LETTER OF INTENT
August 5, 2002
Xx. Xxxx X. Xxxxx
Xx. Xxxxxxx X. Xxxxx
c/o Paramount Financial Group, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Dear Messrs. Xxxxx and Xxxxx:
This letter evidences our mutual understanding, in principle,
whereby The Prestige Xxxxx.Xxx, Inc., a Nevada corporation
("Prestige"), will acquire, from each of you, as the sole holders
thereof (the "Sellers"), all of the issued and outstanding
capital stock (the "Paramount Shares") of Paramount Financial
Group, Inc., a Colorado corporation ("Paramount"), on the terms
outlined herein (the "Share Exchange").
1. The Parties. Prestige shall be the purchaser of the
Paramount Shares. Each of you, as the record and beneficial
owners of an aggregate of 5,000,000 shares of common stock of
Paramount, which represents all of the Paramount Shares, shall be
the Sellers. Paramount also has two wholly-owned subsidiaries,
Paramount Mortgage Investments, Inc. ("PMI"), and Paramount Real
Estate Investment Trust, Inc. ("PREI"), both Colorado
corporations, the expected ownership of which after the closing
of the proposed Share Exchange is discussed below.
2. The Nature of the Transaction. Prestige will acquire the
Paramount Shares from the Sellers. In consideration of the sale
of the Paramount Shares by the Sellers to Prestige, Prestige will
issue and deliver to the Sellers that number of shares of common
stock of Prestige as the parties shall mutually determine (the
"Prestige Shares"). We shall use our respective best efforts
promptly to value the Paramount Shares and the Prestige Shares in
a manner and utilizing methods standard for transactions of this
nature and magnitude. All of the Prestige Shares, when issued,
shall be validly issued, duly paid, non-assessable, and free and
clear of any liens and/or encumbrances. The Prestige Shares
shall be issued in a private transaction pursuant to Section 4(2)
of the Securities Act of 1933, as amended, and shall be subject
to the restrictions on transfer as set forth in Rule 144 as
promulgated by the Securities and Exchange Commission.
3. Other Provisions. As a result of the proposed Share
Exchange, Paramount will become a wholly-owned subsidiary of
Prestige. Prestige currently intends that, as soon after the
closing of the proposed Share Exchange as is practicable,
Paramount will merge with and into Prestige and be the surviving
entity. In connection with such merger, Prestige currently
expects to change its name to "Paramount Financial Group, Inc."
As a result of such merger, PMI and PREI will become, and operate
as, wholly-owned subsidiaries of the surviving entity. Prestige
also currently intends and expects that, as of the date on which
Paramount becomes a wholly-owned subsidiary of Prestige, the
present management of Paramount, PMI, and PREI would be serving
in their present positions and, therefore, would be eligible for
participation in any benefit and/or stock option plans or
programs offered to similarly-ranked officers of any other
subsidiaries of the surviving entity.
4. Due Diligence. Closing of the proposed Share Exchange is
contingent upon completion by Prestige, or its designated
representatives, of its due diligence investigation, the results
of which must be satisfactory to Prestige's board of directors,
in their sole and absolute discretion. Said due diligence
investigation shall include, but not be limited to, a review of
the financial statements, books, and corporate records of each of
Paramount, PMI, and PREI. In addition, prior to the closing of
the proposed Share Exchange, each Seller shall be afforded the
opportunity to obtain such information about Prestige as each may
deem relevant to making the decision to exchange all of the
Paramount Shares for Prestige Shares.
5. Miscellaneous. This letter is an expression of our mutual
intent and is not a binding contract. We each contemplate that
the proposed Share Exchange will be concluded pursuant to the
terms and provisions of a definitive agreement to be negotiated
by the parties, which will be signed by Prestige and each Seller.
In this regard, we contemplate that we will each make the usual
and customary representations and warranties concerning the
business and financial condition of Paramount and Prestige,
respectively, as may be appropriate in a transaction of this
nature and magnitude. The consummation of the proposed Share
Exchange shall also be subject to receipt of any necessary (a)
approvals by the board of directors and shareholders of Prestige
and/or Paramount, (b) consents of third parties, and (c)
governmental approvals. If the foregoing is acceptable, in
principle, please sign a copy of this letter in the space
provided below and return the same to us.
Very truly yours,
THE PRESTIGE XXXXX.XXX, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------
Xxxxxxx X. Xxxxx, President
ACCEPTED AND AGREED TO
As of this 5th day of August, 2002:
/s/ XXXX X. XXXXX
---------------------
Xxxx X. Xxxxx
/s/ XXXXXXX X. XXXXX
-----------------------
Xxxxxxx X. Xxxxx
