Xx. Xxxxx X. Xxxxxx, President
The Enchanted Village, Inc.
0000 X. Xxxx Xxxxxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxx
Dear Xx. Xxxxxx
This letter is a purchase and sale agreement between the Xxxxxxx
Reverse Merger Fund, LLC, a Colorado limited liability company (the "Purchaser")
and The Enchanted Village, Inc., a Delaware corporation (the "Company"). Subject
to the conditions set forth herein, the Purchaser agrees to purchase 500,000
shares of company's common stock at a price of $0.10 per share. The purchase
price shall be paid in full on or before November 24, 2003. Upon request of the
Company, the purchase price may be paid in one or more installments. For
purposes of this agreement, any payments that the Purchaser makes to Continental
Stock Transfer & Trust Company or other vendors who are or may be involved in
the delivery of replacement stock certificates to the stockholders of the
Company shall be treated as partial payments of the purchase price which entitle
the Purchaser to immediate delivery of 10 shares of common stock for each dollar
so paid.
1. Purchaser's Representations.
In connection with the subscription evidenced hereby, the Purchaser
represents and warrants to the Company that it:
(a) has full power and authority to buy the common stock on the
terms set forth herein. This Agreement has been duly executed
and delivered by the Purchaser and, assuming the due
authorization, execution and delivery hereof by the Company,
constitutes the legal, valid and binding obligation of the
Purchaser enforceable in accordance with its terms;
(b) is acquiring the common stock solely for its own account, for
investment, and not with a view to any subsequent
"distribution" thereof within the meaning of that term as
defined in the Securities Act;
(c) has been given the opportunity to review all of the files and
business records of the Company including the articles of
incorporation, by-laws, documents defining the rights of
security holders, material contracts, and financial statements
and to ask questions of and receive answers from the officers,
directors, attorneys and accountants of the Company with
respect to the Common Stock, the business of the Company and
any other matters which he considered to be material and all
such questions have been answered to its full satisfaction;
(d) is purchasing the Common Stock without being furnished any
offering literature or prospectus and has not been presented
with or solicited by any leaflet, public promotional meeting,
circular, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising;
(e) has been advised that the Common Stock issuable under the
terms of this letter agreement has not been registered under
the Act;
(f) is either an "Accredited Investor" as that term is defined in
Securities and Exchange Commission Regulation D, promulgated
under the Securities Act of 1933, as amended, or a
non-accredited investor who has demonstrated his financial
sophistication and suitability to the satisfaction of the
Company, has sufficient financial and other resources to
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provide for his anticipated financial needs and has no need
for liquidity with respect to his investment in the Common
Stock;
(g) has total investments in illiquid investments that are
reasonable in relation to his net worth and can afford the
total loss of his investment in the Common Stock;
(h) understands that pending the completion of the
reclassification and reverse split described in the Company's
Schedule 14C Information statement dated February 10, 2003,
such shares will be held in uncertificated form and the
Company's transfer agent will act as the duly authorized
registrar with respect to such shares.
(i) understands that the Company will issue stop transfer
instructions to his transfer agent with respect to the Common
Stock and intends to place the following restrictive legend,
or a legend similar thereto, on each certificate representing
such securities:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED PURSUANT TO A TRANSACTION EFFECTED IN RELIANCE
UPON SECTION 4(2) OF THE SECURITIES ACT OF 1933, AS
AMENDED, (THE "ACT") AND HAVE NOT BEEN THE SUBJECT OF A
REGISTRATION STATEMENT UNDER THE ACT OR ANY STATE
SECURITIES ACT. THESE SECURITIES MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR APPLICABLE EXEMPTION THEREFROM UNDER THE ACT OR ANY
APPLICABLE STATE SECURITIES ACT."
(j) will not assign, sell, transfer, convey or hypothecate any
interest in the Common Stock to any person, unless in the
opinion of counsel reasonably satisfactory to the Company the
proposed transfer may be lawfully effected pursuant to Section
4(1) of the Act or under the applicable provisions of
Securities and Exchange Commission Rule 144;
2. Representations of the Company
In connection with this agreement, the Purchaser has been informed of
the following express representations and warranties of the Company:
(a) The Company is a corporation duly organized, validly existing,
and in good standing under the, laws of Delaware with full
corporate power and authority to own its properties and
conduct its business, and is duly qualified to conduct the
business in which it is engaged in all jurisdictions where the
conduct of its business requires qualification, except those
jurisdictions where the failure to be qualified would not have
a material adverse effect on the business or financial
condition of the Company;
(b) All documents that have been previously provided to the
Purchaser are true, correct and complete copies of the
original documents.
(c) The issuance and sale of the Common Stock has been duly and
validly authorized by all required corporate action of the
Company and will not result in a breach or violation of any of
the terms or provisions of, or constitute a default under, (i)
any indenture, mortgage, deed of trust, loan agreement, bond,
debenture, note agreement, or other evidence of indebtedness,
lease, contract, or other agreement or instrument to which the
Company is a party or by which the property of the Company is
bound, (ii) the Company's certificate of incorporation or
bylaws, or (iii) any statute or any order, rule, or regulation
of any court or governmental agency or body having
jurisdiction over the Company or its properties;
(d) Upon delivery to the Purchaser, the Common Stock will be
validly issued, fully paid, nonassessable, and free of
preemptive rights;
(e) There are no material legal or governmental proceedings
pending or threatened to which the Company is a party or of
which the business or property of the Company is the subject
that are not disclosed in materials previously provided to the
undersigned;
3. Arbitration of Disputes. In the event a dispute between the parties hereto
arises out of, in connection with, or with respect to this Agreement, or any
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breach thereof, such dispute shall, on the written request of one party
delivered to the other party, be submitted to and settled by arbitration
conducted in Denver, Colorado before a single arbitrator appointed by the
American Arbitration Association in accordance with the commercial arbitration
rules of the American Arbitration Association then in effect. The award of such
arbitrator shall be final and may be entered by any party hereto in any court of
competent jurisdiction. The party against whom the arbitrator's award is
rendered shall pay all costs and expenses of such arbitration, unless the
arbitrator shall specifically allocate costs in a different manner because the
award is not entirely in favor of either party.
4. Notices. All notices or other communications which are, or may be, required
or permitted to be given or made hereunder shall be in writing and shall be
delivered or mailed by registered or certified mail, return receipt requested,
postage prepaid, to the parties at their respective addresses set forth below.
5. Governing Law. The offer and other transactions contemplated under this
agreement shall be construed in accordance with and governed by the laws of the
State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement on the date first written above.
XXXXXXX REVERSE MERGER FUND, LLC
0000 XXX Xxxxxxx, Xxxxx 0000,
Xxxxxxxxx Xxxxxxx XX 00000-0000
By:
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THE ENCHANTED VILLAGE, INC.
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
By:
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Xxxxx X. Xxxxxx, President
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