AGREEMENT RELATING TO INITIAL CAPITAL
November 15, 1995
SOUTHWEST SMALL CAP EQUITY FUND, INC.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
XxXxxxx & Company I, L.P. (the "Purchaser") hereby agrees to purchase
from Southwest Small Cap Equity Fund, Inc. (the "Fund"), and the Fund hereby
agrees to sell to the Purchaser, 10,000 shares of Common Stock, par value $.001
per share, of the Fund (the "Shares"), at an aggregate price of $100,000, or
$10.00 per share.
In conjunction with the purchase by the Purchaser of the Shares, the
Purchaser hereby represents that it is acquiring the Shares for investment with
no intention of reselling or otherwise distributing the Shares. The Purchaser
hereby further agrees that any transfer of any of the Shares or any interest
therein shall be subject to the following conditions:
1. The Purchaser shall furnish you and counsel satisfactory to
you prior to the time of transfer, a written description of
the proposed transfer specifying its nature and consequence
and giving the name of the proposed transferee.
2. You shall have obtained from your counsel a written opinion
stating whether in the opinion of such counsel the proposed
transfer may be effected without registration under the
Securities Act of 1933. If such opinion states that such
transfer may be so effected, the Purchaser shall then be
entitled to transfer the Shares in accordance with the terms
specified in its description of the transaction to you. If
such opinion states that the proposed transfer may not be so
effected, the Purchaser will not be entitled to transfer the
Shares unless the Shares are registered.
The Purchaser hereby authorizes you to take such action as you shall
reasonably deem appropriate to prevent any violation of the Securities Act of
1933 in connection with the transfer of the Shares, including the imposition of
a requirement that any transferee of the Shares sign a letter agreement similar
to this one. The Purchaser agrees that in the event the Shares are sold by the
Purchaser or its successors or any current holder prior to the complete
amortization of organization expenses by the Fund the proceeds payable in
respect of the Shares shall be reduced by the pro-rata share (based on the
proportionate share of the Shares sold to the total number of the Shares
outstanding at the time of sale) of the then unamortized deferred organization
expenses as of the date of such redemption.
Very truly yours,
XxXXXXX & COMPANY I, L.L.P.
Agreed to and accepted by:
SOUTHWEST SMALL CAP EQUITY By:
FUND, INC. Xxxx X. XxXxxxx, Chairman of the Board
Xxxx X. XxXxxxx, President