Excerpts of 8-K:
<<1.02. Purchase Price. In consideration of the purchase of the Shares, on the Closing Date, Southwestern will issue to the Shareholder shares of Southwestern's preferred stock (the "Preferred Stock") having a liquidation value of Two Million Two Hundred Thousand Dollars ($2,200,000).>>
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<<2.01. Preferred Stock. The Preferred Stock will be valued at its liquidation value, will be non-voting, will have a liquidation preference over all other classes of capital stock of Southwestern and will be convertible at the option of the holder thereof into shares of Southwestern's Common Stock having a value of $2,200,000 twelve (12) months following the Closing Date.>>
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<<2.04. Acquisition of Stock. The Shareholder represents and warrants that the Preferred Stock to be acquired by it pursuant to the terms of this Agreement and the Common Stock into which the Preferred Stock is convertible (collectively, the "Southwestern Stock") is being acquired for its own account, with no intention of assigning any participation or interest therein, and without a view to the distribution of any portion thereof, except in accordance with Securities Act of 1933, as amended (the "Act"). The Shareholder will not sell, assign, transfer or encumber any of such shares unless (i) a registration statement under the Act with respect thereto is in effect and the prospectus included therein meets the requirements of Section 10 of the Act, or (ii) a no-action letter is obtained from the staff of the Commission in respect of such proposed sale, assignment, transfer or encumbering, or (iii) Southwestern has received a written opinion of counsel reasonably satisfactory to it that, after an investigation of the relevant facts, such counsel is of the opinion that such proposed sale, assignment, transfer or encumbering does not require registration under the Act.
The Shareholder understands that the Southwestern Stock is not being registered under the Act and must be held indefinitely unless it is subsequently registered thereunder or an exemption from such registration is available.>>
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