PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of the 13th of June, 2002, by and between the
following:
ASHFORD CAPITAL LLC, a California limited liability
company (hereinafter "Seller"); and
AIRLINE COMMUNICATIONS, LTD., a Nevada corporation
(hereinafter "Buyer").
W I T N E S S E T H
WHEREAS, subject to the terms and conditions of this
Agreement, Buyer and Seller desire for Buyer to purchase from
Seller and for Seller to sell to Buyer all of Seller's interest
in Two Million Six Hundred Sixty Thousand (2,660,000) shares of
the outstanding common stock of THE PRESTIGE XXXXX.XXX, INC., a
Nevada corporation, (the "Acquired Prestige Shares", "Prestige
Common Stock" and "Prestige", respectively), which Acquired
Prestige Shares constitutes approximately sixty-one Percent (61%)
of all of the issued and outstanding Prestige Common Stock; and
WHEREAS, the Buyer deems it desirable and in the best
interests of Buyer that Buyer purchases the Acquired Prestige
Shares in consideration of cash in the amount of $326,000.00 as
evidenced by the promissory note of Buyer (the "Buyer's Note")
and other consideration as set forth hereinbelow; and
WHEREAS, Seller deems it desirable and in the best interests
of Seller that Seller sells the Acquired Prestige Shares to
Buyer; and
WHEREAS, Buyer and Seller desire to provide for certain
undertakings, conditions, representations, warranties, and
covenants in connection with the transactions contemplated by
this Agreement; and
WHEREAS, Seller and Buyer have approved and adopted this
Agreement, subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties
hereto do hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 "Acquired Prestige Shares", "Agreement", "Buyer",
"Buyer's Note", "Prestige" "Prestige Common Stock" and "Seller",
respectively, shall have the meanings defined in the foregoing
preamble and recitals to this Agreement.
1.2 "Closing Date" shall mean 10:00 a.m., local time, July
16, 2002, at Newport Beach, California, the date on which the
parties hereto shall close the transactions contemplated herein;
provided that the parties can change the Closing Date and place
of Closing to such other time and place as the parties shall
mutually agree, in writing. As of the Closing Date, all Exhibits
to this Agreement shall be complete and attached to this
Agreement.
SECTION 2
AGREEMENT FOR PURCHASE AND SALE OF ACQUIRED PRESTIGE SHARES
2.1 Substantive Terms of the Purchase and Sale of Acquired
Prestige Shares.
Seller shall sell and deliver to Buyer Two Million Six
Hundred Sixty Thousand shares of Prestige Common Stock, which
constitutes approximately sixty-one percent (61%) of the issued
and outstanding Prestige Common Stock in a form enabling Buyer,
then and there, to become the record and beneficial owner of said
common stock.
2.2 Consideration Paid by Buyer.
Buyer shall deliver to Seller the Buyer's Note in the
initial principal amount of Three Hundred Twenty-Six Thousand
Dollars ($326,000.00) made payable to Seller. The Buyer's Note
shall bear interest at the rate of five percent (5%) per annum,
with the entire principal balance and accrued interest thereon
being due and payable, in full, Ninety (90) days following the
Closing Date. The Buyer's Note shall be in the form attached
hereto as Exhibit "2.2(a)". The performance by Buyer of its
obligations under the Buyer's Note shall be secured by the
certain collateral, as further described in the provisions of the
Security Agreement to be entered into as of the Closing Date by
and between Buyer and Seller (hereinafter referred to as the
"Security Agreement"), in form attached hereto as Exhibit
"2.2(b)".
SECTION 3
REPRESENTATIONS AND WARRANTIES OF BUYER
BUYER, in order to induce Seller to execute this Agreement
and to consummate the transactions contemplated herein,
represents and warrants to Seller, as follows:
3.1 Organization and Qualification. Buyer is a corporation
duly organized, validly existing, and in good standing under the
laws of Nevada, with all requisite power and authority to own its
property and to carry on its business as it is now being
conducted. Buyer is duly qualified as a foreign corporation and
in good standing in each jurisdiction where the ownership, lease,
or operation of property or the conduct of business requires such
qualification, except where the failure to be in good standing or
so qualified would not have a material, adverse effect on the
financial condition or business of Buyer.
3.2 Authorization and Validity. Buyer has the requisite
power and is duly authorized to execute and deliver and to carry
out the terms of this Agreement. The board of directors and
stockholders of Buyer have taken all action required by law, its
Articles of Incorporation and Bylaws, or otherwise, to authorize
the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, subject to the
satisfaction or waiver of the conditions precedent set forth in
Section 7 of this Agreement. Assuming this Agreement has been
approved by all action necessary on the part of Seller, this
Agreement is a valid and binding agreement of Buyer.
3.3 No Defaults. Buyer is not in default under or in violation
of any provision of its Articles of Incorporation or Bylaws.
Buyer is not in default under or in violation of any material
provision of any indenture, mortgage, deed of trust, lease, loan
agreement, or other agreement or instrument to which it is a
party or by which it is bound or to which any of its assets is
subject, if such default would have a material, adverse effect on
the financial condition or business of Buyer. Buyer is not in
violation of any statute, law, ordinance, order, judgment, rule,
regulation, permit, franchise, or other approval or authorization
of any court or governmental agency or body having jurisdiction
over it or any of its properties which, if enforced, would have a
material, adverse effect on the financial condition or business
of Buyer. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated herein,
will conflict with or result in a breach of or constitute a
default under any of the foregoing or result in the creation of
any lien, mortgage, pledge, charge, or encumbrance upon any asset
of Buyer and no consents or waivers thereunder are required to be
obtained in connection therewith in order to consummate the
transactions contemplated by this Agreement.
3.4 Documents. The copies of all agreements and other
instruments that have been delivered by Buyer to Seller are true,
correct, and complete copies of such agreements and instruments
and include all amendments thereto.
3.5 Disclosure. The representations and warranties made by
Buyer herein and in any schedule, statement, certificate, or
document furnished or to be furnished by Buyer to Seller pursuant
to the provisions hereof or in connection with the transactions
contemplated hereby, taken as a whole, do not and will not as of
their respective dates contain any untrue statements of a
material fact, or omit to state a material fact necessary to make
the statements made not misleading.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller, in order to induce Buyer to execute this Agreement
and to consummate the transactions contemplated herein,
represents and warrants to Buyer as follows:
4.1 Organization and Qualification. Prestige is a Nevada
corporation, duly organized, validly existing, and in good
standing under the laws of the State of Nevada with all requisite
power and authority to own its property and assets and to carry
on its business as it is now being conducted. Prestige is
qualified as a foreign corporation and is in good standing in
each jurisdiction where the ownership, lease, or operation of
property or the conduct of its business requires such
qualification, except where the failure to be in good standing or
so qualified would not have a material, adverse effect on the
financial condition and business of Prestige.
4.2 Ownership of Acquired Prestige Shares. Prestige is
authorized to issue two classes of stock, of up to Fifty Million
(50,000,000) shares of common stock, $0.001 par value per share,
and up to Five Million (5,000,000) shares of preferred stock,
$0.001 par value per share. At the date hereof, Four Million
Three Hundred sixty-six Thousand Four Hundred ninety-four
(4,366,494) shares of common have been validly issued and are
outstanding, fully paid, and non-assessable. As of this date, no
shares of preferred stock are issued or outstanding and no class
or series of preferred stock have been designated or determined
by Prestige. There are no options, warrants, or other securities
exercisable or convertible into or any calls, commitments, or
agreements of any kind relating to any unissued equity securities
of Prestige.
4.3 Authorization and Validity. Seller has the requisite
power and is duly authorized to execute and deliver and to carry
out the terms of this Agreement. Assuming this Agreement has
been approved by all action necessary on the part of Buyer, this
Agreement is a valid and binding agreement of Seller.
4.4 SEC Documents; Financial Statements. As of the Closing,
Prestige has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act") (all of the foregoing filed
prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to
as the "SEC Documents"). As of their respective dates, the SEC
Documents substantially complied in all material respects with
the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with
the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As
of their respective dates, the financial statements of the
Company included in the SEC Documents substantially complied as
to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been
prepared in
substantial accordance with generally accepted accounting
principles, consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or
may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the
dates thereof and the results of its operations and cash flows
for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Prestige to the Buyer
which is not included in the SEC Documents, including, without
limitation, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstance under which
they are or were made, not misleading. Neither Prestige nor any
of its officers, directors, employees or agents have provided the
Buyer with any material, nonpublic information.
4.5 Absence of Certain Changes. Since the most recent
filing by Prestige with the SEC, there has been no material
adverse change and no material adverse development in the
business, properties, operations, financial condition, results of
operations or prospects of Prestige. Prestige has not taken any
steps, and does not currently expect to take any steps, to seek
protection pursuant to any bankruptcy law nor does Prestige have
any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings.
4.6 Compensation Due Employees. Prestige will not have any
outstanding liability for payment of wages, payroll taxes,
vacation pay (whether accrued or otherwise), salaries, bonuses,
pensions, contributions under any employee benefit plans or other
compensation, current or deferred, under any labor or employment
contracts, whether oral or written, based upon or accruing in
respect of those services of employees of Prestige that have been
performed prior to the Closing Date, except as specified on
Exhibit 4.6 hereto. On the Closing Date, Prestige will not have
any unfunded, contingent or other liability under any defined
benefits plan or any other retirement or retirement-type plan,
whether such plan(s) are to continue or are thereupon terminated,
except for the normal on-going obligations for future
contributions under such plan(s) not related, generally or
specifically, to the termination of such plan(s) or except as
specified on Exhibit 4.6 hereto.
4.7 Union Agreements and Employment Agreements. Prestige
is not a party to any union agreement or any organized labor
dispute. Prestige has no written or verbal employment agreements
with any of its employees, except as listed in Exhibit 4.7
hereto.
4.8 Contracts and Leases. Except as listed in Exhibit 4.8
hereto, Prestige is not a party to any written or oral leases,
commitments, or any other agreements. On the Closing Date,
Prestige has paid or performed in all material respects all
obligations required to be paid or performed by it to such date
and will not be in default under any document, contract,
agreement, lease, or other commitment to which it is a party.
4.9 Insurance. All insurance against losses or damages or
other risks which are in force for the benefit of Prestige are
set forth in Exhibit 4.9 hereto.
4.10 Liabilities. Prestige has no liabilities that are not
disclosed in the SEC Documents, except as described in Exhibit
4.10 hereto.
4.11 Contracts and Agreements. Prestige is not a party to
any material contracts or agreements in respect of the operation
of its business, except as listed in Exhibit 4.11 hereto.
4.12 Minute Books. The minute books of Prestige contain
true, complete, and accurate records of all meetings and other
corporate actions of its shareholders and Board of Directors, and
true and accurate copies thereof have been delivered to Buyer
prior to the Closing Date. The signatures appearing on all
documents contained therein are the true signatures of the
persons purporting to have signed the same.
4.13 Litigation. Except as set forth in Exhibit 4.13, there
are no actions, suits, proceedings, orders, investigations, or
claims (whether or not purportedly on behalf of Prestige) pending
against or affecting Prestige at law or in equity or before or by
any federal, state, municipal, or other governmental department,
commission, board, agency, or instrumentality, domestic or
foreign, nor has any such action, suit, proceeding, or
investigation been pending or threatened in writing during the 12-
month period preceding the date hereof, which, if adversely
determined, would materially and adversely affect the financial
condition of Prestige or which seeks to prohibit, restrict, or
delay the consummation of the stock sale contemplated hereby.
Prestige is not operating under or subject to, or in default with
respect to, any order, writ, injunction, or decree of any court
or federal, state, municipal, or other governmental department,
commission, board, agency, or instrumentality.
4.14 Taxes. At the Closing Date, all tax returns required
to be filed with respect to the operations or assets of each of
Prestige prior to Closing Date have been correctly prepared in
all material respects and timely filed, and all taxes required to
be paid in respect of the periods covered by such returns have
been paid in full or adequate reserves have been established for
the payment of such taxes. Except as set forth in Exhibit 4.14,
as of the Closing Date, Prestige has not requested any extension
of time within which to file any tax returns, and all known
deficiencies for any tax, assessment, or governmental charge or
duty shall have been paid in full or adequate reserves have been
established for the payment of such taxes. The Prestige Tax
Returns are true and complete in all material respects. No
audits by federal or state authorities are currently pending or
threatened.
4.15 No Defaults. Prestige is not in default under or in
violation of any provision of its Articles of Incorporation or
Bylaws. Prestige is not in default under or in violation of any
material provision of any indenture, mortgage, deed of trust,
lease, loan agreement, or other agreement or instrument to which
it is a party or by which it is bound or to which any of its is
subject, if such default would have a material, adverse effect on
the financial condition or business of Prestige. Prestige is not
in violation of any statute, law, ordinance, order, judgment,
rule, regulation, permit, franchise, or other approval or
authorization of any court or governmental agency or body having
jurisdiction over it or any of its properties which, if enforced,
would have a material, adverse effect on the financial condition
or business of Prestige. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions
contemplated herein, will conflict with or result in a breach of
or constitute a default under any of the foregoing or result in
the creation of any lien, mortgage, pledge, charge, or
encumbrance upon any asset of Prestige and no consents or waivers
thereunder are required to be obtained in connection therewith in
order to consummate the transactions contemplated by this
Agreement.
4.16 Documents. The copies of all agreements and other
instruments that have been delivered by Seller to Buyer are true,
correct, and complete copies of such agreements and instruments
and include all amendments thereto.
4.17 Disclosure. The representations and warranties made by
Seller herein and in any schedule, statement, certificate, or
document furnished or to be furnished by Prestige and/or Seller
to Buyer pursuant to the provisions hereof or in connection with
the transactions contemplated hereby taken as a whole do not and
will not as of their respective dates contain any untrue
statements of a material fact, or omit to state a material fact
necessary to make the statements made not misleading.
SECTION 5
BROKERAGE
5.1 Brokers and Finders. Except as set forth in Exhibit
5.1, neither Buyer nor Seller, or any of their respective
officers, directors, employees, or agents, has employed any
broker, finder, or financial advisor or incurred any liability
for any fee or commissions in connection with initiating the
transactions contemplated herein. Each party hereto agrees to
indemnify and hold the other party harmless against or in respect
of any commissions, finder's fees, or brokerage fees incurred or
alleged to have been incurred with respect to initiating the
transactions contemplated herein as a result of any action of the
indemnifying party.
SECTION 6
CLOSING AGREEMENTS
6.1 Closing Agreements. On the Closing Date, the following
activities shall occur, the following agreements shall be
executed and delivered, and the respective parties thereto shall
have performed all acts that are required by the terms of such
activities and agreements to have been performed simultaneously
with the execution and delivery thereof as of the Closing Date:
(a) Seller shall have executed and delivered documents
to Buyer sufficient then and there to transfer record and
beneficial ownership to Buyer of the Acquired Prestige
Shares, consisting of 2,660,0000 shares of common stock of
Prestige;
(b) Buyer shall have delivered the duly executed Buyer's Note to
Seller;
(c) Seller and Buyer shall have executed the Security Agreement
and the Collateral Agent Agreement;
(d) Seller shall deliver to Buyer a resolution of the Board of
Directors of Prestige appointing Xxxxxxx X. Xxxxx to the Board of
Directors of Prestige and the written resignations of all other
officers and directors of Prestige effective as of the Closing
Date.
SECTION 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS TO CLOSE
The obligations of Buyer to consummate this Agreement are
subject to satisfaction on or prior to the Closing Date of the
following conditions:
7.1 Representations and Warranties. The representations
and warranties of Seller contained in this Agreement shall be
true and correct in all material respects on and as of the
Closing Date, and Seller shall have performed in all material
respects all of his obligations hereunder theretofore to be
performed.
7.2 Other. The joint conditions precedent in Section 9
hereof shall have been satisfied and all documents required for
Closing shall be acceptable to Counsel for Buyer.
SECTION 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS TO CLOSE
The obligation of Seller to consummate this Agreement is
subject to the satisfaction on or prior to the Closing Date of
the following conditions:
8.1 Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement shall be true
and correct in all material respects on and as of the Closing
Date, and Buyer shall have performed in all material respects all
of its obligations hereunder theretofore to be performed.
8.2 Other. The joint conditions precedent in Section 9
hereof shall have been satisfied.
SECTION 9
JOINT CONDITIONS PRECEDENT
The obligations of Buyer and Seller to consummate this
Agreement shall be subject to satisfaction or waiver in writing
by all parties of each and all of the following additional
conditions precedent at or prior to the Closing Date:
9.1 Other Agreements. All of the agreements contemplated
by Section 6.1 of this Agreement shall have been executed and
delivered, and all acts required to be performed thereunder as of
the Closing Date shall have been duly performed, including,
without limitation, completion of all exhibits to this Agreement.
9.2 Absence of Litigation. At the Closing Date, there
shall be no action, suit, or proceeding pending or threatened
against any of the parties hereto by any person, governmental
agency, or subdivision thereof, nor shall there be pending or
threatened any action in any court or administrative tribunal,
which would have the effect of inhibiting the consummation of the
transactions contemplated herein.
SECTION 10
TERMINATION AND WAIVER
10.1 Termination. This Agreement may be terminated and
abandoned on the Closing Date by:
(a) the mutual consent in writing of the parties
hereto;
(b) Buyer, if the conditions precedent in Sections 7
and 9 of this Agreement have not been satisfied or waived by
the Closing Date; and
(c) Seller, if the conditions precedent in Sections 8
and 9 of this Agreement have not been satisfied or waived by
the Closing Date.
If this Agreement is terminated pursuant to Section
10.1, the parties hereto shall not have any further obligations
under this Agreement, and each party shall bear all costs and
expenses incurred by it.
SECTION 11
NATURE AND SURVIVAL OF REPRESENTATIONS, ETC.
11.1 All statements contained in any certificate or other
instrument delivered by or on behalf of Buyer or Seller pursuant
to this Agreement or in connection with the transactions
contemplated hereby shall be deemed representations and
warranties by such party. All representations and warranties and
agreements made by Buyer or Seller in this Agreement or pursuant
hereto shall survive the Closing Date hereunder until the
expiration of the 12th month following the Closing Date.
SECTION 12
MISCELLANEOUS
12.1 Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if written and
delivered in person or sent by registered mail, postage prepaid,
addressed as follows:
to Seller: Ashford Capital LLC
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
to Buyer: Airline Communications, Ltd.
0000 Xx. Xxxxxx Xx.
Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Tell: (000) 000-0000
Fax: (000) 000-0000
or such other address as shall be furnished in writing by the
appropriate person, and any such notice or communication shall be
deemed to have been given as of the date so mailed.
12.2 Time of the Essence. Time shall be of the essence of
this Agreement.
12.3 Costs. Each party will bear the costs and expenses
incurred by it in connection with this Agreement and the
transactions contemplated hereby.
12.4 Cancellation of Agreement. In the event that this
Agreement is canceled by mutual agreement of the parties or by
failures of any of the conditions precedent set forth in
Paragraphs 7, 8 and 9, neither Seller nor Buyer shall be entitled
to any damages, fees, costs or other consideration.
12.5 Entire Agreement and Amendment. This Agreement and
documents delivered at the Closing Date hereunder contain the
entire agreement between the parties hereto with respect to the
transactions contemplated by this Agreement and supersedes all
other agreements, written or oral, with respect thereto. This
Agreement may be amended or modified in whole or in part, and any
rights hereunder may be waived, only by an agreement in writing,
duly and validly executed in the same manner as this Agreement or
by the party against whom the waiver would be asserted. The
waiver of any right hereunder shall be effective only with
respect to the matter specifically waived and shall not act as a
continuing waiver unless it so states by its terms.
12.6 Counterparts. This Agreement may be executed in one or
more counterparts each of which shall be deemed to constitute an
original and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
party.
12.7 Governing Law. This Agreement shall be governed by,
and construed and interpreted in accordance with, the laws of the
State of California.
12.8 Attorneys' Fees and Costs. In the event any party to
this Agreement shall be required to initiate legal proceedings to
enforce performance of any term or condition of this Agreement,
including, but not limited to, the interpretation of any term or
provision hereof, the payment of moneys or the enjoining of any
action prohibited hereunder, the prevailing party shall be
entitled to recover such sums, in addition to any other damages
or compensation received, as will reimburse the prevailing party
for reasonable attorneys' fees and court costs incurred on
account thereof (including, without limitation, the costs of any
appeal) notwithstanding the nature of the claim or cause of
action asserted by the prevailing party.
12.9 Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their
respective heirs, executors, personal representatives,
successors, and assigns, as the case may be.
12.10 Access to Counsel. Each party hereto acknowledges
that each has had access to legal counsel of her or its own
choice and has obtained such advice therefrom, if any, as such
party has deemed necessary and sufficient prior to the execution
hereof. Each party hereto acknowledges that the drafting of this
Agreement has been a joint effort and any ambiguities or
interpretative issues that may arise from and after the execution
hereof shall not be decided in favor or, or against, any party
hereto because the language reflecting any such ambiguities or
issues may have been drafted by any specific party or her or its
counsel.
12.11 Captions. The captions appearing in this
Agreement are inserted for convenience of reference only and
shall not affect the interpretation of this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
AIRLINE COMMUNICATIONS, LTD.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
President
"Buyer"
ASHFORD CAPITAL, LLC
By: /s/ Xxxxx Xxxxxxxxx
-------------------
Xxxxx Xxxxxxxxx
Chairman
"Seller"
