Exhibit 10.1

SIXTH AMENDMENT TO LOAN AGREEMENT

     This Sixth Amendment to Loan Agreement (this "Agreement") dated as of March
31, 2009, is entered into among Lithia Motors, Inc., an Oregon corporation
("Borrower"); the lenders which are from time to time parties to the Loan
Agreement (each a "Lender" and any two or more "Lenders"); and U.S. Bank
National Association, as agent for the Lenders (in such capacity, "Agent").

R E C I T A L S

                      A.      Borrower, the Lenders and Agent have entered into
a Loan Agreement dated as of August 31, 2006, which has been amended by
amendments dated as of June 29, 2007, February 13, 2008, March 17, 2008, August
15, 2008, and December 12, 2008 (collectively, the "Loan Agreement").

                      B.      The parties wish to modify the terms and
conditions of the Loan Agreement, as set forth below.

                      For valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

                      1.      Amendments to Loan Agreement.

                              1.1       Changed Definitions. The following
defined terms in Section 1.1 of the Loan Agreement are deleted and replaced with
the following:

            "LIBOR Rate" means the one-month LIBOR rate quoted by Agent from
Reuters Screen LIBOR01 Page or any successor thereto, which shall be that
one-month LIBOR rate in effect two Business Days prior to the beginning of each
calendar month, adjusted for any Reserve Requirements and any subsequent costs
arising from a change in government regulation, such rate to be reset at the
beginning of each succeeding month; provided, however, if the first Loan is made
other than on the first day of the month, the initial monthly LIBOR Rate shall
be that one-month LIBOR rate in effect two Business Days prior to the date of
the initial Loan, which rate shall be in effect for the remaining days of the
month in which such Loan is made; such monthly LIBOR Rate to be reset at the
beginning of each succeeding month. Agent's internal records of applicable
interest rates shall be determinative in the absence of manifest error.

            "Swingline Commitment" means (a) $35,000,000 through September 29,
2009; (b) $25,000,000 from September 30, 2009 through December 30, 2009; and (c)
$12,500,000 on and after December 31, 2009.

            "Total Revolving Loan Commitment" means (a) $150,000,000 prior to
the Sixth Amendment Date; (b) $100,000,000 from the Sixth Amendment Date through
April 30, 2009; (c) $75,000,000 from May 1, 2009 through September 29, 2009; (d)
$50,000,000 from September 30,

Page 1

--------------------------------------------------------------------------------

2009 through December 30, 2009; and (e) $25,000,000 on and after December 31,
2009.

                              1.2           New Definitions.  The following
definitions are hereby added to Section 1.1 of the Loan Agreement:

               "Base Rate"  means, as of any date of determination, the greatest
of (a) the Prime Rate in effect on such date, (b) the Federal Funds Rate in
effect on such date plus 1.50% or (c) the Daily Reset LIBOR Rate in effect on
such date plus 2.0%.

               "Daily Reset LIBOR Rate"  means the one-month LIBOR rate quoted
by Agent from Reuters Screen LIBOR01 Page or any successor thereto, which shall
be that one-month LIBOR rate in effect on and reset on each Business Day,
adjusted for any Reserve Requirements and any subsequent costs arising from a
change in government regulation. Agent’s internal records of applicable interest
rates shall be determinative in the absence of manifest error.

               "Sixth Amendment Date"  means the date of the Sixth Amendment to
Loan Agreement between Borrower, the Lenders, and Agent.

                              1.3           Swingline Loans.  Sections 3.1.1 and
3.1.2 of the Loan Agreement are deleted and replaced with the following:

                          3.1.1   Maximum Amount.  Subject to the terms and
conditions of this Agreement, the Swingline Lender may, in its sole discretion,
but without any obligation to do so, make loans (each, a "Swingline Loan" and
collectively, the Swingline Loans") to Borrower on a revolving credit basis
during the period from the Closing Date to but not including the Expiration
Date; provided that (a) the aggregate outstanding principal balance of the
Swingline Loans shall not at any time exceed the Swingline Commitment; and (b)
the outstanding principal balance of all Revolving Loans made by all Lenders
plus the outstanding principal balance of all Swingline Loans, plus the LC
Outstandings, shall not at any time exceed the Maximum Amount.

                         3.1.2   Term.  Subject to the terms and conditions
hereof, Borrower may borrow, prepay and reborrow Swingline Loans. The
availability of Swingline Loans shall terminate automatically and permanently on
the Expiration Date and no Swingline Loans shall be made on or after that date.

                              1.4           Interest Rate.  Effective as of the
Sixth Amendment Date, Section 5.1.1 of the Loan Agreement is deleted and
replaced with the following:

5.1.1        Interest Rate.  Unless the Default Rate is applicable, (a) the
Revolving Loans shall bear interest at a variable per annum rate equal to the
LIBOR Rate plus 4.40% ("Revolving Loan Borrowing

Page 2

--------------------------------------------------------------------------------

Rate"); and (b) the Swingline Loans shall bear interest at a variable per annum
rate equal to the LIBOR Rate plus 4.40% ("Swingline Borrowing Rate"), in each
case adjusted without notice on the date of each change in the LIBOR Rate.

                              1.5           Unavailability or Illegality. 
Section 6.3 of the Loan Agreement is deleted and replaced with the following:

                6.3           Unavailability or Illegality.  If at any time any
Lender determines that the LIBOR Rate is unascertainable or unavailable or that
the LIBOR Rate will not adequately and fairly reflect the cost of maintaining or
funding the Loans, or if, because of the introduction of or any change in, or
because of any judicial, administrative or other governmental interpretation of,
any law or regulation, it becomes unlawful for any Lender to make, fund or
maintain Loans based on the LIBOR Rate, then such Lender’s obligation to make,
fund or maintain any such loans at the Revolving Loan Borrowing Rate or
Swingline Borrowing Rate shall terminate and the Loans of such Lender shall, on
the earlier of the date specified by Agent in a notice to Borrower or on date
the making, funding or maintaining of such Loans becomes unlawful, be converted
to Loans bearing interest at a variable rate equal to the Base Rate plus 1.80%.

                             1.6           Total Net Worth.  Effective as of
March 31, 2009, Section 10.1.1 of the Loan Agreement is deleted and replaced
with the following, it being understood that for time periods prior to such
date, Section 10.1.1 shall be calculated in accordance with the provisions then
in effect:

                         10.1.1 Total Net Worth.  The Total Net Worth for
Borrower and its Subsidiaries, on a consolidated basis, as of the last day of
any fiscal quarter, shall not be less than (a) $175,000,000 as of March 31,
2009; or (b) on and after June 30, 2009, (i) $175,000,000 plus (ii) seventy five
percent (75%) of consolidated net income (to the extent such amount is positive,
but without deduction for consolidated net loss) for fiscal quarters ending on
or after June 30, 2009, plus (iii) one hundred percent (100%) of the
consolidated net cash proceeds realized from the issuance of any equity
securities by Borrower or any of its Subsidiaries (and other capital
contributions made to Borrower or any of its Subsidiaries) after March 31, 2009.

                          As used herein, "Total Net Worth" means for any Person
(a) the net book value of all of such Person's assets, minus (b) all of such
Person's liabilities.

                             1.7           Current Ratio.  The first paragraph
of Section 10.1.2 of the Loan Agreement is deleted and replaced with the
following:

Current Ratio.  The Current Ratio for Borrower and its Subsidiaries on a
consolidated basis, as of the last day of each fiscal quarter, shall not be less
than (a) 1.20 to 1.0 as of the last day of each fiscal quarter ending on

Page 3

--------------------------------------------------------------------------------

or before March 31, 2009, (b) 1.05 to 1.0 as of June 30, 2009 and September 30,
2009, and (c) 1.10 to 1.0 as of the last day of each fiscal quarter ending on or
after December 31, 2009.

                              1.8           Approved Sales.

                                              1.8.1           Sections 12.1.2
and 12.1.3 of the Loan Agreement are deleted and replaced with the following:

                                   12.1.2     Notwithstanding the provisions of
Section 12.1.1, Borrower or any Subsidiary may sell all or substantially all of
the assets (including Equity Interests) of any Dealership or other Subsidiary
(or of any business unit or franchise of a Dealership or other Subsidiary) for
not less than fair market value, if no Default shall exist immediately prior to
or upon giving effect to any such sale, and

                                   (a)           the sale is included on the
Schedule of Approved Sales attached hereto (which shall replace the Schedule of
Approved Sales attached to the Fifth Amendment to Loan Agreement dated December
12, 2008) or

                                   (b)           Required Lenders have consented
in writing to the sale and Borrower has complied with all terms and conditions
of such consent, it being acknowledged that Required Lenders have consented to
the sales of facilities in Issaquah, Washington and Burlingame, California which
occurred in August, 2008.

                                   12.1.3      Notwithstanding the provisions of
Sections 12.1.1 and 12.1.2, any Subsidiary that no longer has assets (or that
has assets with an aggregate book value less than $25,000) may discontinue
operations and dissolve or liquidate unless such action would constitute a
Material Adverse Effect or any Default shall exist immediately prior to or upon
giving effect thereto.

                                            1.8.2            Section 12.1.4 of
the Loan Agreement is hereby deleted.

                             1.9          Subordinated Debt.       Section 12.5
of the Loan Agreement is deleted and replaced with the following:

                                            12.5             Subordinated Debt.

                                  12.5.1       Borrower will not and will not
permit any Loan Party to, make any redemption, prepayment, principal payment,
defeasance or repurchase of any Subordinated Debt other than the Senior
Subordinated Notes, or agree to modify the terms of any Subordinated Debt other
than the Senior Subordinated Notes, except that Borrower or any Loan Party may
take any of the foregoing actions so long as no Event of Default has occurred or
will exist after giving effect to such action.

Page 4

--------------------------------------------------------------------------------

                  12.5.2      Borrower will not and will not permit any Loan
Party to, make any redemption, prepayment, principal payment, defeasance or
repurchase of all or any of the Senior Subordinated Notes, or agree to modify
the terms of the Senior Subordinated Notes; provided, however, that so long as
no Event of Default has occurred or will exist after giving effect thereto (a)
Borrower may repurchase Senior Subordinated Notes prior to May 1, 2009, and (b)
Borrower may repurchase the Senior Subordinated Notes on May 1, 2009, if and to
the extent requested to do so by the noteholders in accordance with the terms of
the Indenture governing the Senior Subordinated Notes.

                              1.10           Debt.  The following is hereby
added to Section 12.10 (Debt) of the Loan Agreement:

                  (n)           Debt appearing as a claims reserve (or similar
term) on the balance sheet of Borrower and its Subsidiaries, which represents
amounts which have been received but which will be expended to pay warranty and
service claims by customers of the Dealerships.

                       2.      Exhibits D and E.  Exhibit D (Compliance
Certificate) and Exhibit E (Borrowing Base Certificate) are deleted and replaced
with the Exhibits D and E attached hereto.

                       3.      Schedule 1.  Schedule 1 to the Loan Agreement is
deleted and replaced with the Schedule 1 attached hereto.

                       4.      Consent of Lenders.

                                4.1      Lithia of Spokane, Inc. has entered
into an agreement to sell the Mercedes Benz of Spokane dealership. Part of the
consideration for the sale is a promissory note payable by the buyer to Lithia
Real Estate, Inc. (the "Mercedes of Spokane Note"). Pursuant to Section 12.6(m)
of the Loan Agreement, the Lenders hereby consent to the Mercedes of Spokane
Note in a principal amount of up to $4,000,000.

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

                                5.1      Agent has received executed originals
of this Agreement and such other Loan Documents as Agent requires and Borrower
and each Guarantor have provided such information and satisfied such
requirements as Agent reasonably requires.

                                5.2      No Default shall have occurred and be
continuing under the Loan Agreement.

                                5.3      The outstanding principal balance of
the Obligations does not exceed the Maximum Amount, as in effect after giving
effect to the amendments set forth in this Agreement.

                                5.4       Borrower has paid to Agent, for the
account of the Lenders, in accordance with their Pro Rata Shares of the
Revolving Loan Commitments, an amendment fee in the amount of $40,000.

Page 5

--------------------------------------------------------------------------------

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

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

                        7.       Reaffirmation; Release.  By signing this
Agreement or the attached Acknowledgment:

                                  7.1      Borrower and each Guarantor (each, a
"Loan Party") affirm that the representations and warranties in each of the
existing Loan Documents are and will be true, correct and complete as of the
date hereof, and agree that (i) except as amended previously or in connection
herewith, each Loan Document is and shall remain valid and enforceable in
accordance with its terms and (ii) such Borrower or Guarantor has no claims,
defenses, setoffs, counterclaims or claims for recoupment against Agent, the
Lenders, or the indebtedness and obligations represented by the Notes,
Guaranties, Security Documents and other Loan Documents.

                                 7.2      Each Loan Party hereby releases,
acquits, and forever discharges Agent, each Lender, their parent corporations,
affiliates, subsidiaries, employees, successors, agents, assigns,
representatives, and attorneys (collectively, "Lenders' Agents"), and each of
them, of and from any and all liability, claims, demands, damages, actions,
causes of action, defenses, counterclaims, setoffs, or claims for recoupment of
whatsoever nature, whether known or unknown, whether in contract or tort or
otherwise, arising directly or indirectly from, or in any way related to the
Loan Agreement, this Amendment, the Guaranties and the other Loan Documents, any
other indebtedness or obligations of any Loan Party to Agent or any one or more
of the Lenders or to the relationship between any Loan Party and Agent, any
Lender, or Lenders' Agents.

                        8.       References.  On and after the effective date of
this Agreement, all references in the Loan Agreement and the other Loan
Documents to the Loan Agreement shall be deemed to refer to the Loan Agreement
as amended hereby.

                        9.       Representations and Warranties.  Each Loan
Party represents and warrants to Agent and the Lenders as follows:

                                  9.1     Authorization.  (a) It has all
requisite power and authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its obligations under, the Loan
Agreement as amended by this Agreement (the "Amended Agreement"), (b) its
execution, delivery and performance of this Agreement and the other Loan
Documents and all documents to be executed, delivered or performed by it have
been duly authorized by all necessary entity action, do not require the approval
of any governmental agency or other Person, do not contravene any law,
regulation, rule, order, or restriction binding on it or its articles of
incorporation or other organizational documents, and do not contravene the
provisions of or constitute a default under any agreement or instrument to which
it is a party or by which it may be bound or affected, and (c) this Agreement
has been duly executed and delivered by each Loan Party and this Agreement and
the Amended Agreement are the legally valid and binding obligations of each Loan
party, enforceable against such Loan Party in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,

Page 6

--------------------------------------------------------------------------------

moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.

                     9.2      Absence of Default.  No Event of Default has
occurred and is continuing and no event will result from the consummation of the
transactions contemplated by this Agreement that would constitute a Default or
Event of Default.

                    10.        Expenses.  Borrower shall pay all outside and/or
third party costs, fees and expenses (including without limitation, attorney
fees) incurred by Agent and each Lender in connection with the preparation,
negotiation, execution, and delivery of this Agreement and any other document
required to be furnished herewith.

                    11.        Recitals.  The Recitals are hereby incorporated
herein.

                    12.        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.

(signature page follows)

Page 7

--------------------------------------------------------------------------------

LITHIA MOTORS, INC.

U.S. BANK NATIONAL ASSOCIATION,
as Agent, Lender, Swingline Lender, and
Issuing Lender

 

By: /s/ Jeff DeBoer 
Name: Jeff DeBoer 
Title:SVP and CEO

CHRYSLER FINANCIAL SERVICES
AMERICAS LLC, as Lender

By: /s/ Judy C. Johnson
Name: Judy C. Johnson 
Title: Credit Director National Accounts

DCFS USA LLC, as Lender

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

By: /s/ Silvia K. Boulger
Name: Silvia K. Boulger 
Title: Vice President

TOYOTA MOTOR CREDIT
CORPORATION, as Lender

By: /s/ Mark Doi
Name: Mark Doi 
Title: National Dealer
         Credit Manager

Page 8

--------------------------------------------------------------------------------

ACKNOWLEDGMENT AND CONSENT OF GUARANTORS

     Each Guarantor hereby acknowledges, consents, and agrees to all terms and
conditions of the foregoing amendment.

Hutchins Eugene Nissan, Inc.
Hutchins Imported Motors, Inc.
LAD Advertising, Inc.
LGPAC, Inc.
Lithia Auto Services, Inc.
Lithia BNM, Inc.
Lithia DE, Inc.
Lithia DM, Inc.
Lithia Financial Corporation
Lithia Aircraft, Inc.
Lithia HPI, Inc.
Lithia Klamath, Inc.
L2 Auto, Inc.
Lithia Medford Hon, Inc.
Lithia Motors Support Services, Inc.
Lithia MTLM, Inc.
Lithia of Roseburg, Inc.
Lithia Real Estate, 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 NA, Inc.
Lithia of Anchorage, Inc.
Lithia of Fairbanks, Inc.
Lithia of South Central AK, Inc.
Lithia CIMR, Inc.
Lithia DC, Inc.
Lithia FMF, Inc.
Lithia JEF, Inc.
Lithia MMF, Inc.

Page 9

--------------------------------------------------------------------------------

Lithia NF, Inc.
Lithia of California, Inc.
Lithia of Eureka, Inc.
Lithia Seaside, Inc.
Lithia Sea P, Inc.
Lithia of Santa Rosa, Inc.
Lithia TKV, Inc.
Lithia TR, Inc.
Lithia Centennial Chrysler Plymouth Jeep, Inc.
Lithia Cherry Creek Dodge, Inc.
Lithia Colorado Jeep, Inc.
Lithia Colorado Springs Jeep Chrysler Plymouth, Inc.
Lithia Foothills Chrysler, Inc.
Lithia of Thornton, Inc.
Lithia CCTF, Inc.
Lithia Ford of Boise, Inc.
Lithia of Caldwell, Inc.
Lithia of Pocatello, Inc.
Lithia Poca-Hon, Inc.
Lithia of TF, Inc.
Lithia MBDM, Inc.
Lithia of Des Moines, Inc.
Lithia CDH, Inc.
Lithia HGF, Inc.
Lithia of Billings, Inc.
Lithia of Great Falls, Inc.
Lithia of Helena, Inc.
Lithia of Missoula, Inc.
Lithia CJD of Omaha, Inc.
Lithia CJDSF, Inc.
Lithia of Santa Fe, Inc.
Lithia Reno Sub-Hyun, Inc.
Lithia SALMIR, Inc.
Lithia ND Acquisition Corp. #1
Lithia ND Acquisition Corp. #3
Lithia ND Acquisition Corp. #4
Lithia Automotive, Inc.
Camp Automotive, Inc.
Lithia BC, Inc.
Lithia DC of Renton, Inc.
Lithia Dodge of Tri-Cities, Inc.
Lithia FTC, Inc.
Lithia HyR, Inc.
Lithia IC, Inc.
Lithia of Seattle, Inc.
Lithia of Spokane, Inc.
Lithia of Wenatchee, Inc. TC Hon, Inc.
Lithia of Cedar Rapids #1, Inc.

Page 10

--------------------------------------------------------------------------------

Lithia of Cedar Rapids #2, Inc.
Lithia of Cedar Rapids #3, Inc.
Lithia AcDM, Inc.
Lithia HDM, Inc.
Lithia NDM, Inc.
Lithia VAuDM, Inc.
Lithia Bryan Texas, Inc.
Lithia CJDO, Inc.
Lithia CJDSA, Inc.
Lithia CM, Inc.
Lithia CO, Inc.
Lithia CSA, Inc.
Lithia DMID, Inc.
Lithia HMID, Inc.
Lithia NSA, Inc.
Lithia of Abilene, Inc.
Lithia of Corpus Christi, Inc.
Lithia of Midland, Inc.
Lithia TA, Inc.
Lithia TO, Inc.
Lithia VaUB, Inc.
Lithia Community Development Company, Inc.
L2 Auto of Colorado, Inc.
L2 Auto of Texas, Inc.
L2 Auto of Idaho, Inc.

By: /s/ Jeff DeBoer
Name: Jeff DeBoer
Title: Authorized Agent

SOE, LLC
Lynnwood Properties, LLC
Lithia GP of Texas, LLC

By: /s/ Jeff DeBoer
Name: Jeff DeBoer
Title: Authorized Agent

Page 11

--------------------------------------------------------------------------------

SCHEDULE 1

Name of
Financial
Institution Pro Rata
Share
of Revolving
Loans Revolving Loan Commitment

Prior to Sixth
Amendment Date

Sixth
Amendment Date
through 4/30/09 5/1/09 – 9/29/09 9/30/09 – 12/30/09 12/31/09 and
Thereafter U.S. Bank
National
Association 25.0% $37,500,000 $25,000,000 $18,750,000 $12,500,000 $6,250,000
Chrysler
Financial
Services
Americas LLC 25.0% $37,500,000 $25,000,000 $18,750,000 $12,500,000 $6,250,000
Toyota Motor
Credit
Corporation  25.0% $37,500,000 $25,000,000 $18,750,000 $12,500,000 $6,250,000
DCFS USA LLC 25.0% $37,500,000 $25,000,000 $18,750,000 $12,500,000 $6,250,000
TOTAL 100% $150,000,000  $100,000,000 $75,000,000 $50,000,000 $25,000,000

Page 12

--------------------------------------------------------------------------------

 

EXHIBIT D
COMPLIANCE CERTIFICATE

     This Compliance Certificate is executed and delivered by Lithia Motors,
Inc. ("Borrower") to U.S. Bank National Association, as Agent (in such capacity,
"Agent") pursuant to the requirements of the Loan Agreement dated as of August
31, 2006 between Borrower, the Lenders which are from time to time parties
thereto, and Agent ("Loan Agreement"). Any capitalized terms used herein and not
defined herein shall have the meanings given to such terms in the Loan
Agreement. This Compliance Certificate covers the four (4) consecutive fiscal
quarters ended __________________ with respect to Section 10.1.3 and 10.1.4 of
the Loan Agreement and is prepared as of _______________ with respect to
Sections 10.1.1 and 10.1.2 of the Loan Agreement.

     1. A review of the activities of the Borrower during the fiscal period
covered by this Compliance Certificate has been made under the supervision of
the undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all of their obligations under the Loan
Agreement. To the best knowledge of the undersigned, during such fiscal period
all covenants and conditions of the Borrower have been performed and observed
and no Default has occurred and is continuing under the Loan Agreement [with the
exceptions set forth below in response to which Borrower has taken or propose to
take the following actions:
______________________________________________________________________________
______________________________________________________________________________    
___________________________________________.]

     2. To the best knowledge of the undersigned, no event or circumstance which
has had or may have a Material Adverse Effect has occurred since the last
Compliance Certificate was delivered [with the exceptions set forth below:

______________________________________________________________________________
______________________________________________________________________________    
___________________________________________.]

     3. Attached are the calculations showing whether Borrower was in compliance
with Sections 10.1.1, 10.1.2, 10.1.3, and 10.1.4 of the Loan Agreement as of the
end of the fiscal period covered by this Compliance Certificate. Each such
calculation is derived from the books and records of Borrower and correctly
reflects whether Borrower is in compliance with the applicable Sections of the
Loan Agreement.

     4. Borrower hereby gives notice of a Current Assets Election in the
Specified Current Assets Commitment Amount of $ _____________.

        This Compliance Certificate is executed on
______________________________.

LITHIA MOTORS, INC.

By:______________________
Name:___________________
Title:_____________________

Page 13

--------------------------------------------------------------------------------

 

Calculation of Financial Covenants
______________________________________________________________________________

            Amounts in Thousands  10.1.1  Total Net Worth        A.  Required
Total Net Worth          1 .   $175,000,000.00  $     2 .   PLUS 75% of positive
net income for quarters               ending on or after 6-30-09  $     3 . 
 PLUS Proceeds from issuance of equity securities               (and other
capital contributions) after 3-31-09  $         Minimum Requirement  $   B.     
 Net Book Value of Assets  $   C.       MINUS Total Liabilities  $   D.     
 Total Net Worth  $ 10.1.2  Current Ratio        A.  Borrowing Base Minus the
Total Outstandings  $   B.  Specified Current Assets Commitment Amount  $   C. 
Total Revolving Loan Commitment minus Total          Outstandings  $   D. 
Current Assets Commitment Amount (least of A,          B, and C)  $   E. 
Consolidated Current Assets (including any Current          Assets Commitment
Amount specified above)  $   F.  MINUS Receivables from Related Parties  $   G. 
Total Current Assets  $   H.  Total Current Liabilities (if the Expiration Date
is          within one year, including any Current Assets          Commitment
Amount specified above)(1)  $

__________________
1 Excludes any portion of Senior Subordinated Notes, which is not due and
payable.

Page 14

--------------------------------------------------------------------------------

  I.  Permitted Ratio of G to H: Not less than______ to 1.0.          RATIO:    
 ____ to 1.0  10.1.3  Fixed Charge Coverage Ratio        A.  EBITDAR            
1. Consolidated Net Income (or Loss)  $__________     2. PLUS interest expense 
$__________     3. PLUS income tax expense  $__________     4. PLUS depreciation
expense  $__________     5. PLUS amortization expense  $__________     6. PLUS
goodwill impairment charges  $__________     7. PLUS stock-based compensation   
        charges  $__________     8. PLUS other approved non-cash           
charges  $__________     9. MINUS non-cash gains  $__________     10. PLUS
rental expense  $__________     11. PLUS extraordinary losses  $__________    
12. MINUS extraordinary gains  $__________     13. PLUS or MINUS Excluded Items 
$__________     14. PLUS Other Income(2)  $__________     Total EBITDAR 
$__________   B.  PLUS pro forma Permitted Acquisitions EBITDA  $__________  
C.  1. MINUS Dividends paid in cash  $__________     2. MINUS Income taxes paid
in cash  $__________

__________________
2 Maximum $10 million for fiscal quarter ending 6-30-08, $10 million for fiscal
quarter ending 9-30-08, $0 for other fiscal quarters.

Page 15

--------------------------------------------------------------------------------

3. MINUS Maintenance capital $__________ expenditures  TOTAL EBITDAR plus EBITDA
from acquisitions minus Dividends paid in cash, Income Taxes paid in cash and
Maintenance Capital Expenditures ("Total Adjusted EBITDAR")  $__________ D. 
Fixed Charges 1. Interest paid in cash $__________ 2. PLUS Required principal
payments on $__________ Debt (except Senior Subordinated Notes)  3. PLUS Rental
expense $__________ TOTAL Fixed Charges  $__________ E.  Permitted Ratio of
Total Adjusted EBITDAR to Total Fixed Charges: Not less than_____ to 1.0
RATIO:   ____  to 1.0   10.1.4  Cash Flow Leverage  A.  Adjusted Funded Debt  1.
Current Maturities of Long Term Debt $__________ 2. PLUS Long Term Debt, less
current maturities $__________ 3. PLUS Flooring Notes Payable $__________ 4.
Total Funded Debt  $__________ 5. MINUS Subordinated Debt  $__________ 6. MINUS
Flooring Notes Payable (New and Program Inventory)  $__________ 7. MINUS Service
Loaner Vehicle Notes $__________ 8. MINUS Real Estate Debt  $__________

Page 16

--------------------------------------------------------------------------------

 

      9.   PLUS Current Asset Commitment Amount  $ __________       Total
Adjusted Funded Debt  $ __________     B.  EBITDA                 1.  
Consolidated Net Income (or Loss)  $ __________           2.   PLUS interest
expense  $ __________           3.   PLUS income tax expense  $ __________      
    4.   PLUS depreciation expense  $ __________           5.   PLUS
amortization expense  $ __________           6.   PLUS goodwill impairment
charges  $ __________           7.   PLUS stock-based compensation             
  charges  $ __________           8.   PLUS other approved non-cash             
  charges  $ __________           9.   MINUS non-cash gains  $ __________      
    10.   MINUS all extraordinary gains (or                PLUS extraordinary
losses)  $ __________           11.   PLUS or MINUS Excluded Items  $ __________
          12.   PLUS Other Income              13.   PLUS pro forma Permitted
Acquisitions                EBITDA  $ __________       Total EBITDA    
$ __________           1.   MINUS Floorplan Interest  $ __________           2.
  MINUS Real Estate Debt Interest  $ __________           3.   MINUS Required
Principal Payments                on Real Estate Debt  $ __________

Page 17

--------------------------------------------------------------------------------

      Total EBITDA MINUS Floorplan Interest, Real         Estate Debt Interest,
and Required Principal Payments         on Real Estate Debt ("Total Adjusted
EBITDA")   $__________       D.  Permitted Ratio of Total Adjusted Funded Debt
to Total         Adjusted EBITDA: Not greater than ________to 1.0          
RATIO:   ______to 1.0

Page 18

--------------------------------------------------------------------------------

EXHIBIT E
BORROWING BASE CERTIFICATE

This Borrowing Base Certificate is executed and delivered by Lithia Motors, Inc.
("Borrower") to U.S. Bank National Association, as Agent (in such capacity,
"Agent") pursuant to the requirements of Section 10.2.6 of the Loan Agreement
dated as of August 31, 2006, between Borrower, the Lenders which are from time
to time parties thereto, and Agent ("Loan Agreement"). Any capitalized terms
used herein and not defined herein shall have the meanings given to such terms
in the Loan Agreement. This Borrowing Base Certificate is prepared as of
___________________ ("Calculation Date").

     Attached are the calculations showing the status of the Borrowing Base as
of the Calculation Date. The Borrowing Base Certificate has been prepared in
accordance with the requirements of the Loan Agreement and the information
contained therein is true, accurate and complete as of the Calculation Date.

This Borrowing Base Certificate is executed on ______________________________.

LITHIA MOTORS, INC.

By:__________________________
Title:_________________________

Page 19

--------------------------------------------------------------------------------

               Borrowing Base Calculation

[Date]

(a) Vehicle Equity:            1 .  Contracts in Transit     $________    2 . 
Vehicle Receivables      $ ________     a.  Vehicle Receivables      $ ________
    b.  Less: amounts outstanding 30+ days  - $ ________   3 .  Cash on Deposit
with perfected security          interest (1)       $ ________     a.  Cash and
Cash Equivalents (per            balance sheet)     $ ________     b.  Less:   
          c.  Undeposited Cash    - $ ________     d.  Insurance Trust Accounts 
  - $ ________     e.  Ford Money Market Account  - $ ________     f. 
Ameritrade Cash Balance    - $ ________     g.  Lynwood Security Deposit Trust 
- $ ________     h.  Washington Customer Deposit Trust            Accounts     
- $ ________     i.  Nevada Sales Tax Trust Accounts  - $ ________     j. 
Nebraska Sales Tax Trust Accounts  - $ ________   4 .  Net Book Value of
Inventory      $ ________     a.  New Vehicle Inventory      $ ________     b. 
Used Vehicle Inventory (includes            Program Vehicles) held 100 days or 
+$ ________       less              c.  Flooring N/P New Vehicle    - $ ________
    d.  Flooring N/P Program Vehicle  - $ ________     e.  Vehicle Lien Payoff
(includes            discontinued operations)    - $ ________     f.  Other Debt
secured by New, Used,            Program Vehicles    - $ ________      
Discontinued Operations:            g.  New Vehicle Inventory    +$ ________    
h.  Used Vehicle Inventory (includes            Program Vehicles) held 100 days
or            less      +$ ________     i.  Flooring N/P New Vehicle    -
$ ________     j.  Flooring N/P Program Vehicle  - $ ________  

Page 20

--------------------------------------------------------------------------------

                          k.  Other debt secured by New,     $ ________        
      Used, Program Vehicles  - $ ________           Total Vehicle Equity       
$ ________ 80%   $ ________   (b)  Eligible Receivables:                  1.  
Eligible Accounts        $              a.  Customer Receivables      $ ________
            b.  Less: amounts 60+ past due  - $ ________         2.   PLUS
Insurance Receivables      $ ________         3.   PLUS Factory Receivables     
$ ________         4.   PLUS Finance Receivables      $ ________         5.  
PLUS Notes Receivable (2)      $ ________           Total Eligible Receivables 
    $ ________ 50%   $ ________   (c)  Service Loaner Vehicles                 
1.   Service Loaner Vehicles, cost      $ ________         2.   MINUS Service
Loaner Vehicles,                accumulated depreciation      $ ________        
3.   MINUS Service Loaner Vehicle Notes    $ ________           Total Service
Loaner Vehicles (3)      $ ________ 80%   $ ________   (d)  Parts & Accessories 
                    Continuing Operations:              1.   Parts and
Accessories Inventory      $ ________         2.   PLUS Materials       
$ ________         3.   MINUS Factory Trade Creditors (includes               
discontinued operations)      $ ________             Discontinued Operations:   
          4.   PLUS Parts and Accessories Inventory    $ ________         5.  
PLUS Materials        $ ________           Total Parts & Accessories     
$ ________ 65%   $ ________

Page 21

--------------------------------------------------------------------------------

 

(e)  Aircraft              1.   Lithia Aircraft, cost  $ __________         2.  
MINUS Lithia Aircraft, accumulated                depreciation  $ __________    
      Net Book Value of Aircraft  $ __________ 80%   $__________ (3)    (f) 
Equipment              1.   Continuing Operations:  $ __________         2.  
Office Equipment, cost (includes aircraft)  $ __________         3.   MINUS
Office Equipment, accumulated                depreciation $ __________        
4.   PLUS Service and Parts Equipment, cost  $ __________         5.   MINUS
Service and Parts Equipment,                accumulated depreciation 
$ __________         6.   MINUS Net Book Value of Aircraft  $ __________        
    Discontinued Operations:(4)            7.   PLUS Office Equipment, cost 
$ __________         8.   MINUS Office Equipment, accumulated               
depreciation  $ __________         9.   PLUS Service and Parts Equipment, cost 
$ __________         10.   MINUS Service and Parts Equipment,               
accumulated depreciation  $ __________           Net Equipment book value (5) 
$ __________ 35%   $ __________   (g)  Required Reduction  Minus     
$__________ (6)          Total Aggregate Borrowing Base    $__________         
Outstandings on Line of Credit and            Letters of Credit    $ __________
                             Total Revolving Loan Commitment    $__________ (7) 
        Total Revolving Loan Commitment            Minus Outstandings    $     
    Borrowing Base Minus Outstandings    $ 

Page 22

--------------------------------------------------------------------------------

Notes:
(1)   Cannot exceed $10 million
(2)   Cannot exceed $50 thousand
(3)   Lesser of 80% of nbv or $6 million
(4)   Discontinued Operations does not include $_______________ in
non-collateral assets such as Real Estate, Leasehold Improvements, Goodwill and
Other Intangible Assets classified as "Held for Sale"
(5)   Net Equipment Book Value does not include $_________________ in "Leasehold
Improvements" included in "Equipment and other" on the balance sheet
(6)   $40 million prior to February 28, 2009 or $85 million on and after
February 28, 2009, minus, in either case, permitted principal payments made on
the Senior Subordinated Notes
(7)   $150 million prior to Sixth Amendment Date; $100 million from Sixth
Amendment Date through April 30, 2009; $75 million from May 1, 2009 through
September 29, 2009; $50 million from September 30, 2009 through December 30,
2009; and $25 million on and after December 31, 2009.

Page 23

--------------------------------------------------------------------------------