Exhibit 2.1
(CDA LOGO)
ACQUISITION AGREEMENT
This Agreement dated the twentieth day of November, 2003 between ProMortgage
Corporation, a California Corporation (the SELLER or the Company) and Consumer
Direct of America Inc., a Nevada corporation, with its principal place of
business in Las Vegas, Nevada ("BUYER").
WITNESS
WHEREAS, SELLER owns ten thousand (10,000) 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:
At the Closing which will occur on or about November 20, 2003, SELLER will
exchange, assign and deliver to BUYER all of their respective shares of
the Company in exchange for Three Million (3,000,000) shares of the common
stock of BUYER, subject and according to the terms and conditions of this
Section. The 3,000,000 shares of BUYERS stock shall he apportioned among
SELLER as follows: Xxxxxx Xxxxx - 1,350,000 shares; Xxxxxx Xxxxxxxxxx -
1,350,000 shares; Xxxxx Xxxx - 300,000 shares.
2. STOCK VALUATION PROTECTION
2.1 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 $2,500,000 shall be divided by the
calculated share price to determine the NEW SHARES. The NEW SHARES
calculation shall be compared with 3,000,000 shares issued at
closing and the difference between the two shall be deemed to be the
ADDED SHARES. The ADDED SHARES shall be issued by BUYER 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.
All shares and the share price of one dollar ($1.00) are pre-reverse
should a reverse split occur (i.e. in the event of a reverse split
the stock valuation shall not be less than $1.00 per share). 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.
3. COVENANTS OF SELLER
3.1 From the date of this Agreement until the third 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.
3.2 SELLER will not use or disclose any trade secrets or other
proprietary or confidential information pertaining to any aspect of
the Business.
3.3 SELLER acknowledge that violation of any of the provisions of this
Section 3 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
3, 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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3.4 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.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 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
(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
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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.
(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).
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5. REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 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.
6. INDEMNITIES
6.1 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.
6.2 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.
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6.3 The Company 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 the Company being incorrect or by reason of any breach
by the Company of any of its covenants or obligations under this
Agreement
7. GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of the State of California. Any dispute arising form this agreement
will be the laws of the State of California, Marin County.
8. AMENDMENT AND WAIVER
8.1 This Agreement may not be amended or terminated except by an
instrument in writing signed by all of the parties hereto.
8.2 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.
9. 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.
10. NOTICES
10.1 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;
PRO MORTGAGE
000 XXXXXX XXX.
XXXXX XXXXXX, XX.
00000
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(b) If to the BUYERS;
CONSUMER DIRECT OF AMERICA INC.
0000 X. XXXXXXXX XX XXXXX 0
XXX XXXXX, XXXXXX
00000
ATTN: XXXXXXX X. XXXXXX
11. 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.
SELLERS
/s/ Xxxxxx Xxxxxxxxxx
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PRO MORTGAGE
BY: XXXXXX XXXXXXXXXX
CHIEF FINANCIAL OFFICER
/s/ Xxxxxx Xxxxx
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PRO MORTGAGE
BY: XXXXXX XXXXX
PRESIDENT
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PRO MORTGAGE
BY: XXXXX XXXX
BUYERS
/s/ Xxxxxxx X. Xxxxxx
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CONSUMER DIRECT OF AMERICA INC.
BY: XXXXXXX X. XXXXXX
CHIEF EXECUTIVE OFFICER
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EXHIBIT A
ARTICLES OF INCORPORATION AND BY-LAWS
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EXHIBIT B
ASSETS, LIABILITIES, TANGIBLES AND INTANGIBLES
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EXHIBIT C
OFFICER, DIRECTORS, AGENTS AND EMPLOYEES OF THE COMPANY
SALARIES AND COMPENSATION (OF THE ABOVE)
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