Common use of LACK OF REGISTRATION OF STOCK Clause in Contracts

LACK OF REGISTRATION OF STOCK. Each Shareholder understands that: (a) the offer and sale of the Class A Common Stock and Series M Preferred Stock to be issued to the Shareholder pursuant to the Plan of Merger and any additional shares of Class A Common Stock which may be issued upon a conversion of the Series M Preferred Stock have not been registered under the Securities Act of 1933, as amended, or any state securities laws in reliance upon exemptions from registration; (b) the shares of Class A Common Stock and Series M Preferred Stock must be held indefinitely, unless their resale is subsequently registered under the Securities Act of 1933, as amended, and under applicable state securities laws or unless exemptions from registration are available; (c) except as provided in the Registration Rights Agreement, Lithia has not agreed to register the resale of any of the securities to be received by the Shareholders; (d) the Class A Common Stock and Series M Preferred Stock may not be offered, sold, transferred, pledged or otherwise disposed of in the absence of either an effective registration statement under the Securities Act of 1933 and applicable state securities laws or an opinion of counsel acceptable to Lithia that such registration is not required; and (e) the certificates representing Series M Preferred Stock and the Class A Common Stock (including any additional shares of Class A Common Stock which may be issued upon a conversion of the Series M Preferred Stock) will contain the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NO OFFER, SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE SHARES MAY BE EFFECTED IN THE ABSENCE OF EITHER AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.