EXHIBIT 10.1


 


SECOND AMENDMENT


 


THIS SECOND AMENDMENT dated as of December 4, 2003
(this “Amendment”) is to the Credit Agreement (as amended, the “Credit
Agreement”) dated as of February 25, 2003 among LITHIA MOTORS, INC. (the “Company”),
various financial institutions (the “Lenders”) and DAIMLERCHRYSLER
SERVICES NORTH AMERICA LLC, as agent for the Lenders (the “Agent”).  Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as defined in the Credit
Agreement.


 


WHEREAS, the parties hereto desire to amend the Credit
Agreement in certain respects;


 


NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties hereto agree as follows:


 


SECTION 1  AMENDMENTS.  Effective on (and subject to the occurrence
of) the Amendment Effective Date (as defined below):


 


1.1          (a) The following
definitions shall be added to Section 1.1 of the Credit Agreement, each in its
appropriate alphabetical position:


 


Floor Plan Business
means Floor Plan Financing provided or to be provided by any Person in respect
of New Motor Vehicles and/or Auction Motor Vehicles.


 


Provider
– see Section 13.17, as amended hereafter.


 


Second Amendment
Effective Date means December 4, 2003.


 


(b)  The definition of Interest Rate in Section
1.1 of the Credit Agreement shall be amended and restated in its entirety to
read as follows:


 


Interest Rate
means, for each day, a rate per annum equal to the sum of (a) (i) in the case
of any day from and including the first day of each calendar month through and
including the 15th day of such calendar month, the Eurodollar Rate for the
first day of such calendar month and (ii) in the case of any day from and
including the 16th day of each calendar month through and including the last
day of such calendar month, the Eurodollar Rate for the 16th day of such
calendar month plus (b) (i) to the extent that the Revolving Outstandings are
less than or equal to the Borrowing Base, a margin of two and three-quarters
percent (2.75%) per annum and (ii) to the extent that the Revolving
Outstandings exceed the Borrowing Base, a margin of three and one-half percent
(3.50%) per annum (with the determination of such Borrowing Base to be
effective as of the first day of the calendar month during which the Borrowing
Base Certificate is delivered).  The
foregoing margins may be adjusted at any time in the Agent’s sole and absolute


 


Second Amendment


 

















 


discretion upon 90 days’
prior written notice from the Agent to the Company; provided that (i) no
reduction in such margins shall be permitted without the prior written consent
of each Lender, (ii) no more than one such adjustment may be made during any
period of twelve consecutive months and (iii) no such notice may be delivered
until the date which is 90 days prior to the first anniversary of the Closing
Date.  Notwithstanding the foregoing,
(i) at any time an Event of Default exists under Section 11.1.1 or 11.1.4,
if requested by the Required Lenders, the applicable margin shall be increased
by two percent (2.00%) per annum and (ii) at any time an Event of Default
exists other than an Event of Default under Section 11.1.1 or 11.1.4,
if requested by the Required Lenders, the applicable margin shall be increased
by one percent (1.00%) per annum.  For
purposes of this definition, “Eurodollar Rate”
means, for any day, the rate of interest (rounded upwards, if necessary, to the
next 1/16th of 1%) published in The Wall Street
Journal (Midwest Edition) on such day (or if not published on such
day, for the immediately preceding day on which it was published) in its “Money
Rates” column as the one-month London Interbank Offered Rate for
Dollar-denominated deposits (if The Wall Street
Journal ceases to publish such a rate or substantially changes the
methodology used to determine such rate, then the rate shall be otherwise
independently determined by the Agent from an alternate source selected by the
Agent in its sole discretion or determined by the Agent on a basis substantially
similar to the methodology used by The Wall Street
Journal on the date of this Agreement).  If the Company fails to deliver any Borrowing Base Certificate
required by Section 9.1.6 by the 45th day after any Fiscal
Quarter, then, from the first day of the month during which such Borrowing Base
Certificate was required to be delivered until the first day of the month
during which such Borrowing Base Certificate is actually delivered, the first
$50,000,000 of Revolving Loans shall bear interest at an Interest Rate
determined pursuant to clause (b)(ii) above, but subject to the fourth
sentence of this definition.


 


1.2          Section 2.2 of the
Credit Agreement shall be amended by inserting the following sentence after the
final sentence thereof:  


 


“The Company may not use
the Agent’s electronic funds transfer system to fund any borrowings under this
Agreement.”


 


1.3          Section 5.1 of the
Credit Agreement shall be amended and restated in its entirety to read as
follows:


 


5.1           Agent’s Fee.  Each Lender hereto that is not DCSNA
acknowledges and agrees that the Agent may deduct from interest payments
received by it from the Company an amount equal to 0.15% per annum of the daily
unpaid principal amount of the Loans of such Lender.  All fees under this Section are nonrefundable.


 


1.4          Section 7.1 of the
Credit Agreement shall be amended and restated in its entirety to read as
follows:


 


2

















 


7.1           Making of Payments.  All payments of principal of or interest on
the Notes, and of all fees, shall be made by the Company to the Agent in
immediately available funds at the office specified by the Agent not later than
2:00 p.m., Detroit time, on the date due; and funds received after that hour
shall be deemed to have been received by the Agent on the following Business
Day.  For purposes of the preceding
sentence, “in immediately available funds” shall mean (a) with respect to
payments of principal of the Notes, by federal wire transfer and (b) with
respect to payments of interest on the Notes and payments of all fees, by
federal wire transfer or by the Agent’s electronic funds transfer system (in
accordance with written instructions provided by the Agent to the
Company).  The Agent shall remit to each
Lender its share of all such payments received in collected funds by the Agent
for the account of such Lender (x) on the same Business Day it has received any
payment in respect of principal and (y) no later than the Business Day after it
has received any payment in respect of interest or fees.


 


1.5          Section 9.7(i) of the
Credit Agreement shall be amended by (x) deleting the words “or Toyota Motor
Credit Corporation” therein and (y) substituting the word “or” for the comma
immediately following the words “General Motors Acceptance Corporation”
therein.


 


1.6          Section 9.7(j) of the
Credit Agreement shall be amended by inserting the words “or Toyota Motor
Credit Corporation” immediately after the term “DCSNA” therein.


 


1.7          Section 9.7(k) of the
Credit Agreement shall be amended by (x) inserting the words “and Toyota Motor
Credit Corporation” immediately after each reference to the term “DCSNA”
therein and (y) substituting the word “have” for the word “has” therein.


 


1.8          Section 9.8(d) of the
Credit Agreement shall be amended by inserting the words “and improvements
thereon” at the end of clause (ii) thereof.


 


1.9          Section 9.8(h) of the
Credit Agreement shall be amended by (x) substituting the word “for” for the
word “with” therein and (y) substituting the words “is providing financing” for
the words “is affiliated” therein.


 


1.10        Section 9.20(h) of the
Credit Agreement shall be amended by (x) deleting the existing text therein and
(y) substituting “[INTENTIONALLY LEFT BLANK]” therefor.


 


1.11        Section 9.20 of the Credit
Agreement shall be amended by substituting the designation “(c) or (g)”
for the designation “(c), (g) or (h)” in clause (y) of the
proviso therein.


 


1.12        Section 11.2 of the Credit
Agreement shall be amended by substituting the term “Cash Collateral” for the
words “cash collateral” each place where they appear therein. 


 


1.13        Section 13.17 of the
Credit Agreement shall be amended and restated in its entirety to read as
follows:


 


13.17       DCSNA and Toyota Motor
Credit Corporation Right of First Refusal on Floor Plan Financing.  No Automobile Dealership shall obtain any
Floor Plan Financing


 


3

















 


from any Person
other than DCSNA or Toyota Motor Credit Corporation (other than Floor Plan
Financings permitted under Section 9.7(i)) unless and until it shall
have submitted a request in writing to each of DCSNA and Toyota Motor Credit
Corporation (each, a “Provider”) that each Provider provide such Floor
Plan Financing on terms consistent with the terms of the Floor Plan Financing
at the time provided by such Provider to the Company and the other Automobile
Dealerships and provided a reasonable opportunity to each Provider to provide
such financing and each Provider shall have declined to provide the same.  For purposes hereof, a Provider will be deemed
to have declined to provide any Floor Plan Financing requested by an Automobile
Dealership in writing if it shall have failed to respond to such Automobile
Dealership within ten Business Days of receiving such written request.  If each Provider declines to provide any
such requested Floor Plan Financing, the Automobile Dealership that requested
the same may then obtain such requested Floor Plan Financing from another
Person.


 


1.14        Schedule
2.1 to the Credit Agreement shall be replaced by Schedule 2.1 hereto.


 


1.15        Schedule 13.3 of the Credit Agreement shall be
amended by inserting the following text at the end thereof: 


 


TOYOTA MOTOR CREDIT CORPORATION,
as a Lender


 


Notices of Borrowing and All Other Notices


 


19001 South
Western Avenue


Torrance,
CA  90509-2958


Attention:  Reid Boozer

Telephone: (310) 468-4791

Facsimile: (310) 381-7794


 


SECTION 2
 REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Agent and the Lenders that:  (a) the representations and warranties made
in Section 8 of the Credit Agreement are true and correct on and as of the
Amendment Effective Date (as defined below) with the same effect as if made on
and as of the Amendment Effective Date (except to the extent relating solely to
an earlier date, in which case they were true and correct as of such earlier
date); (b) no Event of Default or Unmatured Event of Default exists or will
result from the execution of this Amendment; (c) no event or circumstance has
occurred since the Closing Date that has resulted, or would reasonably be
expected to result, in a Material Adverse Effect; (d) the execution and
delivery by the Company of this Amendment and the performance by the Company of
its obligations under the Credit Agreement as amended hereby (as so amended,
the “Amended Credit Agreement”) (i) are within the corporate powers of
the Company, (ii) have been duly authorized by all necessary corporate action,
(iii) have received all necessary approval from any governmental authority and
(iv) do not and will not contravene or conflict with any provision of any law,
rule or regulation or any order, decree, judgment or award which is binding on
the Company or any of its Subsidiaries or of any provision of the


 


4

















 


certificate of
incorporation or bylaws or other organizational documents of the Company or of
any agreement, indenture, instrument or other document which is binding on the
Company or any of its Subsidiaries; and (e) the Amended Credit Agreement is the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally or by equitable principles relating to
enforceability.


 


SECTION 3
 EFFECTIVENESS.  The amendments set forth in Section 1
above shall become effective as of such date (the “Amendment Effective Date”)
when the Agent shall have received (a) a counterpart of this Amendment executed
by the Company and the Lenders (or, in the case of any party other than the
Company from which the Agent has not received a counterpart hereof, facsimile
confirmation of the execution of a counterpart hereof by such party) and (b)
each of the following documents, each in form and substance satisfactory to the
Agent:


 


3.1          Reaffirmation.  A counterpart of the Reaffirmation of Loan
Documents, substantially in the form of Exhibit A, executed by each Loan
Party other than the Company.


 


3.2          Assignment Agreement.  A counterpart of an Assignment Agreement,
substantially in the form of Exhibit B, executed by DCSNA, Toyota Motor
Credit Corporation, the Agent and the Company.


 


3.3          Amended
and Restated Intercreditor Agreement.          A
counterpart of the Amended and Restated Intercreditor Agreement, substantially
in the form of Exhibit C, executed by 
DCSNA, Toyota Motor Credit Corporation, Ford Motor Credit Company and
General Motors Acceptance Corporation.


 


3.4          Other Documents.  Such other documents as the Agent or any
Lender may reasonably request.


 


SECTION 4  MISCELLANEOUS.


 


4.1          Continuing
Effectiveness, etc.  As hereby
amended, the Credit Agreement shall remain in full force and effect and is
hereby ratified and confirmed in all respects. 
As of the Amendment Effective Date, all references in the Credit
Agreement, the Notes, each other Loan Document and any similar document to the
“Credit Agreement” or similar terms shall refer to the Amended Credit
Agreement. 


 


4.2          Counterparts.  This Amendment may be executed in any number
of counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.


 


4.3          Expenses.  The Company agrees to pay the reasonable
costs and expenses of the Agent (including reasonable fees and disbursements of
counsel, including, without duplication, the allocable costs of internal legal
services and all disbursements of internal legal counsel) in connection with
the preparation, execution and delivery of this Amendment.


 


5

















 


4.4          Governing Law.  This Amendment shall be a contract made
under and governed by the laws of the State of Michigan applicable to contracts
made and to be wholly performed within the State of Michigan.


 


4.5          Successors and
Assigns.  This Amendment shall be
binding upon the Company, the Lenders and the Agent and their respective
successors and assigns, and shall inure to the benefit of the Company, the
Lenders and the Agent and the successors and assigns of the Lenders and the
Agent.


 


4.6          Termination of Letter
Agreement Regarding Section 13.17 of the Credit Agreement.  The Company and DCSNA hereby agree that as
of the Amendment Effective Date the letter agreement dated as of February 25,
2003 by and between the Company and DCSNA regarding Section 13.17 of the Credit
Agreement is terminated.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


6

















 


Delivered as of
the day and year first above written.


 


 


	
   

  	
  LITHIA MOTORS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer 

  	
   

  
	
   

  	
  Title:

  	
  Senior VP and CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DAIMLERCHRYSLER SERVICES NORTH

  AMERICA LLC, as the Agent, as the Issuing

  Lender and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. L’Archer

  	
   

  
	
   

  	
  Title:

  	
  Director, Dealer Credit

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TOYOTA MOTOR CREDIT CORPORATION,

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. M. Taylor

  	
   

  
	
   

  	
  Title:

  	
  Corporate Mgr. Dealer Relations

  	
   

  
											



 


S-1

















 


SCHEDULE 2.1


 


LENDERS AND PRO RATA
SHARES


 


	
  Lender

  	
   

  	
  Pro Rata
  Share

  of Revolving

  Commitment Amount

  	
   

  	
  Pro Rata
  Share

  	
   

  
	
  DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC

  	
   

  	
  $

  	
  125,000,000

  	
   

  	
  62.5

  	
  %

  
	
  TOYOTA MOTOR CREDIT CORPORATION

  	
   

  	
  $

  	
  75,000,000

  	
   

  	
  37.5

  	
  %

  
	
  TOTALS

  	
   

  	
  $

  	
  200,000,000

  	
   

  	
  100

  	
  %

  



 

















 


EXHIBIT A


 


FORM OF REAFFIRMATION


 


December 4, 2003


 


DaimlerChrysler Services North


America LLC, as the Agent


and the Lenders party


to the Credit Agreement


referred to below


27777 Inkster Road


Farmington Hills, Michigan
48334


Attn: Michele Nowak


 


Re:  Reaffirmation of Loan Documents 


 


Ladies and Gentlemen:


 


Please refer
to:


 


(a)           The Security Agreement
dated as of  February 25, 2003 (the “Security
Agreement”) among Lithia Motors, Inc. (the “Company”), its
subsidiaries and DaimlerChrysler Services North America LLC in its capacity as
Agent (in such capacity, the “Agent”);


 


(b)           The Guaranty dated as of February 25, 2003
(the “Guaranty”) executed in favor of the Agent and various other
parties by all subsidiaries of the Company; and


 


(c)           The Pledge Agreement
dated as of February 25, 2003 (the “Pledge Agreement”) executed by the
Company and certain of its subsidiaries.


 


Each of the
undersigned acknowledges that the Company, the Lenders and the Agent have
executed the Second Amendment (the “Second Amendment”) to the Credit
Agreement dated as of February 25, 2003 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”).  Capitalized terms not otherwise defined
herein have the meanings given in the Credit Agreement.


 


Each of the
undersigned hereby confirms that the Security Agreement, the Guaranty, the
Pledge Agreement and each other Loan Document to which such undersigned is a
party remains in full force and effect after giving effect to the effectiveness
of the Second Amendment and that, upon such effectiveness, all references in
each Loan Document to the “Credit Agreement” shall be references to the Credit
Agreement, as amended by the Second Amendment.


 


Reaffirmation of Loan Documents


 

















 


 


This letter agreement may be signed in
counterparts and by the various parties on separate counterparts.  This letter agreement shall be governed by
the laws of the State of Michigan applicable to contracts made and to be
performed entirely within such State.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK.  SIGNATURES FOLLOW]


 


2

















 


	
   

  	
  HUTCHINS EUGENE NISSAN, INC.

  
	
   

  	
  HUTCHINS
  IMPORTED MOTORS, INC.

  
	
   

  	
  LGPAC, INC.

  
	
   

  	
  LITHIA AUTO
  SERVICES, INC.

  
	
   

  	
  LITHIA BNM,
  INC.

  
	
   

  	
  LITHIA DE,
  INC.

  
	
   

  	
  LITHIA DM,
  INC.

  
	
   

  	
  LITHIA HPI,
  INC.

  
	
   

  	
  LITHIA
  KLAMATH, INC.

  
	
   

  	
  LITHIA LAC,
  INC.

  
	
   

  	
  LITHIA
  MEDFORD HON, INC.

  
	
   

  	
  LITHIA
  MOTORS SUPPORT SERVICES, INC.

  
	
   

  	
  LITHIA MTLM,
  INC.

  
	
   

  	
  LITHIA OF
  ROSEBURG, INC.

  
	
   

  	
  LITHIA
  RENTALS, INC.

  
	
   

  	
  LITHIA
  ROSE-FT, INC.

  
	
   

  	
  LITHIA SOC,
  INC.

  
	
   

  	
  SATURN OF
  SOUTHWEST OREGON, INC.

  
	
   

  	
  LITHIA CHRYSLER JEEP OF ANCHORAGE,

  INC.

  
	
   

  	
  LITHIA
  IMPORTS OF ANCHORAGE, INC.

  
	
   

  	
  LITHIA CIMR,
  INC.

  
	
   

  	
  LITHIA CJDB,
  INC.

  
	
   

  	
  LITHIA DC,
  INC.

  
	
   

  	
  LITHIA FMF,
  INC.

  
	
   

  	
  LITHIA FN,
  INC.

  
	
   

  	
  LITHIA FVHC,
  INC.

  
	
   

  	
  LITHIA JEF,
  INC.

  
	
   

  	
  LITHIA MMF,
  INC.

  
	
   

  	
  LITHIA NF,
  INC.

  
	
   

  	
  LITHIA OF
  ANCHORAGE, INC.

  
	
   

  	
  LITHIA TKV,
  INC.

  
	
   

  	
  LITHIA TR,
  INC.

  
	
   

  	
  LITHIA VWC,
  INC.

  
	
   

  	
  LITHIA VWPC,
  INC.

  
	
   

  	
  LITHIA CENTENNIAL CHRYSLER PLYMOUTH

  JEEP, INC.

  
	
   

  	
  LITHIA
  CHERRY CREEK DODGE, INC.

  
	
   

  	
  LITHIA COLORADO CHRYSLER PLYMOUTH,

  INC.

  
	
   

  	
  LITHIA
  COLORADO JEEP, INC.

  
	
   

  	
  LITHIA COLORADO SPRINGS JEEP CHRYSLER

  PLYMOUTH, INC.

  
	
   

  	
  LITHIA
  FOOTHILLS CHRYSLER, INC.

  
	
   

  	
  LITHIA OF
  THORNTON, INC.

  
	
   

  	
  LITHIA CB,
  INC.

  



 


S-1

















 


	
   

  	
  LITHIA DB,
  INC.

  
	
   

  	
  LITHIA IB,
  INC.

  
	
   

  	
  LITHIA LMB,
  INC.

  
	
   

  	
  LITHIA FORD
  OF BOISE, INC.

  
	
   

  	
  LITHIA OF
  CALDWELL, INC.

  
	
   

  	
  LITHIA OF
  POCATELLO, INC.

  
	
   

  	
  LITHIA
  POCA-HON, INC.

  
	
   

  	
  LITHIA CD,
  INC.

  
	
   

  	
  LITHIA OF
  OMAHA, INC.

  
	
   

  	
  LITHIA MBO,
  INC.

  
	
   

  	
  LITHIA RENO
  SUB-HYUN, INC.

  
	
   

  	
  LITHIA
  SALMIR, INC.

  
	
   

  	
  LITHIA
  AUTOMOTIVE, INC.

  
	
   

  	
  LITHIA OF
  SIOUX FALLS, INC.

  
	
   

  	
  CAMP AUTOMOTIVE,
  INC.

  
	
   

  	
  LITHIA BC,
  INC.

  
	
   

  	
  LITHIA DC OF
  RENTON, INC.

  
	
   

  	
  LITHIA DODGE
  OF TRI-CITIES, INC.

  
	
   

  	
  LITHIA FTC,
  INC.

  
	
   

  	
  LITHIA IC,
  INC.

  
	
   

  	
  LITHIA OF
  SEATTLE, INC.

  
	
   

  	
  TC HON, INC.

  
	
   

  	
  LITHIA HYR,
  INC.

  
	
   

  	
  LITHIA CS,
  INC.

  
	
   

  	
  LITHIA OF
  FAIRFIELD, INC.

  
	
   

  	
  LITHIA OF
  SANTA ROSA, INC.

  
	
   

  	
  LITHIA OF
  VACAVILLE, INC.

  
	
   

  	
  LITHIA CCTF,
  INC.

  
	
   

  	
  LITHIA OF
  TWIN FALLS, INC.

  
	
   

  	
  LITHIA LMM,
  INC.

  
	
   

  	
  LITHIA OF
  MISSOULA, INC.

  
	
   

  	
  LITHIA OF
  OKLAHOMA, INC.

  
	
   

  	
  LITHIA OF
  BILLINGS, INC.

  
	
   

  	
  LITHIA OF
  SPOKANE, INC.

  
	
   

  	
  LITHIA OF
  FAIRBANKS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


S-2

















 


	
   

  	
  LITHIA LP OF
  TEXAS, LLC

  
	
   

  	
  LITHIA GP OF
  TEXAS, LLC

  
	
   

  	
   

  	
  By:  Lithia Motors, Inc., Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LITHIA LAC
  OF WASHINGTON, LLC

  	
   

  
	
   

  	
   

  	
  By:

  	
  Lithia LAC,
  Inc., Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LITHIA SH,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SOE, LLC

  
	
   

  	
   

  	
  By:

  	
  Lithia SH,
  LLC, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LITHIA VS,
  LLC

  
	
   

  	
   

  	
  By:  Camp Automotive, Inc., Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LITHIA
  CJDBS, L.P.

  
	
   

  	
  LITHIA CJDO,
  L.P.

  
	
   

  	
  LITHIA
  CJDSA. L.P.

  
	
   

  	
  LITHIA CM,
  L.P.

  
	
   

  	
  LITHIA CO,
  L.P.

  
	
   

  	
  LITHIA CSA,
  L.P.

  
	
   

  	
  LITHIA DMID,
  L.P.

  
	
   

  	
  LITHIA DSA,
  L.P.

  
	
   

  	
  LITHIA HMID,
  L.P.

  
	
   

  	
  LITHIA NSA,
  L.P.

  
	
   

  	
  LITHIA OF
  GRAPEVINE, L.P.

  
	
   

  	
   

  	
  By:  Lithia GP of Texas, LLC, General Partner

  
	
   

  	
   

  	
  By:  Lithia Motors, Inc., Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
												



 


S-3

















 


	
   

  	
  LRE
  SPRINGFIELD, LLC

  
	
   

  	
   

  	
  By:  Lithia Real Estate, Inc., Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED
  AND AGREED

  	
   

  	
   

  
	
  as of the
  date first written above

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DAIMLERCHRYSLER
  SERVICES NORTH

  	
   

  	
   

  
	
  AMERICA,
  LLC, as the Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
									



 


S-4

















 


EXHIBIT B


 


ASSIGNMENT
AGREEMENT


 


Date:  December 4, 2003


 


To:          Lithia
Motors, Inc.


 


and


 


DaimlerChrysler
Services North America LLC, as Agent


 


Re:  Assignment under the Credit Agreement referred to below


 


Ladies and Gentlemen:


 


Please refer to Section 13.9.1 of the Credit
Agreement, dated as of February 25, 2003 (as amended or otherwise modified from
time to time, the “Credit Agreement”)
among Lithia Motors, Inc. (the “Company”),
various financial institutions and DaimlerChrysler Services North America LLC,
as agent (in such capacity, the “Agent”).  Unless otherwise defined herein or the
context otherwise requires, capitalized terms used herein have the meanings
provided in the Credit Agreement.


 


DCSNA (the “Assignor”)
hereby sells and assigns to Toyota Motor Credit Corporation (the “Assignee”), and the Assignee hereby purchases
and assumes from the Assignor, that interest in and to the Assignor’s rights
and obligations under the Credit Agreement as of the date hereof equal to  37.5% of the Assignor’s Loans, Letters of
Credit and Commitments, such sale, purchase, assignment and assumption to be
effective as of December 4, 2003, or such later date on which the Company and
the Agent shall have consented hereto, to the extent such consents are required
(the “Effective Date”).  After giving effect to such sale, purchase,
assignment and assumption, the Assignee’s and the Assignor’s respective
Commitments and Pro Rata Shares for purposes of the Credit Agreement will be as
set forth below their names on the signature pages hereof.


 


The Assignor hereby
instructs the Agent to make all payments from and after the Effective Date in
respect of the interest assigned hereby directly to the Assignee.  The Assignor and the Assignee agree that all
interest and fees accrued up to, but not including, the Effective Date are the
property of the Assignor, and not the Assignee, provided that the
Assignor agrees to pay to the Assignee on the Effective Date an amount equal to
$17,054.94 representing the Pro Rata Share of the Assignee in the fees
previously paid by the Company pursuant to Section 5.2 of the Credit Agreement
for the period from the Effective Date to the first anniversary of the Closing
Date (the “TMCC Facility Fee”). 
The Assignee agrees that, upon receipt of any such interest or fees
(other than the TMCC Facility Fee), the Assignee will promptly remit the same to
the Assignor.


 


The Assignee hereby confirms that it has received a
copy of the Credit Agreement and the exhibits thereto, together with copies of
the documents which were required to be delivered


 


Assignment Agreement


 

















 


under the Credit
Agreement as a condition to the making of the initial extensions of credit
thereunder.  The Assignee acknowledges
and agrees that it (i) has made and will continue to make such inquiries and
has taken and will take such care on its own behalf as would have been the case
had its Commitment been granted and its Loans been made directly to the Company
without the intervention of the Agent, the Assignor or any other Lender and
(ii) has made and will continue to make, independently and without reliance
upon the Agent, the Assignor or any other Lender and based on such documents
and information as it has deemed appropriate, its own credit analysis and
decisions relating to the Credit Agreement. 
The Assignee further acknowledges and agrees that neither the Agent nor
the Assignor has made any representation or warranty about the creditworthiness
of the Company or any other party to the Credit Agreement or any other Loan
Document or with respect to the legality, validity, sufficiency or
enforceability of the Credit Agreement or any other Loan Document or the value
of any security therefor.  This
assignment shall be made without recourse to the Assignor.


 


The Assignor represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim.


 


The Assignee represents and warrants to the Company
and the Agent that, as of the date hereof, the Company will not be obligated to
pay any greater amount under Section 7.6 of the Credit Agreement than
the Company is obligated to pay to the Assignor under such Section.


 


Except as otherwise provided in the Credit Agreement,
effective as of the Effective Date:


 


(a)           the Assignee (i) shall
be deemed automatically to have become a party to the Credit Agreement and to
have all the rights and obligations of a “Lender” under the Credit Agreement as
if it were an original signatory thereto to the extent specified in the second
paragraph hereof; and (ii) agrees to be bound by the terms and conditions set forth
in the Credit Agreement as if it were an original signatory thereto; and


 


(b)           the Assignor shall be
released from its obligations under the Credit Agreement to the extent
specified in the second paragraph hereof.


 


The Assignee hereby
advises each of you of the following administrative details with respect to the
assigned Loans and Commitment:


 


	
  (A)

  	
  Institution
  Name:

  	
   

  	
  Toyota Motor Credit
  Corporation

  	
   

  
	
   

  	
  Address:

  	
   

  	
  19001 South Western
  Avenue

  	
   

  
	
   

  	
   

  	
   

  	
  Torrance, CA  90509-2958

  	
   

  
	
   

  	
  Attention:

  	
   

  	
  Reid Boozer

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
  (310) 468-4791

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
  (310) 381-7794

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (B)

  	
  Payment Instructions:
  Bank:  Bank of America, N.A., Concord
  CA

  	
   

  
	
   

  	
  ABA#:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Account
  #:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Account
  Name:

  	
   

  	
  TMCC

  	
   

  
	
   

  	
  Attention:  Ref:

  	
   

  	
  Lithia

  	
   

  
								



 


2

















 


Please evidence your
receipt hereof and your consent to the sale, assignment, purchase and
assumption set forth herein by signing and returning counterparts hereof to the
Assignor and the Assignee.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


3

















 


	
   

  	
  TOYOTA MOTOR CREDIT CORPORATION,

  as the Assignee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Commitment = $75,000,000

  
	
   

  	
  Pro Rata Share = 37.5%

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DAIMLERCHRYSLER SERVICES NORTH

  AMERICA LLC, as the Assignor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Commitment = $125,000,000

  
	
   

  	
  Pro Rata Share = 62.5%

  
				



 


Intercreditor Agreement


 

















 


	
  ACKNOWLEDGED AND CONSENTED TO

  
	
  this 4th day of December, 2003

  
	
   

  
	
  DAIMLERCHRYSLER
  SERVICES NORTH AMERICA LLC, as the Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  ACKNOWLEDGED AND CONSENTED TO

  
	
  this 4th day of December, 2003

  
	
   

  
	
   

  
	
  LITHIA MOTORS, INC.,
  as the Company

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						



 


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