EXHIBIT
10.16.4


 


FOURTH
AMENDMENT TO

AMENDED AND RESTATED LOAN AGREEMENT


 


	
  DATED:

  	
  As of December 22,
  2004

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PARTIES:

  	
  Lithia
  Financial Corporation

  	
   

  	
  (“LFC”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lithia
  Motors, Inc.

  	
   

  	
  (“LMI”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lithia
  Aircraft, Inc.

  	
   

  	
  (“LAI”)

  
	
   

  	
   

  	
   

  	
   

  
	
  AND:

  	
  U.S. Bank National
  Association

  	
   

  	
  (“Lender”)

  



 


This Agreement amends (a) the Amended and Restated Loan Agreement
between the parties and Lithia Salmir, Inc. dated as of December 28,
2001, as amended by agreements dated April 2, 2003, and February 6,
2004 (collectively, the “Loan Agreement”) and (b) the promissory note
executed by LFC and LAI dated February 6, 2004, in the principal amount of
$50,000,000.00 (“Note”).


 


For valuable consideration, the parties agree as follows:


 


1.                                      Amendments to Loan Agreement.


 


a.                                       The definitions of the following
terms in Section 1.1 of the Loan Agreement are deleted and replaced with
the following:


 


“Total Net
Worth” means for any Person the net book value of (a) all of such Person’s
assets minus (b) all of such Person’s liabilities; provided, however, that
at any time during which a Current Assets Election is in effect, LMI’s assets
and liabilities shall be deemed to include the Current Assets Commitment Amount
at such time.


 


“Tangible Net
Worth” means for any Person the net book value of (a) all of such Person’s
assets exclusive of patents, trademarks, licenses, goodwill and other
intangibles and of loans to and notes and receivables from officers, employees,
directors, shareholders, partners, members and affiliates of such Person minus (b) all
of such Person’s liabilities determined in accordance with GAAP; provided,
however, at any time during which a LFC Current Assets Election is in effect,
LFC’s assets and liabilities shall be deemed to include the LFC Current Assets
Commitment Amount at such time.


 


b.                                      The following definitions are
hereby added to Section 1.1 of the Loan Agreement:


 


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“Current
Assets Commitment Amount” has the meaning given to such term in the Fourth
Amendment dated as of October 31, 2004 (“Fourth Amendment”) to the Credit
Agreement dated as of February 25, 2003, among Lithia Motors, Inc.,
various financial institutions and Daimler Chrysler Services North America,
LLC, as agent (“LMI Credit Agreement”).


 


“Current
Assets Election” has the meaning given to such term in the Fourth Amendment to
the LMI Credit Agreement.


 


“LFC Current
Assets Commitment Amount” means, with respect to any LFC Current Assets
Election, the least of (a) $50,000,000.00 minus the sum of then outstanding
principal balance of the New Revolving Note and the Term-Out Notes; (b) the
Borrowing Base Amount minus the sum of the then outstanding principal balance
of the New Revolving Note and the Term-Out Notes; or (c) the LFC Specified
Current Assets Commitment Amount.


 


“LFC Current
Assets Election” – see Section 9.1.4. 
A LFC Current Assets Election shall become effective on the date on
which the Compliance Certificate electing the same is delivered to Lender and
shall remain in effect until the next Compliance Certificate is due.


 


“LFC Specified
Current Assets Commitment Amount” means, with respect to any LFC Current Assets
Election, the amount specified by LFC as the “LFC Specified Current Assets
Commitment Amount” in such LFC Current Assets Election.


 


“Termination
Date” has the meaning given to such term in the LMI Credit Agreement.


 


c.                                       Section 3.3.1 of the Loan
Agreement is deleted and replaced with the following:


 


3.3.1                        The
Revolving Loans shall be evidenced by two promissory notes executed by LFC and
LAI, one in the principal amount of $35,000,000.00 and one in the principal
amount of $15,000,000.00 (individually and collectively, “New Revolving Note”),
substantially in the form attached as Exhibit A (appropriately completed)
or in such other form as is acceptable to Lender.  The Revolving Loans shall be subject to all
terms and conditions of the New Revolving Note and of this Agreement.


 


d.                                      Section 3.3.3 of the Loan
Agreement is deleted and replaced with the following:


 


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3.3.3                        Principal Payments. 
The principal balance of the New Revolving Note shall be due and payable
on April 30, 2006.


 


e.                                       Section 9.1.1 of the Loan
Agreement is deleted and replaced with the following:


 


9.1.1                        LMI Current Ratio. 
LMI and its subsidiaries shall maintain, on a consolidated basis, as of
the last day of each fiscal quarter ending on or after December 31, 2002,
a ratio of current assets to current liabilities of at least 1.20 to 1.0;
provided, however, that at any time during which a Current Assets Election is
in effect, (a) LMI’s current assets shall be deemed to include the Current
Assets Commitment Amount at such time, and (b) if the Termination Date is
within one year, LMI’s current liabilities shall be deemed to include the Current
Assets Commitment Amount at such time.


 


f.                                         Section 9.1.4 of the Loan
Agreement is deleted and replaced with the following:


 


9.1.4                        LFC Current Ratio. 
LFC shall maintain a ratio of current assets to current liabilities of
at least 1.20 to 1.0; provided, however, that at the election of Borrower given
by written notice to Lender, delivered with any quarterly Compliance
Certificate (an “LFC Current Assets Election”), (a) LFC’s current assets
shall be deemed to include the LFC Current Assets Commitment Amount at such
time and (b) if the Revolving Loan Termination Date is within one year, LFC’s
current liabilities shall be deemed to include the LFC Current Assets
Commitment Amount at such time.


 


2.                                      Exhibit A.  Exhibit A
to the Loan Agreement is deleted and replaced with the Exhibit A attached
hereto.


 


3.                                      Conditions Precedent.  The
effectiveness of this Agreement is subject to satisfaction of each of the
following conditions:


 


a.                                       Lender has received executed
originals of this Agreement, New Revolving Note and such other Loan Documents
as Lender requires and each Loan Party has provided such information and
satisfied such requirements as Lender reasonably requires.


 


b.                                      No Default has occurred and is
continuing.


 


c.                                       All representations and
warranties in the Loan Agreement are true and correct as of the date of this
Agreement.


 


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4.                                      Defined Terms.  Capitalized terms
not otherwise defined herein shall have the meanings given to such terms in the
Loan Agreement.


 


5.                                      Reaffirmation.  Each Loan
Party reaffirms the representations and warranties in each of the existing Loan
Documents and agrees that (a) except as amended previously or in
connection herewith, each Loan Document is and shall remain valid and
enforceable in accordance with its terms and (b) such Loan Party has no
claims, defenses, setoffs, counterclaims or claims for recoupment against
Lender or the indebtedness and obligations represented by the Notes,
Guaranties, LC Agreements, Letter of Credit, and other Loan Documents.


 


6.                                      Expenses.  Borrower
shall pay all costs, fees and expenses incurred by Lender in connection with
the preparation, negotiation, execution, and delivery of this Agreement and any
other document required to be furnished herewith, including without limitation
the charges of Lender’s legal counsel.


 


7.                                      Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of said counterparts taken together shall be
deemed to constitute but one document.


 


8.                                      Copies.  Each Loan
Party acknowledges receipt of a copy of this amendment.  The Loan Agreement and New Revolving Note,
together with all amendments thereto from time to time, are “transferable
records” as defined in applicable law relating to electronic transactions.  Therefore, Lender may, on behalf of Borrower,
create a microfilm or optical disk or other electronic image of the Loan
Agreement and New Revolving Note (and all amendments thereto) that is an
authoritative copy of the Loan Agreement and New Revolving Note as defined in
such law.  Lender may store the
authoritative copy in its electronic form and then destroy the paper original
as part of Lender’s normal business practices. 
Lender, on its own behalf, may control and transfer such authoritative
copy as permitted by such law.


 


9.                                      Disclosure.  Under Oregon law,
most agreements, promises and commitments made by lenders concerning loans and
other credit extensions which are not for personal, family or household
purposes or secured solely by the borrower’s residence must be in writing,
express consideration and be signed by the lender to be enforceable.


 


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  LITHIA FINANCIAL CORPORATION

  	
   

  	
  LITHIA MOTORS, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Jeffrey B. DeBoer

  	
   

  	
   

  	
  By:

  	
  Jeffrey B. DeBoer

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Secretary and Treasurer

  	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  LITHIA AIRCRAFT, INC.

  	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Jeffrey B. DeBoer

  	
   

  	
   

  	
  By:

  	
  Steve Paladino

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Secretary and Treasurer

  	
   

  	
   

  	
  Its:

  	
  Senior Vice President

  	
   

  



 


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