Document:

ex10-1.htm

 

STERILITE SOLUTIONS, CORP.

STERILITE SOLUTIONS, CORP.

SUBSCRIPTION AGREEMENT

1. INVESTMENT:

	
(a)  

	
The undersigned subscribes for ____________ shares of Common Stock of Sterilite Solutions, Corp., at $0.10 per share.

(b) Total subscription price ($0.10 times number of shares): = $

2. INVESTOR INFORMATION:

_______________________                                               ________________                                           _________________________________

Name (type or print)                                                                Social Sec. No.                                                      Address

_______________________                                               ________________                                           _________________________________

Name (type or print)                                                                Social Sec. No.                                                      Address

Mailing Address:

_________________________________________________________________________________

Street                                                                City                                 State                                Zip

3. TYPE OF OWNERSHIP: (You must check one box)

	
1.  

	
[   ] Individual                                                6.    [   ] Joint Tenants with rights of Survivorship

	
2.  

	
[   ] Tenants in Common                              7.    [   ] Custodian for_____________________________________

	
3.  

	
[   ] Community Property                            8.    [   ] Uniform Gifts to Minors Act of the State ______________

	
4.  

	
[   ] Partnership                                            9.    [   ] Corporation  _____________________________________

	
5.  

	
[   ] Trust                                                        10.  [   ] Other (explain)  ___________________________________

4. RECEIPT OF DISCLOSURE DOCUMENT:

By executing this subscription agreement the undersigned acknowledges receipt of a current Prospectus, as supplemented to the date of this Subscription Agreement, in which the terms and conditions of the offering of Common Stock and the risks associated therewith are described.

  

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5. TERMINATION OF THE OFFERING:

The undersigned understands that the Company may terminate the offering at any time and for any reason. If the offering is so terminated, and the Company is holding subscriptions that have not been accepted by an authorized representative of the Company, together with the un-accepted subscription agreements, then in that event the subscriptions so held shall be returned without any interest earned thereon.

6. REPRESENTATION AND WARRANTS:

By executing this subscription agreement, the undersigned represents and warrants to the Company that:

	
(a)

	
Subscriber is buying the Common Stock for Subscriber's own account or is buying for the account or benefit of a member or members of Subscriber's immediate family or in a fiduciary capacity for the account of another person or entity and is not purchasing as an agent for another. Furthermore, if Subscriber is purchasing for the account of another person or entity, Subscriber has full authority to execute this Subscription Agreement in such capacity and on behalf of such person or entity.

(b)           Subscriber is 18 years of age or over (You must check box) [   ] Yes                                                                                                                     [   ] No

 

	
 

	
 

7. ACCEPTANCE OF SUBSCRIPTION:

The undersigned hereby confirms Subscriber's understanding that the Company has the full right to accept or reject this subscription, providing that the Company must accept or reject the subscription by____________________, 2010. In case of rejection of a subscription, contributions of such persons will promptly be returned to such persons without interest thereon.

---- REST OF PAGE LEFT BLANK INTENTIONALLY----

  

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Please make a copy of your completed Subscription Agreement

Signatures:

Executed this day of 2010 at, _____________________________________________________

            Address       City                State    Zip

X__________________________                                                                                     X__________________________

Signature (investor or authorized signature)                                                                    Signature (investor or authorized signature)

MAKE CHECK PAYABLE TO:                                                                                      STERILITE SOLUTIONS, CORP.

SEND SUBSCRIPTION AGREEMENT AND CHECK TO:                                                         Sterilite Solutions, Corp.

c/o Stoecklein Law Group

402 W. Broadway

Suite 690

San Diego, California 92101

Accepted for the Company this _________day of _____________________________, 2010.

By:  _____________________________                                                                           Title:  _____________________________

           Steven A. Subick

  

3ex10-2.htm

 

Stoecklein Law Group, a Professional Corporation

Practice Limited to Federal Securities

	
Emerald Plaza

	
Telephone:  (619) 704-1310

	
402 West Broadway

	
Facsimile:  (619) 704-1325

	
Suite 690

	
email:  djs@slgseclaw.com

	
San Diego, California  92101

	
web:  www.slgseclaw.com

	  	  
	  	  
	  	  
	  	  

June 17, 2010

Steven A. Subick

President

41738 W. Hillman Dr.

Maricopa, AZ 85239

Re: Offering on a Best Efforts All or None Basis- Waiver of Rights as a Creditor

 

Dear Mr. Subick:

 

We understand that you are filing Form S-1 Registration and plan on raising money on an best efforts, all or none basis. The money raised from this offering will be put into an account that will not bar attachment from creditors. We know we may be one of those creditors and we agree to waive any rights and claims we have to funds in that account, other than any amount you pay us voluntarily pursuant to our agreement.

 

 

Sincerely

 

 

/s/Donald StoeckleinSAN WEST, INC.

CERTIFICATE OF DESIGNATION

FOR THE

SERIES A PREFERRED STOCK

Series A Preferred Stock to consist of 5,000,000 shares:

1.

Dividends.  Except as provided herein, the Holders of outstanding shares of the Series A Preferred Stock shall be entitled to receive cash, stock, or other property, as dividends when, as, and if declared by the Board of Directors of San West, Inc., a California corporation (the “Company”).  If shares of the Series A Preferred Stock or the common stock of the Company, no par value per share (the “Common Stock”) are to be issued as a dividend, any such shares shall be issued at Market Value.  “Market Value” for the Common Stock for the purposes of this Certificate of Designation shall mean the average Closing Bid Price for the Common Stock for the five business days preceding the declaration of a dividend by the Board of Directors.  “Market Value” with respect to any shares of the Series A Preferred Stock shall be as determined by the Board of Directors, whose decision shall be final and binding on all parties.

2.

Redemption Rights.  Subject to the applicable provisions of California law, the Company, at the option of its directors, may at any time or from time to time redeem the whole or any part of the outstanding Series A Preferred Stock.  Any such redemption shall be pro rata with respect to all of the Holders of the Series A Preferred Stock.  Upon redemption, the Company shall pay for each share redeemed the amount of $1.15 per share, payable in cash (the “Redemption Price”).

At least 30 days previous notice by mail, postage prepaid, shall be given to the Holders of record of the Series A Preferred Stock to be redeemed, such notice to be addressed to each such Holder at the address of such Holder appearing on the books of the Company or given by such Holder to the Company for the purpose of notice, or if no such address appears or is given, at the place where the principal office of the Company is located.  Such notice shall state the date fixed for redemption and the Redemption Price, and shall call upon the Holder to surrender to the Company on said date at the place designated in the notice such Holder’s certificate or certificates representing the shares to be redeemed.  On or after the date fixed for redemption and stated in such notice, each Holder of Series A Preferred Stock called for redemption shall surrender the certificate evidencing such shares to the Company at the place designated in such notice and shall thereupon be entitled to receive payment of the Redemption Price.  If less than all the shares represented by any such surrendered certificate are redeemed, a new certificate shall be issued representing the unredeemed shares.  If such notice of redemption shall have been duly given, and if on the date fixed for redemption funds necessary for the redemption shall be available therefor, notwithstanding that the certificates evidencing any Series A Preferred Stock called for redemption shall not have been surrendered, the dividends with respect to the shares so called for redemption shall forthwith after such date cease and determine, except only the right of the Holders to receive the Redemption Price without interest upon surrender of their certificates therefor.

If, on or prior to any date fixed for redemption of Series A Preferred Stock, the Company deposits, with any bank or trust company as a trust fund, a sum sufficient to redeem, on the date fixed for redemption thereof, the shares called for redemption, with irrevocable instructions and authority to the bank or trust company to give the notice of redemption thereof (or to complete the giving of such notice if theretofore commenced) and to pay, or deliver, on or after the date fixed for redemption or prior thereto, the Redemption Price of the shares to their respective holders upon the surrender of their share certificates, then from and after the date of the deposit (although prior to the date fixed for redemption), the shares so called shall be redeemed and any dividends on those shares shall cease to accrue after the date fixed for redemption.  The deposit shall constitute full payment of the shares to their Holders, and from and after the date of the deposit the shares shall no longer be outstanding and the Holders thereof shall cease to be stockholders with respect to such shares, and shall have no rights with respect thereto except the right to receive from the bank or trust company payment of the Redemption Price of the shares without interest, upon the surrender of their certificates therefor.  Any interest accrued on any funds so deposited shall be the property of, and paid to, the Company.  If the Holders of Series A Preferred Stock so called for redemption shall not, at the end of six years from the date fixed for redemption thereof, have claimed any funds so deposited, such bank or trust company shall thereupon pay over to the Company such unclaimed funds, and such bank or trust company shall thereafter be relieved of all responsibility in respect thereof to such Holders and such Holders shall look only to the Company for payment of the Redemption Price.

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3.

Liquidation Rights.  Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the Holders of the then outstanding shares of Series A Preferred Stock shall be entitled to receive out of the assets of the Company the sum of $1.00 per share (the “Liquidation Rate”) before any payment or distribution shall be made on the Common Stock, or any other class of capital stock of the Company ranking junior to the Series A Preferred Stock.  Upon the dissolution, liquidation or winding up of the Company, the following shall also apply:

(a)

The sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all the property and assets of the Company shall be deemed a dissolution, liquidation or winding up of the Company for purposes of this Paragraph 3, but the merger or consolidation of the Company into or with any other corporation, or the merger or consolidation of any other corporation into or with the Company, shall not be deemed a dissolution, liquidation or winding up, voluntary or involuntary, for purposes of this Paragraph 3.

(b)

After the payment to the Holders of shares of the Series A Preferred Stock of the full preferential amounts fixed by this Paragraph 3 for shares of the Series A Preferred Stock, the Holders of the Series A Preferred Stock as such shall have no right or claim to any of the remaining assets of the Company.

(c)

In the event the assets of the Company available for distribution to the Holders of the Series A Preferred Stock upon dissolution, liquidation or winding up of the Company shall be insufficient to pay in full all amounts to which such Holders are entitled pursuant to this Paragraph 3, no distribution shall be made on account of any shares of a class or series of capital stock of the Company ranking on a parity with the shares of the Series A Preferred Stock, if any, upon such dissolution, liquidation or winding up unless proportionate distributive amounts shall be paid on account of the shares of the Series A Preferred Stock, ratably, in proportion to the full distributive amounts for which Holders of all such parity shares are respectively entitled upon such dissolution, liquidation or winding up.

4.

Conversion of Series A Preferred Stock.  Subject to the terms hereof, at any time, the Holder of shares of the Series A Preferred Stock shall have the right, at such Holder’s option, to convert any number of shares of the Series A Preferred Stock into shares of the Common Stock.  Such right to convert shall commence as of the date the shares of such Series A Preferred Stock are issued to such Holder (the “Issue Date”).  In the event that the Holder of the Series A Preferred Stock elects to convert such shares into Common Stock, the Holder shall have 60 days from the date of such notice in which to tender his shares of Series A Preferred Stock to the Company.  Any such conversion shall be upon the other following terms and conditions:

(a)

Conversion Rate.  Subject to adjustment as provided herein, each share of the Series A Preferred Stock shall be convertible into one fully paid and nonassessable share of the Common Stock (the “Conversion Rate”).  Provided, however, notwithstanding anything herein contained to the contrary, no Holder may convert shares of the Series A Preferred Stock into an amount of shares of the Common Stock in excess of 10% of the number of shares of the Common Stock traded on the Principal Market or any Eligible Market on the date of any such conversion.

(b)

Conversion Price.  The conversion price (the “Conversion Price”), subject to adjustment as provided herein, for each share of the Series A Preferred Stock shall be 85% of the 20-day trailing, lowest, Closing Bid Price of the Common Stock during such 20-day period.

5.

Adjustment of Conversion Rate for Dilution and Other Events.  In order to prevent dilution of the rights granted to the Holders of shares of the Series A Preferred Stock, the Conversion Rate will be subject to adjustment from time to time as follows:

(a)

Adjustment of Conversion Rate upon Subdivision or Combination of the Common Stock.  If the Company at any time after the Issue Date subdivides (by any share split, share dividend, recapitalization or
otherwise) its outstanding Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.  If the Company at any time combines (by combination, reverse share split or otherwise) its outstanding Common Stock into a smaller number of shares and the Conversion Price in effect immediately prior to such combination will be proportionately increased.

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(b)

Reorganization, Reclassification, Consolidation, Merger, or Sale.  Any recapitalization, reorganization, reclassification, consolidation.  merger, or other similar transaction which is effected in such a way that holders of the Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for the Common Stock is referred to herein as an “Organic Change.”  Prior to the consummation of any Organic Change, the Company will make appropriate provision, in form and substance satisfactory to the Holders of a majority of the outstanding shares of the Series A Preferred Stock, to ensure that each of the Holders of shares of the Series A Preferred Stock will thereafter have the right to acquire and receive in lieu of or in addition to, as the case may be, the shares of the Common Stock immediately theretofore acquirable and receivable upon the conversion of such Holder’s Series A Preferred Stock, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for the number of shares of the Common Stock immediately theretofore acquirable and receivable upon the conversion of such Holder’s shares of the Series A Preferred Stock had such Organic Change not taken place.  In any such case, the Company will make appropriate provision, in form and substance satisfactory to the Holders of a majority of the outstanding shares of the Series A Preferred Stock, with respect to such Holders’ rights and interests to ensure that the provisions of this paragraph and Paragraph 3(c) below will thereafter be applicable to the Series A Preferred Stock.  The Company will not effect any such consolidation or  merger, unless prior to the consummation thereof the successor entity resulting from such consolidation or merger, if other than the Company, assumes, by written instrument, in form and substance satisfactory to the Holders of a majority of the outstanding shares of the Series A Preferred Stock, the obligation to deliver to each Holder of shares of the Series A Preferred Stock such shares of stock, securities or assets as, in accordance with the foregoing provisions, that such Holder may be entitled to acquire.

(c)

Notices.  Immediately upon any adjustment of the Conversion Rate, the Company will give written notice of such adjustment to each Holder of shares of the Series A Preferred Stock, setting forth in reasonable detail and certifying the calculation of such adjustment.  The Company will give written notice to each Holder of shares of the Series A Preferred Stock at least 20 days prior to the date on which the Company closes its books or takes a record with respect to any dividend or distribution upon the Common Stock, or with respect to any pro rata subscription offer to holders of the Common Stock.  The Company will also give written notice to each Holder of shares of the Series A Preferred Stock at least 20 days prior to the date on which any Organic Change, dissolution or liquidation will take place.

(d)

Purchase Rights.  If at any time the Company grants, issues or sells any options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of the Common Stock (the “Purchase Rights”), then each Holder of shares of the Series A Preferred Stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of the Common Stock acquirable upon complete conversion of the Holder’s shares of the Series A Preferred Stock immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of the Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(e)

Mechanics of Conversion.  To convert shares of the Series A Preferred Stock into full shares of the Common Stock on any date (the “Conversion Date”), the Holder thereof shall (i) deliver or transmit by facsimile to the Company, for receipt on or prior to 11:59 p.m., Pacific Time, on the Conversion Date, a copy of a fully executed notice of conversion in the form attached hereto as Exhibit A (the “Conversion Notice”), and (ii) surrender to a common carrier for delivery to the Company as soon as practicable following such date, the certificates (each a “Preferred Stock Certificate”) representing the shares of the Series A Preferred Stock being converted, or an indemnification undertaking with respect to such shares in the case of the loss, theft or destruction thereof, and the originally executed Conversion Notice.  Upon receipt by the Company of a facsimile copy of a Conversion Notice, the Company shall immediately send, via facsimile, a confirmation of receipt of such Conversion Notice to such Holder.  Within five business days of the Company’s receipt of the originally executed Conversion Notice and the Holder’s Preferred Stock Certificate(s), the Company shall issue and surrender to a
common carrier for overnight delivery to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of the Common Stock to which the Holder is entitled.

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(f)

Record Holder.  The person or persons entitled to receive shares of the Common Stock issuable upon conversion of shares of the Series A Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of the Common Stock on the Conversion Date.

(g)

Fractional Shares.  The Company shall not be required to issue any fraction of a share of the Common Stock upon any conversion.  All shares of the Common Stock, including fractions thereof, issuable upon conversion of more than one share of the Series A Preferred Stock shall be aggregated for purposes of determining whether the conversion would result in the issuance of a fraction of a share of the Common Stock.  If, after such aggregation, the issuance would result in the issuance of a fraction of it share of the Common Stock, the Company shall round such fraction of a share of the Common Stock up or down to the nearest whole share.

(h)

Reissuance of Certificates.  In the event of a conversion of less than all of the shares of the Series A Preferred Stock represented by a particular Preferred Stock Certificate, the Company shall promptly cause to be issued and delivered to the Holder of such Series A Preferred Stock a new Series A Preferred Stock Certificate representing the remaining shares of the Series A Preferred Stock which were not corrected.

6.

Reservation of Shares.  The Company shall, so long as any of the shares of the Series A Preferred Stock are outstanding, reserve and keep available out of its authorized and unissued shares of the Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred Stock, the number of shares of the Common Stock as shall from time to time be sufficient to affect the conversion of all of the outstanding shares of the Series A Preferred Stock.

7.

Preferred Status.  The rights of the shares of the Common Stock shall be subject to the preferences and relative rights of the shares of the Series A Preferred Stock.  Without the prior written consent of the Holders of not less than two-thirds (2/3) of the outstanding shares of the Series A Preferred Stock, the Company shall not hereafter authorize or issue additional or other capital stock that is of senior or equal rank to the shares of the Series A Preferred Stock in respect of the preferences as to distributions and payments upon the liquidation, dissolution and winding up of the Company described in Paragraph 3 above.

8.

Restriction on Dividends.  If any shares of the Series A Preferred Stock are outstanding, the Company shall not, without the prior written consent of the Holders of not less than two-thirds (2/3) of the then outstanding shares of the Series A Preferred Stock, directly or indirectly declare, pay or make any dividends or other distributions upon any of the Common Stock.  Notwithstanding the foregoing, this paragraph shall not prohibit the Company from declaring and paying a dividend in cash with respect to the shares of the Common Stock so long as the Company simultaneously pays each Holder of shares of the Series A Preferred Stock an amount in cash equal to the amount such Holder would have received had all of such Holder’s shares of the Series A Preferred Stock been converted to shares of the Common Stock on the business day prior to the record date for any such dividend.

9.

Vote to Change the Terms of the Series A Preferred Stock.  Without the prior written consent of the Holders of not less than two-thirds (2/3) of the outstanding shares of the Series A Preferred Stock, the Company shall not amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series A Preferred Stock.

10.

Lost or Stolen Certificates.  Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Preferred Stock Certificates representing shares of the Series A Preferred Stock, and, in the case of loss, theft or destruction, of any indemnification undertaking or bond, in the Company’s discretion, by the Holder to the Company and, in the case of mutilation, upon surrender and cancellation of the Preferred Stock Certificate(s), the Company shall execute and deliver new Series A Preferred Stock Certificate(s) of like tenor and date; provided, however, the Company shall not be obligated to re-issue Series A Preferred Stock Certificates if the Holder thereof contemporaneously requests the Company to convert such shares of the Series A Preferred Stock into the Common Stock.

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11.

Denial of Preemptive Rights.  No Holder of shares of the Series A Preferred Stock shall by reason of his holding of such shares have any preemptive or preferential rights to purchase or subscribe to any shares of any class of the Company’s capital stock now or hereafter to be authorized or any notes, debentures, bonds, or other securities convertible into or carrying options or warrants to purchase shares of any class, now or hereafter to be authorized, whether or not the issuance of any such shares, or such notes, debentures, bonds or other securities would adversely affect dividend or voting rights of Holders of shares of the Series A Preferred Stock, other than such rights, if any, as the Board of Directors in its discretion may fix; and the Board of Directors may issue shares of any class of the Company, or any notes, debentures, bonds, or other securities convertible into or carrying options or warrants to purchase shares of any class, without offering any such shares of any class, either in whole or in part, to the Holders of the Series A Preferred Stock.

12.

Voting.  On all matters submitted to a vote of the holders of the Common Stock, including, without limitation, the election of directors, a Holder of shares of the Series A Preferred Stock shall be entitled to the number of votes on such matters equal to the number of shares of the Series A Preferred Stock held by such Holder multiplied by the number of shares of the Common Stock each such share of the Series A Preferred Stock shall then be convertible into pursuant to the terms Paragraph 4 hereof.

13.

Certain Defined Terms.  For purposes of this Certificate of Designations, the following terms shall have the following meanings:

(a)

“Bloomberg” means Bloomberg Financial Markets.

(b)

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

(c)

“Closing Bid Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 5:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holders.  All such determinations shall be appropriately adjusted for any share dividend, share split, share combination or other similar transaction during the applicable calculation period.

(d)

“Eligible Market” means the Principal Market, NYSE, the Nasdaq National Market, The American Stock Exchange, The Nasdaq Capital Market, or the “Pink Sheets.”

(e)

“Holder” means any owner of shares of the Series A Preferred Stock.

(f)

“NYSE” means The New York Stock Exchange, Inc.

(g)

“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(h)

“Principal Market” means The National Association of Securities Dealers Inc.’s Over-The-Counter Bulletin Board.

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14.

Limitation on Beneficial Ownership.  The Company shall not effect and shall have no obligation to effect any conversion of shares of Series A Preferred Stock, and no Holder shall have the right to convert any shares of Series A Preferred Stock, to the extent that after giving effect to such conversion, the beneficial owner of such shares (together with such Person’s affiliates) would have acquired, through conversion of shares of the Series A Preferred Stock or otherwise, beneficial ownership of a number of shares of the Common Stock that exceeds 4.99% (“Maximum Percentage”) of the number of shares of the Common Stock outstanding immediately after giving effect to such conversion.  For purposes of the foregoing sentence, the number of shares of the Common Stock beneficially owned by a Person and its affiliates shall include the number of shares of the Common Stock issuable upon conversion of the shares of Series A Preferred Stock that are subject to a pending conversion notice for which the determination of whether the Maximum Percentage had been exceeded is being determined, but shall exclude the number of shares of the Common Stock which would be issuable upon (a) conversion of any remaining, nonconverted shares of Series A Preferred Stock beneficially owned by such Person or any of its affiliates not subject to a pending conversion notice, and (b) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any warrants) beneficially owned by such Person or any of its affiliates that are similarly subject to a limitation on conversion or exercise analogous to the limitation contained in this Paragraph 14.  Except as set forth in the preceding sentence, for purposes of this Paragraph 14, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.  For purposes of this Paragraph 14, in determining the number of outstanding shares of the Common Stock, a Holder may rely on the number of outstanding of shares of the Common Stock as reflected in (A) the Company’s most recent Form 8-K, Form 10-Q, or Form 10-K, as the case may be, (B) a more recent public announcement by the Company, or (C) any other notice by the Company or its transfer agent setting forth the number of shares of the Common Stock outstanding.  Upon the written request of any Holder, the Company shall promptly, but in no event later than one Business Day following the receipt of such notice, confirm orally and in writing to any such Holder the number of shares of the Common Stock then outstanding.  In any case, the number of outstanding shares of the Common Stock shall be determined after giving effect to all conversions of shares of Series A Preferred Stock by such Holder and its affiliates that had occurred since the date as of which such number of outstanding Common Stock was reported.  By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided that (i) any such increase will not be effective until the sixty-first day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder and not to any other Holder.

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EXHIBIT A

SAN WEST, INC.

CONVERSION NOTICE

In accordance with and pursuant to the provisions of the Certificate of Designation establishing Series A Preferred Stock of San West, Inc., the undersigned hereby elects to convert the number of shares of Series A Preferred Stock, no par value per share, of San West, Inc., a California corporation (the “Company”), indicated below into shares of the Common Stock, no par value per share (the “Common Stock”), of the Company, by tendering the stock certificate(s) representing the share(s) of the Series A Preferred Stock specified below as of the date specified below.

The undersigned acknowledges that the securities issuable to the undersigned upon conversion of shares of the Series A Preferred Stock may not be sold, pledged, hypothecated or otherwise transferred unless such securities are registered under the Securities Act of 1933, as amended, and any other applicable securities law, or the Company has received an opinion of counsel satisfactory to it that registration is not required.  A legend in substantially the following form will be placed on any certificates or other documents evidencing the securities to be issued upon any conversion of the shares of the Series A Preferred Stock:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE.  WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

Date of Conversion:

Number of shares of the Series A Preferred Stock to be converted:

Stock certificate no(s).  of the shares of the Series A Preferred Stock to be converted:

Conversion Rate:

Number of shares of the Common Stock to be issued:

Name in which shares of the Common Stock are to be issued:

Signature

Printed Name and Address

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