Document:

exv10w17

 

Exhibit No. 10.17

RESCISSION AND SETTLEMENT AGREEMENT

     THIS RESCISSION AND SETTLEMENT AGREEMENT (the “Agreement”), dated and effective as of October
1, 2004, is by and among Consumer Direct of America Inc. (“CDA”), a Nevada corporation, Pro
Mortgage Corporation (“Pro Mortgage”), a California corporation, Brenda Cantu (“Cantu”), Edward
Rubinstein (“Rubinstein”), and Randi Ryan (“Ryan”). (Cantu, Rubinstein and Ryan shall be referred
to collectively as the “Pro Mortgage Shareholders”.)

R E C I T A L S

     A. CDA and Pro Mortgage entered into that certain Acquisition Agreement dated November 20,
2003 (the “Acquisition Agreement”), whereby Pro Mortgage and CDA agreed that Pro Mortgage would
exchange, in the aggregate, one thousand (1,000) shares of its capital stock (the “Pro Mortgage
Shares”), representing one hundred percent (100%) of the issued and outstanding capital stock of
Pro Mortgage, for three million shares of capital stock of CDA (the “CDA Shares”), in the aggregate
(such exchange of Pro Mortgage Shares for CDA Shares being referred to as the “Exchange”).

     B. In connection with the Exchange, CDA and Pro Mortgage entered into that certain Operating
Agreement dated as of November 25, 2003, and CDA and each of Cantu and Rubinstein entered into
those certain Employment Agreements, each dated as of November 20, 2003 (the Acquisition Agreement
and such Operating Agreement and Employment Agreements being referred to collectively as the
“Exchange Documents”).

     C. The Exchange never was duly authorized and approved by the parties thereto, and each of the
parties hereto desires to rescind the Exchange and the Exchange Documents, which Exchange and
Exchange Documents shall be deemed void ab initio.

     D. In connection with such rescission, CDA shall transfer, assign and convey to the Pro
Mortgage Shareholders, free and clear of any and all liens and encumbrances, the Pro Mortgage
Shares, and the Pro Mortgage Shareholders shall transfer, assign and convey to CDA, free and clear
of any and all liens and encumbrances, the CDA Shares.

     NOW, THEREFORE, in consideration of the foregoing recitals and the representations,
warranties, covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

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A G R E E M E N T

1. Exchange and Rescission.

     1.1 Exchange by the Pro Mortgage Shareholders. Subject to the terms and conditions of this
Agreement, in exchange for the receipt of the Pro Mortgage Shares pursuant to Section 1.2, at the
Closing, each Pro Mortgage Shareholder agrees to transfer, assign and convey to CDA, and CDA hereby
accepts, the number of CDA Shares opposite each Pro Mortgage Shareholder’s name set forth below:

	 	 	 	 	 
	Name	 	Number of CDA Shares	 	Certificate Number
	Cantu

	 	250,000 (pre-split)
	 	CD 00403
	

	 	67,500 (post split)
	 	CD 00632
	Rubinstein

	 	250,000 (pre-split)
	 	CD 00402
	

	 	67,500 (post split)
	 	CD 00631
	Ryan

	 	15,000 (post-split)
	 	CD 00633

     1.2 Exchange by CDA. Subject to the terms and conditions of this Agreement, in exchange for
the receipt of the CDA Shares pursuant to Section 1.1, at the Closing, CDA agrees to transfer,
assign and convey to the Pro Mortgage Shareholders, and the Pro Mortgage Shareholders hereby
accept, the number of Pro Mortgage Shares opposite each Pro Mortgage Shareholder’s name set forth
below:

	 	 	 	 	 	 	 	 	 
	Name	 	Number of Pro Mortgage Shares	 	Certificate Number
	Cantu

	 	 	150	 	 	 	6	 
	

	 	 	300	 	 	 	2	 
	Rubinstein

	 	 	150	 	 	 	5	 
	

	 	 	300	 	 	 	3	 
	Ryan

	 	 	100	 	 	 	4	 
	

	 	 	 	 	 	(share certificate never

	

	 	 	 	 	 	actually delivered)

     1.3 Rescission. Upon the Closing, the Exchange and the Exchange Documents shall be void ab
initio, and neither party thereto shall have any right or obligation of whatsoever nature or kind
thereunder or with respect thereto.

     1.4 Closing. Subject to the terms and conditions of this Agreement, the closing of the
transactions contemplated herein (the “Closing”) shall take place on or about February 18, 2005
(but in any event upon delivery and receipt of the deliverables referred to in Section 6) or on
such other date as the Pro Mortgage Shareholders and CDA shall agree (the “Closing Date”). The
Closing shall take place at 10:00 a.m. California time on the Closing Date at the Law Offices of
Shartsis, Friese & Ginsburg LLP, One Maritime Plaza, Eighteenth Floor, San Francisco, California
94111, or at such other time or place as the Pro Mortgage Shareholders and CDA shall

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agree. At the Closing, the Pro Mortgage Shareholders, Pro Mortgage and CDA shall deliver to
each other the documents, instruments and other items described in Section 6 of this Agreement. At
the election of the Pro Mortgage Shareholders and CDA, the Closing may take place through an
exchange of documents using overnight courier service or facsimile.

2. Representations and Warranties of the Pro Mortgage Shareholders. The Pro Mortgage Shareholders
hereby represent and warrant to CDA as follows:

     2.1 Valid Title. Each Pro Mortgage Shareholder owns and holds good and valid title to the CDA
Shares held by him or her as is set forth in Section 1.2. None of the Pro Mortgage Shareholders
has granted any option, warrant, or interest any of the CDA Shares of any sort or any right to
acquire any of the CDA Shares other than as contemplated hereby.

     2.2 Authority. Each Pro Mortgage Shareholder has the full and unrestricted right, power,
capacity and authority to enter into, execute and deliver this Agreement; to transfer, assign and
convey good and valid title to the CDA Shares free and clear of any mortgages, pledges, liens,
security interests, encumbrances, restrictions or charges of any kind, except for restrictions on
transfer pursuant to applicable state and federal securities laws.

     2.3 Compliance. Each Pro Mortgage Shareholder’s compliance with his or her obligations
hereunder will not violate, conflict with or constitute a breach of any agreement, arrangement,
commitment or understanding to which such Pro Mortgage Shareholder is a party or by which he or she
is bound.

     2.4 No Consent. No consent, approval or authorization of, or designation, declaration or
filing with, any governmental authority or agency is required on the part of any Pro Mortgage
Shareholder in connection with the valid execution and delivery of this Agreement, or the transfer,
assignment or conveyance of the CDA Shares.

     2.5 Investment Intent and Investor Status. (i) Each Pro Mortgage Shareholder is acquiring the
Pro Mortgage Shares he or she is acquiring hereunder for investment for his or her own account, not
as a nominee or agent, and not with a view to the sale in connection with a public distribution of
any part thereof; and (ii) such Pro Mortgage Shareholder has no present intention of selling,
granting a participation in or otherwise distributing any of the Pro Mortgage Shares he or she is
purchasing hereunder to any unrelated natural person, corporation, partnership, association or
other entity (each, a “Person”). Each Pro Mortgage Shareholder understands that the Pro Mortgage
Shares are not registered under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “Securities Act”). Each Pro Mortgage Shareholder (i) is
both an “accredited investor” as that term is defined in Regulation D promulgated under the
Securities Act, and (ii) alone or together with its professional advisor, has such knowledge and
experience in financial and business matters as to be capable of evaluating the merits and risks of
investment in the Company and has the capacity to protect his or its own interest in connection
with the transactions contemplated hereby.

     2.6 Disclosure. No representations or warranties by the Pro Mortgage Shareholders in this
Agreement and no statement contained in any document (including, without limitation,

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financial statements and the Disclosure Schedule), certificate, or other writing furnished or
to be furnished by the Pro Mortgage Shareholders to CDA pursuant to the provisions hereof or in
connection with the transactions contemplated hereby, contain or will contain any untrue statement
of material fact or omit or will omit to state any material fact necessary in order to make the
statements herein or therein, in light of the circumstances under which they were made, not
misleading.

3. Representations and Warranties of Pro Mortgage and CDA.

     Each of Pro Mortgage and CDA represents and warrants to the Pro Mortgage Shareholders as
follows:

     3.1 Corporate Organization. Each of CDA and Pro Mortgage is a corporation duly organized,
validly existing and in good standing under the law of its jurisdiction of incorporation. Each of
CDA and Pro Mortgage has full power and authority (corporate and otherwise) to carry on its
business as it is now being conducted and to own, lease or operate its properties and assets. Each
of CDA and Pro Mortgage is duly qualified or licensed to do business as a foreign corporation in
good standing in every jurisdiction in which the character or location of the properties and assets
owned, leased or operated by it or the conduct of its business requires such licensing or
qualification, except in those jurisdictions where the failure to be so duly qualified or licensed
in good standing will not have a material adverse effect on the business, operation, properties,
assets or condition (financial or otherwise) of CDA or Pro Mortgage.

     3.2 Capitalization. Pro Mortgage has one thousand (1,000) shares of capital stock issued and
outstanding. All issued and outstanding shares of capital stock of Pro Mortgage are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive rights. Except as set
forth in this Section 3.2, there are no shares of capital stock or other securities of Pro Mortgage
outstanding; there are no outstanding options, warrants, conversion or exchange privileges or other
rights to purchase or obtain any capital stock of or interest in Pro Mortgage; and there are no
contracts, commitments, understandings, arrangements or restrictions relating to the issuance,
sale, transfer or purchase by Pro Mortgage or CDA of any shares of Pro Mortgage’s capital stock.
All of the Pro Mortgage Shares are owned directly by CDA free and clear of any mortgages, pledges,
liens, security interests, encumbrances, restrictions or charges of any kind, except for
restrictions on transfer pursuant to applicable state and federal securities laws. Pro Mortgage
has no subsidiaries.

     3.3 Authorization. Each of CDA and Pro Mortgage has full corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby. The Board of
Directors of each of CDA and Pro Mortgage has taken all action required by law, its Articles of
Incorporation, its Bylaws or otherwise to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby. This Agreement has been
duly and validly authorized, executed and delivered by CDA and Pro Mortgage and no other corporate
or individual action is necessary. This Agreement is a valid and binding obligation of each of CDA
and Pro Mortgage enforceable in accordance with its terms.

     3.4 No Violation. Neither the execution and delivery of this Agreement nor its

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performance and the consummation of the transactions contemplated hereby will (a) violate any
provision of the Articles of Incorporation or Bylaws of CDA or Pro Mortgage, (b) violate, or be in
conflict with, or constitute a default (or an event which, with or without due notice or lapse of
time, or both, would constitute a default) under, or result in the modification or termination of,
or cause or permit the acceleration of the maturity of any debt, obligation, contract, commitment
or other agreement to which CDA or Pro Mortgage is a party or by which it or its property may be
bound, (c) result in the creation or imposition of any mortgage, pledge, lien, security interest,
encumbrance, restriction, charge or limitation of any kind, upon any property or assets of CDA or
Pro Mortgage, or (d) violate any statute or law or any judgment, decree, order, regulation or rule
of any court or governmental authority.

     3.5 Consents and Approvals of Government Authorities. No consent, approval or authorization
of, or declaration, filing or registration with, any governmental, regulatory authority or third
party is required in connection with the execution, delivery and performance of this Agreement by
CDA and Pro Mortgage and the consummation of the transactions contemplated thereby.

     3.6 Financial Statements. Pro Mortgage has furnished to the Pro Mortgage Shareholders a
consolidated balance sheet of Pro Mortgage as at December 31, 2003 and December 31, 2004 and
consolidated statements of income, changes in stockholders’ equity and changes in financial
position for the years then ended. All of such financial statements are in accordance with the
books and records of Pro Mortgage. The above consolidated balance sheets and the notes thereto are
complete and correct and fully and fairly present the consolidated assets, liabilities and
financial condition of Pro Mortgage as at the respective dates thereof, and the consolidated
statements of income, changes in stockholders’ equity and changes in financial position and the
notes thereto are complete and correct and fully and fairly present the results of the operations
for the periods therein referred to, all in accordance with generally accepted accounting
principles consistently followed throughout the periods involved. Pro Mortgage has no liabilities
or obligations of any nature (absolute, accrued, contingent or otherwise, and whether due or to
become due) (herein “liabilities”) except as reflected on the December 31, 2004 balance sheet (the
“Balance Sheet”).

     3.7 Absence of Certain Changes. Since the date of the Exchange, except as set forth in
Schedule 3.7 of the Disclosure Schedule attached hereto, Pro Mortgage has not:

          (a) Suffered any material adverse change in its condition (financial or otherwise), working
capital, assets, liabilities, reserves, business, operations or prospects;

          (b) Suffered any loss, damage, destruction or other casualty materially and adversely
affecting any of the properties, assets or business of Pro Mortgage (whether or not covered by
insurance);

          (c) Borrowed or agreed to borrow any funds or incurred, or assumed or became subject to,
whether directly or by way of guarantee or otherwise, any obligation or liability;

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          (d) Paid, discharged or satisfied any claims, liabilities or obligations;

          (e) Permitted or allowed any of its property or assets (real, personal or mixed, tangible or
intangible) to be subjected to any mortgage, pledge, lien, security interest, encumbrance,
restriction or charge of any kind;

          (f) Written down the value of any inventory or written off as uncollectible any notes or lease
or accounts receivable, except for write-downs and write-offs in the ordinary course of business
and consistent with past practice, none of which is material;

          (g) Cancelled any debts or waived any claims or rights, waived any statute of limitation, or
sold, transferred, or otherwise disposed of any of its properties or assets (real, personal or
mixed, tangible or intangible);

          (h) Licensed, disposed of or permitted to lapse any rights to the use of any trademark, trade
name, technology, process, or other intangible asset, copyright, or disposed of or disclosed to any
Person any trade secret, formula, technology, process or know-how not theretofore a matter of
public knowledge;

          (i) Granted any general increase in the compensation of officers or employees (including any
such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment) or any
increase in the compensation payable or to become payable to any officer or employee;

          (j) Made any capital expenditure or commitment;

          (k) Declared, paid or set aside for payment any dividend or other distribution in respect of
its capital stock or, directly or indirectly, redeemed, purchased or otherwise acquired any shares
of its capital stock or other securities;

          (l) Made any change in any method of accounting or accounting practice;

          (m) Paid, loaned or advanced any amount to, or sold, transferred or leased any properties or
assets (real, personal or mixed, tangible or intangible) to, or entered into any agreement or
arrangement with any of its officers or directors or any affiliate of any of its officers or
directors;

          (n) Paid, loaned or advanced any amount to, or sold, transferred or leased any properties or
assets to any Person, whether by lease, leveraged lease, lease intended as security, vendor
arrangement, loan agreement, note, conditional sales arrangement, issue of preferred stock or
otherwise;

          (o) Entered into any other transaction, contract or commitment; or

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          (p) Agreed, whether in writing or otherwise, to take any action described in this Section 3.7.

     3.8 Litigation. Except for that certain claim or allegation brought by Surinder P. Sora,
a/k/a Navjot, LLC against Pro Mortgage and/or CDA in respect of a certain lending transaction
involving Pro Mortgage (the “Claim”), there is no legal, administrative, arbitration or other
proceeding, claim, or action of any nature or investigation pending or threatened against or
involving Pro Mortgage or which questions or challenges the validity of this Agreement or any
action taken or to be taken by CDA or Pro Mortgage pursuant to this Agreement or in connection with
the transactions contemplated hereby; and neither CDA nor Pro Mortgage knows or has any reason to
know of any valid basis for any such legal, administrative, arbitration or other proceeding, claim,
or action of any nature or investigation. Pro Mortgage is not subject to any judgment, order or
decree entered in any lawsuit or proceeding which has had an adverse effect on its business
practices or on its ability to acquire any property or conduct its business in any area.

     3.9 Taxes. All federal, state, local and foreign tax reports and returns required to be filed
by Pro Mortgage either separately or as a member in a group of corporations have been duly filed
and all taxes including, without limitation, income, gross receipts, ad valorem, value added,
turnover, sales, use, personal property (tangible and intangible), stamp leasing, lease, user,
leasing excise, franchise, transfer, fuel, excess profits, occupational and interest equalization,
and other charges due or claimed to be due from it or another member of such group of corporations
by federal, state, local or foreign taxing authorities have been duly paid; the reserves for taxes
reflected in the Balance Sheet are adequate; and there are no tax liens upon any property or assets
of Pro Mortgage. No state of facts exists or has existed which would constitute grounds for the
assessment of any further tax liability. All deficiencies and assessments resulting from
examination of state and local tax returns and reports of Pro Mortgage have been paid. There are
no outstanding agreements or waivers extending the statutory period of limitation applicable to any
federal, state, local, or foreign tax return or report for any period. Pro Mortgage has not been
included in a consolidated return under Internal Revenue Code section 1501 with CDA or any of its
affiliates for any period.

     3.10 Insurance. The Disclosure Schedule contains an accurate and complete description of all
policies of fire, liability, directors’ and officers’, worker’s compensation and other forms of
insurance owned or held by CDA and Pro Mortgage. All such policies are in full force and effect;
are sufficient for compliance with all requirements of law and of all agreements to which CDA or
Pro Mortgage is a party; are valid, outstanding and enforceable policies; provide full insurance
coverage for the acts or omissions of all officers, directors and employees of CDA and Pro Mortgage
the assets and operations of Pro Mortgage; will remain in full force and effect through the
respective dates set forth in the Disclosure Schedule; and will not in any way be affected by, or
terminate or lapse by reason of, the transactions contemplated by this Agreement.

     3.11 Contracts and Commitments; No Default. Except as set forth in Schedule 3.11 of the
Disclosure Schedule:

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          (a) Except as set forth in the Disclosure Schedule:

          (b) Pro Mortgage has no employment agreement with any officer, employee or agent, nor any
agreement that contains any severance or termination pay liabilities or obligations;

          (c) Pro Mortgage is not restricted by agreement from carrying on its business or any part
thereof anywhere in the world or from competing in any line of business with any Person;

          (d) Pro Mortgage has no debt obligation for borrowed money, including guarantees of or
agreements to acquire any such debt obligation of others;

          (e) Pro Mortgage has no outstanding loan to any Person;

          (f) Pro Mortgage has no obligation or liability as guarantor, surety, co-signer, endorser,
co-maker, indemnitor or otherwise in respect of the obligation of any other Person;

          (g) Pro Mortgage is not subject to any obligation or requirement to provide funds to or make
any investment (in the form of a loan, capital contribution or otherwise) in any Person whether
under a loan agreement, note or otherwise;

          (h) Pro Mortgage is not a party to any agreement, contract, commitment or loan to which any of
its officers or directors or any affiliate of Pro Mortgage or its officers and directors is a
party;

          (i) Pro Mortgage is not a party to any purchase or sale contract or agreement that continues
for a period of more than twelve months (including periods covered by any option to renew by any
party);

          (j) Pro Mortgage is not a lessor under any lease, lease intended as security, an owner
participant in any leveraged lease transaction or party to a vendor arrangement or conditional
sales agreement;

          (k) Pro Mortgage has not given any irrevocable power of attorney to any person, firm,
corporation or other entity for any purpose whatsoever, except the appointment of agents to accept
service of process;

          (l) There are no outstanding sales or purchase contracts, commitments or proposals of Pro
Mortgage that will result in any loss upon completion or performance thereof, after allowance for
direct distribution expenses; and

          (m) Except for agreements, contracts, commitments or restrictions referred to in Sections
3.11(a) through 3.11(m) or elsewhere specifically disclosed pursuant to this

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Agreement, Pro Mortgage has no agreements, contracts, commitments or restrictions that are
material to its business, operations or prospects.

          (n) True and complete copies of all documents (including all amendments thereto) referred to
in Schedule 3.11 of the Disclosure Schedule have been delivered to the Pro Mortgage Shareholders.
Schedule 3.11 of the Disclosure Schedule contains a list of employees of Pro Mortgage and their
annual compensation and job descriptions. All contracts, agreements, commitments or restrictions
referred to on Schedule 3.11 of the Disclosure Schedule are valid and enforceable in accordance
with their respective terms, Pro Mortgage is not in default in the performance of any of its
obligations thereunder, no event of default has occurred which (whether with or without notice,
lapse of time, or both, or the happening or the occurrence of any other event) would constitute a
default thereunder and all other parties thereto are not in default thereunder and have no
counterclaims, offsets and defenses with respect thereto.

     3.12 Compliance with Law. Pro Mortgage is in compliance with all laws, regulations and orders
applicable to its business. Neither CDA nor Pro Mortgage has received any notification that Pro
Mortgage is in violation of any such laws, regulations or orders and no such violation exists.

     3.13 Investment Intent and Investor Status. (i) CDA is acquiring the CDA Shares for
investment for its own account, not as a nominee or agent, and not with a view to the sale in
connection with a public distribution of any part thereof; and (ii) CDA has no present intention of
selling, granting a participation in or otherwise distributing any of the CDA Shares it is
purchasing hereunder to any Person. CDA understands that the CDA Shares are not registered under
the Securities Act. CDA is an “accredited investor” as that term is defined in Regulation D
promulgated under the Securities Act.

     3.14 Disclosure. No representations or warranties by CDA or Pro Mortgage in this Agreement
and no statement contained in any document (including, without limitation, financial statements and
the Disclosure Schedule), certificate, or other writing furnished or to be furnished by CDA or Pro
Mortgage to any Pro Mortgage Shareholder pursuant to the provisions hereof or in connection with
the transactions contemplated hereby, contain or will contain any untrue statement of material fact
or omit or will omit to state any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not misleading.

4. Mutual Releases.

     4.1 Release by the Pro Mortgage Shareholders. For valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Pro Mortgage Shareholder hereby fully and
forever releases and discharges CDA and its directors, partners, members, managers, officers,
employees, agents, heirs, attorneys, executors, administrators, predecessors, successors and
assigns (each, a “CDA Party” and, collectively, the “CDA Parties”), of and from any and all claims,
demands, agreements, contracts, covenants, suits, actions, causes of action, obligations,
controversies, debts, costs, expenses, accounts, damages, judgments, losses and liabilities, of
whatever kind or nature, in law, equity or otherwise, whether known or unknown,

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concealed or hidden (collectively, “Claims”), which any Pro Mortgage Shareholder has had, may
have had or now has, to and including the date of this Agreement, against any of the CDA Parties,
arising out of or in connection with the Exchange or the Exchange Documents.

     4.2 Release by CDA and Pro Mortgage. For valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of CDA and Pro Mortgage hereby fully and forever releases
and discharges Pro Mortgage and the Pro Mortgage Shareholders and their respective directors,
partners, members, managers, officers, employees, agents, heirs, attorneys, executors,
administrators, predecessors, successors and assigns (each, a “Pro Mortgage Party” and,
collectively, the “Pro Mortgage Parties”), of and from any and all Claims which CDA or Pro Mortgage
has had, may have had or now has, to and including the date of this Agreement, against any of the
Pro Mortgage Parties, including without limitation any Claims arising out of or in connection with
allegations, facts and/or circumstances referred to in the Exchange or the Exchange Documents.

     4.3 Acknowledgements. The Pro Mortgage Shareholders, Pro Mortgage and CDA intend for their
respective releases to be effective as a bar to all actions, causes of action, suits, claims or
demands of every kind, nature or character whatsoever, known or unknown, suspected or unsuspected,
fixed or contingent, except to the extent arising out of, in connection with or resulting from any
breach of this Agreement. THE PRO MORTGAGE SHAREHOLDERS, PRO MORTGAGE AND CDA EACH ACKNOWLEDGES
THAT HE, SHE OR IT HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH CALIFORNIA CIVIL CODE
SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.”

THE PRO MORTGAGE SHAREHOLDERS, PRO MORTGAGE AND CDA EACH EXPRESSLY WAIVE AND RELINQUISH ANY AND ALL
RIGHTS OR BENEFITS HE, SHE OR IT MAY HAVE UNDER, OR WHICH MAY BE CONFERRED UPON HIM BY, THE
PROVISIONS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE TO THE FULLEST EXTENT THAT HE MAY LAWFULLY
WAIVE SUCH RIGHTS OR BENEFITS PERTAINING TO THE SUBJECT MATTER OF THESE RELEASES. In connection
with such waiver and relinquishment, the Pro Mortgage Shareholders, Pro Mortgage and CDA each
hereby acknowledge that he, she or it is aware that he, his, she, her or it or its attorneys may
hereafter discover claims or facts in addition to, or different from, those which they now know or
believe to exist with respect to the subject matter of this release, but that the Pro Mortgage
Shareholders, Pro Mortgage and CDA each nonetheless intend hereby to fully, finally and forever
release all disputes and differences, known or unknown, suspected or unsuspected, which do now
exist as to the released matters.

5. Insurance. CDA has one or more E&O, general liability, workers’ compensation and health
insurance policies (each, a “Policy” and collectively, the “Policies”) in full force and effect for
claims arising during the period from and after November 20, 2003 through the Closing

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Date (the “Coverage Period”), and Pro Mortgage is and shall remain, at CDA’s expense, an additional
named insured under each such Policy. In addition, CDA shall maintain through February 28, 2005,
at CDA’s expense, the workers’ compensation insurance Policy on behalf of Pro Mortgage and its
employees. So long as each such Policy (or any replacement policy) remains in effect, CDA shall
cause the activities of Cantu, Rubinstein and Ryan on behalf of CDA and Pro Mortgage during the
Coverage Period (including any and all acts and omissions) to be covered thereby (to the extent
insurable thereunder), subject to the conditions and limitations set forth in any such policy.
Notwithstanding the foregoing, in the event the insurance carrier denies coverage of the Claim, Pro
Mortgage shall assume responsibility therefor; provided, however, that CDA shall use best efforts
to cause such insurance carrier to accept coverage of the Claim and assume the defense thereof, and
in no event shall CDA withdraw the request that the insurance carrier assume full responsibility
for the Claim.

6. Closing Deliverables.

     6.1 By CDA and Pro Mortgage. At the Closing, CDA or Pro Mortgage, as the case may be, shall
deliver (i) to each Pro Mortgage Shareholder certificates evidencing the Pro Mortgage Stock, in the
respective amount for each as is set forth in Section 1.2, accompanied by duly executed blank stock
powers, (ii) to the Pro Mortgage Shareholders, at the office located at 101 Nellen Avenue, Corte
Madera, CA 94925, the minute book, stock ledger, charter documents good standing certificates and
the like for Pro Mortgage, and all documents, contracts, licenses, permits, authorizations,
information and materials relating to Pro Mortgage in CDA’s or Pro Mortgage’s possession.

     6.2 By the Pro Mortgage Shareholders. At the Closing, the Pro Mortgage Shareholders shall
deliver to CDA the certificates evidencing the CDA Stock held by each as is set forth in Section
1.1, accompanied by duly executed blank stock powers.

7. Indemnification.

     7.1 By CDA. CDA shall indemnify, defend and hold harmless Pro Mortgage, the Pro Mortgage
Shareholders, and their respective directors, officers, employees, agents, heirs, attorneys,
executors, administrators, successors and assigns (each, an “Indemnified Party”), from and against
any and all Damages incurred or suffered by any Indemnified Party arising out of, in connection
with or resulting from any breach of any representation, warranty, covenant or obligation hereunder
by CDA. In addition, CDA shall indemnify, defend and hold harmless Cantu, Rubinstein and Ryan, to
the fullest extent permitted by applicable law, as it now exists or as it may hereafter be amended,
from and against any and all Damages incurred or suffered by either arising out of, in connection
with or resulting from any claim or allegation either breached his or her fiduciary duty as an
officer, director, employee or consultant of CDA or Pro Mortgage.

     7.2 By the Pro Mortgage Shareholders. The Pro Mortgage Shareholders shall indemnify, defend
and hold harmless CDA and its directors, officers, employees, agents, attorneys, successors and
assigns (each, an “Indemnified Party”), from and against any and all Damages incurred or suffered
by any Indemnified Party arising out of, in connection with or

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resulting from any breach of any representation, warranty, covenant or obligation hereunder by
the Pro Mortgage Shareholders.

     7.3 Indemnification Procedure. If there is asserted any claim or allegation that in the
judgment of an Indemnified Party may give rise to any Damages, or if an Indemnified Party
determines the existence of a potential claim or allegation whether or not the same shall have been
asserted, such Indemnified Party shall notify the Indemnifying Party within fifteen (15) business
days of receipt or determination of such actual or potential claim or allegation; provided,
however, that failure of the Indemnified Party to provide such timely notice to the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to
the extent the Indemnifying Party is actually prejudiced by such failure.

     7.4 Definition of Damages. The term “Damages” as used in this Section 7 means all demands,
claims, actions or causes of action, assessments, losses, damages, costs, expenses, liabilities,
judgments, awards, fines, sanctions, penalties, charges, and amounts agreed by the Indemnifying
Party to be paid in settlement, including, without limitation, costs, fees and expenses of
investigating and/or defending any claim or allegation, attorneys, experts, accountants,
appraisers, consultants, witnesses, investigators and any other agents. The Indemnifying Party
shall have the right to assume the sole defense of any claim or allegation as to which the
Indemnified Party is to be indemnified hereunder.

8. Miscellaneous.

     8.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the parties.

     8.2 Governing Law. This Agreement shall be governed by and construed under the laws of the
State of California without regard to its rules regarding choice of law.

     8.3 Severability. If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall be enforced in
accordance with its terms.

     8.4 Survival. The representations and warranties set forth in Sections 2, and 3, and Sections
4, 5, 7, 8.1, 8.2, 8.4, 8.5, and 8.6 shall survive the Closing Date.

     8.5 Entire Agreement. This Agreement reflects the entire agreement among the parties with
respect to the matters set forth herein and supersedes any prior agreements, commitments,
discussions and understandings, oral or written, with respect thereto.

     8.6 Attorneys’ Fees. In the event of any action arising out of this Agreement, the prevailing
party shall be entitled to reimbursement for its costs and expenses, including reasonable
attorneys’ fees, in connection therewith.

     8.7 Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument.

12

 

[THE NEXT PAGE IS THE SIGNATURE PAGE]

13

 

     IN WITNESS WHEREOF, the parties have executed or caused their duly authorized
representatives to execute this Rescission and Settlement Agreement as of the date first written
above.

	 	 	 	 	 
	 	CONSUMER DIRECT OF AMERICA INC.

 	 
	 	By:  	/s/ Michael A. Barron
 	 
	 	Name: 	Michael A. Barron 	 
	 	Title: 	CEO 	 
	 

	 	 	 	 	 
	 	PRO MORTGAGE CORPORATION

 	 
	 	By:  	/s/ Michael A. Barron
 	 
	 	Name: 	Michael A. Barron 	 
	 	Title: 	CEO for Consumer Direct of America 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                             /s/ Brenda Cantu
 	 
	 	Brenda Cantu 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                             /s/ Edward Rubinstein
 	 
	 	Edward Rubinstein 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                             /s/ Randi Ryan
 	 
	 	Randi Ryan 	 
	 	 	 
	 

14exv10w18

 

Exhibit No. 10.18

CONSUMER DIRECT OF AMERICA

6330 So. Sandhill Road

Las Vegas, NV 89120

Phone: 702-851-5607                Fax: 702-851-5646

PROMISSORY NOTE

Dated as of October 25, 2004

Amount: $150,000.00

     FOR VALUE RECEIVED, the undersigned Consumer Direct of America a Nevada Corporation
(“Borrower”), promises to pay to the order of Michael Barron, (“Lender”), the principal sum of One
Hundred and fifty thousand Dollars ($150,000.00), (the “Principal Amount”) together with accrued
interest calculated through the same time frame as that certain note with Nevada State Bank dated
October 25, 2004.

     1. INTEREST RATE.

     The Principal Amount under this Note shall bear interest at a rate of ten percent (10%)per
annum. Said Note shall be at the same terms and conditions as the note executed with Nevada state
Bank.

     In the case any Principal Amount and any accrued interest thereon or the Maturity Payment
remains unpaid following the Maturity Date or in the case of an Event of Default (as hereinafter
defined) the unpaid Principal Amount and accrued interest thereon and the unpaid Maturity Payment
shall bear interest also at a rate of ten percent (10%) per annum from the Maturity Date or the
date of the Event of Default as applicable.

     In the event that any interest rate provided for in this Agreement shall be determined to be
unlawful, such interest rate shall be computed at the highest rate permitted by applicable law.
Interest not paid when due shall be added to the unpaid Principal Amount and shall thereafter bear
interest at the same rate as the Principal Amount. All payments (including prepayments) hereunder
are to be applied first to the payment of accrued interest and the balance remaining applied to the
payment of the Principal Amount and the Maturity Payment.

     2. PAYMENTS.

 

 

     Borrower shall make payments of the Principal Amount, the Maturity Payment and accrued
interest thereon to Lender as follows: except as otherwise set forth in this Note, the unpaid
Principal Amount under the Note plus all accrued and unpaid interest thereon plus the Maturity
Payment shall be payable upon the Maturity Date. If the Borrower has not repaid the Principal
Amount together with any and all accrued interest thereon and the Maturity Payment on the Maturity
Date, the Lender may, in his sole discretion, at any time after the Maturity Date, (i) make a
written demand to the guarantors for payment of any unpaid Principal Amount, Maturity Payment and
accrued interest thereon.

     3. LAWFUL MONEY; DESIGNATED PLACES OF PAYMENT.

     All amounts due hereunder are payable in lawful money of the United States of America, in
immediately available funds, at Investor’s designated address not later than 6:00 p.m., Pacific
time, on the day of payment.

     4. WAIVERS.

     Except as set forth elsewhere herein, Borrower, for itself and its legal representatives,
successors, and assigns, expressly waives presentment, protest, demand, notice of dishonor, notice
of nonpayment, notice of maturity, notice of protest, notice of intent to accelerate, notice of
acceleration, presentment for the purpose of accelerating maturity, and diligence in collection.

     5. DEFAULT.

     The occurrence and continuance of one or more of the following events shall constitute an
event of default (“Event of Default”) of this Note:

     5.1 The nonpayment of the Principal Amount or the Maturity Payment under the Note or any
accrued interest thereon by Borrower within five business days of when the same shall have become
due and payable.

     5.2 The entry of a decree or order by a court having appropriate jurisdiction adjudging
Borrower bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Borrower under the federal Bankruptcy
Act or any other applicable federal or state law, or appointing a receiver, liquidator, assignee or
trustee of Borrower, or any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect
for a period of sixty (60) consecutive days.

     5.3 The institution by Borrower of proceedings to be adjudicated bankrupt or insolvent, or
the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief under the federal
Bankruptcy Act or any other applicable federal or state law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee or trustee of the
Company, or of any substantial part of its property, shall become subject to the jurisdiction of a
federal bankruptcy court or similar state court, or if Borrower shall make an assignment for the
benefit of its creditors, or if there

 

 

is a receivership, execution or other material judicial seizure, or if there is an admission in
writing by Borrower of its inability to pay its debts generally as they become due, or the taking
of corporate action by Borrower in furtherance of any such action.

     5.4 Default in the obligation of Borrower for borrowed money, other than this Note, which
shall continue for a period of sixty (60) days, or any event that results in acceleration of the
maturity of any material indebtedness of Borrower under any note, indenture, contract, or
agreement.

     5.5 Borrower’s failure to comply with any material term, obligation, covenant, or condition
contained in this Note, within 10 days after the expiration of all cure periods and receipt of
written notice from the Investor demanding such compliance.

     5.6 Any warranty, covenant, or representation made to the Investor by Borrower under this
Agreement, proves to have been false in any material respect when made or furnished.

     6. SECURITY INTERESTS.

     6.1 Borrower, in consideration of the indebtedness described in this Agreement,
Borrower has secured various individuals who have provided a personal guarantee.

     7. ATTORNEYS’ FEES.

     In the event it should become necessary to employ counsel to collect any amounts owed by
Borrower under this Note, Borrower agrees to pay the reasonable attorneys’ fees and costs of the
Investor, incurred in connection with the Investor’s collection efforts, irrespective of whether
suit is brought.

     8. SECTION HEADINGS.

     Headings and numbers have been set forth for convenience only. Unless the contrary is
compelled by the context, everything contained in each paragraph applies equally to this entire
Note.

     9. AMENDMENTS IN WRITING.

     Subject to applicable law, this Note may be amended, modified, or supplemented only by a
written agreement signed by the Investor and the Borrower.

     10. ENTIRE AGREEMENT

     This Agreement, contains the entire and final Agreement and understanding between the parties
with respect to it’s respective subject matter and supercedes any and all prior discussions,
understandings, and the two (2) previous sets of documents and Agreements dated March 29, 2004 and
April 20, 2004 between Investor and Borrower with respect to such subject matter.

     11. CHOICE OF LAW

 

 

     This Note and all transactions hereunder and/or evidenced hereby shall be governed by and
construed under the laws of the State of Nevada without regard to the conflicts of law principles
thereof.

     12. ARBITRATION.

     If at any time during the term of this Note any dispute, difference, or disagreement shall
arise upon or in respect of the Note, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon by the parties
hereto, or if no single arbiter can be agreed upon, an arbiter or arbiters shall be selected in
accordance with the rules of the American Arbitration Association and such dispute, difference, or
disagreement shall be settled by binding arbitration in accordance with the then prevailing
commercial rules of the American Arbitration Association, and judgment upon the award rendered by
the arbiter may be entered in any court having jurisdiction thereof. The parties hereto each
jointly and severally waive any and all rights to appeal the judgment or award of such arbiter(s).

     13. TRANSFERABILITY.

     The right to principal and interest under this Note may be transferred only through a book
entry system maintained by Borrower. Any other means of transfer, including, without limitation,
transfers by endorsement, shall be null and void. Ownership of the obligation must be reflected in
a book entry. A book entry is a record of ownership that identifies the owner of an interest in
this Promissory Note.

IN WITNESS WHEREOF, the Borrower has caused its duly authorized representative to execute this Note
as of the date first written above.

Consumer Direct of America

	 	 	 	 	 	 	 
	BY:

	/s/ Michael A. Barron

	 
	 	By:
	/s/ Wayne K. Bailey

	 
	

	Michael A. Barron – COO	 	 	 	Wayne K. Bailey – CFO	 

	 	 	 
	BY:

	/s/ Paul Grady

	 
	 
	Paul Grady — EVP

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