EXHIBIT 2.1
AMENDMENT TO ACQUISITION AGREEMENT
This Agreement dated the 6th day of July 2002 between Lending Services
Corporation dba Las Vegas Mortgage, a Nevada Corporation (the SELLER or the
Company) and Consumer Direct of America Inc., a Nevada corporation, with its
principal place of business in Santa Ana, California ("BUYER").
WITNESS
WHEREAS, SELLER owns 1,000 shares (the "Shares") of the Company which constitute
all of the outstanding and issued common shares of the Company, and which SELLER
wishes to exchange with BUYER for shares of BUYER and which BUYER wishes to
acquire from SELLER on the terms hereinafter set forth;
WHEREAS, the Company deems that it is in its best interest of the Company for
BUYER to purchase the Shares, and the Company is entering into this Agreement to
induce the BUYER to enter into this tax-free exchange of Shares in accordance
with this Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
1. EXCHANGE OF SHARES:
1.1 At the Closing which will occur on or about July 6th,
2002, SELLER will exchange, assign and deliver to
BUYER all of their respective shares of the Company
in exchange for Two Million Four Hundred Thousand
(2,400,000) shares of the common stock of BUYER,
subject and according to the terms and conditions of
this Section. The 2,400,000 shares of BUYERS stock
shall he apportioned among SELLER as follows:
Xxxxxxx X. Xxxxxxxx 2,400,000
2. CASH PAYMENT
2.1 In addition to 1.1 above, SELLER will receive a cash
payment of $100,000 at closing.
3. STOCK VALUATION PROTECTION
3.1 Twelve months from the closing date, the average
closing price of the BUYER's trading stock from the
previous five (5) trading days as listed on
XXXXXX.xxx shall be calculated and if the price per
share is less than one dollar ($1.00) per share,
SELLER shall be entitled to ADDED SHARES according to
the following formula. Two million dollars $2,000,000
shall be divided by the calculated share price to
determine the NEW SHARES. The NEW SHARES
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calculation shall be compared with 2,400,000 shares
issued at closing and the difference between the two
shall be deemed to be the ADDED SHARES. BUYER shall
issue the ADDED SHARES to SELLER at no cost to
SELLER. No ADDED SHARES shall be issued if the
trading price referenced above is one dollar ($1.00)
per share or greater.
The parties agree that these exchanges shall be
treated for all as a tax-free reorganization (REORG)
pursuant to Sections 354 and 368 of the Internal
Revenue Code.
4. PURCHASE OF LAS VEGAS REALTY
4.1 In addition to 2.1 above, SELLER will receive 250,000
shares of the Company's freely trading stock as
consideration for all the outstanding shares of stock
in Las Vegas Real Estate Company. Said shares are to
be distributed as follows:
Xxxxxxx X. Xxxxxxxx 250,000 shares
5. COVENANTS OF SELLER
5.1 From the date of this Agreement until the second
anniversary thereof, SELLER will not engage directly
or indirectly in developing or operating a call
center based direct solicitation mortgage brokerage
business (the "Business), except in connection with
the Company's call center based direct solicitation
mortgage brokerage business, and will not Invest in
or provide loans or other credit facilities to any
person, corporation, partnership or other entity
which engages directly or indirectly in any aspect of
the Business, but this covenant will not preclude
SELLER from acquiring securities which are traded
publicly.
5.2 SELLER will not use or disclose any trade secrets or
other proprietary or confidential information
pertaining to any aspect of the Business.
5.3 SELLER acknowledge that violation of any of the
provisions of this Section 2 will cause irreparable
loss and harm to both the Company and BUYER, which
cannot be reasonably or adequately compensated by
damages in an action at law. Accordingly, in the
event of a breach or related breach by SELLER of any
of the provisions of this Section 2, each of the
Company and BUYER shall be entitled to injunctive and
other equitable relief to prevent or cure any breach
or threatened breach thereof, and SELLER agree that
it will not be a defense to any request for such
relief that Company or BUYER has an adequate remedy
at law.
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5.4 Notwithstanding the foregoing, the Company and BUYER
shall have other legal remedies as may be appropriate
under the circumstance including, inter alla,
recovery of damages occasioned by such breach. For
purposes of any proceeding under or with respect to
this Section 2, SELLER, the Company and BUYER submit
to the non-exclusive jurisdiction of the courts of
the State of California and of the United States
located in the County of Orange State of California;
and each agrees not to raise, and waives any
objection to or defense based on the venue of any
such court.
5.5 If it is determined that any of the provisions of
this Section 2 to be unreasonable in scope, time or
geography, SELLER, and Company are able to enforce
the same in such narrower scope, shorter time or
lesser geography as such court determines to be
reasonable under all the circumstances.
6. REPRESENTATIONS AND WARRANTIES OF SELLER
6.1 SELLER represents and warrants to the BUYER as
follows:
(a) The Company is duly incorporated and validly
existing under the laws of Nevada; the
Company is duly qualified to conduct
business in all jurisdictions where it is
required to qualify; the Company has the
corporate power and authority to execute,
deliver and perform this Agreement and any
other agreement or document executed by
either of them under or in connection with
this Agreement; and the Company has taken
all necessary corporate action to authorize
the execution, delivery and performance of
this Agreement and any such other agreement
or document. This Agreement constitutes, and
any such other agreement or document when
executed will constitute, the legal, valid
and binding obligations of SELLER and the
Company enforceable against SELLER and the
Company in accordance with their respective
terms.
(b) Neither the execution nor delivery of this
Agreement nor the transactions contemplated
herein, nor compliance with the terms and
conditions of this Agreement will:
(i) contravene any provision of law or
any statute, decree, rule or
regulation binding upon SELLER or
the Company or contravene any
judgment, decree, franchise, order
or permit applicable to SELLER or
the Company; or
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(ii) conflict with or result in any
breach of any terms, covenants,
conditions or provisions of, or
Constitute a default (with or
without the giving of notice or
passage of time or both) under the
Articles of Incorporation or
By-Laws of the Company or any
agreement or other instrument to
which SELLER or the Company is a
party or by which either is bound,
or result in the creation or
imposition of any lien, security
interest, charge or encumbrance
upon any of the assets, rights,
contracts or other property of the
Company.
(c) All authorizations, consents approvals of,
or exemptions by, any governmental, judicial
or public body or authority required to
authorize, or required in connection with
(i) the execution, delivery and performance
of this Agreement by SELLER and the Company,
or (ii) any of the transactions contemplated
by this Agreement, or (iii) any of the
certificates instruments or agreements
executed by SELLER or the Company in
connection with Agreement or (iv) the taking
of any action by SELLER or the Company, have
been or at the Closing will have been
obtained and at the Closing will be in full
force and effect.
(d) EXHIBIT A herein contains true and complete
copies of the Articles of Incorporation and
By-Laws of the Company, and the same have
not been amended and are in full force and
effect.
(e) The Company has filed all tax returns that
it has been required to file and has paid
all taxes and interest and penalties, if
any, which it has been required to pay.
(f) EXHIBIT B sets forth all of the assets and
liabilities, tangibles and intangibles of
the Company, including third party
contracts. All of the information concerning
the Company's Assets contained in said
EXHIBITS is true and correct.
(g) There is no litigation or arbitration or
administrative proceeding or claim asserted
pending or threatened respecting or
involving the business or the Company or any
of the Company Assets or other assets of the
Company.
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(h) EXHIBIT C contains a full list of all the
officers, directors, employees and agents of
the Company, their salaries and other
compensation (cash and deferred).
7. REPRESENTATIONS AND WARRANTIES OF BUYER
7.1 BUYER represents and warrants to SELLER and the
Company as follows:
(a) BUYER is duly incorporated and validly
existing under the laws of Nevada: it has
the corporate power and authority to
execute, deliver and perform this Agreement
and any other agreement or document executed
by it under or in connection with this
Agreement; and has taken all necessary
corporate action to authorize the execution,
delivery and performance of this Agreement
and any such other agreement or document.
This Agreement constitutes the legal, valid
and binding obligations of BUYER enforceable
against BUYER in accordance with its
respective terms.
(b) Neither the execution nor delivery of this
Agreement, nor the transactions contemplated
herein, nor compliance with the terms and
conditions of this Agreement will:
(i) contravene any provision of law or
any statute, decree, or regulation
binding upon BUYER or containing
any judgment, decree, franchise,
order or permit applicable to
BUYER.
8. INDEMNITIES
8.1 The representations and warranties of the Company,
SELLER and BUYER will be deemed made on execution of
this Agreement and at the simultaneous Closing, and
all of those representations and warranties and all
of the covenants and obligations of the parties under
this Agreement will survive the Closing.
8.2 BUYER will hold each of SELLER and the Company
harmless from and pay any loss, damage, cost or
expense (including, without limitation, legal fees
and court costs) which either SELLER or the Company
incurs by reason of any representation or warranty of
BUYER being incorrect or by reason of any breach by
BUYER of any of its covenants or obligations under
this Agreement.
8.3 The Company will hold BUYER harmless from and pay any
loss, damage, cost or expense (including, without
limitation, legal fees
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and court costs) which BUYER incurs by reason of any
representation or warranty of the Company being
incorrect or by reason of any breach by the Company
of any of its covenants or obligations under this
Agreement
8.4 SELLER, Jointly and severally will hold BUYER
harmless from and pay any loss damage, cost or
expense (including, without limitation, legal fees
and court costs) which BUYER incurs by reason of any
representation or warranty of SELLER being incorrect
by reason of any breach by SELLER of any of their
covenants or obligations under this Agreement, or by
reason of any liability arising out of conduct by or
actions of the Company or SELLER prior to the date of
this Agreement.
9. EMPLOYMENT OF XXXXXXX X. XXXXXXXX, XXXXXX XXXXXXXX
9.1 SELLER XXXXXXX X. XXXXXXXX AND XXXXXX XXXXXXXX shall
be employed as officers of the Company, subject to
the terms and conditions of individual Employment
Agreements to be negotiated in good faith and
executed as soon as practicable after execution of
this Agreement. Xxxxxxx X. Xxxxxxxx shall be employed
as President of Las Vegas Mortgage with an annual
salary of $96,000 under a two-year employment
agreement. Xxxxxx Xxxxxxxx shall be employed as Vice
President of Operations for Las Vegas Mortgage with
an annual salary of $96,000 per year under a two-year
employment agreement. Both employment contracts will
presume full time employment. Part time, little or no
work will cause employment payments to be ratably
less.
10. GOVERNING LAW
This Agreement will be governed by and construed in accordance
with the laws of the State of California.
11. AMENDMENT AND WAIVER
11.1 This Agreement may not be amended or terminated
except by an instrument in writing signed by all of
the parties hereto.
11.2 No provision of this Agreement and no right or
obligation under this Agreement may be waived except
by an instrument in writing signed by the party
waiving the provision, right or obligation in
question.
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12. ASSIGNMENT
No party may transfer or assign any of its rights or
obligations under this Agreement and any attempt thereat shall
be null and void.
13. NOTICES
13.1 Any notice, request, demand, waiver, consent,
approval, or other communication which is required or
permitted to be given to any party under this
Agreement shall be in writing and shall be sent to
that party with copy at the addresses or fax numbers
set forth below or in the event of a change in any
address or number, then to such other address or fax
number as to which notice of the change is given.
(a) If to SELLER and the Company;
LENDING SERVICES CORPORATION DBA LAS
VEGAS MORTGAGE
0000 XXXXXXX XXXX
XXX XXXXX, XXXXXX 00000
ATTN: XXXXXXX X. XXXXXXXX
(b) If to the BUYERS;
CONSUMER DIRECT OF AMERICA, INC.
0000 X. XXXXXXX XX. XXXXX X
XXXXX XXX, XXXXXXXXXX 00000
ATTN: XXXXXXX X. XXXXXX
14. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties with
respect to the matters described herein and supersedes any and all
prior agreements.
IT WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SELLER(S)
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LENDING SERVICES CORPORATION DBA LAS VEGAS MORTGAGE
BY: XXXXXXX X. XXXXXXXX, PRESIDENT
BUYER(S)
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CONSUMER DIRECT OF AMERICA, INC.
BY: XXXXXXX X. XXXXXX, PRESIDENT AND CHIEF EXECUTIVE OFFICER
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