Document:

EXHIBIT 10.1

 

THIRD AMENDMENT

 

THIS THIRD
AMENDMENT dated as of June 30, 2004 (this “Amendment”) is to the
Credit Agreement (as heretofore 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)                                  Section 1.1
of the Credit Agreement shall be amended by adding the following definitions
thereto, each in its appropriate alphabetical position:

 

Senior Subordinated Indenture means the
Indenture, dated as of May 4, 2004, between the Company and U.S. Bank National
Association, as trustee.

 

Senior Subordinated Notes means the
$85,000,000 of 2.875% Convertible Senior Subordinated Notes due 2014 of the
Company issued pursuant to the Senior Subordinated Indenture.

 

Third Amendment Effective Date means the
“Amendment Effective Date” under and as defined in the Third Amendment hereto
dated as of June 30, 2004.

 

Unused Revolving Commitment Amount means, as
of any time, (x) the Revolving Commitment Amount as of such time less (y) the
Revolving Outstandings as of such time.

 

(b)                                 The
definitions of “Commitment,” “Pro Rata Share,” “Revolving Commitment Amount,”
“Subordinated Debt” and “Termination Date” in Section 1.1 of the Credit
Agreement shall be amended and restated in their entireties to read as follows:

 

Commitment means, as to any Lender, such
Lender’s commitment to make Loans, and to issue or participate in Letters of
Credit, under this Agreement.  The amount
of each Lender’s Pro Rata Share of the Revolving Commitment Amount on the Third
Amendment Effective Date is set forth on Schedule 2.1.

 

Pro Rata Share means, with respect to any
Lender, the percentage which (a) the amount of such Lender’s Commitment is of
(b) the Commitments of all Lenders;

 

 

provided
that, after the Commitments have been terminated, “Pro Rata Share” shall mean,
as to any Lender, the percentage which the sum of the aggregate principal
amount of such Lender’s Revolving Loans plus the participations of such
Lender in all Letters of Credit is of the sum of the aggregate principal amount
of all Revolving Loans plus the Stated Amount of all Letters of
Credit.  The Pro Rata Share of each
Lender as of the Third Amendment Effective Date is set forth on Schedule 2.1.

 

Revolving
Commitment Amount means $150,000,000, as reduced from
time to time pursuant to Section 6.1.

 

Subordinated
Debt means (i) the Senior Subordinated Notes and (ii)
other unsecured Debt of the Company that has subordination terms, covenants,
pricing and other terms that have been approved in writing by the Required
Lenders.

 

Termination
Date means the earlier to occur of (a) May 1, 2007 (or
any later date that may be established as the Termination Date pursuant to Section 2.6)
or (b) such other date on which the Commitments terminate pursuant to Section 6
or 11.

 

(c)                                  The
definition of “Provider” in Section 1.1 of the Credit Agreement shall be
deleted in its entirety.

 

1.2                               Section 2.6
of the Credit Agreement shall be amended and restated in its entirety to read
as follows:

 

2.6                                 Extension
of Termination Date.  On each May 1
from and after May 1, 2005 (each, an “Extension Date”), the Termination
Date shall be extended for an additional year (i.e., to the May 1 of the
year following the year in which the then-scheduled Termination Date is to
occur) if the Agent (acting at the request of all of the Lenders) shall have
notified the Company in writing on or prior to such Extension Date that the
Termination Date is so extended for an additional year (such notice an “Extension
Notice”).  If the Agent shall have
issued an Extension Notice on or prior to an Extension Date, the Agent shall
promptly notify the Company and each Lender of the new Termination Date.  If no Extension Notice is received by the
Company on or prior to any Extension Date, the Termination Date shall not be
extended on such Extension Date.  For
example: (x) if no Extension Notice is given before May 1, 2005, the
Termination Date shall remain May 1, 2007 (unless such date occurs earlier
pursuant to clause (b) of the definition of “Termination Date”) and (y)
if an Extension Notice is given before May 1, 2005, the Termination Date shall
be thereby extended to May 1, 2008, subject to further extension by operation
of this Section (unless such date occurs earlier pursuant to clause (b)
of the definition of “Termination Date”).

 

1.3                               Section 5.2
of the Credit Agreement shall be amended and restated in its entirety to read
as follows:

 

5.2                                 Unused
Fees.  The Company agrees to pay to
the Agent for the account of each Lender an unused fee at a rate per annum
equal to 0.15% on such Lender’s share of the daily Unused Revolving Commitment
Amount.  All unused fees 

 

 

shall be
payable in arrears as follows: (i) the Agent will present an invoice reflecting
the unused fees on or about April 30th of each year for the
period ending on such April 30t h for which such fees shall not have been
theretofore paid and the Company shall pay such invoiced amount to the Agent
for the account of the Lenders within one Business Day after receipt of such
invoice, and (ii) on the Termination Date, the Agent will present an invoice
reflecting the unused fees for the period ending on the Termination Date for
which such fees shall not have been theretofore paid and the Company shall pay
such invoiced amount to the Agent for the account of the Lenders on the
Termination Date.

 

1.4                               Section 5
of the Credit Agreement shall be amended by (i) changing the designation of
Section 5.4 to Section 5.5 and (ii) by adding the following new
Section 5.4:

 

5.4                                 Administrative
Fee.  The Company agrees to pay to
the Agent for its own account (and not for the account of any Lender) an
administrative fee at a rate per annum equal to 0.10% on the daily Unused
Revolving Commitment Amount.  The
administrative fee shall be payable in arrears as follows: (i) the Agent will
present an invoice reflecting the administrative fee on or about
April 30th of each year for the period ending on such April 30th for
which such fee shall not have been theretofore paid and the Company shall pay
such invoiced amount to the Agent within one Business Day after receipt of such
invoice; and (ii) on the Termination Date, the Agent will present an invoice
reflecting the administrative fee for the period ending on the Termination Date
for which such fee shall not have been theretofore paid and the Company shall
pay such invoiced amount to the Agent on the Termination Date.

 

1.5                               Section 9.7(k)
of the Credit Agreement shall be amended and restated to read in its entirety
as follows:

 

(k)                                  Debt
with respect to Floor Plan Financings provided by Persons to whom all the
Lenders consent;

 

1.6                               Section 9.20(h)
of the Credit Agreement shall be amended by (x) deleting the existing text
therein that read “[INTENTIONALLY LEFT BLANK]” and (y) inserting the following
in lieu of such deleted text “an Investment in an amount not to exceed
$50,000,000 in Lithia Real Estate, provided such Investment is made
within 60 days after the Third Amendment Effective Date”.

 

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

 

1.8                               Section 9
of the Credit Agreement shall be amended by adding thereto the following new
Section 9.24:

 

9.24                           Senior
Subordinated Notes.  Not: (i) make
any redemption, prepayment, defeasance or repurchase of the Senior Subordinated
Notes prior to May 1, 2009 (it being understood that, as a condition to extending
the Termination Date or otherwise in connection with any modification or waiver
of the Loan Documents, the Agent and the Lenders may require that such date be
extended to another future date); or

 

 

(ii) amend,
modify or waive any rights under the Senior Subordinated Indenture or the
Senior Subordinated Notes without the prior written consent of the Required
Lenders.

 

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

 

13.17                     [Intentionally
left blank]

 

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

 

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 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                               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.

 

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.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

Delivered as
of the day and year first above written.

 

 

	
   

  	
  LITHIA MOTORS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DAIMLERCHRYSLER SERVICES NORTH

  AMERICA LLC, as the Agent, as the Issuing

  Lender and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janet B. Toronski

  
	
   

  	
  Title:

  	
  VP National Accounts

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TOYOTA MOTOR CREDIT CORPORATION,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ P. Reid Boozer

  
	
   

  	
  Title:

  	
  National Accounts Manager

  

 

 

SCHEDULE 2.1

 

LENDERS AND PRO RATA SHARES

 

 

	
  Lender

  	
   

  	
  Pro Rata Share

  of Revolving

  Commitment Amount

  	
   

  	
  Pro Rata Share

  	
   

  
	
  DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC

  	
   

  	
  $

  	
  93,750,000

  	
   

  	
  62.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOYOTA MOTOR CREDIT CORPORATION

  	
   

  	
  $

  	
  56,250,000

  	
   

  	
  37.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTALS

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  100

  	
  %

  

 

 

EXHIBIT A

 

FORM OF REAFFIRMATION

 

June 30, 2004

 

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 Third Amendment (the “Third 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 Third 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 Third
Amendment.

 

 

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]

 

 

	
   

  	
  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.

  
	
   

  	
  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.

  
	
   

  	
  LITHIA OF
  MEDFORD LM, INC.

  
	
   

  	
  LITHIA OF
  HELENA, INC.

  
	
   

  	
  LITHIA OF
  SOUTH CENTRAL AK, INC.

  
	
   

  	
  LITHIA NA,
  INC.

  
	
   

  	
  [LITHIA OF
  CLOVIS, INC.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  

 

 

	
   

  	
  LITHIA LP OF
  TEXAS, LLC

  
	
   

  	
  LITHIA GP OF
  TEXAS, LLC

  
	
   

  	
    By: 
  Lithia Motors, Inc., Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LITHIA LAC OF
  WASHINGTON, LLC

  
	
   

  	
  By:  Lithia LAC, Inc., Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LITHIA SH,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOE, LLC

  
	
   

  	
    By: 
  Lithia SH, LLC, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LITHIA VS,
  LLC

  
	
   

  	
    By: 
  Camp Automotive, Inc., Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  

 

 

	
   

  	
  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:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LRE
  SPRINGFIELD, LLC

  
	
   

  	
  By:  Lithia Real Estate, Inc.,
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. DeBoer

  
	
   

  	
  Title:

  	
  CFO

  

 

 

ACKNOWLEDGED
AND AGREED

as of the date
first written above

 

DAIMLERCHRYSLER
SERVICES NORTH

AMERICA, LLC,
as the Agent

 

 

	
  By:

  	
  /s/ Janet B. Toronski

  	
   

  
	
  Title:

  	
  VP National AccountsExhibit 4.8  

FIRST SUPPLEMENTAL INDENTURE  

        THIS FIRST SUPPLEMENTAL INDENTURE (the "First Supplemental Indenture") is dated as of
July 20, 2004, among OMEGA HEALTHCARE INVESTORS, INC., a Maryland corporation (the "Issuer"), each of the SUBSIDIARY GUARANTORS listed on
Schedule I hereto (the "Subsidiary Guarantors"), OHI ASSET II (TX), LLC, a Delaware limited liability company and wholly owned subsidiary
of the Issuer (the "Texas Sub"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United
States of America, as trustee (the "Trustee"). 

W I T N E S S E T H:  

        WHEREAS, the Issuer and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee an
indenture (the "Indenture"), dated as of March 22, 2004, providing for the issuance of the Issuer's 7% Senior Notes due 2014 (the
"Notes"); 

        WHEREAS, Section 9.01 of the Indenture authorizes the Issuer, the Subsidiary Guarantors and the Trustee, together, to amend or
supplement the Indenture, without notice to or consent of any Holder (as defined in the Indenture) of the Notes, in order to make any change that would not materially adversely affect the rights of
any Holder of the Notes; 

        WHEREAS, in Section 1.01 of the Indenture the term "Subsidiary Guarantor" is defined to include each Restricted Subsidiary (as
defined in the Indenture) of the Issuer on the Closing Date; 

        WHEREAS, Section 10.01 of the Indenture provides that each Subsidiary Guarantor shall be a guarantor of the Issuer's obligations
under the Notes, subject to the terms and conditions described in the Indenture; 

        WHEREAS, the Texas Sub existed as a Restricted Subsidiary as of the Closing Date, but was inadvertently not included as a named Subsidiary
Guarantor in the Indenture; 

        WHEREAS, Section 4.03 of the Indenture provides that the Issuer shall not be required to maintain the existence of any Restricted
Subsidiary if the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole, and the loss thereof is not adverse in any
material respect to the Holders of the Notes; 

        WHEREAS, OHI (Greensboro), Inc. and OHI (Clemmons), Inc. (collectively, the "Dissolved
Subsidiaries") are Restricted Subsidiaries under the Indenture and were dissolved under the laws of the state of North Carolina, effective as of June 14, 2004; 

        WHEREAS, (i) the Dissolved Subsidiaries were single asset entities, (ii) the respective properties owned by each of the
Dissolved Subsidiaries were distressed properties, (iii) each of these properties were sold at auctions conducted pursuant to the applicable regulations set forth by the US Department of
Housing and Urban Development ("HUD"), and (iv) all of the proceeds received from such auctions were retained by HUD to be applied toward
outstanding debt secured by each of the aforementioned properties; 

        NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Issuer, the Subsidiary Guarantors, the Texas Sub and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 

        1.     CAPITALIZED
TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 

        2.     RELEASE
OF DISSOLVED SUBSIDIARIES. The Dissolved Subsidiaries are hereby released as Subsidiary Guarantors under the Indenture as a result of the dissolution thereof. 

        3.     AGREEMENT
TO GUARANTEE. The Texas Sub hereby agrees, jointly and severally with all other Subsidiary Guarantors, to guarantee the Issuer's obligations under the Notes on
the terms and subject to the conditions set forth in the Indenture, and to be bound by, and to receive the benefit of, all other applicable provisions of the Indenture as a Subsidiary Guarantor. Such
guarantee shall be evidenced by
the Texas Sub's execution of a Subsidiary Guarantee, the form of which is attached as Exhibit E to the Indenture, and shall be effective as of March 22, 2004. 

        3.     NO
RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, partner, affiliate, beneficiary or stockholder of the Texas Sub, as such, shall have
any liability for any obligations of the Issuer or any Subsidiary Guarantor under the Notes, any Guarantees, the Indenture or this First Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for
issuance of the Notes. 

        4.     NEW
YORK LAW TO GOVERN. The laws of the State of New York shall govern and be used to construe this First Supplemental Indenture. 

        5.     COUNTERPARTS.
The parties may sign any number of copies of this First Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement. 

        6.     EFFECT
OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 

        7.     THE
TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture or for or
in respect of the recitals contained herein, all of which recitals are made solely by the Issuer, the Subsidiary Guarantors and the Texas Sub. 

        IN
WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed and attested, all as of the date first above written. 

Dated
as of July 20, 2004 

	 	 	OMEGA HEALTHCARE INVESTORS, INC.
	

 	
 	

By:	
 	

/s/  C. TAYLOR PICKETT      
 Name: C. Taylor Pickett

Title: President and Chief Executive Officer
	

 	
 	

On behalf of each Subsidiary Guarantor named on the attached Schedule I
	

 	
 	

By:	
 	

/s/  C. TAYLOR PICKETT      
 Name: C. Taylor Pickett

Title: President and Chief Executive Officer
	

 	
 	

OHI ASSET II (TX), LLC
	

 	
 	

By:	
 	

/s/  C. TAYLOR PICKETT      
 Name: C. Taylor Pickett

Title: President and Chief Executive Officer
	

 	
 	

U.S. BANK NATIONAL ASSOCIATION, as Trustee
	

 	
 	

By:	
 	

/s/  TERESA L. DAVIS      
 Name: Teresa L. Davis

Title: Vice President

Schedule I  

SUBSIDIARY
GUARANTORS 

Omega
Healthcare Investors, Inc. 

Arizona
Lessor—Infinia, Inc. 

Bayside
Alabama Healthcare Second, Inc. 

Bayside
Arizona Healthcare Associates, Inc. 

Bayside
Arizona Healthcare Second, Inc. 

Bayside
Colorado Healthcare Associates, Inc. 

Bayside
Colorado Healthcare Second, Inc. 

Bayside
Indiana Healthcare Associates, Inc. 

Bayside
Street II, Inc. 

Bayside
Street, Inc. 

Care
Holdings, Inc 

Center
Healthcare Associates, Inc. 

Cherry
Street—Skilled Nursing, Inc. 

Colorado
Lessor—Conifer, Inc. 

Dallas
Skilled Nursing, Inc. 

Delta
Investors I, LLC 

Delta
Investors II, LLC 

Florida
Lessor—Crystal Springs, Inc. 

Florida
Lessor—Emerald, Inc. 

Florida
Lessor—Five Facilities, Inc. 

Florida
Lessor—Lakeland, Inc. 

Florida
Lessor—Meadowview, Inc. 

Florida
Lessor—West Palm Beach and Southpoint, Inc. 

Georgia
Lessor—Bonterra/Parkview, Inc. 

Heritage
Texarkana Healthcare Associates, Inc. 

Indiana
Lessor—Jeffersonville, Inc. 

Indiana
Lessor—Wellington Manor, Inc. 

Jefferson
Clark, Inc. 

Lake
Park Skilled Nursing, Inc. 

Long
Term Care—Michigan, Inc. 

Long
Term Care—North Carolina, Inc. 

Long
Term Care Associates—Illinois, Inc. 

Long
Term Care Associates—Indiana, Inc. 

Long
Term Care Associates—Texas, Inc. 

NRS
Ventures, LLC 

OHI
(Clemmons), Inc.* 

OHI
(Connecticut), Inc. 

OHI
(Florida), Inc. 

OHI
(Greensboro), Inc.* 

*
Entity dissolved on June 14, 2004. 

OHI
(Illinois), Inc. 

OHI
(Indiana), Inc. 

OHI
(Iowa), Inc. 

OHI
(Kansas), Inc. 

OHI
Asset (CA), LLC 

OHI
Asset (FL) Tarpon Springs, Pinellas Park & Gainesville, LLC 

OHI
Asset (FL), LLC 

OHI
Asset (ID), LLC 

OHI
Asset (IN), LLC 

OHI
Asset (LA), LLC 

OHI
Asset (MI/NC), LLC 

OHI
Asset (MO), LLC 

OHI
Asset (OH), LLC 

OHI
Asset (TX), LLC 

OHI
Asset II (CA), LLC 

OHI
Asset II (TX), LLC 

OHI
Asset, LLC 

Ohio
Lessor Waterford & Crestwood, Inc. 

OHI
of Kentucky, Inc. 

OHI
of Texas, Inc. 

OHI
Sunshine, Inc. 

OHIMA,
Inc. 

Omega
(Kansas), Inc. 

Omega
Acquisition Facility I, LLC 

Omega
TRS I, Inc. 

OS
Leasing Company 

Parkview—Skilled
Nursing, Inc. 

Pine
Texarkana Healthcare Associates, Inc. 

Reunion
Texarkana Healthcare Associates, Inc. 

San
Augustine Healthcare Associates, Inc. 

Skilled
Nursing—Gaston, Inc. 

Skilled
Nursing—Herrin, Inc. 

Skilled
Nursing—Hicksville, Inc. 

Skilled
Nursing—Paris, Inc. 

South
Athens Healthcare Associates, Inc. 

Sterling
Acquisition Corp. 

Sterling
Acquisition Corp. II 

Texas
Lessor—Stonegate GP, Inc. 

Texas
Lessor—Stonegate Limited, Inc. 

Texas
Lessor—Stonegate, L.P. 

Texas
Lessor—Treemont, Inc. 

Washington
Lessor—Silverdale, Inc. 

Waxahachie
Healthcare Associates, Inc. 

West
Athens Healthcare Associates, Inc.

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