-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qx2PLK+bmMZNsraTvOpevLgSbhj0AazH/5V6fzz39HawjABJNdAtUeasQ9puhy8E Stlh9t8V8oUGrj3jOLrRFw== 0001015402-02-001923.txt : 20020520 0001015402-02-001923.hdr.sgml : 20020520 20020520164149 ACCESSION NUMBER: 0001015402-02-001923 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEDGE NET EXPERTS INC CENTRAL INDEX KEY: 0001123606 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 330875030 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 333-45678 FILM NUMBER: 02657910 BUSINESS ADDRESS: STREET 1: 1706 WINDING RIDGE ROAD CITY: KNOXVILLE STATE: TN ZIP: 37922 BUSINESS PHONE: 8586899266 MAIL ADDRESS: STREET 1: 1706 WINDING RIDGE ROAD CITY: KNOXVILLE STATE: TN ZIP: 37922 10QSB 1 doc1.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________to _______________. COMMISSION FILE NUMBER 333-45678 SEQUIAM CORPORATION (Exact name of registrant as specified in its charter) CALIFORNIA 33-0875030 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 300 SUNPORT LANE, ORLANDO, FLORIDA 32809 (Address, including zip code, of principal executive offices) 407-541-0774 (Registrant's telephone number, including area code) WEDGE NET EXPERTS, INC. 1706 WINDING RIDGE ROAD, KNOXVILLE, TENNESSEE 37922 (Former name, former address) The number of shares of the Registrant's Common Stock outstanding as of May 15, 2002 was 24,233,000. DOCUMENTS INCORPORATED BY REFERENCE Transitional Small Business Disclosure Format (Check one): Yes [_] No [X] ================================================================================ PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FORM 10-QSB 1ST QUARTER WEDGE NET EXPERTS, INC. INDEX Page ---- PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements Independent Accountants' Report . . . . . . . . . . . . . . . . . 3 Condensed balance sheet, March 31, 2002 (unaudited) . . . . . . . 4 Condensed statements of operations, three months ended March 31, 2002 (unaudited) and 2002 (unaudited), and September 21, 1999 (inception) through March 31, 2002 (unaudited) . . . . . . . . 5 Condensed statements of cash flows, three months ended March 31, 2002 (unaudited) and 2001 (unaudited), and September 21, 1999 (inception) through March 31, 2002 (unaudited) . . . . . . . . 6 Notes to condensed financial statements (unaudited) . . . . . . . 7 Item 2. Plan of Operation. . . . . . . . . . . . . . . . . . . . 9 PART 2 - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 13 Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2 PART 1. ITEM 1. FINANCIAL INFORMATION INDEPENDENT ACCOUNTANTS' REPORT To the Board of Directors and Shareholders Wedge Net Experts, Inc. We have reviewed the accompanying balance sheet of Wedge Net Experts, Inc. (a development stage company), as of March 31, 2002, and statements of operations and cash flows for the three months ended March 31, 2002 and 2001 and for the period from September 21, 1999 (inception) through March 31, 2002. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less ins cope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. Cordovano and Harvey, P.C. Denver, Colorado May 17, 2002 3 WEDGE NET EXPERTS, INC. (A Development Stage Company) CONDENSED BALANCE SHEET (Unaudited) March 31, 2002 ASSETS $ - ================= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: $ - ----------------- Commitment. . . . . . . . . . . . . . . . . . . - Shareholders' equity: Preferred stock. . . . . . . . . . . . . . . - Common stock . . . . . . . . . . . . . . . . 4,733 Additional paid-in capital . . . . . . . . . 123,007 Deficit accumulated during development stage (127,740) ----------------- Total shareholders' equity - ----------------- $ - ================= See accompanying notes to condensed financial statements 4 WEDGE NET EXPERTS, INC. (A Development Stage Company) CONDENSED STATEMENTS OF OPERATIONS (Unaudited) September 21, 1999 Three Months Ended (Inception) March 31, Through ------------------------ March 31, 2002 2001 2002 ----------- ----------- ---------- Sales. . . . . . . . . . . . . . . . . . $ 1,825 $ 735 $ 3,572 ----------- ----------- ---------- Operating expenses: Stock-based compensation: Organization costs. . . . . . . . . - - 2,800 Compensation . . . . . . . . . . . . . - 500 10,561 Contract labor . . . . . . . . . . . . 1,500 1,172 5,147 Contributed services (Note B). . . . . - - 49,630 Contributed rent (Note B). . . . . . . 600 600 6,000 Office . . . . . . . . . . . . . . . . 3,394 713 8,816 Professional fees. . . . . . . . . . . 9,840 250 13,998 Travel . . . . . . . . . . . . . . . . 1,755 624 4,827 Internet services. . . . . . . . . . . 2,567 1,200 7,262 Depreciation . . . . . . . . . . . . . - 1,030 5,951 Loss on equipment abandoned. . . . . . 11,262 - 11,262 Other. . . . . . . . . . . . . . . . . 634 38 4,508 ----------- ----------- ---------- Total operating expenses (31,552) (6,127) (130,762) ----------- ----------- ---------- Operating loss (29,727) (5,392) (127,190) Interest expense . . . . . . . . . . . . - - (550) ----------- ----------- ---------- Loss before income taxes (29,727) (5,392) (127,740) Income taxes (Note C). . . . . . . . . . - - - ----------- ----------- ---------- Net loss $ (29,727) $ (5,392) $(127,740) =========== =========== ========== Basic and diluted loss per common share. $ (0.01) $ (0.00) =========== =========== Basic and diluted weighted average common shares outstanding. . . . . . . 4,733,000 3,800,000 =========== =========== See accompanying notes to condensed financial statements 5
WEDGE NET EXPERTS, INC. (A Development Stage Company) CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) September 21, 1999 Three Months Ended (Inception) March 31, Through ------------------- March 31, 2002 2001 2002 --------- -------- --------------- Net cash used in operating activities . . . . . . $(20,552) $(6,048) $ (51,547) --------- -------- --------------- Cash flows from investing activities: Equipment purchases . . . . . . . . . . . . . . - - (17,213) --------- -------- --------------- Net cash used in investing activities - - (17,213) --------- -------- --------------- Cash flows from financing activities: Proceeds from issuance of notes payable . . . . - - 50,000 Capital contributions by officer. . . . . . . . - - 200 Proceeds from sale of common stock. . . . . . . - - 46,650 Payments for offering costs . . . . . . . . . . - - (28,090) --------- -------- --------------- Net cash provided by financing activities - - 68,760 --------- -------- --------------- Net change in cash (20,552) (6,048) - Cash, beginning of period . . . . . . . . . . . . 20,552 11,400 - --------- -------- --------------- Cash, end of period $ - $ 5,352 $ - ========= ======== =============== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest . . . . . . . . . . . . . . . . . . $ - $ - $ - ========= ======== =============== Income taxes . . . . . . . . . . . . . . . . $ - $ - $ - ========= ======== =============== Non-cash financing activity: Common stock issued in exchange for debt . . $ - $ - $ 50,000 ========= ======== ===============
See accompanying notes to condensed financial statements 6 WEDGE NET EXPERTS, INC. (A Development Stage Company) NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) NOTE A: BASIS OF PRESENTATION ----------------------- The financial statements presented herein have been prepared by the Company in accordance with the accounting policies in its Form 10-KSB dated December 31, 2001, and should be read in conjunction with the notes thereto. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim period presented have been made. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the year. The Company is in the development stage in accordance with Statements of Financial Accounting Standards (SFAS) No. 7 "Accounting and Reporting by Development Stage Enterprises". As of March 31, 2002, the Company has devoted substantially all of its efforts to financial planning, raising capital and developing markets. Financial data presented herein are unaudited. NOTE B: RELATED PARTY TRANSACTIONS ---------------------------- Contributed rent - ----------------- An officer contributed office space to the Company for the three months ended March 31, 2002 and 2001. The office space was valued at $200 per month based on the market rate in the local area and is included in the accompanying unaudited condensed financial statements as rent expense with a corresponding credit to additional paid-in capital. NOTE C: INCOME TAXES ------------- The Company records its income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes". The Company incurred net operating losses during the three months ended March 31, 2002 resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefit and expense resulted in $-0- income taxes. NOTE D: SUBSEQUENT EVENTS ------------------ Effective as of April 1, 2002, we acquired Sequiam, Inc. pursuant to the Agreement and Plan of Merger, as more fully described in our Form 8-K filed on April 16, 2002. In connection with the acquisition, our issued and outstanding common stock was increased from 4,733,000 shares to 24,233,000 shares. Following the acquisition of Sequiam, Inc., our officers and directors resigned and appointed Nicolaas H. Van den Brekel and Mark L. Mroczkowski as our officers and directors. On May 1, 2002, our board appointed Dr. Bernard Luskin as the third member of our board of directors. Dr. Luskin is an independent director and currently owns none of our common stock. 7 WEDGE NET EXPERTS, INC. (A Development Stage Company) NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) Following our special shareholders' meeting held on April 29, 2002, we changed our name to Sequiam Corporation and changed the name of Sequiam, Inc. to Sequiam Software, Inc., each effective as of May 1, 2002. Our common stock continues to be traded on the OTC Bulletin Board under the new trading symbol: SQUM. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION This Quarterly Report on Form 10-QSB includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These include, among others, the statements about our plans and strategies under the headings "Management's Discussion and Analysis of Plan of Operations." When used in this document and the documents incorporated herein by reference, the words "believes," "expects," "anticipates," "intends," "plans," "estimates," or similar expressions are intended to identify, in certain circumstances, forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed in forward-looking statements. Although it is not possible to itemize all of the factors and specific events that could affect the outlook of a technology company like ours operating in a competitive environment, factors that could significantly impact expected results include: the acceptance of our technology; the effect of national and local economic conditions; our outstanding indebtedness; the loss of key employees; competition from technologies developed by other companies; the ability to attract and retain employees; delays in completing the development of our new products caused by a lack of capital or external causes beyond our reasonable control; and the ability to identify and consummate relationships with strategic partners. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward- looking statements are reasonable, we cannot assure that such plans, intentions or expectations will be achieved. Actual results may differ materially from the forward-looking statements made in this Quarterly Report on Form 10-QSB. We do not intend to update any forward-looking statements, and we hereby disclaim any obligation to update such forward-looking statements. (1) Our plan of operation for the next twelve months. (a) Recent developments. During the quarter ended March 31, 2002, we did not have any available credit, bank financing or other external sources of liquidity. We had very little operating revenue, and as a result, our operations had not been a source of liquidity. We needed to obtain additional capital in order to continue our operations. In order to obtain capital, we needed to sell additional shares of our common stock or borrow funds from private lenders. Our former officers and directors believed it was is in the best interest of our shareholders to discontinue the company's current business and attempt to acquire a new business which may provide more value to our shareholders. To further this objective, our former officers and directors agreed to acquire Sequiam, Inc., a Delaware corporation, in a tax-free reorganization, pursuant to an Agreement and Plan of Merger, dated March 1, 2002. We filed a copy of the Agreement and Plan of Merger as an exhibit to our Form 8-K filed with the Securities and Exchange Commission on April 16, 2002. Effective as of April 1, 2002, we acquired Sequiam, Inc. pursuant to the Agreement and Plan of Merger, as more fully described in our Form 8-K filed on April 16, 2002. In connection with the acquisition, our issued and outstanding common stock was increased from 4,733,000 shares to 24,233,000 shares. 9 Following the acquisition of Sequiam, Inc., our officers and directors resigned and appointed Nicolaas H. Van den Brekel and Mark L. Mroczkowski as our officers and directors. This change in control is more fully described in our Information Statement filed on April 16, 2001 pursuant to Rule 14f-1. On May 1, 2002, our board appointed Dr. Bernard Luskin as the third member of our board of directors. Dr. Luskin is an independent director and currently owns none of our common stock. Following our special shareholders' meeting held on April 29, 2002, we changed our name to Sequiam Corporation and changed the name of Sequiam, Inc. to Sequiam Software, Inc., each effective as of May 1, 2002. Our common stock continues to be traded on the OTC Bulletin Board under the new trading symbol: SQUM. (b) Cash requirements and additional funds in the next twelve months. Our new management is committed to investment in its newly acquired subsidiary, Sequiam Software, Inc. A more detailed description of our plan of operation for Sequiam Software, Inc. is included in our Form 8-K filed on April 16, 2002. Our Form 8-K filed on April 16, 2002, is hereby incorporated into this report. In addition, more information about Sequiam Software, Inc. can be found at www.sequiam.com. Our new management expects that we will need --------------- additional capital over the next twelve (12) months before our operating revenues equal expenses. We expect to obtain this additional capital through traditional financing, convertible debt or the sale of additional equity stock. In addition, we are currently negotiating the acquisition of Brekel Group, Inc., a Delaware corporation ("Brekel Group") through a tax-free reorganization. We expect to issue 11,000,000 new shares of common stock in exchange for all of the issued and outstanding stock of Brekel Group, which includes all of the equity interest in Brekel Group. We believe as a result of this acquisition, we will have the opportunity to raise additional capital upon more favorable terms and conditions to our existing shareholders. The acquisition of Brekel Group is contingent upon satisfaction of a due diligence investigation being conducted by our management and the management and board of Brekel Group, and upon the approval of the shareholders of Brekel Group. Brekel Group is a leading provider of digital on-demand manufacturing and publishing services to authors, corporate publishers and print buyers. Brekel Group owns and operates the following businesses: QuestPrint. ---------- QuestPrint is a digital on-demand manufacturing division that eliminates the necessity of keeping large volumes of print inventory. It exemplifies the 10 models of POD (Print on Demand) DTP (Deliver then Print) digital warehousing and one-to-one printing. Markets include commercial customers who create significant documentation, and medium and large publishers with active backlists and specialty titles. For more information about QuestPrint visit www.questprint.com. - ------------------ FirstPublish. ------------ The FirstPublish brand represents the niche in short-run publications. It offers professional and aspiring authors of books and screenplays a web-based, cost-effective alternative to traditional "vanity press". FirstPublish provides several turnkey publishing services in an affordable package of bundled services. The author can utilize FirstPublish with a manuscript in any format and can use FirstPublish to produce a finished book. For more information about FirstPublish visit www.firstpublish.com. -------------------- Griffin Publishing Group. -------------------------- Griffin Publishing Group is a trade book publishing company specializing in Sports, Education Curriculum and Health and Fitness. Griffin Publishing Group developed the "Learning Champions" product line, which are creative and innovative educational programs for schools. If we complete the acquisition of Brekel Group, we are committed to invest in the marketing, development and distribution of all of Brekel Group's products. We believe that Brekel Group's products are a valuable compliment to the products offered by Sequiam Software, Inc. and can be marketed and distributed to many of the same consumers of Sequiam's products. (c) Summary of any product research and development and other investments. Sequiam. ------- Our plan for Sequiam Software, Inc. includes investment in the research and development of our software products, Sequiam and Sequiam link. In addition to our investment in Sequiam's research and development, we plan to devote more resources to the marketing, sales and distribution of Sequiam's existing products. We believe that we have the potential to significantly increase Sequiam's operating revenue by investment in marketing and distribution. We will require additional capital liquidity in order to meet our goals with respect to marketing, sales and distribution. We believe we have the opportunity to raise such additional capital through traditional financing, convertible debt or the sale of additional equity stock. We believe that if we acquire Brekel Group, we will have an opportunity to raise such capital on terms more favorable to our shareholders. 11 Brekel Group. ------------- If we acquire Brekel Group, we intend to invest in research and development of the products related to the current business of QuestPrint, FirstPublish and Griffen Publishing Group. These products include: digital document warehousing, variable data and web-enabled print on demand. In addition to our investment in Brekel Group's research and development, we plan to devote more resources to the marketing, sales and distribution of Brekel Group's existing products. If we acquire Brekel Group, we believe that we could significantly increase Brekel Group's operating revenue by investment in marketing and distribution. We would require additional capital liquidity in order to meet our goals with respect to marketing, sales and distribution of Brekel Group's products. Nonetheless, we believe that if we acquire Brekel Group, we will have the opportunity to raise such additional capital liquidity through traditional financing, convertible debt or the sale of additional equity stock. (d) Expected purchase or sale of plant and significant equipment. We currently occupy approximately 14,500 square feet of office space in Orlando, Florida pursuant to a sublease with Brekel Group. Our space is part of a building also currently occupied by Brekel Group, and we believe this facility will be sufficient to maintain our business operations over the next twelve months, even if we acquire Brekel Group. We currently own equipment sufficient to continue the operations of Sequiam Software, Inc. over the next twelve months. To grow the business, we expect to invest a modest amount of our capital investment and operating revenue in upgrading our existing equipment and purchasing new equipment. The amount of these expenses are dependent, in part, upon our acquisition of Brekel Group. We believe that Brekel Group currently owns equipment sufficient to continue its operations over the next twelve months. We anticipate acquiring all such equipment in the acquisition of Brekel Group. To grow the business, we expect to invest a modest amount of our capital investment and operating revenue in upgrading Brekel Group's existing equipment and purchasing new equipment for Brekel Group. (e) Expected significant changes in the number of employees. We currently have ten full-time employees. These employees include our new officers identified in our Information Statement and Form 8-K, each filed on April 16, 2002. We plan to increase this number to thirty over the next twelve months. We plan to have eight of these new employees devoted to marketing and sales. We plan to have another twenty-two of these employees devoted to development and distribution of our products. If we acquire Brekel Group, we expect to add an additional thirty-two full-time employees. We plan to increase this number by an additional eight over the next twelve months. We plan to have most of these new employees devoted to publishing and print on demand. 12 PART II: OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 2.1 Agreement and Plan of Merger, dated March 1, 2002, included as an Exhibit to our Form 8-K filed on April 16, 2002, is hereby incorprated by this reference as Exhibit 2.1. 3.1 Certificate of Amendment to Articles of Incorporation of Wedge Net Experts, Inc., dated April 29, 2002. 10.1 Employment Agreement ~ Nicolaas Van den Brekel, dated as of March 1, 2002. 10.2 Employment Agreement ~ Mark Mroczkowski, dated as of March 1, 2002. 20.1 Schedule 14A, Proxy Statement, filed on April 19, 2002, is hereby incorporated by this reference as Exhibit 20.1. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ending March 31, 2002. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SEQUIAM CORPORATION Date: May 20, 2002 By: /s/ Nicolaas H. Van den Brekel --------------------------------------------------- Nicolaas H. Van den Brekel, Chief Executive Officer By: /s/ Mark L. Mroczkowski --------------------------------------------------- Mark L. Mroczkowski, Chief Financial Officer 14 EX-3.1 3 doc2.txt CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF WEDGE NET EXPERTS, INC., A CALIFORNIA CORPORATION The undersigned certify that: I They are the president and the secretary, respectively, of WEDGE NET EXPERTS, INC., a California corporation. II Article I of the Articles of Incorporation of this corporation is amended to read as follows: "The name of this corporation is SEQUIAM CORPORATION." III The foregoing amendment of Articles of Incorporation has been duly approved by the board of directors. IV The foregoing amendment of Articles of Incorporation has been duly approved by the required vote of the shareholders in accordance with Section 902, California Corporations Code. The total number of outstanding shares of this corporation is Twenty-four Million Two Hundred Thirty-three Thousand (24,233,000). The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50%. We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge. Dated: April 29, 2002 /s/ Nicolaas H. Van den Brekel ------------------------------------- Nicolaas H. Van den Brekel, President /s/ Mark L. Morczkowski ------------------------------------- Mark L. Mroczkowski, Secretary EX-10.1 4 doc3.txt EMPLOYMENT AGREEMENT (Nicolaas Van den Brekel) This EMPLOYMENT AGREEMENT between Sequiam, Inc. and Nicolaas Van den Brekel (this "Agreement") is made effective as of the 1st day of March, 2002 (the "Effective Date") by and between NICOLAAS VAN DEN BREKEL, an individual ("Employee"), and SEQUIAM, INC., a Delaware corporation (the "Corporation"), with reference to the following recitals: A. The Corporation was formed on January 23, 2001. B. Employee has acted as the Corporation's Chief Executive Officer since the inception of the Corporation pursuant to an oral agreement between Employee and the Corporation. C. Employee and the Corporation are parties to that certain Agreement and Plan of Merger, dated as of March 1, 2002 (the "Merger Agreement"), pursuant to which Employee has agreed to continue to serve as the Corporation's Chief Executive Officer and the Corporation has agreed to continue to hire Employee as such, pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements set forth herein, the Merger Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee and the Corporation hereby agree as follows: 1. Employment. The Corporation hereby affirms, renews and extends the ---------- employment of Employee as the Corporation's Chief Executive Officer, and Employee hereby affirms, renews and accepts such employment by the Corporation, for the "Term" (as defined in Section 3 below), upon the terms and conditions set forth herein. 2. Duties. During the Term, the Employee shall serve the Corporation ------ faithfully, diligently and to the best of his ability, under the direction of the Board of Directors of the Corporation. The Employee shall render such services during the Term at the Corporation's principal place of business, as the Corporation may from time to time reasonably require of him, and shall devote all of his business time to the performance thereof. Employee shall have those duties and powers as generally pertain to the office of Chief Executive Officer, subject to the control of the Board of Directors. The precise services and duties that the Employee is obligated to perform hereunder may from time to time be changed, amended, extended or curtailed by the Board of Directors of the Corporation. 3. Term. The "Term" of this Agreement shall commence on the Effective ---- Date and continue thereafter for a term of two (2) years, as may be extended or earlier terminated pursuant to the terms and conditions of this Agreement. The Term of this Agreement shall automatically renew for successive one (1) year periods unless, within sixty (60) days of the expiration of the then existing Term, the Corporation or Employee provides written notice to the other party that it elects not to renew the Term. Upon delivery of such notice, this Agreement shall continue until expiration of the Term, whereupon this Agreement shall terminate and neither party shall have any further obligation thereafter arising under this Agreement, except as explicitly set forth herein to the contrary. 4. Compensation. ------------ 4.1 Salary. The Corporation shall pay to Employee an minimum ------ annual salary of one hundred and fifty thousand Dollars ($150,000), payable in equal installments at the end of such regular payroll accounting periods as are established by the Corporation, or in such other installments upon which the parties hereto shall mutually agree. In addition, the Corporation may adjust the salary from time to time, and award bonuses in cash, stock or stock options or other property and services. 4.2 Benefits. During the Term, Employee shall be entitled to -------- participate in all medical and other employee benefit plans, including vacation, sick leave, retirement accounts, profit sharing, stock option plans, stock appreciation rights, and other employee benefits, provided by the Corporation to employees similarly situated. 4.3 Expense Reimbursement. The Corporation shall reimburse ---------------------- Employee for reasonable and necessary expenses incurred by him on behalf of the Corporation in the performance of his duties hereunder during the Term, provided that such expenses are adequately documented in accordance with the Corporation's then customary policies. 5. Other Employment. Employee shall devote as much of his business and ---------------- professional time and effort, attention, knowledge, and skill to the management, supervision and direction of the Corporation's business and affairs as is necessary to ensure the success of the Corporation as determined solely by Employee. Employee may, during the term hereof, be interested directly or indirectly, in any manner, as partner, officer, director, stockholder, advisor, employee or in any other capacity in any other business; and nothing herein contained shall prevent or limit the right of Employee to invest any of his surplus funds in the capital stock or other securities of any corporation, company or limited partnership, or whose stock or securities are publicly owned or are regularly traded on any public exchange; nor shall anything herein contained prevent Employee from investing or limit Employee's right to invest his surplus funds in real estate; nor shall anything herein contained prevent Employee from serving in a volunteer capacity as officer, director, or advisor for professional organizations with which he is affiliated. 6. Indemnification. --------------- 6.1 Third Party Actions. The Corporation hereby indemnifies --------------------- Employee in the event that Employee is a party, or is threatened to be made a party, to any proceeding (other than an proceeding by or in the right of the Corporation to procure a judgment in the Corporation's favor) by reason of Employee's status as an officer, director, agent or employee of the Corporation, 2 against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding if Employee acted in good faith and in a manner that Employee reasonably believed to be in the Corporation's best interests and, in the case of a criminal proceeding, Employee had no reasonable cause to believe Employee's conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create any presumption that (a) Employee did not act in good faith or in a manner which Employee reasonably believed to be in the Corporation's best interests or (b) Employee had no reasonable cause to believe that Employee's conduct was unlawful. 6.2 Actions By the Corporation. The Corporation hereby ----------------------------- indemnifies Employee in the event that Employee was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action by or in the right of the Corporation to procure a judgment in the Corporation's favor by reason of Employee's status as an officer, director, agent or employee of the Corporation, against expenses actually and reasonably incurred by Employee in connection with the defense or settlement of that action, if Employee acted in good faith and in a manner Employee believed to be in the best interests of the Corporation and the Corporation's shareholders. No indemnification shall be made under this Section 6.2 with respect to any claim, issue, or matter on which Employee has been adjudged to be liable to the Corporation in the performance of Employee's duty to the Corporation and/ or the Corporation's shareholders, unless and only to the extent that the court in which such proceeding is or was pending shall determine on application that, in view of all the circumstances of the case, Employee is fairly and reasonably entitled to indemnity for expenses and then only to the extent that the court shall determine. 6.3 Successful Defense By Employee. To the extent that Employee -------------------------------- has been successful on the merits in defense of any proceeding referred to in Sections 6.1 or 6.2, or in defense of any claim, issue, or matter therein, the Corporation shall indemnify Employee against expenses actually and reasonably incurred by Employee in connection therewith. 6.4 Required Approval. Except for the indemnifications expressly ------------------ authorized by Sections 6.1, 6.2 and 6.3, any indemnification of Employee by the Corporation shall be made only if authorized in the specific case, after a determination that indemnification of Employee is proper in the circumstances by one of the following: 6.4.1 A majority vote of a quorum consisting of directors who are not parties to such proceeding; 6.4.2 Independent legal counsel in a written opinion if a quorum of directors who are not parties to such a proceeding is not available; 6.4.3 Either (a) the affirmative vote of a majority of shares in the Corporation entitled to vote represented at a duly held meeting at which a quorum is present; or (b) the written consent of holders of a majority of the 3 outstanding shares entitled to vote; provided however that for purposes of this Section 6.4.3, the shares owned by Employee shall not be considered outstanding or entitled to vote thereon); or 6.4.4 The court in which the proceeding is or was pending, on application made by the Corporation, Employee or any attorney or other person rendering services in connection with the defense, whether or not such application is opposed by the Corporation. 6.5 Advances. Expenses incurred in defending any proceeding shall -------- be advanced by the Corporation before the final disposition of such proceeding upon receipt of an undertaking by or on behalf of Employee to repay such amounts if it shall be determined ultimately that Employee is not entitled to be indemnified as authorized in this Section 7. 6.6 Other Contractual Rights. The indemnification provided by -------------------------- this Section 6 shall be deemed cumulative, and not exclusive, of any other rights to which Employee may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. Nothing in this section shall affect any right to indemnification to which Employee may be entitled by contract or otherwise. 6.7 Limitations. No indemnification or advance shall be made ----------- under this Section 6, except as provided in Sections 6.4.3 or 6.4.4, in any circumstance if it appears that it would be inconsistent with (a) an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (b) any condition expressly imposed by a court in approving settlement. 6.8 Insurance. To the extent available at commercially reasonable --------- rates and limits, the Corporation shall purchase and maintain insurance on behalf of Employee insuring against any liability asserted against or incurred by Employee in that capacity or arising out of Employee's status as such, whether or not the Corporation has the power to indemnify Employee against that liability under the provisions of this Section 6. 6.9 Survival. The rights provided by this Section 6 shall survive -------- the expiration or earlier termination of this Agreement pursuant hereto and shall inure to the benefit of Employee' heirs, executors, and administrators. 6.10 Amendment. Any amendment, repeal, or modification of the --------- Corporation's articles or bylaws shall not adversely affect Employee's right or protection existing at the time of such amendment, repeal, or modification. 6.11 Settlements. The Corporation shall not be liable to ----------- indemnify Employee under this Section 6 for (i) any amounts paid in settlement of any action or claim effected without the Corporation's written consent, which 4 consent shall not be unreasonably withheld, or (ii) any judicial award, if the Corporation was not given a reasonable and timely opportunity to participate, at the Corporation's expense, in the defense of such action. 6.12 Subrogation. In the event of payment under this Section 6, ----------- the Corporation shall be subrogated to the extent of such payment to all Employee's rights of recovery; and Employee shall execute all papers required and shall do everything necessary or appropriate to secure such rights, including the execution of any documents necessary or appropriate to the Corporation effectively bringing suit to enforce such rights. 6.13 No Duplication Of Payments. The Corporation shall not be ----------------------------- liable under this Section 6 to make any payment in connection with any claim made against Employee to the extent Employee has otherwise actually received payment, whether under a policy of insurance, agreement, vote, or otherwise, of any amount which is otherwise subject to indemnification under this Section 6. 6.14 Proceedings And Expenses. For the purposes of this Section 6, ------------------------ "proceeding" means any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative; and "expenses" includes, without limitation, attorney fees and any expenses of establishing a right to indemnification under this Section 6. 7. Confidential Information/ Inventions. -------------------------------------- 7.1 Employee shall not, in any manner, for any reasons, either directly or indirectly, divulge or communicate to any person, firm or corporation, any confidential information concerning any matters not generally known in the document management software industry or otherwise made public by the Corporation which affects or relates to the Corporation's business, finances, marketing and/ or operations, research, development, inventions, products, designs, plans, procedures, or other data (collectively, "Confidential Information") except in the ordinary course of business or as required by applicable law. Without regard to whether any item of Confidential Information is deemed or considered confidential, material, or important, the parties hereto stipulate that as between them, to the extent such item is not generally known in the property casualty insurance industries, such item is important, material, and confidential and affects the successful conduct of the Corporation's business and good will, and that any breach of the terms of this Section 7.1 shall be a material and incurable breach of this Agreement. 7.2 Employee further agrees that all documents and materials furnished to Employee by the Corporation and relating to the Corporation's business or prospective business are and shall remain the exclusive property of the Corporation as the case may be. Employee shall deliver all such documents and materials to the Corporation upon demand therefor and in any event upon expiration or earlier termination of this Agreement. Any payment of sums due 5 and owing to Employee by the Corporation upon such expiration or earlier termination shall be conditioned upon returning all such documents and materials, and Employee expressly authorizes the Corporation to withhold any payments due and owing pending return of such documents and materials. 7.3 All ideas, inventions, and other developments or improvements conceived or reduced to practice by Employee, alone or with others, during the term of this Agreement, whether or not during working hours, that are within the scope of the business of the Corporation or that relate to or result from any of the Corporation's work or projects or the services provided by Employee to the Corporation pursuant to this Agreement, shall be the exclusive property of the Corporation. Employee agrees to assist the Corporation during the term, at the Corporation's expense, to obtain patents and copyrights on any such ideas, inventions, writings, and other developments, and agrees to execute all documents necessary to obtain such patents and copyrights in the name of the Corporation. 8. Covenant Not to Compete. Except as expressly permitted in Section 5 ----------------------- above, during the term of this Agreement, Employee shall not engage in any of the following competitive activities: (a) engaging directly or indirectly in any business or activity substantially similar to any business or activity engaged in (or proposed to be engaged in) by the Corporation; (b) engaging directly or indirectly in any business or activity competitive with any business or activity engaged in (or proposed to be engaged in) by the Corporation; (c) soliciting or taking away any employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor of the Corporation, or attempting to so solicit or take away; (d) interfering with any contractual or other relationship between the Corporation and any employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor; or (e) using, for the benefit of any person or entity other than the Corporation, any Confidential Information of the Corporation. The foregoing covenant prohibiting competitive activities shall survive the termination of this Agreement and shall extend, and shall remain enforceable against Employee, for the period of one (1) year following the date this Agreement is terminated. In addition, during the two-year period following such expiration or earlier termination, Employee shall not make or permit the making of any negative statement of any kind concerning the Corporation. 9. Survival. Employee agrees that the provisions of Sections 7 and 8 -------- shall survive expiration or earlier termination of this Agreement for any reasons, whether voluntary or involuntary, with or without cause, and shall remain in full force and effect thereafter. 10. Injunctive Relief. Employee acknowledges and agrees that the ------------------ covenants and obligations of Employee set forth in Sections 7 and 8 with respect to non-competition, non-solicitation, confidentiality and the Corporation's property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Corporation irreparable injury for which adequate remedies are not available at law. Therefore, Employee agrees that the Corporation shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem 6 necessary or appropriate to restrain Employee from committing any violation of the covenants and obligations referred to in this Section 10. These injunctive remedies are cumulative and in addition to any other rights and remedies the Corporation may have at law or in equity. 11. Termination ----------- 11.1 Termination by Employee. Employee may terminate this ------------------------- Agreement without cause at any time and for any reason upon thirty (30) days notice to the Corporation. Employee may immediately terminate this Agreement for cause at any time by written notice to the Corporation. For purposes of this Agreement, the term "cause" for termination by Employee shall be (a) a material breach by the Corporation of any material covenant or obligation hereunder; or (b) the voluntary or involuntary dissolution of the Corporation. The written notice given hereunder by Employee to the Corporation shall specify in reasonable detail the cause for termination, and, in the case of the cause described in (a) above, such termination notice shall not be effective until thirty (30) days after the Corporation's receipt of such notice, during which time the Corporation shall have the right to respond to Employee's notice and cure the breach or other event giving rise to the termination. 11.2 Termination by the Corporation. The Corporation may --------------------------------- terminate its employment of Employee under this Agreement without cause at any time and for any reason upon thirty (30) days notice to Employee. The Corporation may terminate its employment of Employee under this Agreement for cause at any time by written notice to Employee. For purposes of this Agreement, the term "cause" for termination by the Corporation shall be (a) a conviction of or plea of guilty or nolo contendere by Employee to a felony; (b) the consistent refusal by Employee to perform his material duties and obligations hereunder; or (c) Employee's willful and intentional misconduct in the performance of his material duties and obligations. The written notice given hereunder by the Corporation to Employee shall specify in reasonable detail the cause for termination. In the case of a termination for the cause described in (a) above, such termination shall be effective upon receipt of the written notice. In the case of the causes described in (b) and (c) above, such termination notice shall not be effective until thirty (30) days after Employee's receipt of such notice, during which time Employee shall have the right to respond to the Corporation's notice and cure the breach or other event giving rise to the termination. 11.3 Severance. Upon a termination of this Agreement without --------- cause by Employee or with cause by the Corporation, the Corporation shall immediately pay to Employee all accrued and unpaid compensation as of the date of such termination. Upon a termination of this Agreement with cause by Employee or without cause by the Corporation, the Corporation shall immediately pay to Employee all accrued and unpaid compensation as of the date of such termination and the "Severance Payment." The "Severance Payment" shall equal the total amount of salary payable to Employee under Section 4.1 of this Agreement from the date of such termination until the end of the term of this Agreement (prorated for any partial month), but in no event less than one year's salary payable under Section 4.1 hereof. The accrued compensation due and 7 payable at termination together with any Severance Payment due hereunder shall bear interest at the lesser of eight percent (8%) per annum or the maximum rate permitted by law until such amounts are paid in full. 12. Termination Upon Death. If Employee dies during the term of this ------------------------ Agreement, this Agreement shall terminate, except that Employee's legal representatives shall be entitled to receive any earned but unpaid compensation due hereunder. 13. Termination Upon Disability. If, during the term of this ----------------------------- Agreement, Employee suffers and continues to suffer from a "Disability" (as defined below), then the Corporation may terminate this Agreement by delivering to Employee sixty (60) calendar days prior written notice of termination based on such Disability, setting forth with specificity the nature of such Disability and the determination of Disability by the Corporation. For the purposes of this Agreement, "Disability" means Employee's inability, with reasonable accommodation, to substantially perform Employee's duties, services and obligations under this Agreement due to physical or mental illness or other disability for a continuous, uninterrupted period of ninety (90) calendar days. 14. Change In Control. In the event that a change in control of the ------------------- Company occurs without the prior approval of the then existing Board of Board of Directors, whether by proxy contest, or as the result of a tender offer made without the approval of the then existing Board of Board of Directors, or by any other means, then this contract shall be deemed terminated and the following termination compensation will be immediately due and payable to Employee. 14.1 Lump Sum Cash Payment. Ten million dollars ($10,000,000) is ---------------------- due and payable thirty days following the termination of this contract. 14.2 Annual Payments. Two million dollars ($2,000,000) is due and --------------- payable on the anniversary of the termination date of this contract for each of the five years subsequent to the termination date of this contract. 15. Personnel Policies, Conditions, And Benefits. Except as otherwise --------------------------------------------- provided herein, Employee's employment shall be subject to the personnel policies and benefit plans which apply generally to the Corporation's employees as the same may be interpreted, adopted, revised or deleted from time to time, during the term of this Agreement, by the Corporation in its sole discretion. During the term hereof, Employee shall receive the following: 15.1 Term Life Insurance. In addition to Employee's participation ------------------- in any life insurance plan or plans available to all employees of the Corporation, the Corporation shall provide Employee with term life insurance in the amount of One Million Dollars ($1,000,000.00) if available at standard rates or, in the alternative, term life insurance in such lesser amount as the standard, unrated premium for coverage of $1,000,000.00 will purchase. 8 15.2 Vacation. Employee shall be entitled to vacation during each -------- year of the term at the rate of five (5) weeks per year; provided that no vacation shall accrue from year to year during the term. 16. Beneficiaries of Agreement. This Agreement shall inure to the ---------------------------- benefit of the Corporation and any affiliates, successors, assigns, parent corporations, subsidiaries, and/or purchasers of the Corporation as they now or shall exist while this Agreement is in effect. 17. No Waiver. No failure by either party to declare a default based ---------- on any breach by the other party of any obligation under this Agreement, or failure of such party to act quickly with regard thereto, shall be considered to be a waiver of any such obligation, or of any future breach. 18. Modification. No waiver or modification of this Agreement or of ------------ any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the parties to be charged therewith. 19. Choice Of Law/Jurisdiction. This Agreement shall be governed by ---------------------------- and construed in accordance with the laws of the State of Florida, without regard to any conflict-of-laws principles. The Company and Employee hereby consent to personal jurisdiction before all courts in the County of Orange, State of Florida, and hereby acknowledge and agree that Orange County, Florida is and shall be the most proper forum to bring a complaint before a court of law. 20. Entire Agreement. This Agreement embodies the whole agreement ----------------- between the parties hereto and there are no inducements, promises, terms, conditions, or obligations made or entered into by the Corporation or Employee other than contained herein. 21. Severability. All agreements and covenants contained herein are ------------ severable, and in the event any of them, with the exception of those contained in Sections 1 and 4 hereof, shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein. 22. Headings. The headings contained herein are for the convenience of -------- reference and are not to be used in interpreting this Agreement. IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written. 9 the "CORPORATION" SEQUIAM, INC., a Delaware corporation By: /s/ Nicolaas Van den Brekel ------------------------------------------- Nicolaas Van den Brekel, Chairman and CEO By: /s/ Mark L. Mroczkowski ------------------------------------------- Mark L. Mroczkowski, Secretary and CFO "EMPLOYEE" /s/ Nicolaas Van den Brekel - -------------------------------- NICOLAAS VAN DEN BREKEL, an individual 10 EX-10.2 5 doc4.txt EMPLOYMENT AGREEMENT (Mark Mroczkowski) This EMPLOYMENT AGREEMENT between Sequiam, Inc. and Mark Mroczkowski (this "Agreement") is made effective as of the 1st day of March, 2002 (the "Effective Date") by and between MARK MROCZKOWSKI, an individual ("Employee"), and SEQUIAM, INC., a Delaware corporation (the "Corporation"), with reference to the following recitals: A. The Corporation was formed on January 23, 2001. B. Employee has acted as the Corporation's Treasurer, Chief Financial Officer, Secretary and Senior Vice President since the inception of the Corporation pursuant to an oral agreement between Employee and the Corporation. C. Employee and the Corporation are parties to that certain Agreement and Plan of Merger, dated as of March 1, 2002 (the "Merger Agreement"), pursuant to which Employee has agreed to continue to serve as the Corporation's Treasurer, Chief Financial Officer, Secretary and Senior Vice President and the Corporation has agreed to continue to hire Employee as such, pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements set forth herein, the Merger Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee and the Corporation hereby agree as follows: 1. Employment. The Corporation hereby affirms, renews and extends the ---------- employment of Employee as the Corporation's Treasurer, Chief Financial Officer, Secretary and Senior Vice President, and Employee hereby affirms, renews and accepts such employment by the Corporation, for the "Term" (as defined in Section 3 below), upon the terms and conditions set forth herein. 2. Duties. During the Term, the Employee shall serve the Corporation ------ faithfully, diligently and to the best of his ability, under the direction of the Board of Directors of the Corporation. The Employee shall render such services during the Term at the Corporation's principal place of business, as the Corporation may from time to time reasonably require of him, and shall devote all of his business time to the performance thereof. Employee shall have those duties and powers as generally pertain to the office of Treasurer, Chief Financial Officer, Secretary and Senior Vice President, subject to the control of the Board of Directors. The precise services and duties that the Employee is obligated to perform hereunder may from time to time be changed, amended, extended or curtailed by the Board of Directors of the Corporation. 3. Term. The "Term" of this Agreement shall commence on the Effective ---- Date and continue thereafter for a term of two (2) years, as may be extended or earlier terminated pursuant to the terms and conditions of this Agreement. The Term of this Agreement shall automatically renew for successive one (1) year periods unless, within sixty (60) days of the expiration of the then existing Term, the Corporation or Employee provides written notice to the other party that it elects not to renew the Term. Upon delivery of such notice, this Agreement shall continue until expiration of the Term, whereupon this Agreement shall terminate and neither party shall have any further obligation thereafter arising under this Agreement, except as explicitly set forth herein to the contrary. 4. Compensation. ------------ 4.1 Salary. The Corporation shall pay to Employee an minimum ------ annual salary of one hundred and fifty thousand Dollars ($150,000), payable in equal installments at the end of such regular payroll accounting periods as are established by the Corporation, or in such other installments upon which the parties hereto shall mutually agree. In addition, the Corporation may adjust the salary from time to time, and award bonuses in cash, stock or stock options or other property and services. 4.2 Benefits. During the Term, Employee shall be entitled to -------- participate in all medical and other employee benefit plans, including vacation, sick leave, retirement accounts, profit sharing, stock option plans, stock appreciation rights, and other employee benefits, provided by the Corporation to employees similarly situated. 4.3 Expense Reimbursement. The Corporation shall reimburse ---------------------- Employee for reasonable and necessary expenses incurred by him on behalf of the Corporation in the performance of his duties hereunder during the Term, provided that such expenses are adequately documented in accordance with the Corporation's then customary policies. 5. Other Employment. Employee shall devote as much of his business and ---------------- professional time and effort, attention, knowledge, and skill to the management, supervision and direction of the Corporation's business and affairs as is necessary to ensure the success of the Corporation as determined solely by Employee. Employee may, during the term hereof, be interested directly or indirectly, in any manner, as partner, officer, director, stockholder, advisor, employee or in any other capacity in any other business; and nothing herein contained shall prevent or limit the right of Employee to invest any of his surplus funds in the capital stock or other securities of any corporation, company or limited partnership, or whose stock or securities are publicly owned or are regularly traded on any public exchange; nor shall anything herein contained prevent Employee from investing or limit Employee's right to invest his surplus funds in real estate; nor shall anything herein contained prevent Employee from serving in a volunteer capacity as officer, director, or advisor for professional organizations with which he is affiliated. 6. Indemnification. --------------- 6.1 Third Party Actions. The Corporation hereby indemnifies --------------------- Employee in the event that Employee is a party, or is threatened to be made a party, to any proceeding (other than an proceeding by or in the right of the Corporation to procure a judgment in the Corporation's favor) by reason of 2 Employee's status as an officer, director, agent or employee of the Corporation, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding if Employee acted in good faith and in a manner that Employee reasonably believed to be in the Corporation's best interests and, in the case of a criminal proceeding, Employee had no reasonable cause to believe Employee's conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create any presumption that (a) Employee did not act in good faith or in a manner which Employee reasonably believed to be in the Corporation's best interests or (b) Employee had no reasonable cause to believe that Employee's conduct was unlawful. 6.2 Actions By the Corporation. The Corporation hereby ----------------------------- indemnifies Employee in the event that Employee was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action by or in the right of the Corporation to procure a judgment in the Corporation's favor by reason of Employee's status as an officer, director, agent or employee of the Corporation, against expenses actually and reasonably incurred by Employee in connection with the defense or settlement of that action, if Employee acted in good faith and in a manner Employee believed to be in the best interests of the Corporation and the Corporation's shareholders. No indemnification shall be made under this Section 6.2 with respect to any claim, issue, or matter on which Employee has been adjudged to be liable to the Corporation in the performance of Employee's duty to the Corporation and/ or the Corporation's shareholders, unless and only to the extent that the court in which such proceeding is or was pending shall determine on application that, in view of all the circumstances of the case, Employee is fairly and reasonably entitled to indemnity for expenses and then only to the extent that the court shall determine. 6.3 Successful Defense By Employee. To the extent that Employee -------------------------------- has been successful on the merits in defense of any proceeding referred to in Sections 6.1 or 6.2, or in defense of any claim, issue, or matter therein, the Corporation shall indemnify Employee against expenses actually and reasonably incurred by Employee in connection therewith. 6.4 Required Approval. Except for the indemnifications expressly ------------------ authorized by Sections 6.1, 6.2 and 6.3, any indemnification of Employee by the Corporation shall be made only if authorized in the specific case, after a determination that indemnification of Employee is proper in the circumstances by one of the following: 6.4.1 A majority vote of a quorum consisting of directors who are not parties to such proceeding; 6.4.2 Independent legal counsel in a written opinion if a quorum of directors who are not parties to such a proceeding is not available; 6.4.3 Either (a) the affirmative vote of a majority of shares in the Corporation entitled to vote represented at a duly held meeting at which 3 a quorum is present; or (b) the written consent of holders of a majority of the outstanding shares entitled to vote; provided however that for purposes of this Section 6.4.3, the shares owned by Employee shall not be considered outstanding or entitled to vote thereon); or 6.4.4 The court in which the proceeding is or was pending, on application made by the Corporation, Employee or any attorney or other person rendering services in connection with the defense, whether or not such application is opposed by the Corporation. 6.5 Advances. Expenses incurred in defending any proceeding shall -------- be advanced by the Corporation before the final disposition of such proceeding upon receipt of an undertaking by or on behalf of Employee to repay such amounts if it shall be determined ultimately that Employee is not entitled to be indemnified as authorized in this Section 7. 6.6 Other Contractual Rights. The indemnification provided by -------------------------- this Section 6 shall be deemed cumulative, and not exclusive, of any other rights to which Employee may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. Nothing in this section shall affect any right to indemnification to which Employee may be entitled by contract or otherwise. 6.7 Limitations. No indemnification or advance shall be made ----------- under this Section 6, except as provided in Sections 6.4.3 or 6.4.4, in any circumstance if it appears that it would be inconsistent with (a) an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (b) any condition expressly imposed by a court in approving settlement. 6.8 Insurance. To the extent available at commercially reasonable --------- rates and limits, the Corporation shall purchase and maintain insurance on behalf of Employee insuring against any liability asserted against or incurred by Employee in that capacity or arising out of Employee's status as such, whether or not the Corporation has the power to indemnify Employee against that liability under the provisions of this Section 6. 6.9 Survival. The rights provided by this Section 6 shall survive -------- the expiration or earlier termination of this Agreement pursuant hereto and shall inure to the benefit of Employee' heirs, executors, and administrators. 6.10 Amendment. Any amendment, repeal, or modification of the --------- Corporation's articles or bylaws shall not adversely affect Employee's right or protection existing at the time of such amendment, repeal, or modification. 4 6.11 Settlements. The Corporation shall not be liable to ----------- indemnify Employee under this Section 6 for (i) any amounts paid in settlement of any action or claim effected without the Corporation's written consent, which consent shall not be unreasonably withheld, or (ii) any judicial award, if the Corporation was not given a reasonable and timely opportunity to participate, at the Corporation's expense, in the defense of such action. 6.12 Subrogation. In the event of payment under this Section 6, ----------- the Corporation shall be subrogated to the extent of such payment to all Employee's rights of recovery; and Employee shall execute all papers required and shall do everything necessary or appropriate to secure such rights, including the execution of any documents necessary or appropriate to the Corporation effectively bringing suit to enforce such rights. 6.13 No Duplication Of Payments. The Corporation shall not be ----------------------------- liable under this Section 6 to make any payment in connection with any claim made against Employee to the extent Employee has otherwise actually received payment, whether under a policy of insurance, agreement, vote, or otherwise, of any amount which is otherwise subject to indemnification under this Section 6. 6.14 Proceedings And Expenses. For the purposes of this Section 6, ------------------------ "proceeding" means any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative; and "expenses" includes, without limitation, attorney fees and any expenses of establishing a right to indemnification under this Section 6. 7. Confidential Information/ Inventions. -------------------------------------- 7.1 Employee shall not, in any manner, for any reasons, either directly or indirectly, divulge or communicate to any person, firm or corporation, any confidential information concerning any matters not generally known in the document management software industry or otherwise made public by the Corporation which affects or relates to the Corporation's business, finances, marketing and/ or operations, research, development, inventions, products, designs, plans, procedures, or other data (collectively, "Confidential Information") except in the ordinary course of business or as required by applicable law. Without regard to whether any item of Confidential Information is deemed or considered confidential, material, or important, the parties hereto stipulate that as between them, to the extent such item is not generally known in the property casualty insurance industries, such item is important, material, and confidential and affects the successful conduct of the Corporation's business and good will, and that any breach of the terms of this Section 7.1 shall be a material and incurable breach of this Agreement. 7.2 Employee further agrees that all documents and materials furnished to Employee by the Corporation and relating to the Corporation's business or prospective business are and shall remain the exclusive property of the Corporation as the case may be. Employee shall deliver all such documents 5 and materials to the Corporation upon demand therefor and in any event upon expiration or earlier termination of this Agreement. Any payment of sums due and owing to Employee by the Corporation upon such expiration or earlier termination shall be conditioned upon returning all such documents and materials, and Employee expressly authorizes the Corporation to withhold any payments due and owing pending return of such documents and materials. 7.3 All ideas, inventions, and other developments or improvements conceived or reduced to practice by Employee, alone or with others, during the term of this Agreement, whether or not during working hours, that are within the scope of the business of the Corporation or that relate to or result from any of the Corporation's work or projects or the services provided by Employee to the Corporation pursuant to this Agreement, shall be the exclusive property of the Corporation. Employee agrees to assist the Corporation during the term, at the Corporation's expense, to obtain patents and copyrights on any such ideas, inventions, writings, and other developments, and agrees to execute all documents necessary to obtain such patents and copyrights in the name of the Corporation. 8. Covenant Not to Compete. Except as expressly permitted in Section 5 ----------------------- above, during the term of this Agreement, Employee shall not engage in any of the following competitive activities: (a) engaging directly or indirectly in any business or activity substantially similar to any business or activity engaged in (or proposed to be engaged in) by the Corporation; (b) engaging directly or indirectly in any business or activity competitive with any business or activity engaged in (or proposed to be engaged in) by the Corporation; (c) soliciting or taking away any employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor of the Corporation, or attempting to so solicit or take away; (d) interfering with any contractual or other relationship between the Corporation and any employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor; or (e) using, for the benefit of any person or entity other than the Corporation, any Confidential Information of the Corporation. The foregoing covenant prohibiting competitive activities shall survive the termination of this Agreement and shall extend, and shall remain enforceable against Employee, for the period of one (1) year following the date this Agreement is terminated. In addition, during the two-year period following such expiration or earlier termination, Employee shall not make or permit the making of any negative statement of any kind concerning the Corporation. 9. Survival. Employee agrees that the provisions of Sections 7 and 8 -------- shall survive expiration or earlier termination of this Agreement for any reasons, whether voluntary or involuntary, with or without cause, and shall remain in full force and effect thereafter. 10. Injunctive Relief. Employee acknowledges and agrees that the ------------------ covenants and obligations of Employee set forth in Sections 7 and 8 with respect to non-competition, non-solicitation, confidentiality and the Corporation's property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Corporation irreparable injury for which adequate remedies are not available at 6 law. Therefore, Employee agrees that the Corporation shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Employee from committing any violation of the covenants and obligations referred to in this Section 10. These injunctive remedies are cumulative and in addition to any other rights and remedies the Corporation may have at law or in equity. 11. Termination ----------- 11.1 Termination by Employee. Employee may terminate this ------------------------- Agreement without cause at any time and for any reason upon thirty (30) days notice to the Corporation. Employee may immediately terminate this Agreement for cause at any time by written notice to the Corporation. For purposes of this Agreement, the term "cause" for termination by Employee shall be (a) a material breach by the Corporation of any material covenant or obligation hereunder; or (b) the voluntary or involuntary dissolution of the Corporation. The written notice given hereunder by Employee to the Corporation shall specify in reasonable detail the cause for termination, and, in the case of the cause described in (a) above, such termination notice shall not be effective until thirty (30) days after the Corporation's receipt of such notice, during which time the Corporation shall have the right to respond to Employee's notice and cure the breach or other event giving rise to the termination. 11.2 Termination by the Corporation. The Corporation may --------------------------------- terminate its employment of Employee under this Agreement without cause at any time and for any reason upon thirty (30) days notice to Employee. The Corporation may terminate its employment of Employee under this Agreement for cause at any time by written notice to Employee. For purposes of this Agreement, the term "cause" for termination by the Corporation shall be (a) a conviction of or plea of guilty or nolo contendere by Employee to a felony; (b) the consistent refusal by Employee to perform his material duties and obligations hereunder; or (c) Employee's willful and intentional misconduct in the performance of his material duties and obligations. The written notice given hereunder by the Corporation to Employee shall specify in reasonable detail the cause for termination. In the case of a termination for the cause described in (a) above, such termination shall be effective upon receipt of the written notice. In the case of the causes described in (b) and (c) above, such termination notice shall not be effective until thirty (30) days after Employee's receipt of such notice, during which time Employee shall have the right to respond to the Corporation's notice and cure the breach or other event giving rise to the termination. 11.3 Severance. Upon a termination of this Agreement without --------- cause by Employee or with cause by the Corporation, the Corporation shall immediately pay to Employee all accrued and unpaid compensation as of the date of such termination. Upon a termination of this Agreement with cause by Employee or without cause by the Corporation, the Corporation shall immediately pay to Employee all accrued and unpaid compensation as of the date of such termination and the "Severance Payment." The "Severance Payment" shall equal the total amount of salary payable to Employee under Section 4.1 of this 7 Agreement from the date of such termination until the end of the term of this Agreement (prorated for any partial month), but in no event less than one year's salary payable under Section 4.1 hereof. The accrued compensation due and payable at termination together with any Severance Payment due hereunder shall bear interest at the lesser of eight percent (8%) per annum or the maximum rate permitted by law until such amounts are paid in full. 12. Termination Upon Death. If Employee dies during the term of this ------------------------ Agreement, this Agreement shall terminate, except that Employee's legal representatives shall be entitled to receive any earned but unpaid compensation due hereunder. 13. Termination Upon Disability. If, during the term of this Agreement, ---------------------------- Employee suffers and continues to suffer from a "Disability" (as defined below), then the Corporation may terminate this Agreement by delivering to Employee sixty (60) calendar days prior written notice of termination based on such Disability, setting forth with specificity the nature of such Disability and the determination of Disability by the Corporation. For the purposes of this Agreement, "Disability" means Employee's inability, with reasonable accommodation, to substantially perform Employee's duties, services and obligations under this Agreement due to physical or mental illness or other disability for a continuous, uninterrupted period of ninety (90) calendar days. 14. Change In Control. In the event that a change in control of the ------------------- Company occurs without the prior approval of the then existing Board of Board of Directors, whether by proxy contest, or as the result of a tender offer made without the approval of the then existing Board of Board of Directors, or by any other means, then this contract shall be deemed terminated and the following termination compensation will be immediately due and payable to Employee. 14.1 Lump Sum Cash Payment. Five million dollars ($5,000,000) is ----------------------- due and payable thirty days following the termination of this contract. 14.2 Annual Payments. One million dollars ($1,000,000) is due and ---------------- payable on the anniversary of the termination date of this contract for each of the five years subsequent to the termination date of this contract. 15. Personnel Policies, Conditions, And Benefits. Except as otherwise --------------------------------------------- provided herein, Employee's employment shall be subject to the personnel policies and benefit plans which apply generally to the Corporation's employees as the same may be interpreted, adopted, revised or deleted from time to time, during the term of this Agreement, by the Corporation in its sole discretion. During the term hereof, Employee shall receive the following: 15.1 Term Life Insurance. In addition to Employee's participation ------------------- in any life insurance plan or plans available to all employees of the Corporation, the Corporation shall provide Employee with term life insurance in the amount of One Million Dollars ($1,000,000.00) if available at standard rates 8 or, in the alternative, term life insurance in such lesser amount as the standard, unrated premium for coverage of $1,000,000.00 will purchase. 15.2 Vacation. Employee shall be entitled to vacation during each -------- year of the term at the rate of five (5) weeks per year; provided that no vacation shall accrue from year to year during the term. 16. Beneficiaries of Agreement. This Agreement shall inure to the ---------------------------- benefit of the Corporation and any affiliates, successors, assigns, parent corporations, subsidiaries, and/or purchasers of the Corporation as they now or shall exist while this Agreement is in effect. 17. No Waiver. No failure by either party to declare a default based ---------- on any breach by the other party of any obligation under this Agreement, or failure of such party to act quickly with regard thereto, shall be considered to be a waiver of any such obligation, or of any future breach. 18. Modification. No waiver or modification of this Agreement or of ------------ any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the parties to be charged therewith. 19. Choice Of Law/Jurisdiction. This Agreement shall be governed by ---------------------------- and construed in accordance with the laws of the State of Florida, without regard to any conflict-of-laws principles. The Company and Employee hereby consent to personal jurisdiction before all courts in the County of Orange, State of Florida, and hereby acknowledge and agree that Orange County, Florida is and shall be the most proper forum to bring a complaint before a court of law. 20. Entire Agreement. This Agreement embodies the whole agreement ----------------- between the parties hereto and there are no inducements, promises, terms, conditions, or obligations made or entered into by the Corporation or Employee other than contained herein. 21. Severability. All agreements and covenants contained herein are ------------ severable, and in the event any of them, with the exception of those contained in Sections 1 and 4 hereof, shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein. 22. Headings. The headings contained herein are for the convenience of -------- reference and are not to be used in interpreting this Agreement. IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written. 9 the "CORPORATION" SEQUIAM, INC., a Delaware corporation By: /s/ Nicolaas Van den Brekel ------------------------------------------- Nicolaas Van den Brekel, Chairman and CEO By: /s/ Mark L. Mroczkowski ------------------------------------------- Mark L. Mroczkowski, Secretary and CFO "EMPLOYEE" /s/ Mark L. Mroczkowski - ---------------------------------------------- MARK MROCZKOWSKI, an individual 10 -----END PRIVACY-ENHANCED MESSAGE-----