Date.

 

		ii.	King hereby grants to Acura effective the Termination Effective Date a fully paid-up, nonexclusive license under King Sole
Inventions relating to the Product or the Aversion Technology to develop, manufacture, use, sell, offer for sale and import the
Product anywhere in the world including the right to grant sublicenses.

 

		iii.	King hereby conveys, assigns and transfers to Acura effective the Termination Effective Date at no expense to Acura, and free
of any liens, pledges, security interests and other financial encumbrances including those incurred in the Commercialization of
the Product, all of King’s and its Affiliates’ right, title and interest in and to the Listed Assets (as defined in
the Transition Plan attached as Schedule A to this Letter Agreement) and to all other information and assets of any kind or nature
whatsoever, in King’s possession or in the possession of its Affiliates or its or their respective agents related to the
Product (all of the foregoing, including the Listed Assets, being the “Conveyed Assets”). The Conveyed Assets shall
be deemed to be Acura Confidential Information and shall be subject to all of the protections of Sections 12.1 to 12.4 of the License
Agreement. The term “Product” is defined as the pharmaceutical drug in all doses described in New Drug Application
(“NDA”) #202080. King represents and warrants that it has full right, title and interest to the Conveyed Assets, that
there are no liens, pledges, security interests and other financial encumbrances on the Conveyed Assets, that all Regulatory Approvals
and approvals relating to the Product are valid and are up to date. In the event Acura or King determines after the Termination
Effective Date that title to or ownership of any of the Conveyed Assets is in a King Affiliate, King shall promptly cause such
Affiliate to convey, assign and transfer to Acura such Conveyed Asset at no cost or expense to Acura.

 

    	2

    	 

    

 

		iv.	The Parties agree that certain of the activities relating to the assignment and transfer to Acura of the Conveyed Assets and
the assistance in the transition of the Product to Acura will occur following the Termination Effective Date in accordance with
the Transition Plan attached as Schedule A to this Letter Agreement.  King will commence delivery of the items specified in
the Transition Plan as soon as reasonably practicable and complete such delivery within the time period specified in the applicable
deliveries. The Parties shall use reasonable efforts to complete the Transition Plan and all deliveries of items therein within
ninety (90) days from the Termination Effective Date.

 

		v.	King shall have no obligations or responsibility for the commercial supply of Product to Acura from the Termination Effective
Date.

 

		vi.	King shall as of the Termination Effective Date cease Developing, manufacturing, and Commercializing Product under the License
Agreement and the licenses granted to King thereunder with respect to Product shall terminate as of the Termination Effective Date,
and King shall be responsible for all returns, financial and regulatory obligations (including chargebacks and pharmacovigilance
investigations and reporting) for Product manufactured prior to the Termination Effective Date.

 

		b.	Royalty and Payment Obligations. Termination of this License Agreement will not release King from any obligation
to pay royalties to Acura which were accrued prior to the Termination Effective Date in accordance with Article 9 of the License
Agreement. However, termination of this License Agreement will release King from any obligation to pay royalties or make any payments
to Acura which would have otherwise become accrued after the Termination Effective Date (provided that King shall be obligated
to pay royalties after the effective date of termination for Product sold prior to such effective date). For clarity, there are
no milestones or other payments due or payable from King to Acura under this License Agreement.

 

    	3

    	 

    

 

		c.	Termination Fee. Acura shall pay a fee to King or as directed by King to King’s Affiliate the sum of two
million (US$2,000,000) US dollars, one million (US$1,000,000) US dollars within ten (10) days of Termination Effective Date and
one million (US$1,000,000) within five (5) days of King’s submission to the FDA of a letter (substantially in the form attached
to the Transition Plan as Exhibit 1.1) notifying FDA of the transfer of NDA 202,080 from King to Acura.

 

		5.	Publicity. Neither party will originate any publicity, press release, or other public announcement or make any comment,
written or oral, relating to this Letter Agreement without the advance written consent of the other Party (except as has been previously
consented), unless such announcement is required by law or the regulations of a national securities exchange. A Party required
by law, rule or regulation or the regulation of a national securities exchange to make such an announcement will give the other
Party an opportunity to review the form or content of such announcement and make comments upon it in advance. Either Party may
issue a press release in the form substantially similar to Schedule B to this Letter Agreement. The Parties acknowledge
that Acura will file a Form 8-K with the Securities and Exchange Commission regarding this Letter Agreement and will be attaching
a redacted copy of the Letter Agreement to such 8-K (or a Form 10-Q or 10-K as appropriate) requesting confidential treatment of
certain information and the 8-K and redacted copy will be treated as a public announcement as described herein.

 

		6.	Confidentiality. The terms of this Letter Agreement shall be deemed Confidential Information of each Party and the Schedules
attached hereto shall be deemed Confidential Information of each Party (provided that the contents of any Conveyed Assets are solely
the Confidential Information of Acura as provided in Section 4).

 

		7.	Survival of Obligations/Further Assurances. Sections 10.4 (with respect to payments due under the License Agreement
to Acura), 11.1, 11.8(d)(i) (with respect to any claims relating to the Oxecta trademark or any King trademark or any trademark
used in connection with the Product prior to the Termination Effective Date), 12.1 through 12.4, and Articles 10, 14 and 17 and
any definitions used in any such Section or Article shall survive the termination of this License Agreement in its entirety. Each
Party at any time after the date hereof, at the reasonable request of the other Party shall execute, acknowledge and deliver any
further assignments, documents and instruments of transfer that may be reasonably necessary for the purpose of conveying, assigning
and granting to Acura the Conveyed Assets.

 

    	4

    	 

    

 

		8.	Governing Law. This Agreement shall be governed by the laws of the State of New York without regard to its conflict
of laws rules or principles.

 

		9.	Specific Performance. In
the event of a breach or threatened breach of any provision of this Letter Agreement by King and without limiting any other available
remedies, nothing in this Letter Agreement shall prevent Acura from seeking to obtain from any court of competent jurisdiction,
injunctive relief, including specific performance. 

 

		10.	Miscellaneous. This Letter Agreement may be executed manually, electronically in Adobe® PDF file format, or by facsimile
by the Parties, in any number of counterparts, each of which shall be considered one and the same agreement and shall become effective
when a counterpart hereof shall have been signed by each of the Parties and delivered to the other Party.

 

Sincerely,

 

KING PHARMACEUTICALS RESEARCH AND DEVELOPMENT, INC.

 

	By:	/s/ Thomas Dykstra	 
	 	 	 
	Name:  	Thomas Dykstra	 
	 	 	 
	Title:	Vice President	 

 

	Accepted and agreed as of the date first set forth above.
	 
	ACURA PHARMACEUTICALS, INC.

 

	By:	/s/ Robert B. Jones	 
	 	 	 
	Name:  	Robert B. Jones	 
	 	 	 
	Title:	CEO	 

 

    	5

    	 

    

 

Schedule A

 

Transition
Plan

 

(LISTED Assets)

 

For assets described below in which Pfizer/King does not directly
own but has an interest in, Pfizer shall assign its interest in such asset to Acura, to the extent reasonably practical.

 

		1.	Regulatory [***]

		2.	CMC [***]

		3.	Clinical [***]

		4.	Commercial [***]

		5.	Safety [***]

 

During the 90 days transition period, if either Party identifies
assets and both parties mutually agree that the assets are necessary for Acura to maintain the Product NDA or to manufacture and/or
sell the Product, such assets shall be added to this Schedule A.

 

 

		***	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.

 

    	6

    	 

    

 

EXHIBIT 1.1

 

[FDA TRANSMITTAL LETTER AND
FORM 356h]

 

_________, 2014

 

_________,

[Center for Drug Evaluation and Research]

Food and Drug Administration

Metro Park North II

7500 Standish Place, Room 150

Rockville, MD 20855-2773

 

Transfer of Ownership

RE: NDA # 202080 

 

Dear Mr._________:

 

Pursuant to the Code of Federal Regulation, Title 21 314.72,
KING PHARMACEUTICALS RESEARCH AND DEVELOPMENT, INC. is providing notice that all rights to NDA# 202080 approved on June
17, 2011 have been transferred to ACURA PHARMACEUTICALS, INC. A complete copy of the application has been provided to Acura Pharmaceuticals,
Inc. The change of ownership for this application becomes effective on XX/XX/XX. FDA Form 356h is enclosed.

 

Should you have any questions or require additional information
on this transfer, please do not hesitate to contact me at the telephone number or address shown below.

 

Sincerely,

 

    	7

    	 

    

 

SCHEDULE B

[FORM OF PRESS RELEASE]

 

Acura Pharmaceuticals Announces Return
of Product Rights

 

Palatine, IL - (XXXXXXX,
YY, 2014) - Acura Pharmaceuticals, Inc. (NASDAQ: ACUR), a specialty pharmaceutical
company developing products intended to address medication abuse and misuse, announced
today a letter agreement with Pfizer Inc. providing for the termination of Pfizer’s license to Acura’s AVERSION
Technology and the return to Acura of the FDA approved Oxecta® (oxycodone HCl) product. The letter agreement provides
that Acura will make a one-time payment of $2.0 million to Pfizer. The license termination is effective April 9, 2014. The AVERSION
Technology utilizes a proprietary mixture of inactive ingredients to discourage tampering of a product for abusive purposes.

“We
are pleased that we have been able to reach agreement on acceptable
terms for the license termination,” said Bob Jones, President and Chief Executive Officer of Acura Pharmaceuticals. Mr. Jones
further added, “We are currently evaluating our strategic options for the returned product and our other AVERSION Technology
products in development, which may include a re-launch under a new brand name in partnership with another pharmaceutical company.”

The Company will host a conference call to discuss our strategies
for the product going forward on XXXXXX at XXXXX  ET. To participate in the live conference call, please dial XXX-XXX-XXXX
(U.S. and Canada) five to ten minutes prior to the start of the call. The participant passcode is YYYYYYY

 

    	8

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