- --------------------------------------------------------------------------------
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT, made and entered into as of August 4th,
2000, by and between CFI Mortgage, Inc., a Delaware corporation, ("CFIM") and
Warren A. Wilbur III, (the "Selling Stockholder").
- --------------------------------------------------------------------------------
WITNESSETH:
WHEREAS, CFIM's common stock is traded in the public securities market
on the OTC Bulletin Board and CFIM is obligated to file reports with the U.S.
Securities and Exchange Commission pursuant to a registration statement under
the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and has
filed all such reports except for a report on Form 8-K with respect to its
acquisition of Inventek, Inc., doing business as Surfside Software ("Surfside"),
the delay in the filing thereof resulting from a delay in obtaining the
requisite audit Surfside's financial statements; and
WHEREAS, CFIM owns a majority of Surfside's outstanding common stock
and desires to acquire 175 shares of Surfside's common stock owned by the
Selling Stockholder and constituting a minority interest in Surfside ("Surfside
Stock"); and
WHEREAS, the Selling Stockholder desires to acquire shares of CFIM
common stock and warrants to purchase its common stock ("CFI Securities") in
exchange for the Surfside Stock which he owns;
NOW, THEREFORE, in consideration of the premises herein before set
forth, in reliance hereon and the mutual promises and respective representations
and warranties of the parties, one to another made herein, and the reliance of
each party upon the other(s) based hereon and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge, the
parties agree, for purposes of consummating the exchange of stock as
contemplated herein, as follows:
ARTICLE I
PRELIMINARY MATTERS
Section 1.01. Recitals. The parties acknowledge the recitals herein
above set forth in the preamble are correct, are, by this reference,
incorporated herein and are made a part of this Agreement.
Section 1.02. Exhibits and Schedules. Exhibits (which are documents to
be executed and delivered at the Closing by the party identified therein or in
the provision requiring its delivery) and Schedules (which are statements
setting forth information about party identified in each such Schedule) referred
to herein and annexed hereto are, by this reference, incorporated herein and
made a part of this Agreement, as if set forth fully herein.
Section 1.03. Use of words and phrases. Natural persons may be
identified by last name, with such additional descriptors as may be desirable.
The words "herein," "hereby," "hereunder," "hereof," "herein before,"
"hereinafter" and any other equivalent words refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision hereof. The
words, terms and phrases defined herein and any pronoun used herein shall
include the singular, plural and all genders. The word "and" shall be construed
as a
Page 1 of 7 pages.
coordinating conjunction unless the context clearly indicates that it should be
construed as a copulative conjunction.
Section 1.04. Accounting terms. All accounting terms not otherwise
defined herein shall have the meanings assigned to them under generally accepted
accounting principles unless specifically referenced to regulatory accounting
principles.
Section 1.05. Calculation of time lapse or passage; Action required on
holidays. When a provision of this Agreement requires or provides for the
calculation of the lapse or passage of a time period, such period shall be
calculated by treating the event which starts the lapse or passage as zero;
provided, that this provision shall not apply to any provision which specifies a
certain day for action or payment, e.g. the first day of each calendar month.
Unless otherwise provided, the term "month" shall mean a period of thirty days
and the term "year" shall mean a period of 360 days, except that the term
"calendar year" shall mean the actual calendar year period. If any calendar day
on which action is required to be taken or payment is required to be made under
this Agreement is not a Business Day (Business Day being a day on which national
banks are open for business where the actor or payer is located), then such
action or payment shall be taken or made on the next succeeding Business Day.
Section 1.06. Use of titles, headings and captions. The titles,
headings and captions of articles, sections, paragraphs and other subdivisions
contained herein are for the purpose of convenience only and are not intended to
define or limit the contents of said articles, sections, paragraphs and other
subdivisions.
ARTICLE II
TERMS OF THE TRANSACTIONS
Section 2.01. Exchange Transaction. In accordance with the terms of
this Agreement, on the Closing Date, (a) the Selling Stockholder will assign,
transfer and deliver to CFIM all of the Surfside Stock owned by the Selling
Shareholder; and (b) CFIM will issue and deliver to the Selling Stockholder the
CFIM Securities.
Section 2.02. The CFIM Securities. The CFIM Securities consists of a
combination of 150,000 shares of CFIM common stock and 15,000 common stock
purchase warrants. Each CFIM common stock purchase warrant included in the CFIM
Securities will entitle the holder to purchase one share of CFIM's common stock
at an exercise price equal to one hundred twenty (120) percent of the average
closing price or average closing asked price, as the case may be, in the best
market for CFIM's common stock on the day of the Closing under this agreement.
The warrants may be exercised at any time for a period beginning on the day
following the Closing and ending two years from the date of this Agreement. The
number of shares subject to and the exercise price of the warrants shall be
subject to adjustment for share divisions, share combinations and
recapitalizations.
Section 2.03. Transaction costs. Each party shall pay all costs and
expenses, which it incurs in connection with this Agreement and the transactions
contemplated hereby.
Page 2 of 7 pages.
ARTICLE III
CLOSING OF THE TRANSACTION
Section 3.01. Location, date and time of the Closing. The Closing of
the Exchange shall be take place as soon as possible, but in any event later
than , 2000, unless extended by mutual agreement of the parties.
Section 3.02. The Selling Stockholders' obligations at Closing. At the
Closing, the Selling Stockholder will deliver to CFIM certificates representing
the Surfside Stock, fully endorsed to enable CFIM to transfer such certificates
on the books of Surfside pursuant Section 2.01; and
Section 3.03. CFIM's obligations at Closing. At the Closing, CFIM will
deliver to the Selling Stockholder the CFIM Securities. If certificates are to
be issued in the name of the Selling Stockholder and any other person jointly,
the Selling Stockholder shall notify CFIM not less than three business days
prior to the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Section 4.01. The Selling Stockholder's representations and warranties.
The Selling Stockholder represents and warrants to CFIM, as follows:
(a) He is the sole legal and beneficial owner of the Surfside Stock
and that the Surfside Stock is not subject to any liens, hypothecations or
encumbrances.
(b) He acknowledges that he had the reasonable opportunity to ask
questions and to examine such supplemental documentation as he may deem
necessary to make an informed decision concerning investment in the CFIM
Securities. He acknowledges that he has received satisfactory answers to these
questions from CFI's management and has verified to his satisfaction the
information in CFIM's reports filed under the Exchange Act.
(c) He understands the offer and sale of the CFIM Securities are not
registered or qualified under federal securities laws or the securities laws of
my/our state of residence; but, the offer and sale is made instead in reliance
upon an exemption from such registration or qualification commonly referred to
as the "private placement exemption" and that the requirements for reliance upon
such exemption include a provision the he purchase the CFIM Securities for
investment and not with a view toward distribution or resale. He understands
that CFIM is under no obligation, except as provided below, to register or
qualify the CFIM Securities, or any component thereof; for resale under the laws
of his state of residence. He understands that he will be required to bear the
economic risk of the investment for at least one year, unless the CFIM
Securities are soon registered for resale by the Selling Stockholder pursuant to
the provision set forth below. He understands a notice of these restrictions
will be printed on the Common Stock certificates for the Shares and the
warrants, if any, and the transfer agent, if any, will be instructed to honor
the notice.
(d) He is acquiring the CFIM Securities, for investment, for his own
account and not with a view to or for the purpose of resale, division,
fractionalization or distribution. He does not have a present or foreseeable
need for liquidation of the CFIM Securities. He has no predetermined the
occurrence of any event or condition upon which I/we intends to sell the Shares.
He understands the CFIM Securities and the components thereof are defined as
"restricted securities" in Rule 144 under the Securities Act of 1933, as
amended, and are subject to the requirements of the rule for resale, unless
registered under said act.
Page 3 of 7 pages.
(e) He understands investment in the CFIM Securities may involve a high
degree of risk which could result in a complete loss of his investment.
(f) He agrees to complete a "Confidential Investor's Questionnaire" in
the event that such a questionnaire is needed to demonstrate compliance with the
Securities Act and the securities law of our state of residence.
Section 4.02. CFIM's representations and warranties. CFIM represents
and warrants to SURFSIDE and to the Selling Stockholder that:
(a) CFIM is a duly incorporated and existing corporation in good
standing under the laws of its state of incorporation, has full corporate power
to execute and deliver this Agreement, is qualified and in good standing as a
foreign corporation in every jurisdiction where the conduct of its business or
the nature of its properties require it to be qualified.
(b) This Agreement has been duly and validly authorized, executed and
delivered by CFIM and constitutes the legal, valid and binding obligation of
CFIM enforceable against CFIM in accordance with its terms subject, as to
enforceability, to bankruptcy, insolvency, reorganization and other laws of,
relating to or affecting shareholders and creditors rights generally and to
general equitable principles.
(c) The CFIM common stock included in the CFIM Securities and the
underlying the CFIM common stock purchase warrants, when issued by CFIM against
payment therefore as provided in this Agreement and authenticated and delivered
by its transfer agent, as contemplated by this Agreement, will be duly and
validly authorized, validly issued and fully paid and non-assessable.
(d) Except as noted in the preamble hereto with respect to the filing
of a report regarding CFIM's acquisition of a majority of Surfside, reports CFIM
has filed under the Exchange Act was, on the date of the information reflected
in each such report accurate in all material respects and such information at
the date hereof as a whole does not contain any untrue statement of material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(f) The Selling Stockholder is justified in relying on the reports CFIM
has filed under the Exchange Act (as supplemented by information he has received
as a result of his opportunity to ask questions and receive answers thereto) in
making his decision to acquire the CFIM Securities.
ARTICLE V
REGISTRATION COVENANT
Section 5.01. Piggyback registration. In the event CFIM files a
registration statement under the Securities Act of 1933, as amended, covering
the sale of securities on its own behalf or on behalf of any of its stockholders
and the registration statement is on a form which would be available for use by
the Selling Stockholder to cover his sale of the CFIM Securities, CFIM shall
notify the Selling Stockholder in advance of the filing thereof and afford the
Selling Stockholder a reasonable opportunity to include the common stock
component of the CFIM Securities, or any number of shares thereof, in such
registration statement at no expense, other than his personal selling expenses,
such as commissions,
Page 4 of 7 pages.
concessions or discounts. This covenant shall expire two years after the
Closing, provided that at any time the Selling Stockholder shall then be
eligible under Rule 144 or otherwise to sell all the shares of CFIM's common
stock which he acquired hereunder (including exercise of the warrants) in a
single three month period CFIM shall be released from this covenant.
ARTICLE IX
NOTICES
Section 9.01. Procedure for giving notices. Any and all notices or
other communications required or permitted to be given under any of the
provisions of this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered (excluding telephone facsimile and
including receipted express courier and overnight delivery service) or mailed by
first class certified U.S. mail, return receipt requested showing name of
recipient, addressed to the proper party.
Section 9.02. Addresses for notices. For purposes of sending notices
under this Agreement, the addresses of the parties are as follows:
As to the Selling Stockholder: Warren A. Wilbur III
P.O. Box 50
Doylestown, Pennsylvania 18901
As to CFIM: Stephen E. Williams, President
CFI Mortgage, Inc.
Suite 500
601 Cleveland Street
Clearwater, Florida 33755
Section 9.03. Change of address. A party may change its address for
notices by sending a notice of such change to all other parties by the means
provided in Section 9.01.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Effective date. The effective date of this Agreement
shall for all purposes be the date set forth in the introductory paragraph
hereto, notwithstanding a later actual date of execution by the parties.
Section 11.02. Entire agreement. This writing constitutes the entire
agreement of the parties with respect to the subject matter hereof; superseding
all prior agreements, understandings, representations and warranties.
Section 11.03. Waivers. No waiver of any provision, requirement,
obligation, condition, breach or default hereunder, or consent to any departure
from the provisions hereof; shall be considered valid unless in writing and
signed by the party giving such
Page 5 of 7 pages.
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
Section 11.04. Amendments. This Agreement may not be modified, amended
or terminated except by a written agreement specifically referring to this
Agreement signed by all of the parties hereto and amendment, modification or
alteration of, addition to or termination of this Agreement or any provision of
this Agreement shall not be effective unless it is made in writing and signed by
the parties.
Section 11.05. Construction. This Agreement has been negotiated by the
parties, section by section, and no provision hereof shall be construed more
strictly against one party than against the another party by reason of such
party having drafted such provision. The order in which the provisions of this
Agreement appear are solely for convenience of organization; and later appearing
provisions shall not be construed to control earlier appearing provisions.
Section 11.06. Invalidity. It is the intent of the parties that each
provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law. If any provision hereof shall be
prohibited, invalid, illegal or unenforceable, in any respect, under applicable
law, such provision shall be ineffective to the extent of such prohibition,
invalidity or non enforceability only, without invalidating the remainder of
such provision or the remaining provisions of this Agreement; and, there shall
be substituted in place of such prohibited, invalid, illegal or unenforceable
provision a provision which nearly as practicable carries out the intent of the
parties with respect thereto and which is not prohibited and is valid, legal and
enforceable.
Section 11.07. Multiple counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be an original and, taken
together, shall be deemed one and the same instrument.
Section 11.08. Assignment, parties and binding effect. This Agreement,
and the duties and obligations of any party shall not be assigned without the
prior written consent of the other party(ies). This Agreement shall benefit
solely the named parties and no other person shall claim, directly or
indirectly, benefit hereunder, express or implied, as a third-party beneficiary,
or otherwise. Wherever in this Agreement a party is named or referred to, the
successors (including heirs and personal representative of individual parties)
and permitted assigns of such party shall be deemed to be included, and all
agreements, promises, covenants and stipulations in this Agreement shall be
binding upon and inure to the benefit of their respective successors and
permitted assigns.
Section 11.09. Survival of representations and warranties. The
representations and warranties made herein shall survive the execution and
delivery of this Agreement and full performance hereunder of the obligations of
the representing and warranting party, subject to the provisions of
Section 4.03.
Section 11.10. Arbitration. Unless a court of competent jurisdiction
shall find that a particular dispute or controversy cannot, as a matter of law,
be the subject of arbitration, any dispute or controversy arising hereunder,
other than suit for injunctive relief which can be granted only by a court of
competent jurisdiction, shall be settled by binding arbitration in West Palm
Beach, Florida by a panel of three arbitrators in accordance with the rules of
the American Arbitration Association; provided, that the rules of discovery of
the U.S. District
Page 6 of 7 pages.
Court with jurisdiction of the situs of the arbitration shall apply. Judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The parties may pursue all other remedies with respect to
any claim that is not subject to arbitration.
Section 11.11. Jurisdiction and venue. Any action or proceeding for
enforcement of this Agreement and the instruments and documents executed and
delivered in connection herewith which is determined by a court of competent
jurisdiction not, as a matter of law, to be subject to arbitration as provided
in Section 11.10 or which seeks injunctive relief shall be brought and enforced
in the courts of the State of Florida in and for Palm Beach County and in the
United States District Court for the Southern District of Florida, Palm Beach
Division, and the parties irrevocably submit to the jurisdiction of each such
court in respect of any such action or proceeding.
Section 11.12. Applicable law. This Agreement and all amendments
thereof shall be governed by and construed in accordance with the law of the
State of Florida applicable to contracts made and to be performed therein (not
including the choice of law rules thereof).
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
signed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, the day and year first above
written.
[Corporate Seal] CFI Mortgage, Inc.
Attest: By: /s/ Stephen E. Williams
------------------------------------
Stephen E. Williams, President
- -----------------------------------
Rodger Stubbs, Secretary
The Selling Stockholder:
/s/ Warren A. Wilbur III
----------------------------------------
Warren A. Wilbur III
Page 7 of 7 pages.
- --------------------------------------------------------------------------------
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT, made and entered into on August 4, 2000,
by and between CFI Mortgage, Inc., a Delaware corporation, ("CFIM") and David
Griffith, (the "Selling Stockholder").
- --------------------------------------------------------------------------------
WITNESSETH:
WHEREAS, CFIM's common stock is traded in the public securities market
on the OTC Bulletin Board and CFIM is obligated to file reports with the U.S.
Securities and Exchange Commission pursuant to a registration statement under
the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and has
filed all such reports except for a report on Form 8-K with respect to its
acquisition of Inventek, Inc., doing business as Surfside Software ("Surfside"),
the delay in the filing thereof resulting from a delay in obtaining the
requisite audit Surfside's financial statements; and
WHEREAS, CFIM owns a majority of Surfside's outstanding common stock
and desires to acquire 175 shares of Surfside's common stock owned by the
Selling Stockholder and constituting a minority interest in Surfside ("Surfside
Stock"); and
WHEREAS, the Selling Stockholder desires to acquire shares of CFIM
common stock and warrants to purchase its common stock ("CFI Securities") in
exchange for the Surfside Stock which he owns;
NOW, THEREFORE, in consideration of the premises herein before set
forth, in reliance hereon and the mutual promises and respective representations
and warranties of the parties, one to another made herein, and the reliance of
each party upon the other(s) based hereon and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge, the
parties agree, for purposes of consummating the exchange of stock as
contemplated herein, as follows:
ARTICLE I
PRELIMINARY MATTERS
Section 1.01. Recitals. The parties acknowledge the recitals herein
above set forth in the preamble are correct, are, by this reference,
incorporated herein and are made a part of this Agreement.
Section 1.02. Exhibits and Schedules. Exhibits (which are documents to
be executed and delivered at the Closing by the party identified therein or in
the provision requiring its delivery) and Schedules (which are statements
setting forth information about party identified in each such Schedule) referred
to herein and annexed hereto are, by this reference, incorporated herein and
made a part of this Agreement, as if set forth fully herein.
Section 1.03. Use of words and phrases. Natural persons may be
identified by last name, with such additional descriptors as may be desirable.
The words "herein," "hereby," "hereunder," "hereof," "herein before,"
"hereinafter" and any other equivalent words refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision hereof. The
words, terms and phrases defined herein and any pronoun used herein shall
include the singular, plural and all genders. The word "and" shall be construed
as a
Page 1 of 7 pages.
coordinating conjunction unless the context clearly indicates that it should be
construed as a copulative conjunction.
Section 1.04. Accounting terms. All accounting terms not otherwise
defined herein shall have the meanings assigned to them under generally accepted
accounting principles unless specifically referenced to regulatory accounting
principles.
Section 1.05. Calculation of time lapse or passage; Action required on
holidays. When a provision of this Agreement requires or provides for the
calculation of the lapse or passage of a time period, such period shall be
calculated by treating the event which starts the lapse or passage as zero;
provided, that this provision shall not apply to any provision which specifies a
certain day for action or payment, e.g. the first day of each calendar month.
Unless otherwise provided, the term "month" shall mean a period of thirty days
and the term "year" shall mean a period of 360 days, except that the term
"calendar year" shall mean the actual calendar year period. If any calendar day
on which action is required to be taken or payment is required to be made under
this Agreement is not a Business Day (Business Day being a day on which national
banks are open for business where the actor or payer is located), then such
action or payment shall be taken or made on the next succeeding Business Day.
Section 1.06. Use of titles, headings and captions. The titles,
headings and captions of articles, sections, paragraphs and other subdivisions
contained herein are for the purpose of convenience only and are not intended to
define or limit the contents of said articles, sections, paragraphs and other
subdivisions.
ARTICLE II
TERMS OF THE TRANSACTIONS
Section 2.01. Exchange Transaction. In accordance with the terms of
this Agreement, on the Closing Date, (a) the Selling Stockholder will assign,
transfer and deliver to CFIM all of the Surfside Stock owned by the Selling
Shareholder; and (b) CFIM will issue and deliver to the Selling Stockholder the
CFIM Securities.
Section 2.02. The CFIM Securities. The CFIM Securities consists of a
combination of 150,000 shares of CFIM common stock and 15,000 common stock
purchase warrants. Each CFIM common stock purchase warrant included in the CFIM
Securities will entitle the holder to purchase one share of CFIM's common stock
at an exercise price equal to one hundred twenty (120) percent of the average
closing price or average closing asked price, as the case may be, in the best
market for CFIM's common stock on the day of the Closing under this agreement.
The warrants may be exercised at any time for a period beginning on the day
following the Closing and ending two years from the date of this Agreement. The
number of shares subject to and the exercise price of the warrants shall be
subject to adjustment for share divisions, share combinations and
recapitalizations.
Section 2.03. Transaction costs. Each party shall pay all costs and
expenses, which it incurs in connection with this Agreement and the transactions
contemplated hereby.
Page 2 of 7 pages.
ARTICLE III
CLOSING OF THE TRANSACTION
Section 3.01. Location, date and time of the Closing. The Closing of
the Exchange shall be take place as soon as possible, but in any event later
than , 2000, unless extended by mutual agreement of the parties.
Section 3.02. The Selling Stockholders' obligations at Closing. At the
Closing, the Selling Stockholder will deliver to CFIM certificates representing
the Surfside Stock, fully endorsed to enable CFIM to transfer such certificates
on the books of Surfside pursuant Section 2.01; and
Section 3.03. CFIM's obligations at Closing. At the Closing, CFIM will
deliver to the Selling Stockholder the CFIM Securities. If certificates are to
be issued in the name of the Selling Stockholder and any other person jointly,
the Selling Stockholder shall notify CFIM not less than three business days
prior to the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Section 4.01. The Selling Stockholder's representations and warranties.
The Selling Stockholder represents and warrants to CFIM, as follows:
(a) He is the sole legal and beneficial owner of the Surfside Stock and
that the Surfside Stock is not subject to any liens, hypothecations or
encumbrances.
(b) He acknowledges that he had the reasonable opportunity to ask
questions and to examine such supplemental documentation as he may deem
necessary to make an informed decision concerning investment in the CFIM
Securities. He acknowledges that he has received satisfactory answers to these
questions from CFI's management and has verified to his satisfaction the
information in CFIM's reports filed under the Exchange Act.
(c) He understands the offer and sale of the CFIM Securities are not
registered or qualified under federal securities laws or the securities laws of
my/our state of residence; but, the offer and sale is made instead in reliance
upon an exemption from such registration or qualification commonly referred to
as the "private placement exemption" and that the requirements for reliance upon
such exemption include a provision that he purchase the CFIM Securities for
investment and not with a view toward distribution or resale. He understands
that CFIM is under no obligation, except as provided below, to register or
qualify the CFIM Securities, or any component thereof, for resale under the laws
of his state of residence. He understands that he will be required to bear the
economic risk of the investment for at least one year, unless the CFIM
Securities are soon registered for resale by the Selling Stockholder pursuant to
the provision set forth below. He understands a notice of these restrictions
will be printed on the Common Stock certificates for the Shares and the
warrants, if any, and the transfer agent, if any, will be instructed to honor
the notice.
(d) He is acquiring the CFIM Securities for investment for his own
account and not with a view to or for the purpose of resale, division,
fractionalization or distribution. He does not have a present or foreseeable
need for liquidation of the CFIM Securities. He has not predetermined the
occurrence of any event or condition upon which I/we intends to sell the Shares.
He understands the CFIM Securities and the components thereof are defined as
"restricted securities " in Rule 144 under the Securities Act of 1933, as
amended, and are subject to the requirements of the rule for resale, unless
registered under said act.
Page 3 of 7 pages.
(e) He understands investment in the CFIM Securities may involve a high
degree of risk which could result in a complete loss of his investment.
(f) He agrees to complete a "Confidential Investor's Questionnaire" in
the event that such a questionnaire is needed to demonstrate compliance with the
Securities Act and the securities law of our state of residence.
Section 4.02. CFIM's representations and warranties. CFIM represents
and warrants to SURFSIDE and to the Selling Stockholder that:
(a) CFIM is a duly incorporated and existing corporation in good
standing under the laws of its state of incorporation, has full corporate power
to execute and deliver this Agreement, is qualified and in good standing as a
foreign corporation in every jurisdiction where the conduct of its business or
the nature of its properties require it to be qualified.
(b) This Agreement has been duly and validly authorized, executed and
delivered by CFIM and constitutes the legal, valid and binding obligation of
CFIM enforceable against CFIM in accordance with its terms subject, as to
enforceability, to bankruptcy, insolvency, reorganization and other laws of,
relating to or affecting shareholders and creditors rights generally and to
general equitable principles.
(c) The CFIM common stock included in the CFIM Securities and the
underlying the CFIM common stock purchase warrants, when issued by CFIM against
payment therefore as provided in this Agreement and authenticated and delivered
by its transfer agent, as contemplated by this Agreement, will be duly and
validly authorized, validly issued and fully paid and non-assessable.
(d) Except as noted in the preamble hereto with respect to the filing
of a report regarding CFIM's acquisition of a majority of Surfside, reports CFIM
has filed under the Exchange Act was, on the date of the information reflected
in each such report accurate in all material respects and such information at
the date hereof as a whole does not contain any untrue statement of material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(f) The Selling Stockholder is justified in relying on the reports CFIM
has filed under the Exchange Act (as supplemented by information he has received
as a result of his opportunity to ask questions and receive answers thereto) in
making his decision to acquire the CFIM Securities.
ARTICLE V
REGISTRATION COVENANT
Section 5.01. Piggyback registration. In the event CFIM files a
registration statement under the Securities Act of 1933, as amended, covering
the sale of securities on its own behalf or on behalf of any of its stockholders
and the registration statement is on a form which would be available for use by
the Selling Stockholder to cover his sale of the CFIM Securities, CFIM shall
notify the Selling Stockholder in advance of the filing thereof and afford the
Selling Stockholder a reasonable opportunity to include the common stock
component of the CFIM Securities, or any number of shares thereof, in such
registration statement at no expense, other than his personal selling expenses,
such as commissions,
Page 4 of 7 pages.
concessions or discounts. This covenant shall expire two years after the
Closing, provided that at any time the Selling Stockholder shall then be
eligible under Rule 144 or otherwise to sell all the shares of CFIM's common
stock which he acquired hereunder (including exercise of the warrants) in a
single three month period CFIM shall be released from this covenant.
ARTICLE IX
NOTICES
Section 9.01. Procedure for giving notices. Any and all notices or
other communications required or permitted to be given under any of the
provisions of this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered (excluding telephone facsimile and
including receipted express courier and overnight delivery service) or mailed by
first class certified U.S. mail, return receipt requested showing name of
recipient, addressed to the proper party.
Section 9.02. Addresses for notices. For purposes of sending notices
under this Agreement, the addresses of the parties are as follows:
As to the Selling Stockholder: David Griffith
2501 Durham Road
PO Box 710
Bristol, PA 19007
As to CFIM: Stephen E. Williams, President
CFI Mortgage, Inc.
Suite 500
601 Cleveland Street
Clearwater, Florida 33755
Section 9.03. Change of address. A party may change its address for
notices by sending a notice of such change to all other parties by the means
provided in Section 9.01.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Effective date. The effective date of this Agreement
shall for all purposes be the date set forth in the introductory paragraph
hereto, notwithstanding a later actual date of execution by the parties.
Section 11.02. Entire agreement. This writing constitutes the entire
agreement of the parties with respect to the subject matter hereof, superseding
all prior agreements, understandings, representations and warranties.
Page 5 of 7 pages.
Section 11.03. Waivers. No waiver of any provision, requirement,
obligation, condition, breach or default hereunder, or consent to any departure
from the provisions hereof, shall be considered valid unless in writing and
signed by the party giving such waiver, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.
Section 11.04. Amendments. This Agreement may not be modified, amended
or terminated except by a written agreement specifically referring to this
Agreement signed by all of the parties hereto and amendment, modification or
alteration of, addition to or termination of this Agreement or any provision of
this Agreement shall not be effective unless it is made in writing and signed by
the parties.
Section 11.05. Construction. This Agreement has been negotiated by the
parties, section by section, and no provision hereof shall be construed more
strictly against one party than against the another party by reason of such
party having drafted such provision. The order in which the provisions of this
Agreement appear are solely for convenience of organization; and later appearing
provisions shall not be construed to control earlier appearing provisions.
Section 11.06. Invalidity. It is the intent of the parties that each
provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law. If any provision hereof shall be
prohibited, invalid, illegal or unenforceable, in any respect, under applicable
law, such provision shall be ineffective to the extent of such prohibition,
invalidity or non enforceability only, without invalidating the remainder of
such provision or the remaining provisions of this Agreement; and, there shall
be substituted in place of such prohibited, invalid, illegal or unenforceable
provision a provision which nearly as practicable carries out the intent of the
parties with respect thereto and which is not prohibited and is valid, legal and
enforceable.
Section 11.07. Multiple counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be an original and, taken
together, shall be deemed one and the same instrument.
Section 11.08. Assignment, parties and binding effect. This Agreement,
and the duties and obligations of any party shall not be assigned without the
prior written consent of the other party(ies). This Agreement shall benefit
solely the named parties and no other person shall claim, directly or
indirectly, benefit hereunder, express or implied, as a third-party beneficiary,
or otherwise. Wherever in this Agreement a party is named or referred to, the
successors (including heirs and personal representative of individual parties)
and permitted assigns of such party shall be deemed to be included, and all
agreements, promises, covenants and stipulations in this Agreement shall be
binding upon and inure to the benefit of their respective successors and
permitted assigns.
Section 11.09. Survival of representations and warranties. The
representations and warranties made herein shall survive the execution and
delivery of this Agreement and full performance hereunder of the obligations of
the representing and warranting party, subject to the provisions of Section
4.03.
Section 11.10. Arbitration. Unless a court of competent jurisdiction
shall find that a particular dispute or controversy cannot, as a matter of law,
be the subject of arbitration, any dispute or controversy arising hereunder,
other than suit for injunctive relief which can be
Page 6 of 7 pages.
granted only by a court of competent jurisdiction, shall be settled by binding
arbitration in West Palm Beach, Florida by a panel of three arbitrators in
accordance with the rules of the American Arbitration Association; provided,
that the rules of discovery of the U.S. District Court with jurisdiction of the
situs of the arbitration shall apply. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The parties
may pursue all other remedies with respect to any claim that is not subject to
arbitration.
Section 11.11. Jurisdiction and venue. Any action or proceeding for
enforcement of this Agreement and the instruments and documents executed and
delivered in connection herewith which is determined by a court of competent
jurisdiction not, as a matter of law, to be subject to arbitration as provided
in Section 11.10 or which seeks injunctive relief shall be brought and enforced
in the courts of the State of Florida in and for Palm Beach County and in the
United States District Court for the Southern District of Florida, Palm Beach
Division, and the parties irrevocably submit to the jurisdiction of each such
court in respect of any such action or proceeding.
Section 11.12. Applicable law. This Agreement and all amendments
thereof shall be governed by and construed in accordance with the law of the
State of Florida applicable to contracts made and to be performed therein (not
including the choice of law rules thereof).
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
signed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, the day and year first above
written.
[Corporate Seal] CFI Mortgage, Inc.
Attest: By: /s/ Stephen E. Williams
------------------------------------
Stephen E. Williams, President
- -----------------------------------
Rodger Stubbs, Secretary
The Selling Stockholder:
/s/ David Griffith
----------------------------------------
David Griffith
Page 7 of 7 pages.
AMENDMENT AND MODIFICATION TO STOCK EXCHANGE AGREEMENT
This Amendment and Modification to Stock Exchange Agreement, made and
entered into July 28, 2000 as of January 13, 2000 by and between CFI Mortgage,
Inc., a Delaware corporation, ("CFIM") and J. Steven Furniss, James B. Furniss
and Charles Iappini, (collectively, the "Selling Stockholders") and Inventek,
Inc., a Florida corporation, doing business as Surfside Software Systems
("Surfside").
WITNESSETH:
Whereas, CFIM, Messrs. Furniss and Surfside executed and conducted the
Closing pursuant to a Stock Exchange Agreement among the parties as of
January 13, 2000 ("Stock Exchange Agreement"); and
Whereas, Mr. Iappini has not executed the Stock Exchange Agreement, but
is willing to do so and to Close with respect to the shares of Surfside common
stock which he owns if he is relieved as provided herein of the representations
and warranties which were to have been made by him jointly and severally with
Messrs. Furniss and Surfside as set forth in Section 4.01 of the Stock Exchange
Agreement; and
Whereas, Mr. Iappini has not bee engaged in the management or
operations of or employed by Surfside, with the result that he is not in a
position to know of the accuracy or inaccuracy of the representations and
warranties set forth in Section 4.01 of the Stock Exchange Agreement; and
Whereas, CFIM, Messrs. Furniss and Surfside are willing to make the
amendment and modification of the Stock Exchange Agreement as provided herein as
an inducement for Mr. Iappini to complete his part of the Stock Exchange
Agreement;
Now Therefore, in consideration of the premises set forth herein and
other good and valuable consideration, including the reliance of each party on
the other parties with respect to the subject matter hereof, receipt and
sufficiency of which is hereby acknowledged, the parties agree that:
Section 1. Relief of representations and warranties. Mr. Iappini is not
making any of the representations and warranties set forth in Section 4.01
of the Stock Exchange Agreement, either individually or jointly with any other
person and said Section 4.01 is hereby amended and modified to remove Mr.
Iappini as a "Selling Stockholder" for purposes of said Section 4.01.
Section 2. Mr. Iappini's ownership of Surfside shares. In lieu of all
the representations and warranties set forth in said Section 4.01, Mr. Iappini
represents and warrants to CFIM solely that he is the legal and beneficial owner
of 50 (fifty shares of Surfside common stock and he owns not other shares of
Surfside common stock.
Section 3. Exchange is not a breach, etc. Mr. Iappini's exchange of his
Surfside common stock as contemplated by the Stock Exchange Agreement will not
breach or violate any pledge, hypothecation, encumbrance, mortgage, security
interest or other agreement or contract to which Mr. Iappini is a party, his
Surfside common stock being subject to none of such things.
Section 4. Tender and exchange of shares. Mr. Iappini will tender to
CFIM his shares of Surfside common stock with the return of this Amendment and
Modification fully executed and CFIM shall promptly deliver to Mr. Iappini his
fractional share of the CFIM Stock and his Warrants, as provided in the Stock
Exchange Agreement.
In Witness Whereof, the undersigned have set their hands the dates set
after their respective names.
[Corporate Seal] CFI Mortgage, Inc.
By: /s/ Stephen E. Williams
------------------------------------
Stephen E. Williams, President
[Corporate Seal] Inventek, Inc.
By: /s/ J. Steven Furniss
------------------------------------
J. Steven Furniss, President
The Selling Stockholders:
/s/ J. Steven Furniss
----------------------------------------
J. Steven Furniss
/s/ James E. Furniss
----------------------------------------
James E. Furniss
/s/ Charles Iappini
----------------------------------------
Charles Iappini