AGREEMENT AND PLAN OF MERGER
by and among
WEDGE NET EXPERTS, INC.;
SEQUIAM ACQUISITIONS, INC.;
XXXXXXX X. XXXXXXX;
SEQUIAM, INC.;
and
the shareholders of
SEQUIAM, INC.
Dated as of March 1, 2002
Merger Agreement - Page iv
TABLE OF CONTENTS
Page
1. DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Section References and Schedules.. . . . . . . . . . . . . . . . . . . 6
2. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 The Merger.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Effect of the Merger.. . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Articles of Incorporation; Bylaws; Directors and Officers. . . . . . . 7
2.4 Conversion of Securities.. . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Adherence with Applicable Securities Laws. . . . . . . . . . . . . . . 8
3. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Time and Place of Closing. . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Documents to be Delivered by Sequiam.. . . . . . . . . . . . . . . . . 9
3.3 Documents to be Delivered by Wedge Net.. . . . . . . . . . . . . . . . 9
4. REPRESENTATIONS AND WARRANTIES OF THE SEQUIAM SHAREHOLDERS. . . . . . . . 10
4.1 Organization and Qualification.. . . . . . . . . . . . . . . . . . . . 10
4.2 Capitalization.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Subsidiaries and Affiliates. . . . . . . . . . . . . . . . . . . . . . 11
4.4 Options or Other Rights. . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 Ownership of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.6 Validity and Execution of Agreement. . . . . . . . . . . . . . . . . . 11
4.7 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.8 Consents and Approvals.. . . . . . . . . . . . . . . . . . . . . . . . 12
4.9 Violation of Laws, Permits, etc. . . . . . . . . . . . . . . . . . . . 12
4.10 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.11 Sequiam Financial Statements.. . . . . . . . . . . . . . . . . . . . . 12
4.12 Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . 12
4.13 Title to Property; Encumbrances. . . . . . . . . . . . . . . . . . . . 13
4.14 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.15 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.16 Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.17 Contracts and Other Agreements.. . . . . . . . . . . . . . . . . . . . 14
4.18 Sequiam Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . 14
4.19 Sequiam Accounts Payable and Liabilities.. . . . . . . . . . . . . . . 14
4.20 Compensation Arrangements; Officers, Directors and Employees.. . . . . 14
4.21 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.22 Operations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.23 Intellectual Property Rights.. . . . . . . . . . . . . . . . . . . . . 17
4.24 Employee Relations.. . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.25 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.26 Licenses and Permits.. . . . . . . . . . . . . . . . . . . . . . . . . 17
4.27 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.28 Acquisition of Exchange Shares.. . . . . . . . . . . . . . . . . . . . 18
4.29 Disclosure.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.30 Absence of Changes.. . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.31 Compliance with Laws.. . . . . . . . . . . . . . . . . . . . . . . . . 18
4.32 Environmental and Safety Matters.. . . . . . . . . . . . . . . . . . . 18
4.33 No Debt to Related Parties.. . . . . . . . . . . . . . . . . . . . . . 19
4.34 Corporate Name.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.35 Non-Merger and Survival. . . . . . . . . . . . . . . . . . . . . . . . 19
5. REPRESENTATIONS AND WARRANTIES OF WEDGE NET, ACQUISITIONS AND XXXXXXX . . 20
5.1 Organization and Qualification.. . . . . . . . . . . . . . . . . . . . 20
5.2 Capitalization.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Subsidiaries and Affiliates. . . . . . . . . . . . . . . . . . . . . . 20
5.4 Options or Other Rights. . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Ownership of Wedge Net Control Shares. . . . . . . . . . . . . . . . . 20
5.6 Validity and Execution of Agreement. . . . . . . . . . . . . . . . . . 21
5.7 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.8 Consents and Approvals.. . . . . . . . . . . . . . . . . . . . . . . . 21
5.9 Violation of Laws, Permits, etc. . . . . . . . . . . . . . . . . . . . 21
5.10 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.11 Wedge Net Financial Statements.. . . . . . . . . . . . . . . . . . . . 22
5.12 Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . 22
5.13 Title to Property; Encumbrances. . . . . . . . . . . . . . . . . . . . 22
5.14 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.15 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.16 Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.17 Contracts and Other Agreements.. . . . . . . . . . . . . . . . . . . . 23
5.18 Wedge Net Accounts Receivable. . . . . . . . . . . . . . . . . . . . . 23
5.19 Wedge Net Accounts Payable and Liabilities.. . . . . . . . . . . . . . 23
5.20 Compensation Arrangements; Officers, Directors and Employees.. . . . . 24
5.21 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.22 Operations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.23 Intellectual Property Rights.. . . . . . . . . . . . . . . . . . . . . 26
5.24 Employee Relations.. . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.25 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.26 Licenses and Permits.. . . . . . . . . . . . . . . . . . . . . . . . . 27
5.27 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.28 Acquisition of Exchange Shares.. . . . . . . . . . . . . . . . . . . . 27
5.29 Disclosure.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.30 Absence of Changes.. . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.31 Compliance with Laws.. . . . . . . . . . . . . . . . . . . . . . . . . 28
5.32 Environmental and Safety Matters.. . . . . . . . . . . . . . . . . . . 28
5.33 No Debt to Related Parties.. . . . . . . . . . . . . . . . . . . . . . 28
5.34 Corporate Name.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.35 Reporting Status; Listing. . . . . . . . . . . . . . . . . . . . . . . 29
5.36 Non-Merger and Survival. . . . . . . . . . . . . . . . . . . . . . . . 29
6. COVENANTS OF SEQUIAM. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.1 Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.3 Survival.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7. COVENANTS OF WEDGE NET AND ACQUISITIONS . . . . . . . . . . . . . . . . . 30
7.1 Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.3 Confidentiality Agreement. . . . . . . . . . . . . . . . . . . . . . . 31
Merger Agreement -- Page ii
7.4 Survival.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8. EMPLOYMENT AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.1 Conditions Precedent in favor of Wedge Net.. . . . . . . . . . . . . . 31
9.2 Waiver by Wedge Net. . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.3 Conditions Precedent in Favor of Sequiam and the Sequiam Shareholders. 33
9.4 Waiver by Company and the Sequiam Shareholders.. . . . . . . . . . . . 35
9.5 Nature of Conditions Precedent.. . . . . . . . . . . . . . . . . . . . 35
9.6 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10. RISK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.1 Material Change in the Business of Sequiam.. . . . . . . . . . . . . . 35
10.2 Material Change in the Business of Wedge Net.. . . . . . . . . . . . . 36
11. POST-CLOSING COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.1 Further Information. . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.2 Record Retention.. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.3 Post-Closing Assistance. . . . . . . . . . . . . . . . . . . . . . . . 37
11.4 Public Filings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.5 Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12. SURVIVAL; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 38
12.1 Survival of Agreements, Representations and Warranties.. . . . . . . . 38
12.2 Indemnification by Sequiam and the Sequiam Shareholders. . . . . . . . 38
12.3 Wedge Net's Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 38
13. TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 39
13.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.2 Survival After Termination.. . . . . . . . . . . . . . . . . . . . . . 39
14. LIMITATION OF LIABILITY AND REMEDY . . . . . . . . . . . . . . . . . . . 40
14.1 Limitation of Liability. . . . . . . . . . . . . . . . . . . . . . . . 40
14.2 Records and Communication. . . . . . . . . . . . . . . . . . . . . . . 40
15. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.1 Expenses.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.2 Further Assurances.. . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.4 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.5 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
15.6 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
15.7 Entire Agreement.. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
15.8 Waivers and Amendments.. . . . . . . . . . . . . . . . . . . . . . . . 43
15.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
15.10 Binding Effect, No Assignment. . . . . . . . . . . . . . . . . . . . . 43
15.11 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
15.12 Effect of Disclosure on Schedules. . . . . . . . . . . . . . . . . . . 44
15.13 Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
15.14 Severability of Provisions.. . . . . . . . . . . . . . . . . . . . . . 44
15.15 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Merger Agreement -- Page iii
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of
March 1, 2002, by and among WEDGE NET EXPERTS, INC., a California corporation
("WEDGE NET"); SEQUIAM ACQUISITIONS, INC., a California corporation
("ACQUISITIONS"); XXXXXXX X. XXXXXXX, an individual ("XXXXXXX"); SEQUIAM, INC.,
a Delaware corporation ("SEQUIAM"); XXXXXXXX X. VAN DEN BREKEL, an individual
("VAN DEN BREKEL"); XXXX X. XXXXXXXXXXX, an individual ("XXXXXXXXXXX"); XXXXX X.
XXXXXX, Trustee of the Xxxxx X. Xxxxxx Living Trust ("ROONEY"); and BREKEL
GROUP, INC., a Delaware corporation ("BREKEL GROUP"), with reference to the
following recitals:
A. Sequiam is engaged in the business of developing, marketing, selling
and distributing document management software known as "Sequiam;"
B. Wedge Net is a reporting company whose common stock is quoted on the
NASD "Bulletin Board" and which is seeking merger or acquisition candidates in
order to create value for its shareholders;
C. The respective Boards of Directors of Wedge Net, Sequiam and
Acquisitions deem it advisable and in the best interests of Wedge Net, Sequiam
and Acquisitions that Sequiam merge with and into Acquisitions pursuant to this
Agreement and the Articles of Merger (defined in Section 1.1(a) below), and the
applicable provisions of the laws of the State of California; and
D. It is intended that the merger shall qualify for United States
federal income tax purposes as a reorganization within the meaning of Section
368 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
premises and covenants hereinafter set forth, each of Wedge Net, Acquisitions,
Xxxxxxx, Van den Brekel, Mroczkowski, Rooney and Brekel Group (each, a "Party"
and collectively, the "Parties") hereby agrees as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. In this Agreement the following terms will have the
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following meanings:
(a) "Articles of Merger" means all of the following: (1) a short form
Agreement of Merger, along with a Certificate of Approval from each of
Acquisitions and Sequiam, to be executed by the parties thereto and filed with
the California Secretary of State by Surviving Company, in substantially the
same form s Schedule 1.1(a)-1, and (2) a short form Agreement of Merger, along
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with a Certificate of Officer from each of Acquisitions and Sequiam, to be
executed by the Parties thereto and filed with the Delaware Secretary of State
by Surviving Company, in substantially the same form as Schedule 1.1(a)-2;
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(b) "Business" means, with respect to each Party, all aspects of
the business conducted by such Party, including, without limitation, the
business described in the foregoing recitals and all other related activities;
(c) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 3 hereof;
(d) "Closing Date" means the day on which all conditions precedent to
the completion of the transaction as contemplated hereby have been satisfied or
waived;
(e) "Effective Time" means the date of the filing of the Articles of
Merger in the form required by the State of California, which shall provide that
the Merger shall become effective upon such filing or as soon thereafter as
permitted by law;
(f) "Employment Agreements" means the employment agreements between
Sequiam and each of Van den Brekel, Xxxxxxxxxxx and Xxxxxx to be entered into
pursuant to Article 8 hereof substantially in the form of Schedule 8;
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(g) "Environmental Law" means any applicable international, federal,
state or local law, regulation or rule that applies to any waste, material or
substance deemed to be a pollutant or a contaminant, or to be hazardous, toxic,
ignitable, reactive, corrosive, dangerous, harmful or injurious to public health
or to the environment.
(h) "Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
(i) "Exchange Shares" means the 20,000,000 shares of Wedge Net common
stock to be issued to the Sequiam Shareholders at Closing;
(j) "Governmental or Regulatory Body" means any court, tribunal,
arbitrator or any government or political subdivision thereof, whether federal,
state, county, local or foreign, or any agency, authority, official or
instrumentality of any such government or political subdivision;
(k) "Hazardous Substances" means without limitation any substance that
is identified as hazardous or is otherwise regulated by any Environmental Law,
or economic poisons, hazardous wastes, toxic substances and/or any similar such
pollutants or contaminants.
(l) "Intellectual Property Rights" means all patents, designs,
formulas, know-how, trade secrets, processes, formulae, compositions, drawings,
specifications, patterns, blueprints, plans, files, notebooks and records,
proprietary and technical information, software source codes, licenses of
technology, and product registrations, franchises, trademarks, trade names,
copyrights, and service marks, and any and all other intangible personal
property, together with all rights to and applications, licenses and franchises
for, any of the foregoing, and all other intangible personal property;
(m) "Material Contracts" means, with respect to Wedge Net, Acquisitions
or Sequiam, the burden and benefit of and the right, title and interest of such
Party in, to and under all trade and non-trade contracts, engagements or
commitments, whether written or oral, to which such Party is entitled and
whereby such Party is obligated to pay or entitled to receive the sum of $10,000
or more including, without limitation, any pension plans, profit sharing plans,
bonus plans, loan agreements, security agreements, indemnities and guarantees,
leases, any agreements with employees, licensees, managers, accountants,
suppliers, agents, distributors, officers, directors, attorneys or others which
cannot be terminated without liability on not more than one month's notice,
including, without limitation, those contracts listed in Schedule 4.17 with
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respect to Sequiam and in Schedule 5.17 with respect to Wedge Net and
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Acquisitions.
(n) "Material Effect" means, with respect to each Party, a material
adverse effect in the Business, operations, properties, assets, liabilities,
prospects, or condition (financial or otherwise) of such Party;
(o) "Merger Consideration" means the Exchange Shares;
(p) "Place of Closing" means the offices of Xxx, Xxxxxxx & Xxxxx, LLP
or such other place as Wedge Net and Sequiam may mutually agree upon;
(q) "Preferred Shares" means the shares of Series A Convertible
Preferred Stock in the capital of Wedge Net to be issued in the Private
Placement;
(r) "Private Placement" means the private sale by Wedge Net of 1,000
Preferred Shares at a price of $1,000 per Preferred Share;
(s) "Securities Act" means the Securities Act of 1933, as amended.
(t) "Sequiam Accounts Payable and Liabilities" means all accounts
payable and liabilities of Sequiam due and owing or otherwise constituting a
binding obligation of Sequiam and/or its affiliates (other than a Sequiam
Material Contract) as of December 31, 2001, as set forth in Schedule 4.19;
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(u) "Sequiam Accounts Receivable" means all accounts receivable and
other debts owing to Sequiam as of December 31, 2001, as set forth in
Schedule 4.18;
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(v) "Sequiam Assets" means the undertaking and all the property and
assets of the Business of Sequiam of every kind and description wherever
situated including, without limitation, Sequiam Equipment, Sequiam Material
Contracts, Sequiam Accounts Receivable, Sequiam Cash, Sequiam Intangible Assets
and Sequiam Goodwill, and all credit cards, charge cards and banking cards
issued to Sequiam;
(w) "Sequiam Bank Accounts" means all of the bank accounts, lock boxes
and safety deposit boxes of Sequiam or relating to the Business of Sequiam;
(x) "Sequiam Cash" means all cash on hand or on deposit to the credit
of Sequiam on the Closing Date;
(y) "Sequiam Common Stock" means all of the issued and outstanding
shares of common stock in the capital of Sequiam;
(z) "Sequiam Equipment" means all machinery, equipment, furniture, and
furnishings used in the Business of Sequiam;
(aa) "Sequiam Financial Statements" means the unaudited financial
statements of Sequiam for the fiscal year ended December 31, 2001, a true copy
of which is attached as Schedule 1.1(aa);
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(bb) "Sequiam Goodwill" means the goodwill of the Business of Sequiam
together with the exclusive right of Wedge Net and Acquirer to represent itself
as carrying on the Business of Sequiam in succession of Sequiam subject to the
terms hereof, and the right to use any words indicating that the Business of
Sequiam is so carried on including the right to use the name "Sequiam" or any
variation thereof as part of the name of or in connection with the Business of
Sequiam or any part thereof carried on or to be carried on by Sequiam, the right
to all corporate, operating and trade names associated with the Business of
Sequiam, or any variations of such names as part of or in connection with the
Business of Sequiam, all telephone listings and telephone advertising contracts,
all lists of customers, books and records and other information relating to the
Business of Sequiam, all necessary licenses and authorizations and any other
rights used in connection with the Business of Sequiam;
(cc) "Sequiam Insurance Policies" means the public liability insurance
and insurance against loss or damage to the Sequiam Assets and the Business of
Sequiam as described in Schedule 4.25;
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(dd) "Sequiam Intangible Assets" means all of the intangible assets of
Sequiam, including, without limitation, Sequiam Goodwill, all trademarks, logos,
copyrights, designs, and other intellectual and industrial property of Sequiam;
(ee) "State Corporation Law" means the California Corporations Code;
(ff) "Subscription Agreement" means the subscription agreement to be
used in the Private Placement in substantially the same form as Schedule
1.1(ff); --------
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(gg) "Subscription Price" means the total aggregate price required to
be paid by the subscribers of the Preferred Stock pursuant to the Subscription
Agreements, but in no event less than $1,000,000.
(hh) "Surviving Company" means Acquisitions following the merger with
Sequiam;
(ii) "Tax" or "Taxes" means any and all Taxes, charges, fees, levies or
other assessments imposed by any federal, state, local or foreign taxing
authority, whether disputed or not, including, without limitation, income,
capital, estimated, excise, property, sales, transfer, withholding, employment,
payroll, and franchise taxes and such terms shall include any interest,
penalties or additions attributable to or imposed on or with respect to such
assessments and any expenses incurred in connection with the settlement of any
tax liability;
(jj) "Wedge Net Accounts Payable and Liabilities" means all accounts
payable and liabilities of Wedge Net and Acquirer due and owing or otherwise
constituting a binding obligation of Wedge Net and/or its affiliates (other than
a Wedge Net Material Contract) as of December 31, 2001 as set forth in
Schedule 5.19;
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(kk) "Wedge Net Accounts Receivable" means all accounts receivable and
other debts owing to Wedge Net as of December 31, 2001, as set forth in
Schedule 5.18;
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(ll) "Wedge Net Assets" means all of the property and assets, whether
tangible or intangible, real or personal, owned by Wedge Net of every kind and
description wherever situated including, without limitation, Wedge Net
Equipment, Wedge Net Material Contracts, Wedge Net Accounts Receivable, Wedge
Net Cash, Wedge Net Intangible Assets and Wedge Net Goodwill, and all credit
cards, charge cards and banking cards issued to Wedge Net;
(mm) "Wedge Net Bank Accounts" means all of the bank accounts, lock
boxes and safety deposit boxes of Wedge Net or relating to the Business of Wedge
Net as more fully described on Schedule 5.10;
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(nn) "Wedge Net Cash" means all cash on hand or on deposit to the
credit of Wedge Net on the Closing Date;
(oo) "Wedge Net Common Shares" means all of the issued and outstanding
shares of common stock in the capital of Wedge Net;
(pp) "Wedge Net Control Shares" means the 2,800,000 Wedge Net Common
Shares owned by the Wedge Net Shareholder;
(qq) "Wedge Net Equipment" means all machinery, equipment, furniture,
and furnishings used in the Business of Wedge Net;
(rr) "Wedge Net Financial Statements" means the audited financial
statements of Wedge Net for the fiscal year ended December 31, 2001, together
with the unqualified auditors' report thereon, a true copy of which is attached
as Schedule 1.1(rr);
----------------
(ss) "Wedge Net Goodwill" means the goodwill of the Business of Wedge
Net including the right to all corporate, operating and trade names associated
with the Business of Wedge Net, or any variations of such names as part of or in
connection with the Business of Wedge Net, all books and records and other
information relating to the Business of Wedge Net, all necessary licenses and
authorizations and any other rights used in connection with the Business of
Wedge Net;
(tt) "Wedge Net Intangible Assets" means all of the intangible assets
of Wedge Net, including, without limitation, Wedge Net Goodwill, all trademarks,
logos, copyrights, designs, and other intellectual and industrial property of
Wedge Net (if any);
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
1.2 SECTION REFERENCES AND SCHEDULES. Any reference to a particular
"Article", "section", "paragraph", "clause" or other subdivision is, unless
otherwise provided, reference to the particular Article, section, clause or
other subdivision of this Agreement. Any reference to a Schedule means, unless
otherwise provided, the appropriate Schedule attached to this Agreement, and by
such reference the appropriate Schedule is incorporated into and made part of
this Agreement. The Schedules to this Agreement are as follows:
Schedule 1.1(a) Articles of Merger
Information concerning Sequiam
Schedule 1.1(aa) Sequiam Financial Statements
Schedule 4.17 Sequiam Material Contracts
Schedule 4.18 Sequiam Accounts Receivable
Schedule 4.19 Sequiam Accounts Payable and Liabilities
Schedule 4.20 Sequiam Officers, Directors and Employees
Schedule 4.25 Sequiam Insurance Policies
Information concerning Wedge Net
Schedule 1.1(rr) Wedge Net Financial Statements
Schedule 5.10 Wedge Net Bank Accounts
Schedule 5.17 Wedge Net Material Contracts
Schedule 5.18 Wedge Net Accounts Receivable
Schedule 5.19 Wedge Net Accounts Payable and Liabilities
Schedule 5.20 Wedge Net Officers, Directors and Employees
Schedule 5.25 Wedge Net Insurance Policies
Agreements
Schedule 7.3 Confidentiality Agreement
Schedule 8; Employment Agreements
Other
Schedule 9.3(c) Share Ownership and Allocation of Merger
2. THE MERGER
2.1 THE MERGER. At Closing, Sequiam shall be merged with and into
-----------
Acquisitions pursuant to this Agreement (the "MERGER"), whereupon (a) the
separate corporate existence of Sequiam shall cease and (b) Acquisitions shall
be the Surviving Company.
2.2 EFFECT OF THE MERGER. The Merger shall have the effect provided
-----------------------
therefor by Chapter 11 of the California Corporation Code, as amended. Without
limiting the generality of the foregoing, and subject thereto, at Closing (i)
all the rights, privileges, immunities, powers and franchises, of a public as
well as of a private nature, and all property, real, personal and mixed, and all
debts due on whatever account, including without limitation subscriptions to
shares, and all other choses in action, and all and every other interest of or
belonging to or due to Sequiam or Acquisitions, as a group, subject to the terms
hereof, shall be taken and deemed to be transferred to, and vested in, Surviving
Company without further act or deed; and all property, rights and privileges,
immunities, powers and franchises and all and every other interest shall be
thereafter as effectually the property of Surviving Company, as they were of
Sequiam and Acquisitions, as a group, and (ii) all debts, liabilities, duties
and obligations of Sequiam and Acquisitions, as a group, subject to the terms
hereof, shall become the debts, liabilities and duties of Surviving Company and
Surviving Company shall thenceforth be responsible and liable for all debts,
liabilities, duties and obligations of Sequiam and Acquisitions, as a group, and
neither the rights of creditors nor any liens upon the property of Sequiam or
Acquisitions, as a group, shall be impaired by the Merger, and may be enforced
against Surviving Company.
2.3 ARTICLES OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS. The
-------------------------------------------------------------
Articles of Incorporation of Acquisitions shall be the Articles of Incorporation
of Surviving Company until thereafter amended in accordance with the provisions
therein and as provided by the applicable provisions of the State Corporation
Law. The Bylaws of Acquisitions shall be the Bylaws of Surviving Company as in
effect immediately prior to the Closing, continuing until thereafter amended in
accordance with their terms, the Articles of Incorporation of Acquisitions, and
as provided by the State Corporation Law. The Directors of Surviving Company
shall be the Directors of Sequiam prior to Closing, and the Officers of
Surviving Company shall be the Officers of Sequiam prior to Closing.
2.4 CONVERSION OF SECURITIES. At the Effective Time, by virtue of the
-------------------------
Merger and without any action on the part of Acquisitions, Sequiam or Sequiam
Shareholders, the shares of capital stock of each of Sequiam and Acquisitions
shall be converted as set forth in Sections 2.4.1 and 2.4.2 below:
2.4.1 Capital Stock of Acquisitions. Each issued and outstanding share
-----------------------------
of Acquisitions' capital stock shall continue to be issued and outstanding and
shall be converted into one share of validly issued, fully paid, and
non-assessable common stock of the Surviving Company. Each stock certificate of
Acquisitions evidencing ownership of any such shares shall continue to evidence
ownership of such shares of capital stock of the Surviving Company.
2.4.2 Conversion of the Sequiam Common Stock. Each Sequiam Share that
---------------------------------------
is issued and outstanding at the Effective Time shall automatically be cancelled
and extinguished and converted, without any action on the part of the holder
thereof, into the right to receive at the time and in the amounts described in
this Agreement an amount of Exchange Shares equal to the number of Exchange
Shares divided by the number of the Sequiam Common Stock outstanding immediately
prior to Closing. All such Sequiam Common Stock, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such shares
shall cease to have any rights with respect thereto, except the right to receive
the Exchange Shares upon the surrender of such certificate in accordance with
this Agreement.
2.5 ADHERENCE WITH APPLICABLE SECURITIES LAWS. The Sequiam
---------------------------------------------
Shareholders agree that they are acquiring the Exchange Shares for investment
purposes and will not offer, sell or otherwise transfer, pledge or hypothecate
any of the Exchange Shares (other than pursuant to an effective Registration
Statement under the Securities Act) directly or indirectly unless:
(a) the sale is to Wedge Net;
(b) the sale is made pursuant to the exemption from
registration under the Securities Act (United States) provided by Rule 144
thereunder; or
(c) the Exchange Shares are sold in a transaction that does
not require registration under the Securities Act (United States) or any
applicable United States state laws and regulations governing the offer and sale
of securities, and such shareholder has furnished to Wedge Net an opinion of
counsel to that effect or such other written opinion as may be reasonably
required by Wedge Net.
The Sequiam Shareholders acknowledge that the certificates representing the
Exchange Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL
SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT
APPLICABLE TO SAID SHARES.
3. THE CLOSING
3.1 TIME AND PLACE OF CLOSING. The closing of the Merger (the
-----------------------------
"CLOSING") shall, unless otherwise agreed to in writing by the Parties, take
place at a mutually acceptable location at 10:00 AM, local time, on or before
March 31, 2002, in accordance with and subject to the terms and conditions set
forth in this Agreement.
3.2 DOCUMENTS TO BE DELIVERED BY SEQUIAM. On or before the Closing,
---------------------------------------
Sequiam
and the Sequiam Shareholders shall deliver or cause to be delivered to Wedge
Net:
(a) share certificates representing the Sequiam Common Stock,
duly endorsed to Wedge Net;
(b) certified copies of such resolutions of the shareholders
and directors of Sequiam as are required to be passed to authorize the
execution, delivery and implementation of this Agreement;
(c) all reasonable consents or approvals required to be
obtained by Sequiam for the purposes of completing the Merger and preserving and
maintaining the interests of Sequiam under any and all Sequiam Material
Contracts and in relation to the Sequiam Assets;
(d) the Employment Agreements, duly executed by Sequiam, and
each of Van den Brekel, Xxxxxxxxxxx and Xxxxxx;
(e) the Articles of Merger, duly executed by Sequiam;
(f) the original or certified copies of the charter documents
of Sequiam and all corporate records, documents and instruments of Sequiam, the
corporate seals of Sequiam and all books and accounts of Sequiam;
(g) an acknowledgement from Sequiam and the Sequiam
Shareholders of the satisfaction of the conditions precedent set forth in
Section 9.3; and
(h) such other documents as Wedge Net may reasonably require
to give effect to the terms and intention of this Agreement.
3.3 DOCUMENTS TO BE DELIVERED BY WEDGE NET. On or before the Closing,
---------------------------------------
Wedge Net shall deliver or cause to be delivered to Sequiam and the Sequiam
Shareholders:
(a) share certificates representing the Exchange Shares duly
registered in the names of the Sequiam Shareholders issued in accordance with
Section 9.3(c);
(b) certified copies of such resolutions of the shareholders
and directors of Wedge Net and Acquisitions as are required to be passed to
authorize the execution, delivery and implementation of this Agreement;
(c) certified copies of such resolutions of the directors of
Wedge Net as are required to be passed to authorize the issuance, sale and
delivery of the Preferred Shares;
(d) copies of any and all Subscription Agreements duly
executed by the subscribers to the Private Placement together with evidence that
the "Escrow Agent" (as that term is defined in the Subscription Agreements) has
received into its trust account not less than the Subscription Price pursuant to
the Subscription Agreement(s);
(e) all reasonable consents or approvals required to be
obtained by Wedge Net for the purposes of completing the Merger and preserving
and maintaining the interests of Wedge Net under any and all Wedge Net Material
Contracts and in relation to the Wedge Net Assets;
(f) a certified copy of a resolution of the directors of
Wedge Net dated as of the Closing Date appointing the nominees of the Sequiam
Shareholders as officers of Surviving Company and Wedge Net (the "Replacement
Officers");
(g) an undated resolution of the directors of Wedge Net
appointing the nominees of the Sequiam Shareholders listed below in Article 11
to the board of directors of Surviving Company and Wedge Net;
(h) an undated resignation of Xxxxxxx X. Xxxxxxx, Xxxx X.
Xxxxxxx and Xxx Xxxxx as directors of Wedge Net;
(i) the Articles of Merger, duly executed by Sequiam;
(j) an acknowledgement from Wedge Net of the satisfaction of
the conditions precedent set forth in Section 9.1; and
(k) such other documents as Sequiam may reasonably require to
give effect to the terms and intention of this Agreement.
4. REPRESENTATIONS AND WARRANTIES
OF THE SEQUIAM SHAREHOLDERS
Sequiam and the Sequiam Shareholders, jointly and severally, represent, warrant,
and covenant to Wedge Net and Acquisitions, as follows:
4.1 ORGANIZATION AND QUALIFICATION. Sequiam is a corporation duly
--------------------------------
organized, validly existing and is in good standing under the laws of the State
of Delaware, and has all requisite corporate power and authority to (a) own,
lease and operate its properties and assets as they are now owned, leased and
operated and (b) carry on its business as currently conducted and as proposed to
be conducted. Sequiam is duly qualified or licensed to do business in each
jurisdiction in which the failure to be so qualified or licensed could have a
Material Effect.
4.2 CAPITALIZATION. Sequiam is authorized to issue 30,000,000 shares
--------------
of common stock, $0.0001 par value and no shares of preferred stock. The issued
and outstanding capital stock of Sequiam consists of 20,000,000 shares of common
stock, $0.0001 par value per share, and no shares of preferred stock. All of
the issued and outstanding shares of capital stock of Sequiam are validly
issued, fully paid, and nonassessable, and none of such shares have been issued
in violation of the preemptive rights of any person.
4.3 SUBSIDIARIES AND AFFILIATES. Sequiam does not own or hold,
-----------------------------
directly or
indirectly, any equity, debt, or other interest in any entity or business or any
option to acquire any such interest.
4.4 OPTIONS OR OTHER RIGHTS. No options, warrants, calls,
--------------------------
subscriptions or other agreements or commitments obligating Sequiam to issue or
transfer from treasury any additional shares of its common or preferred stock of
any class, or commitments or other rights to acquire, sell or issue shares of
capital stock or other equity interests of Sequiam, whether upon conversion of
other securities or otherwise, are issued or outstanding, and there is no
agreement or understanding with respect to the voting of such capital stock or
other equity interests.
4.5 OWNERSHIP OF SHARES. The shares of the Sequiam Common Stock are
---------------------
owned of record and beneficially by the Sequiam Shareholders. The Sequiam
Shareholders possess full authority and legal right to sell, transfer, and
assign the entire legal and beneficial ownership of the shares of the Sequiam
Common Stock, free from all liens, claims, and encumbrances of any kind except
those held by Sequiam; and there are no outstanding rights or obligations
granted by the Sequiam Shareholders to purchase or acquire any of the shares of
the Sequiam Common Stock or any interest in any of the shares of the Sequiam
Common Stock. Upon transfer of the shares of the Sequiam Common Stock to Wedge
Net hereunder at the Closing, Wedge Net will receive the entire legal and
beneficial interest in the shares of the Sequiam Common Stock, free and clear of
all liens, claims, and encumbrances and subject to no legal or equitable
restrictions of any kind.
4.6 VALIDITY AND EXECUTION OF AGREEMENT. Sequiam and each of the
---------------------------------------
Sequiam Shareholders has the full legal right, capacity and power required to
enter into, execute and deliver this Agreement and to carry out the transactions
contemplated in this Agreement. This Agreement has been duly executed and
delivered by each of the Sequiam Shareholders and constitutes the valid and
binding obligation of each of the Sequiam Shareholders, enforceable in
accordance with its terms.
4.7 NO CONFLICT. None of the execution, delivery, or performance of
------------
this Agreement does or will: (a) result in any violation or be in conflict with
or constitute a default under any term or provision of the Articles of
Incorporation or Bylaws of Sequiam or any term or provision of any judgment,
decree, order, statute, injunction, rule, or regulation applicable to Sequiam,
any Sequiam Shareholder or the Sequiam Common Stock, or of any material note,
bond, mortgage, indenture, lease, license, franchise, agreement, or other
instrument or obligation to which Sequiam, any Sequiam Shareholder or any of the
Sequiam Common Stock is bound; (b) result in the creation of any material
option, pledge, security interest, lien, charge, encumbrance, or restriction,
whether imposed by agreement, understanding, law or otherwise, except those
arising under applicable federal or state securities laws (hereinafter an
"ENCUMBRANCE") upon the Sequiam Common Stock or any of the Sequiam Assets; or
(c) constitute a default under, terminate, accelerate, amend or modify, or give
any party the right to terminate, accelerate, amend, modify, abandon, or refuse
to perform or comply with, any Material Contract, agreement, arrangement,
commitment, or plan to which Sequiam or any Sequiam Shareholder is a party, or
by which Sequiam or any Sequiam Shareholder, the Sequiam Assets, or the Sequiam
Common Stock may be subject or bound.
4.8 CONSENTS AND APPROVALS. No federal, state, foreign or other
------------------------
regulatory approvals are required to be obtained prior to the Merger, by Sequiam
or any Sequiam Shareholder in connection with the Merger.
4.9 VIOLATION OF LAWS, PERMITS, ETC.
-----------------------------------
(a) Sequiam is not in violation of any term or provision of
its Articles of Incorporation or Bylaws, or of any material term or provision of
any judgment, decree, order, injunction, statute, law, rule, ordinance, or
governmental regulation that is applicable to it.
(b) Sequiam has maintained in full force and effect all
certificates, licenses, and permits material to the conduct of its business, and
has not received any notification that any revocation or limitation thereof is
threatened or pending that would have a Material Effect or that has not been
cured.
4.10 BOOKS AND RECORDS. The books and records of Sequiam (including,
-------------------
without limitation, the books of account, minute books, and stock record books)
are complete and correct in all material respects and have been maintained in
accordance with sound business practices. The minute books of Sequiam are
complete and current in all material respects and, as applicable, accurately
reflect all actions taken by the shareholders and the board of directors of
Sequiam since the date of inception of Sequiam. All signatures contained in the
books and records of Sequiam are the true signatures of the persons whose
signatures they purport to be.
4.11 SEQUIAM FINANCIAL STATEMENTS. The Sequiam Financial Statements
------------------------------
present fairly, in all material respects, the financial position of Sequiam at
such dates and the results of operations of Sequiam for the periods then ended,
in accordance with United States generally accepted accounting principles
("USGAAP") consistently applied for the periods covered thereby.
4.12 UNDISCLOSED LIABILITIES. Sequiam does not have any material
------------------------
direct or indirect indebtedness, liability, claim, loss, damage, deficiency,
obligation or responsibility, fixed or unfixed, xxxxxx or inchoate, liquidated
or unliquidated, secured or unsecured, accrued, absolute, contingent or
otherwise (all of the foregoing being collectively referred to as "LIABILITIES"
and individually as a "LIABILITY"), of a kind required by USGAAP to be set forth
on a financial statement that is not fully and adequately reflected or reserved
against on the Sequiam Financial Statements. Sequiam does not have any
Liabilities, whether or not of a kind required by USGAAP to be set forth on a
financial statement, other than Liabilities incurred in the ordinary course of
business since the date of the latest balance sheet included in the
Sequiam Financial Statements that are consistent with past practice and are
included in the latest Sequiam Financial Statements.
4.13 TITLE TO PROPERTY; ENCUMBRANCES. Sequiam has good and
----------------------------------
indefeasible title to and other legal right to use all assets, whether real,
personal or mixed, tangible or intangible, reflected as owned on the latest
balance sheet included in the Sequiam Financial Statements or acquired after the
date of such balance sheet, free and clear of all Encumbrances except those
shown on the Sequiam Financial Statements, except for (a) assets disposed of for
full and fair value since the date of such balance sheet in the ordinary course
of business consistent with past practice, or (b) matters that would not have a
Material Effect.
4.14 TAXES. All returns, reports, information returns, or other
-----
documents (including any related or supporting information) filed or required to
be filed with any federal, state, local, or foreign governmental entity or other
authority in connection with the determination, assessment or collection of any
Tax (whether or not such Tax is imposed on Sequiam) or the administration of any
laws, regulations or administrative requirements relating to any Tax
(hereinafter "TAX RETURNS"), and all reports and declarations of estimated Tax
or estimated Tax deposit forms required to be filed by Sequiam, have been duly
and timely filed. Sequiam has paid all Taxes which have become due whether
pursuant to such returns or any assessment received by it or otherwise, and has
paid all installments of estimated Taxes due. All Taxes which Sequiam is
required by law to withhold or to collect have been duly withheld and collected,
and have been paid over to the proper Governmental or Regulatory Body. There
are no tax liens upon any of the assets or properties of Sequiam except for
Taxes not yet due and payable. Sequiam is not a party to any express tax
settlement agreement, arrangement, policy or guideline, formal or informal, and
Sequiam does not have any obligation to make payments under any such settlement
agreement with any Party.
4.15 LIENS. Except as disclosed in the Sequiam Financial Statements,
-----
none of the Sequiam Assets are subject to any lien, pledge, hypothecation,
mortgage, security interest, claim, lease, charge, option, right of first
refusal, easement, servitude, transfer restriction, encumbrance or any other
restriction or limitation whatsoever, other than (i) materialmen's, mechanics',
repairmen's or other like liens arising in the ordinary course of business for
amounts either not yet due or being contested in good faith and by appropriate
proceedings, so long as such proceedings shall not involve any material danger
of sale, forfeiture or loss of any part of the assets and shall have been
disclosed to Wedge Net hereunder, or (ii) any lien arising as a result of any
act or omission of Wedge Net.
4.16 LITIGATION.
----------
(a) Except with respect to that certain Settlement Agreement,
there is no action, proceeding, investigation, or inquiry pending or, to the
best of Sequiam's knowledge, threatened (i) against or affecting any of
Sequiam's assets or business that, if determined adversely to Sequiam, would
result in a Material Effect or (ii) that questions this Agreement or any action
contemplated by this Agreement or in connection with the Merger.
(b) Sequiam is not in default with respect to any order,
writ, injunction or
decree of any federal, state, local or foreign court, department, agency or
instrumentality applicable to it. Sequiam is not engaged in any lawsuit to
recover any material amount of monies due to it.
4.17 CONTRACTS AND OTHER AGREEMENTS. Schedule4.17 contains a complete
------------------------------- ------------
and correct list as of the date hereof of all Material Contracts and all
agreements, contracts, and commitments (and all amendments thereto), written or
oral, to which Sequiam is a party or by which any of its properties is bound,
the breach of which would have a Material Effect. Sequiam will make available
to Wedge Net complete and correct copies of all such written agreements,
contracts, and commitments, together with all amendments thereto, and accurate
(in all material respects) descriptions of all such oral agreements. Such
agreements, contracts, and commitments are in full force and effect, and, to the
best of Sequiam's knowledge, all other parties to such agreements, contracts,
and commitments have performed all obligations required to be performed by them
to date thereunder in all material respects and are not in default thereunder in
any material respect.
4.18 SEQUIAM ACCOUNTS RECEIVABLE. All accounts receivable of Sequiam
-----------------------------
are reflected on Schedule 4.18 and (a) have arisen from bona fide sales
-------------
transactions in the ordinary course of business on ordinary trade terms and (b)
have been collected or are collectible in the ordinary course of business in the
aggregate recorded amounts thereof in accordance with their terms without valid
set-off or counterclaim.
4.19 SEQUIAM ACCOUNTS PAYABLE AND LIABILITIES. There are no material
-----------------------------------------
liabilities, contingent or otherwise, of Sequiam which are not disclosed in
Schedule 4.19 or the Sequiam Financial Statements, except those incurred in the
-------------
ordinary course of business since the date of the Sequiam Financial Statements,
and Sequiam has not guaranteed or agreed to guarantee any debt, liability or
other obligation of any person, firm or corporation. Without limiting the
generality of the foregoing, all accounts payable and liabilities of Sequiam as
of December 31, 2001 are reflected on Schedule 4.19 hereto. Sequiam has made
-------------
payments on accounts payable and other current obligations arising subsequent to
the date of Sequiam Financial Statements, in accordance with past practice of
the business of Sequiam.
4.20 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND EMPLOYEES.
-----------------------------------------------------------------
Schedule 4.20 sets forth: (a) the name of all present executive employees
-------------
(including officers) and other persons providing services for compensation for
Sequiam pursuant to a written employment agreement and current annual
compensation, including any promised, expected or customary bonus or such other
amount, and (b) the names and titles of all directors and officers of Sequiam.
Sequiam has not made a commitment or agreement (verbally or in writing) to
increase the compensation or to modify the conditions or terms of employment of
any person listed on Schedule 4.20. To the knowledge of Sequiam, none of such
-------------
persons has made a threat to Sequiam to terminate such person's relationship
with Sequiam. The consummation of the transactions contemplated by this
Agreement will not result in any liability for severance pay to any such
employee or other such person.
4.21 ERISA. There are no employee benefit plans as defined in ERISA
-----
("PLANS") maintained for the benefit of, or covering, any employee, former
employee, independent
contractor or former independent contractor of Sequiam, or their dependents or
their beneficiaries, or otherwise, now or heretofore contributed to by Sequiam,
and no such Plan is or has ever been subject to ERISA.
4.22 OPERATIONS. Except as expressly authorized by this Agreement,
----------
since the date of the latest Sequiam Financial Statements, Sequiam has not:
(a) amended its Articles of Incorporation or Bylaws or merged
with or into or consolidated with any other entity, or changed or agreed to
rearrange in any manner the character of the Business of Sequiam;
(b) issued, sold or purchased options or rights to subscribe
to, or entered into any contracts or commitments to issue, sell or purchase, any
shares of its capital stock or other equity interests;
(c) entered into, amended or terminated any (i) employment
agreement or collective bargaining agreement, (ii) adopted, entered into or
amended any arrangement which is, or would be, a Plan or (iii) made any change
in any actuarial methods or assumptions used in funding any Plan or in the
assumptions or factors used in determining benefit equivalencies thereunder;
(d) issued any note, bond or other debt security, created,
incurred or assumed any indebtedness for borrowed money other than in the
ordinary course of business in connection with trade payables, or guaranteed any
indebtedness for borrowed money or any capitalized lease obligation;
(e) declared, set aside or paid any dividends or declared or
made any other distributions of any kind to the shareholders, or made any direct
or indirect redemption, retirement, purchase or other acquisition of any shares
of its capital stock or other equity interests;
(f) knowingly waived any right of material value to the
business of Sequiam;
(g) made any change in its accounting methods or practices or
made any changes in depreciation or amortization policies or rates adopted by it
or made any material write-down of inventory or material write-off as
uncorrectable of accounts receivable;
(h) made any wage or salary increase or other compensation
payable or to become payable, any bonus, or any increase in any other direct or
indirect compensation, or any accrual for or commitment or agreement to make or
pay the same, for or to any of its officers, directors, employees, consultants,
agents or other representatives, other than increases made in the ordinary
course of business consistent with past practice;
(i) entered into any transactions with any of its
affiliates, shareholders, officers, directors, employees, consultants, agents or
other representatives (other than
employment arrangements made in the ordinary course of business consistent with
past practice), or any affiliate of any shareholder, officer, director,
consultant, employee, agent or other representative;
(j) made any payment or commitment to pay any severance or
termination pay to any person or any of its officers, directors, employees,
consultants, agents or other representatives, other than payments or commitments
to pay such persons or their officers, directors, employees in the ordinary
course of business;
(k) except in the ordinary course of business, (i) entered
into any lease (as lessor or lessee), (ii) sold, abandoned or made any other
disposition of any of its assets or properties other than in the ordinary course
of business consistent with past practice, (iii) granted or suffered any Lien on
any of its assets or properties other than sales of inventory in the ordinary
course of business, or (iv) entered into or amended any material contract or
other agreement to which it is a party, or by or to which it or its assets or
properties are bound or subject, or pursuant to which it agrees to indemnify any
person or to refrain from competing with any person, in each case or type
required to be disclosed pursuant to Section 4.17 hereof;
(l) except in the ordinary course of business, incurred or
assumed any debt, obligation or liability (whether absolute or contingent and
whether or not currently due and payable);
(m) except for inventory or equipment acquired in the
ordinary course of business, made any acquisition of all or any part of the
assets, properties, capital stock or business of any other person;
(n) except in the ordinary course of business, paid, directly
or indirectly, any of its Liabilities before the same became due in accordance
with their terms or otherwise than in the ordinary course of business, except to
obtain the benefit of discounts available for early payment;
(o) except in the ordinary course of business, created,
incurred or assumed any indebtedness for borrowed money, or guaranteed any
indebtedness for borrowed money or any capitalized lease obligation, in each
case in excess of $5,000 individually or in the aggregate;
(p) except in the ordinary course of business, made any
capital expenditures or commitments for capital expenditures in aggregate amount
exceeding $5,000; or
(q) except in the ordinary course of business, terminated,
failed to renew, amended or entered into any contract or other agreement of a
type required to be disclosed pursuant to Section 4.17.
4.23 INTELLECTUAL PROPERTY RIGHTS. Sequiam possesses all Intellectual
-----------------------------
Property Rights necessary to conduct its business in the manner that is
currently being conducted and anticipates conducting in the future. All of such
Intellectual Property Rights are held in the
name of Sequiam. None of the Intellectual Property Rights of Sequiam infringe
upon the rights of any other person in any material respect or, to the knowledge
of Sequiam, is so infringed upon by any other person or its property. Sequiam
has not received any notice of any claim of any other person relating to any of
the Intellectual Property Rights or any process or confidential information of
Sequiam and does not know of any basis for any such charge or claim. No approval
or consent of any person is needed so that the interest of Sequiam in the
Intellectual Property Rights shall continue to be in full force and effect and
enforceable by Surviving Company following the transactions contemplated by this
Agreement.
4.24 EMPLOYEE RELATIONS. Sequiam is not a party to any agreement with
-------------------
any labor organization, collective bargaining or similar agreement with respect
to its employees. There are no material complaints, grievances or arbitrations,
employment-related litigation, administrative proceedings or controversies
either pending or, to the knowledge of Sequiam, threatened against Sequiam,
involving any employee, applicant for employment, or former employee of Sequiam.
During the past five years, Sequiam has not suffered or sustained any labor
dispute resulting in any work stoppage and no such work stoppage is, to the
knowledge of Sequiam, threatened. To the knowledge of Sequiam, there are no
attempts presently being made to organize any employees employed by Sequiam.
4.25 INSURANCE. Sequiam has adequate policies of insurance for its
---------
operations and each such policy or binder of insurance is reflected on
Schedule 4.25. Sequiam is not in default with respect to any material provision
-------------
contained in any such policy or binder of insurance and has not failed to give
any notice or present any claim under any such policy or binder in due and
timely fashion. There are no outstanding unpaid claims under any such policy or
binder which have gone unpaid for more than 45 days or as to which the carrier
has disclaimed liability. Sequiam has not received any notice of cancellation
or non-renewal of any such policy or binder. Sequiam has not received any
notice from any of its insurance carriers that any insurance premiums will be
materially increased in the future or that any existing insurance coverage will
not be available in the future on substantially the same terms as now in effect.
4.26 LICENSES AND PERMITS. No material government permits, licenses,
----------------------
domain name or other registrations, or other consents or authorizations
(federal, state, local and foreign) of any Governmental or Regulatory Body
(collectively, "PERMITS"), is required to be obtained by Sequiam in connection
with its properties or the business of Sequiam. Sequiam has not received any
notice of any claim of revocation of any such Permit and has no knowledge of any
event which would be likely to give rise to such a claim.
4.27 BROKERS. Except for the assistance of Amerivet Securities, Inc.,
-------
Registered Investment Advisors, all negotiations relating to this Agreement and
the transactions contemplated hereby have been carried out by Sequiam and the
Sequiam Shareholders directly with Wedge Net and Xxxxxxx without the
intervention of any other person on behalf of Sequiam or the Sequiam
Shareholders in such manner as to give rise to any valid claim by any person
against Sequiam, the Sequiam Shareholders, Wedge Net or Xxxxxxx for a finder's
fee, brokerage commission or similar payment.
4.28 ACQUISITION OF EXCHANGE SHARES. Sequiam and each Sequiam
---------------------------------
Shareholder
acknowledges that the Exchange Shares are restricted securities under the
Securities Act and represents that such Sequiam Shareholder (i) is acquiring the
Exchange Shares for his own account without a view to distribution within the
meaning of the Securities Act; (ii) has received from Wedge Net all information
that he has deemed necessary to make an informed investment decision with
respect to an investment in Wedge Net in general and the Exchange Shares in
particular; (iii) is financially able to bear the economic risks of an
investment in Wedge Net; and (iv) has such knowledge and experience in financial
and business matters in general and with respect to investments of a nature
similar to the Exchange Shares so as to be capable, by reason of such knowledge
and experience, of evaluating the merits and risks of, and making an informed
business decision with regard to, the acquisition of the Wedge Net Common
Shares. Each Sequiam Shareholder understands and agrees that the certificates
evidencing the Exchange Shares shall bear the usual restrictive legend
pertaining to Rule 144 under the Securities Act and that the Exchange Shares
will not be transferable except in accordance with a valid exemption from
registration to the satisfaction of the Wedge Net.
4.29 DISCLOSURE. To the knowledge of Sequiam and Sequiam Shareholders,
----------
neither this Agreement, nor any Schedule to this Agreement, contains or will
contain an untrue statement of a material fact or omits a material fact
necessary to make the statements contained herein or therein not misleading.
Sequiam has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any bankruptcy law nor does Sequiam have
any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings.
4.30 ABSENCE OF CHANGES. Since December 31, 2001, except for changes
--------------------
in the ordinary course of business which have not in the aggregate had a
Material Effect, to the best of Sequiam's knowledge, Sequiam has conducted its
business only in the ordinary course and has not experienced or suffered any
material adverse change in the condition (financial or otherwise), results of
operations, properties, business or prospects of Sequiam or waived or
surrendered any claim or right of material value.
4.31 COMPLIANCE WITH LAWS. To the best of Sequiam's knowledge, Sequiam
--------------------
has complied with, and is not in violation of, applicable federal, state or
local statutes, laws and regulations (including, without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
assets or the operation of its business, except for matters which would not have
a material affect on Sequiam or its assets.
4.32 ENVIRONMENTAL AND SAFETY MATTERS. The business operations of
-----------------------------------
Sequiam and its assets have been, and are being, used and operated by Sequiam in
substantial compliance with all applicable Environmental Laws and any permits,
licenses, authorizations, agreements, injunctions, decrees and orders relating
thereto or to air, ground and water pollution or regulation, soil monitoring,
occupational health or safety, or the storage, treatment, disposal, release,
discharge or emission of any Hazardous Substances. To the knowledge of Sequiam,
no Hazardous Substances have been disposed of on any property that is or has
been owned or occupied by Sequiam at any time, and no Hazardous Substances have
been transported by or on behalf of Sequiam or in connection with its business
operations. Sequiam and/or its business activities or assets are not, directly
or indirectly, subject to any obligations, liabilities
(contingent or otherwise), claims, judgments, orders, settlements, resolutions
of disputes, writs, injunctions or decrees relating to the treatment, storage,
disposal, release, discharge or emission of any Hazardous Substances, including
the occupational exposure of Sequiam's employees or agents thereto. There are no
threatened or pending litigation, proceedings, investigations, citations, or
notices of violation resulting from the business activities of Sequiam, or
arising from its use or occupancy of property, relating to the treatment,
storage, disposal, release, discharge or emission of any Hazardous Substances.
To the best of Sequiam's knowledge there are no circumstances which may give
rise to any litigation, claims, proceedings, investigations, citations, or
notices of violations resulting from the business activities of Sequiam, or from
or relating to properties owned or occupied by Sequiam, directly or indirectly,
relating to the treatment, storage, disposal, release, discharge or emission of
any Hazardous Substances.
4.33 NO DEBT TO RELATED PARTIES. Except as shown on the Sequiam
------------------------------
Financial Statements, Sequiam is not, and on Closing will not be, indebted to
the Sequiam Shareholders nor to any family member thereof, nor to any affiliate,
director or officer of Sequiam or the Sequiam Shareholders except accounts
payable on account of bona fide business transactions of Sequiam incurred in the
normal course of Sequiam's business, including employment agreements with
Sequiam Shareholders, none of which are more than thirty (30) days in arrears,
and all of which are disclosed in the Sequiam Financial Statements or otherwise
in this Agreement.
4.34 CORPORATE NAME. Sequiam Carries on the business of Sequiam only
---------------
under the name "Sequiam, Inc." and under no other business or trade names.
Sequiam does not have any knowledge of any infringement by Sequiam of any
Intellectual Property Rights.
4.35 NON-MERGER AND SURVIVAL. The representations, warranties and
-------------------------
covenants of Sequiam and the Sequiam Shareholders contained herein will be true
at and as of Closing in all material respects as though such representations,
warranties and covenants were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a Party from any such
representation or warranty) or any investigation made by Wedge Net, the
representations and warranties of Sequiam and the Sequiam Shareholders shall
survive the Closing. After Closing, any claim for breach of the representations
and warranties set forth in this Article 4 may only be brought in accordance
with Articles 12 and 14.
5. REPRESENTATIONS AND WARRANTIES OF WEDGE NET, ACQUISITIONS AND XXXXXXX
Wedge Net, Acquisitions and Xxxxxxx, jointly and severally, represent, warrant,
and covenant to Sequiam and the Sequiam Shareholders as follows:
5.1 ORGANIZATION AND QUALIFICATION. Wedge Net is a corporation duly
--------------------------------
organized, validly existing and in good standing under the laws of the State of
California and has all requisite corporate power and authority to (a) own, lease
and operate its properties and assets as they are now owned, leased and operated
and (b) carry on its business as currently conducted and as proposed to be
conducted. Wedge Net is duly qualified or licensed to do business in each
jurisdiction in which the failure to be so qualified or licensed could have a
Material Effect.
5.2 CAPITALIZATION. Wedge Net is authorized to issue 50,000,000 shares
--------------
of common stock, $0.001 par value and 10,000,000 shares of preferred stock,
$0.001 par value. The issued and outstanding capital stock of Wedge Net
consists of 4,733,000 shares of common stock, $0.001 par value per share, and no
shares of preferred stock. All of the issued and outstanding shares of capital
stock of Wedge Net are validly issued, fully paid, and nonassessable, and none
of such shares have been issued in violation of the preemptive rights of any
person. Upon delivery of the Exchange Shares to the Sequiam Shareholders
pursuant to this Agreement, the Exchange Shares shall be validly issued, fully
paid, and nonassessable.
5.3 SUBSIDIARIES AND AFFILIATES. Except with respect to Acquisitions,
----------------------------
Wedge Net does not own or hold, directly or indirectly, any equity, debt, or
other interest in any entity or business or any option to acquire any such
interest.
5.4 OPTIONS OR OTHER RIGHTS. Except for the Subscription Agreements,
-------------------------
no options, warrants, calls, subscriptions or other agreements commitments or
other rights to acquire, sell or issue shares of capital stock or other equity
interests of Wedge Net whether upon conversion of other securities or otherwise,
are issued or outstanding, and there is no agreement or understanding with
respect to the voting of such capital stock or other equity interests.
5.5 OWNERSHIP OF WEDGE NET CONTROL SHARES. The Wedge Net Control
------------------------------------------
Shares are owned of record and beneficially by Xxxxxxx. Xxxxxxx possess full
authority and legal right to sell, transfer, and assign the entire legal and
beneficial ownership of the Wedge Net Control Shares, free from all liens,
claims, and encumbrances of any kind; and there are no outstanding rights or
obligations granted by Xxxxxxx to purchase or acquire any of the shares of the
Wedge Net Control Shares or any interest in any other shares of Wedge Net Common
Stock. Upon the return to treasury of a portion of the Wedge Net Control Shares
pursuant to Section 9.3(g) below, Wedge Net will receive the entire legal and
beneficial interest in such shares, free and clear of all liens, claims, and
encumbrances and subject to no legal or equitable restrictions of any kind.
5.6 VALIDITY AND EXECUTION OF AGREEMENT. Each of Wedge Net, Acquisitions
-----------------------------------
and Xxxxxxx has the full legal right, capacity and power required to enter into,
execute and deliver this Agreement and to carry out the transactions
contemplated in this Agreement. This Agreement has been duly executed and
delivered by each of Wedge Net and Xxxxxxx and constitutes the valid and binding
obligation of each of Wedge Net and Xxxxxxx, enforceable in accordance with its
terms.
5.7 NO CONFLICT. None of the execution, delivery, or performance of
------------
this Agreement does or will: (a) result in any violation or be in conflict with
or constitute a default under any term or provision of the Articles of
Incorporation or Bylaws of Wedge Net or Acquisitions or any term or provision of
any judgment, decree, order, statute, injunction, rule, or regulation applicable
to Wedge Net, Acquisitions, Xxxxxxx or any of the Exchange Shares, or of any
material note, bond, mortgage, indenture, lease, license, franchise, agreement,
or other instrument or obligation to which Wedge Net, Acquisitions, Xxxxxxx or
any of the Exchange Shares is bound; (b) result in the creation of any
Encumbrance upon the Exchange Shares or any of the Wedge Net Assets; or (c)
constitute a default under, terminate, accelerate, amend or modify, or give any
party the right to terminate, accelerate, amend, modify, abandon, or refuse to
perform or comply with, any Material Contract, agreement, arrangement,
commitment, or plan to which Wedge Net, Acquisitions or Xxxxxxx is a party, or
by which Wedge Net, Acquisitions or Xxxxxxx, or the Wedge Net Assets or the
Exchange Shares may be subject or bound.
5.8 CONSENTS AND APPROVALS. No federal, state, foreign or other
------------------------
regulatory approvals are required to be obtained prior to the Merger, by Wedge
Net, Acquisitions or Xxxxxxx in connection with the Merger.
5.9 VIOLATION OF LAWS, PERMITS, ETC.
------------------------------------
(a) Neither Wedge Net nor Acquisitions is in violation of any
term or provision of its respective Articles of Incorporation or Bylaws, or of
any material term or provision of any judgment, decree, order, injunction,
statute, law, rule, ordinance, or governmental regulation that is applicable to
it.
(b) Each of Wedge Net and Acquisitions has maintained in full
force and effect all certificates, licenses, and permits material to the conduct
of its respective business, and has not received any notification that any
revocation or limitation thereof is threatened or pending that would have a
Material Effect or that has not been cured.
5.10 BOOKS AND RECORDS. The books and records of each of Wedge Net and
-----------------
Acquisitions (including, without limitation, the books of account, minute books,
and stock record books) are complete and correct in all material respects and
have been maintained in accordance with sound business practices. The minute
books of each of Wedge Net and Acquisitions are complete and current in all
material respects and, as applicable, accurately reflect all actions taken by
the respective shareholders and the board of directors of each corporation since
the date of such corporation's inception. All signatures contained in the books
and records of each of Wedge Net and Acquisitions are the true signatures of the
persons
whose signatures they purport to be. All of the Wedge Net Bank Accounts, their
location, account numbers and authorized signatories thereto are set forth on
Schedule 5.10.
-------------
5.11 WEDGE NET FINANCIAL STATEMENTS. The Wedge Net Financial
---------------------------------
Statements present fairly, in all material respects, the financial position of
Wedge Net at such dates and the results of operations of Wedge Net for the
periods then ended, in accordance with USGAAP consistently applied for the
periods covered thereby.
5.12 UNDISCLOSED LIABILITIES. Neither Wedge Net nor Acquisitions has
------------------------
any material direct or indirect Liability that is not fully and adequately
reflected or reserved against on the Wedge Net Financial Statements. Neither
Wedge Net nor Acquisitions has any Liabilities, whether or not of a kind
required by USGAAP to be set forth on a financial statement, other than
Liabilities incurred in the ordinary course of business since the date of the
latest balance sheet included in the Wedge Net Financial Statements that are
consistent with past practice and are included in the latest Wedge Net Financial
Statements.
5.13 TITLE TO PROPERTY; ENCUMBRANCES. Wedge Net has good and
----------------------------------
indefeasible title to and other legal right to use all assets, whether real,
personal or mixed, tangible or intangible, reflected as owned on the latest
balance sheet included in the Wedge Net Financial Statements or acquired after
the date of such balance sheet, free and clear of all Encumbrances except those
shown on the Wedge Net Financial Statements, except for (a) assets disposed of
for full and fair value since the date of such balance sheet in the ordinary
course of business consistent with past practice, or (b) matters that would not
have a Material Effect.
5.14 TAXES. All Tax Returns, reports and declarations of estimated Tax
-----
or estimated Tax deposit forms required to be filed by Wedge Net or
Acquisitions, have been duly and timely filed. Wedge Net, or Acquisitions, as
the case may be, has paid all Taxes which have become due whether pursuant to
such returns or any assessment received by it or otherwise, and has paid all
installments of estimated Taxes due. All Taxes which Wedge Net or Acquisitions
is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper Governmental or Regulatory
Body. There are no tax liens upon any of the assets or properties of Wedge Net
or Acquisitions except for Taxes not yet due and payable. Neither Wedge Net nor
Acquisitions is a party to any express tax settlement agreement, arrangement,
policy or guideline, formal or informal, and neither Wedge Net nor Acquisitions
has any obligation to make payments under any such settlement agreement with any
Party.
5.15 LIENS. None of the Wedge Net Assets are subject to any lien,
-----
pledge, hypothecation, mortgage, security interest, claim, lease, charge,
option, right of first refusal, easement, servitude, transfer restriction,
encumbrance or any other restriction or limitation whatsoever, other than (i)
materialmen's, mechanics', repairmen's or other like liens arising in the
ordinary course of business for amounts either not yet due or being contested in
good faith and by appropriate proceedings, so long as such proceedings shall not
involve any material
danger of sale, forfeiture or loss of any part of the assets and shall have been
disclosed to Sequiam hereunder, or (ii) any lien arising as a result of any act
or omission of Sequiam.
5.16 LITIGATION.
----------
(a) There is no action, proceeding, investigation, or inquiry
pending or, to the best of Wedge Net's knowledge, threatened (i) against or
affecting any of Wedge Net's or Acquisitions' assets or business that, if
determined adversely to Wedge Net, would result in a Material Effect or (ii)
that questions this Agreement or any action contemplated by this Agreement or in
connection with the Merger.
(b) Neither Wedge Net nor Acquisitions is in default with
respect to any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality applicable to it. Neither
Wedge Net nor Acquisitions is engaged in any lawsuit to recover any material
amount of monies due to it.
5.17 CONTRACTS AND OTHER AGREEMENTS. Schedule 5.17 contains a complete
------------------------------ -------------
and correct list as of the date hereof of all Material Contracts and all
agreements, contracts, and commitments (and all amendments thereto), written or
oral, to which Wedge Net or Acquisitions is a party or by which any of its
properties is bound, the breach of which would have a Material Effect. Wedge
Net and Acquisitions will make available to Sequiam complete and correct copies
of all such written agreements, contracts, and commitments, together with all
amendments thereto, and accurate (in all material respects) descriptions of all
such oral agreements. Such agreements, contracts, and commitments are in full
force and effect, and, to the best of Wedge Net's knowledge, all other parties
to such agreements, contracts, and commitments have performed all obligations
required to be performed by them to date thereunder in all material respects and
are not in default thereunder in any material respect.
5.18 WEDGE NET ACCOUNTS RECEIVABLE. All accounts receivable of Wedge
-------------------------------
Net and Acquisitions are reflected on Schedule 5.18 and (a) have arisen from
-------------
bona fide sales transactions in the ordinary course of business on ordinary
trade terms and (b) have been collected or are collectible in the ordinary
course of business in the aggregate recorded amounts thereof in accordance with
their terms without valid set-off or counterclaim.
5.19 WEDGE NET ACCOUNTS PAYABLE AND LIABILITIES. There are no
-----------------------------------------------
material liabilities, contingent or otherwise, of Wedge Net or Acquisitions
which are not disclosed in Schedule 5.19 or the Wedge Net Financial Statements,
-------------
except those incurred in the ordinary course of business since the date of the
Wedge Net Financial Statements, and neither Wedge Net nor Acquisitions has
guaranteed or agreed to guarantee any debt, liability or other obligation of any
person, firm or corporation. Without limiting the generality of the foregoing,
all accounts payable and liabilities of Wedge Net and Acquisitions as of
December 31, 2001 are reflected on Schedule 5.19 hereto. Wedge Net or
-------------
Acquisitions has made payments on all such accounts payable and other current
obligations arising subsequent to the date of Wedge Net Financial Statements, in
accordance with past practice of the business of Wedge Net.
5.20 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND EMPLOYEES.
-----------------------------------------------------------------
Schedule
--------
5.20 sets forth: (a) the name of all present officers, directors, employees and
----
other persons providing services for compensation for Wedge Net or Acquisitions
and current annual compensation, including any promised, expected or customary
bonus or such other amount, and (b) the names and titles of all directors and
officers of Wedge Net and Acquisitions, respectively. Wedge Net has not made a
commitment or agreement (verbally or in writing) to increase the compensation or
to modify the conditions or terms of employment of any person listed on Schedule
--------
5.20. To the knowledge of Wedge Net, none of such persons has made a threat to
----
Wedge Net or Acquisitions to terminate such person's relationship with Wedge Net
or Acquisitions, as the case may be. The consummation of the transactions
contemplated by this Agreement will not result in any liability for severance
pay to any such employee or other such person.
5.21 ERISA. There are no Plans maintained for the benefit of, or
-----
covering, any employee, former employee, independent contractor or former
independent contractor of Wedge Net or Acquisitions, or their dependents or
their beneficiaries, or otherwise, now or heretofore contributed to by Wedge
Net, and no such Plan is or has ever been subject to ERISA.
5.22 OPERATIONS. Except as expressly authorized by this Agreement,
----------
since the date of the latest Wedge Net Financial Statements, neither Wedge Net
nor Acquisitions has:
(a) amended its Articles of Incorporation or Bylaws or merged
with or into or consolidated with any other entity, or changed or agreed to
rearrange in any manner the character of the Business of Wedge Net or
Acquisitions, respectively;
(b) issued, sold or purchased options or rights to subscribe
to, or entered into any contracts or commitments to issue, sell or purchase, any
shares of its capital stock or other equity interests;
(c) entered into, amended or terminated any (i) employment
agreement or collective bargaining agreement, (ii) adopted, entered into or
amended any arrangement which is, or would be, a Plan or (iii) made any change
in any actuarial methods or assumptions used in funding any Plan or in the
assumptions or factors used in determining benefit equivalencies thereunder;
(d) issued any note, bond or other debt security, created,
incurred or assumed any indebtedness for borrowed money other than in the
ordinary course of business in connection with trade payables, or guaranteed any
indebtedness for borrowed money or any capitalized lease obligation;
(e) declared, set aside or paid any dividends or declared or
made any other distributions of any kind to the shareholders, or made any direct
or indirect redemption, retirement, purchase or other acquisition of any shares
of its capital stock or other equity interests;
(f) knowingly waived any right of material value to the
business of Wedge Net or Acquisitions, respectively;
(g) made any change in its accounting methods or practices or
made any changes in depreciation or amortization policies or rates adopted by it
or made any material write-down of inventory or material write-off as
uncorrectable of accounts receivable;
(h) made any wage or salary increase or other compensation
payable or to become payable, any bonus, or any increase in any other direct or
indirect compensation, or any accrual for or commitment or agreement to make or
pay the same, for or to any of its officers, directors, employees, consultants,
agents or other representatives, other than increases made in the ordinary
course of business consistent with past practice;
(i) entered into any transactions with any of its affiliates,
shareholders, officers, directors, employees, consultants, agents or other
representatives (other than employment arrangements made in the ordinary course
of business consistent with past practice), or any affiliate of any shareholder,
officer, director, consultant, employee, agent or other representative;
(j) made any payment or commitment to pay any severance or
termination pay to any person or any of its officers, directors, employees,
consultants, agents or other representatives, other than payments or commitments
to pay such persons or their officers, directors, employees in the ordinary
course of business;
(k) except in the ordinary course of business, (i) entered
into any lease (as lessor or lessee), (ii) sold, abandoned or made any other
disposition of any of its assets or properties other than in the ordinary course
of business consistent with past practice, (iii) granted or suffered any Lien on
any of its assets or properties other than sales of inventory in the ordinary
course of business, or (iv) entered into or amended any material contract or
other agreement to which it is a party, or by or to which it or its assets or
properties are bound or subject, or pursuant to which it agrees to indemnify any
person or to refrain from competing with any person, in each case or type
required to be disclosed pursuant to Section 5.17 hereof;
(l) except in the ordinary course of business, incurred or
assumed any debt, obligation or liability (whether absolute or contingent and
whether or not currently due and payable);
(m) except for inventory or equipment acquired in the
ordinary course of business, made any acquisition of all or any part of the
assets, properties, capital stock or business of any other person;
(n) except in the ordinary course of business, paid, directly
or indirectly, any of its Liabilities before the same became due in accordance
with their terms or otherwise than in the ordinary course of business, except to
obtain the benefit of discounts available for early payment;
(o) except in the ordinary course of business, created,
incurred or assumed any indebtedness for borrowed money, or guaranteed any
indebtedness for borrowed money or
any capitalized lease obligation, in each case in excess of $5,000 individually
or in the aggregate;
(p) except in the ordinary course of business, made any
capital expenditures or commitments for capital expenditures in aggregate amount
exceeding $5,000; or
(q) except in the ordinary course of business, terminated,
failed to renew, amended or entered into any contract or other agreement of a
type required to be disclosed pursuant to Section 5.17.
5.23 INTELLECTUAL PROPERTY RIGHTS. Wedge Net possesses all of the
------------------------------
necessary Intellectual Property Rights necessary to conduct its business in the
manner that is currently being conducted and anticipates conducting in the
future. All of such Intellectual Property Rights are held in the name of Wedge
Net. None of the Intellectual Property Rights of Wedge Net infringe upon the
rights of any other person in any material respect or, to the knowledge of Wedge
Net, is so infringed upon by any other person or its property. Wedge Net has
not received any notice of any claim of any other person relating to any of the
Intellectual Property Rights or any process or confidential information of Wedge
Net or Acquisitions and does not know of any basis for any such charge or claim.
No approval or consent of any person is needed so that the interest of Wedge Net
and Acquisitions in the Intellectual Property Rights shall continue to be in
full force and effect and enforceable by Wedge Net or Acquisitions following the
transactions contemplated by this Agreement.
5.24 EMPLOYEE RELATIONS. Neither Wedge Net nor Acquisitions is a party
------------------
to any agreement with any labor organization, collective bargaining or similar
agreement with respect to its employees. There are no material complaints,
grievances or arbitrations, employment-related litigation, administrative
proceedings or controversies either pending or, to the knowledge of Wedge Net,
threatened against Wedge Net or Acquisitions, involving any employee, applicant
for employment, or former employee of Wedge Net or Acquisitions. During the
past five years, Wedge Net has not suffered or sustained any labor dispute
resulting in any work stoppage and no such work stoppage is, to the knowledge of
Wedge Net, threatened. To the knowledge of Wedge Net, there are no attempts
presently being made to organize any employees employed by Wedge Net.
5.25 INSURANCE. Wedge Net has adequate policies of insurance for its
---------
operations and each such policy or binder of insurance is reflected on
Schedule 5.25. Wedge Net is not in default with respect to any material
-------------
provision contained in any such policy or binder of insurance and has not failed
to give any notice or present any claim under any such policy or binder in due
and timely fashion. There are no outstanding unpaid claims under any such
policy or binder which have gone unpaid for more than 45 days or as to which the
carrier has disclaimed liability. Wedge Net has not received any notice of
cancellation or non-renewal of any such policy or binder. Wedge Net has not
received any notice from any of its insurance carriers that any insurance
premiums will be materially increased in the future or that any existing
insurance coverage will not be available in the future on substantially the same
terms as now in effect.
5.26 LICENSES AND PERMITS. No material Permits is required to be
----------------------
obtained by Wedge
Net in connection with its properties or the business of Wedge Net. Wedge Net
has not received any notice of any claim of revocation of any such Permit and
has no knowledge of any event which would be likely to give rise to such a
claim.
5.27 BROKERS. Except for the assistance of Amerivet Securities, Inc.,
-------
Registered Investment Advisors, all negotiations relating to this Agreement and
the transactions contemplated hereby have been carried out by Wedge Net,
Acquisitions and Xxxxxxx directly with Sequiam and the Sequiam Shareholders
without the intervention of any other person on behalf of Sequiam, the Sequiam
Shareholders, Wedge Net or Xxxxxxx in such manner as to give rise to any valid
claim by any person against Sequiam, the Sequiam Shareholders, Wedge Net or
Xxxxxxx for a finder's fee, brokerage commission or similar payment.
5.28 ACQUISITION OF EXCHANGE SHARES. Wedge Net and Xxxxxxx acknowledge
------------------------------
that the Sequiam Common Stock are restricted securities under the Securities Act
and hereby represent that Wedge Net (i) is acquiring the Sequiam Common Stock
for its own account without a view to distribution within the meaning of the
Securities Act; (ii) has received from Sequiam all information that it has
deemed necessary to make an informed investment decision with respect to an
investment in Sequiam in general and the Sequiam Common Stock in particular;
(iii) is financially able to bear the economic risks of an investment in
Sequiam; and (iv) has such knowledge and experience in financial and business
matters in general and with respect to investments of a nature similar to the
Sequiam Common Stock so as to be capable, by reason of such knowledge and
experience, of evaluating the merits and risks of, and making an informed
business decision with regard to, the acquisition of the Sequiam Common Stock.
Wedge Net understands and agrees that the certificates evidencing the Sequiam
Common Stock shall bear the usual restrictive legend pertaining to Rule 144
under the Securities Act and that the Sequiam Common Stock will not be
transferable except in accordance with a valid exemption from registration.
5.29 DISCLOSURE. To the knowledge of Wedge Net and Xxxxxxx, neither
----------
this Agreement, nor any Schedule to this Agreement, contains or will contain an
untrue statement of a material fact or omits a material fact necessary to make
the statements contained herein or therein not misleading. Neither Wedge Net
nor Acquisitions has taken any steps, and neither currently expects to take any
steps, to seek protection pursuant to any bankruptcy law. Neither Wedge Net nor
Acquisitions has any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings.
5.30 ABSENCE OF CHANGES. Since December 31, 2001, except for changes
--------------------
in the ordinary course of business which have not in the aggregate had a
Material Effect, to the best of Wedge Net's knowledge, Wedge Net and
Acquisitions have conducted their respective business only in the ordinary
course and have not experienced or suffered any material adverse change
in the condition (financial or otherwise), results of operations, properties,
business or prospects of Wedge Net or Acquisitions or waived or surrendered any
claim or right of material value.
5.31 COMPLIANCE WITH LAWS. To the best of Wedge Net's knowledge, Wedge
--------------------
Net and Acquisitions have complied with, and are not in violation of, applicable
federal, state or local statutes, laws and regulations (including, without
limitation, any applicable building, zoning or other law, ordinance or
regulation) affecting their respective assets or the operation of their
respective businesses, except for matters which would not have a material affect
on Wedge Net, Acquisitions or their respective assets.
5.32 ENVIRONMENTAL AND SAFETY MATTERS. The business operations of
-----------------------------------
Wedge Net and Acquisitions and their assets have been, and are being, used and
operated by Wedge Net and Acquisitions in substantial compliance with all
applicable Environmental Laws and any permits, licenses, authorizations,
agreements, injunctions, decrees and orders relating to air, ground and water
pollution or regulation, soil monitoring, occupational health or safety, or the
storage, treatment, disposal, release, discharge or emission of any Hazardous
Substances. To the knowledge of Wedge Net, no Hazardous Substances have been
disposed of on any property that is or has been owned or occupied by Wedge Net
or Acquisitions at any time, and no Hazardous Substances have been transported
by or on behalf of Wedge Net or Acquisitions in connection with their respective
business operations. Neither Wedge Net nor Acquisitions, or their respective
business activities or assets are, directly or indirectly, subject to any
obligations, liabilities (contingent or otherwise), claims, judgments, orders,
settlements, resolutions of disputes, writs, injunctions or decrees relating to
the treatment, storage, disposal, release, discharge or emission of any
Hazardous Substances, including the occupational exposure of Wedge Net's
employees or agents thereto. There are no threatened or pending litigation,
proceedings, investigations, citations, or notices of violation resulting from
the business activities of Wedge Net or Acquisitions, or arising from its use or
occupancy of property, relating to the treatment, storage, disposal, release,
discharge or emission of any Hazardous Substances. To the best of Wedge Net's
or Acquisitions' knowledge, there are no facts or circumstances which may give
rise to any litigation, claims, proceedings, investigations, citations, or
notices of violations resulting from the business activities of Wedge Net or
Acquisitions, or from or relating to properties owned or occupied by Wedge Net
or Acquisitions, directly or indirectly, relating to the treatment, storage,
disposal, release, discharge or emission of any Hazardous Substances.
5.33 NO DEBT TO RELATED PARTIES. Neither Wedge Net nor Acquisitions
-----------------------------
is, and on Closing will not be, indebted to Xxxxxxx or to any family member
thereof, or to any affiliate, director or officer of Wedge Net or Xxxxxxx except
accounts payable on account of bona fide business transactions of Wedge Net
incurred in the normal course of Wedge Net's business, none of which are more
than thirty (30) days in arrears or exceed in the aggregate, $5,000.00, and all
of which are disclosed in the Sequiam Financial Statements or otherwise in this
Agreement.
5.34 CORPORATE NAME. Wedge Net Carries on the business of Wedge Net
---------------
only under the name "Wedge Net Experts, Inc." and under no other business or
trade names. Wedge Net does not have any knowledge of any infringement by Wedge
Net of any Intellectual Property
Rights.
5.35 REPORTING STATUS; LISTING. Wedge Net is required to file current
--------------------------
reports with the Securities and Exchange Commission ("SEC") pursuant to section
15(d) of the Exchange Act, and the Exchange Shares are quoted on the NASD
"BULLETIN BOARD." All reports required to be filed by Wedge Net with the SEC or
NASD have been timely filed. Prior registration statements and proxy statements
of Wedge Net filed on or before the Closing, comply with or will when filed
comply with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the SEC promulgated thereunder, and no notices have
been received that any prior registration statements or proxy statements of
Wedge Net filed at any time fail to comply with the requirements of the
Securities Act or Exchange Act or the rules and regulations of the SEC
thereunder. All documents filed by Wedge Net with the SEC on or before Closing,
and all documents incorporated by reference therein, as amended or supplemented,
complied or will comply as to form in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and the
rules and regulations of the SEC thereunder, and no notices have been received
that any documents filed by Wedge Net with the SEC at any time, including all
documents incorporated by reference therein, as amended or supplemented, failed
to comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, and the rules and
regulations of the SEC thereunder. To the best of Wedge Net's and Xxxxxxx'x
knowledge and belief, all prior registration statements, proxy statements,
reports and other documents filed by Wedge Net with the SEC were true, accurate
and complete in all material respects, and neither Wedge Net nor Xxxxxxx has
received notice of any facts that if known at the time such registration
statement, proxy statement, report or other document was filed with the SEC,
would make such document untrue or misleading.
5.36 NON-MERGER AND SURVIVAL. The representations, warranties and
-------------------------
covenants of Wedge Net, Acquisitions and Xxxxxxx contained herein will be true
at and as of Closing in all material respects as though such representations,
warranties and covenants were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a Party from any such
representation or warranty) or any investigation made by Sequiam, the
representations and warranties of Wedge Net, Acquisitions and Xxxxxxx shall
survive the Closing. After Closing, any claim for breach of the representations
and warranties set forth in this Article 5 may only be brought in accordance
with Articles 12 and 14.
6. COVENANTS OF SEQUIAM
6.1 COVENANTS. Sequiam covenants and agrees with Wedge Net that it
---------
will, until Closing:
(a) Conduct its business diligently and in the ordinary
course consistent with the manner in which it generally has been operated up to
the date of execution of this Agreement;
(b) Use its best efforts to preserve its business and assets;
(c) Provide Wedge Net, Xxxxxxx, and their representatives
full access to all of the properties, books, contracts, commitments and records
of Sequiam, and furnish to Wedge Net, Xxxxxxx, and their representatives all
such information as they may reasonably request, subject to the Confidentiality
Agreement and Section 9.6; and
(d) Take all reasonable steps required to obtain, prior to
Closing, any and all third party consents required to permit the Merger and to
preserve and maintain the Sequiam Assets notwithstanding the change in control
of Wedge Net arising from the Merger.
6.2 AUTHORIZATION. Each of Sequiam and Acquisitions agrees to
-------------
authorize and direct any and all federal, state, municipal, foreign and
international governments and regulatory authorities having jurisdiction
respecting Sequiam or Acquisitions to release any and all information in their
possession respecting Sequiam or Acquisitions to Wedge Net. Sequiam shall
promptly execute and deliver to Wedge Net any and all consents to the release of
information and specific authorizations which Wedge Net reasonably require to
gain access to any and all such information.
6.3 SURVIVAL. The covenants set forth in this Article 6 shall survive
--------
the Closing for the benefit of Wedge Net and the Wedge Net Shareholders.
7. COVENANTS OF WEDGE NET AND ACQUISITIONS
7.1 COVENANTS. Wedge Net covenants and agrees with Sequiam that it
---------
will, until Closing:
(a) Conduct its business diligently and in the ordinary
course consistent with the manner in which it generally has been operated up to
the date of execution of this Agreement;
(b) Use its best efforts to preserve its business and assets;
(c) Provide Sequiam, the Sequiam Shareholders, and their
representatives full access to all of the properties, books, contracts,
commitments and records of Wedge Net and Acquisitions, and furnish to Sequiam,
the Sequiam Shareholders, and their representatives all such information as they
may reasonably request subject to Section 9.6; and
(d) Take all reasonable steps required to obtain, prior to
Closing, any and all third party consents required to permit the Merger and to
preserve and maintain the Wedge Net Assets notwithstanding the change in control
of Wedge Net arising from the Merger.
7.2 AUTHORIZATION. Each of Wedge Net and Acquisitions agrees to
-------------
authorize and direct any and all federal, state, municipal, foreign and
international governments and regulatory authorities having jurisdiction
respecting Wedge Net or Acquisitions to release any and all information in their
possession respecting Wedge Net or Acquisitions to Sequiam. Wedge Net shall
promptly execute and deliver to Sequiam any and all consents to the release of
information and specific authorizations which Sequiam reasonably require to gain
access to any and all such information.
7.3 CONFIDENTIALITY AGREEMENT. Wedge Net and Xxxxxxx shall execute,
--------------------------
contemporaneously with this Agreement, the Confidentiality Agreement in
substantially the same form as Schedule 7.3, in connection with all
-------------
confidential, proprietary, financial, technical and business information and
documents of Sequiam or the Sequiam Shareholders.
7.4 SURVIVAL. The covenants set forth in this Article 7 shall survive
--------
the Closing for the benefit of Sequiam and the Sequiam Shareholders.
8. EMPLOYMENT AGREEMENTS
At the Closing, Sequiam shall enter into the Employment Agreements with Van den
Brekel, Xxxxxxxxxxx and Xxxxxx, pursuant to which they will provide services to
Sequiam. The Employment Agreements shall be substantially in the form attached
hereto as Schedule 8.
----------
9. CONDITIONS PRECEDENT
9.1 CONDITIONS PRECEDENT IN FAVOR OF WEDGE NET. The obligations of
---------------------------------------------
Wedge Net, Acquisitions and Xxxxxxx to carry out the transactions contemplated
hereby are subject to the fulfillment of each of the following conditions
precedent on or before the Closing:
(a) all documents or copies of documents required to be
executed and delivered to Wedge Net hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this
Agreement to be complied with or performed by Sequiam at or prior to the Closing
will have been complied with or performed;
(c) title to Sequiam Shares and Company Assets will be free
and clear of all mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever, save and except as disclosed herein;
(d) the Articles of Merger shall be executed by Sequiam;
(e) subject to Article 10 hereof, there will not have
occurred
(1) any material adverse change in the financial
position or condition of Sequiam, its liabilities or the Sequiam Assets or any
damage, loss or other change in circumstances materially and adversely affecting
the Business of Sequiam or the Sequiam Assets or Sequiam's right to carry on the
Business of Sequiam, other than changes in the ordinary course of business, none
of which has had a Material Effect, or
(2) any damage, destruction, loss or other event,
including changes to any laws or statutes applicable to Sequiam or the Business
of Sequiam (whether or not covered by insurance) that have had a Material
Effect;
(f) the transactions contemplated hereby shall have been
approved by all
other regulatory authorities having jurisdiction over the subject matter hereof,
if any;
(g) the Escrow Agent (as that term is defined in the
Subscription Agreements) shall have received duly executed Subscription
Agreements for subscriptions pursuant to the Private Placement, in the
aggregate, of not less than the Subscription Price, and the Escrow Agent shall
have received the Subscription Price in immediately available U.S. funds and be
authorized to deliver the Subscription Price to Wedge Net upon Closing; and
(h) Wedge Net shall have received a favorable opinion, dated
the Closing Date, from legal counsel to Sequiam, in form and substance
satisfactory to Wedge Net and its counsel, to the effect that:
(1) Sequiam is a corporation duly organized and legally
existing in good standing under the laws of the State of Delaware,
(2) all corporate acts required to be taken by or on the
part of Sequiam to approve and adopt this Agreement and to authorize the Merger
have been duly and validly taken,
(3) this Agreement and the Articles of Merger have been
duly executed and delivered by Sequiam and are the legal, valid and binding
agreements of Sequiam, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and except that equitable remedies
may not be available in connection with the enforcement thereof,
(4) the par value and number of shares of authorized
stock of Sequiam which will be issued and outstanding are as set forth in
Section 4.2 of this Agreement, which shares of stock are duly authorized, fully
paid and non-assessable and were issued in accordance with the registration or
qualification provisions of the Securities Act and of any relevant state
securities laws or pursuant to valid exemptions therefrom,
(5) said counsel does not know, and has no reason to
believe, that any suit, proceeding or investigation is pending or threatened
against Sequiam which might have any Material Effect, or which questions the
validity of this Agreement or any action taken or to be taken pursuant to or in
connection with this Agreement, and
(6) neither the execution and delivery of this
Agreement, nor any performance hereunder, will conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
Sequiam's Articles of Incorporation or Bylaws, or to the best of such counsel's
knowledge, any agreement, instrument, judgment, decree, regulation or other
restriction, of which such counsel has knowledge and to which Sequiam is a party
or by which its properties are bound.
9.2 WAIVER BY WEDGE NET. The conditions precedent set out in the
----------------------
preceding section are inserted for the exclusive benefit of Wedge Net, and any
such condition may be waived in whole or in part by Wedge Net at or prior to
Closing by delivering to Sequiam a written waiver to that effect signed by Wedge
Net. In the event that the conditions precedent
set out in the preceding section are not satisfied or waived on or before the
Closing, Wedge Net shall be released from all obligations under this Agreement.
9.3 CONDITIONS PRECEDENT IN FAVOR OF SEQUIAM AND THE SEQUIAM
----------------------------------------------------------------
SHAREHOLDERS. The obligations of Sequiam and the Sequiam Shareholders to carry
------------
out the transactions contemplated hereby are subject to the fulfillment of each
of the following conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be
executed and delivered to Sequiam hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this
Agreement to be complied with or performed by Wedge Net at or prior to the
Closing will have been complied with or performed;
(c) Wedge Net will have delivered the Exchange Shares to the
Sequiam Shareholders at the Closing in accordance with Schedule 9.3(c), and the
---------------
Exchange Shares will be registered on the books of Wedge Net in the name of the
Sequiam Shareholders as of the Closing Date;
(d) title to the Exchange Shares will be free and clear of
all mortgages, liens, charges, pledges, security interests, encumbrances or
other claims whatsoever;
(e) the Certificate of Merger shall be executed by the
Acquirer in form acceptable for filing with the California Secretary of State;
(f) subject to Article 10 hereof, there will not have
occurred:
(1) any material adverse change in the financial
position or condition of Wedge Net, its liabilities or Wedge Net Assets or any
damage, loss or other change in circumstances materially and adversely affecting
Wedge Net, the Business of Wedge Net or Wedge Net Assets or Wedge Net's right to
carry on the Business of Wedge Net, other than changes in the ordinary course of
business, none of which has had a Material Effect, or
(2) any damage, destruction, loss or other event,
including changes to any laws or statutes applicable to Wedge Net or the
Business of Wedge Net (whether or not covered by insurance) that have had a
Material Effect;
(g) Wedge Net's issued and outstanding common share capital
shall be reduced to 4,233,000 Wedge Net Common Shares by the return to treasury
of 500,000 of the Wedge Net Control Shares, and Wedge Net shall have received a
release in form satisfactory to Sequiam from Wedge Net Majority Shareholder in
that regard;
(h) the transactions contemplated hereby shall have been
approved by all other regulatory authorities having jurisdiction over the
subject matter hereof, if any;
(i) the Escrow Agent (as that term is defined in the
Subscription
Agreements) shall have received duly executed Subscription Agreements for
subscriptions pursuant to the Private Placement, in the aggregate, of not less
than the Subscription Price, and the Escrow Agent shall have received the
Subscription Price in immediately available U.S. funds and be authorized to
deliver the Subscription Price to Wedge Net upon Closing; and
(j) Sequiam shall have received a favorable opinion, dated
the Closing Date, from legal counsel to Wedge Net, in form and substance
satisfactory to Sequiam and its counsel, to the effect that:
(1) each of Wedge Net and Acquisitions is a corporation
duly organized and legally existing in good standing under the laws of the State
of California,
(2) all corporate acts required to be taken by or on the
part of Wedge Net and Acquisitions to approve and adopt this Agreement and to
authorize the Merger have been duly and validly taken,
(3) this Agreement and the Articles of Merger have been
duly executed and delivered by Wedge Net and Acquisitions and are the legal,
valid and binding agreements of Wedge Net and Acquisitions, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the rights of creditors generally and except
that equitable remedies may not be available in connection with the enforcement
thereof,
(4) the par value and number of shares of authorized
stock of Wedge Net which will be issued and outstanding are as set forth in
Section 5.2 of this Agreement, which shares of stock are duly authorized, fully
paid and non-assessable and were issued in accordance with the registration or
qualification provisions of the Securities Act and of any relevant state
securities laws or pursuant to valid exemptions therefrom,
(5) said counsel does not know, and has no reason to
believe, that any suit, proceeding or investigation is pending or threatened
against Wedge Net or Acquisitions which might have any Material Effect, or which
questions the validity of this Agreement or any action taken or to be taken
pursuant to or in connection with this Agreement, and
(6) neither the execution and delivery of this
Agreement, nor any performance hereunder, will conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
Wedge Net's or Acquisitions' Articles of Incorporation or Bylaws, or to the best
of such counsel's knowledge, any agreement, instrument, judgment, decree,
regulation or other restriction, of which such counsel has knowledge and to
which Wedge Net or Acquisitions is a party or by which its properties are bound.
9.4 WAIVER BY COMPANY AND THE SEQUIAM SHAREHOLDERS. The conditions
--------------------------------------------------
precedent set out in the preceding section are inserted for the exclusive
benefit of Sequiam and the Sequiam Shareholders, and any such condition may be
waived in whole or in part by Sequiam or the Sequiam Shareholders at or prior to
the Closing by delivering to Wedge Net a written
waiver to that effect signed by Sequiam and the Sequiam Shareholders. In the
event that the conditions precedent set out in the preceding section are not
satisfied or waived on or before the Closing, Sequiam and the Sequiam
Shareholders shall be released from all obligations under this Agreement.
9.5 NATURE OF CONDITIONS PRECEDENT. The conditions precedent set forth
-------------------------------
in this Article are conditions of completion of the transactions contemplated by
this Agreement and are not conditions precedent to the existence of a binding
agreement. Each Party acknowledges receipt of the sum of $10.00 and other good
and valuable consideration as separate and distinct consideration for agreeing
to the conditions precedent in favor of the other Party or Parties set forth in
this Article 9.
9.6 CONFIDENTIALITY. The Parties hereto agree that the existence and
---------------
terms of this Agreement are confidential and that if this Agreement is
terminated, the Parties agree to return to one another any and all financial,
technical and business documents delivered to the other Party or Parties in
connection with the negotiation and execution of this Agreement. Each Party
shall keep the terms of this Agreement and all information and documents
received from or regarding Sequiam and Wedge Net and the contents thereof
confidential and not utilize nor reveal or release same; provided, however,
Wedge Net may disclose such information to the extent required by law to
maintain the currency of Wedge Net's filings with the Securities and Exchange
Commission. Prior to the Closing, Wedge Net shall cooperate with Sequiam
regarding any disclosure of information about Sequiam and its Business and shall
not disclose any proprietary information that by law is not required to be
disclosed at that time or absent any voluntary disclosures by Wedge Net.
10. RISK
10.1 MATERIAL CHANGE IN THE BUSINESS OF SEQUIAM. If any material loss
-------------------------------------------
or damage to the Business of Sequiam occurs prior to Closing and such loss or
damage, in Wedge Net's reasonable opinion, cannot be substantially repaired or
replaced within sixty (60) days, Wedge Net shall, within seven (7) days
following any such loss or damage, by notice in writing to Sequiam, at its
option, either:
(a) terminate this Agreement, in which case no Party will be
under any further obligation to any other Party; or
(b) elect to complete the Merger and the other transactions
contemplated hereby, in which case the proceeds and the rights to receive the
proceeds of all insurance covering such loss or damage will, as a condition
precedent to Wedge Net's obligations to carry out the transactions contemplated
hereby, be vested in Sequiam or otherwise adequately secured to the satisfaction
of Wedge Net on or before the Closing Date.
10.2 MATERIAL CHANGE IN THE BUSINESS OF WEDGE NET. If any material
------------------------------------------------
loss or damage to the Business of Wedge Net occurs prior to Closing and such
loss or damage, in Sequiam's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, Sequiam shall, within seven (7)
days following any such loss or damage, by notice in writing to Wedge Net, at
its option, either:
(a) terminate this Agreement, in which case no Party will be
under any further obligation to any other Party; or
(b) elect to complete the Merger and the other transactions
contemplated hereby, in which case the proceeds and the rights to receive the
proceeds of all insurance covering such loss or damage will, as a condition
precedent to Sequiam's obligations to carry out the transactions contemplated
hereby, be vested in Wedge Net or otherwise adequately secured to the
satisfaction of Sequiam on or before the Closing Date.
11. POST-CLOSING COVENANTS
The Parties covenant to take the following actions after the Closing Date:
11.1 FURTHER INFORMATION. Following the Closing, each Party will
--------------------
afford to the other Party, its counsel and its accountants, during normal
business hours, reasonable access to the books, records and other data of
Sequiam or Wedge Net, as the case may be, relating to the business of Sequiam or
Wedge Net in their possession with respect to periods prior to the Closing and
the right to make copies and extracts therefrom, to the extent that such access
may be reasonably required by the requesting Party (a) to facilitate the
investigation, litigation and final disposition of any claims which may have
been or may be made against any Party or its affiliates and (b) for any other
reasonable business purpose.
11.2 RECORD RETENTION. Each Party agrees that for a period of not less
----------------
than seven (7) years following the Closing Date, such Party shall not destroy or
otherwise dispose of any of the Books and Records of Sequiam or Wedge Net
relating to the business of Sequiam or Wedge Net in his or its possession with
respect to periods prior to the Closing Date. Each Party shall have the right
to destroy all or part of such Books and Records after the seventh anniversary
of the Closing Date or, at an earlier time by giving each other Party hereto
thirty (30) days prior written notice of such intended disposition and by
offering to deliver to the other Party or Parties, at the other Party's or
Parties' expense, custody of such Books and Records as such Party may intend to
destroy. Within two (2) business days of Closing, Xxxxxxx shall cause the
original or certified copies of the charter documents of Wedge Net and all
corporate records documents and instruments of Wedge Net, the corporate seals of
Wedge Net and all books and accounts of Wedge Net to be delivered to the
Replacement Officers.
11.3 POST-CLOSING ASSISTANCE. Sequiam and the Sequiam Shareholders on
------------------------
the one hand, and Wedge Net and Xxxxxxx, on the other hand, will provide each
other with such assistance as may reasonably be requested in connection with the
preparation of any Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and provide the requesting Party with any
records or information that may be reasonably relevant to such return, audit or
examination, proceedings or determination. The Party requesting assistance
shall reimburse the other Party for reasonable out-of-pocket expenses incurred
in providing such assistance. Any information obtained pursuant to this Section
11.3 or pursuant to any other Section hereof providing for the sharing of
information or the review of any Tax Return or
other schedule relating to Taxes shall be kept confidential by the Parties
hereto.
11.4 PUBLIC FILINGS. Forthwith after the Closing, Sequiam, the Sequiam
--------------
Shareholders, Wedge Net and Xxxxxxx agree to use all their best efforts to do
the following:
(a) file the Articles of Merger with the Secretary of State
of the State of California;
(b) File with the SEC and mail to shareholders of Wedge Net
an Information Statement pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder, disclosing the change in control of Wedge Net and
shall, ten (10) days after such filing and mailing , date the resolutions
appointing Van den Brekel, Xxxxxxxxxxx and Xxxxxx, to the board of directors of
Wedge Net, and forthwith date and accept the resignation of Xxxxxxx X. Xxxxxxx,
Xxxx X. Xxxxxxx and Xxx Xxxxx as directors and officers of Wedge Net;
(c) file a Form D with the SEC in respect of the Private
Placement (if required);
(d) file Form 8-K with the SEC disclosing the terms of this
Agreement;
(e) take such steps as are required to request the
resignation of Xxxxxxxxx and Xxxxxx, P.C., as auditors of Wedge Net and to file
a Form 8-K in respect thereof with the SEC;
(f) file reports on Forms 13D and 3 with the SEC disclosing
the acquisition of the Exchange Shares by the Sequiam Shareholders; and
(g) file such other notices, reports, forms and schedules
required to be filed with the SEC as a result of this Agreement, the Merger and
the transactions contemplated herein.
11.5 BANK ACCOUNTS. Forthwith after Closing, Surviving Company shall
--------------
open one or more bank accounts (the "Surviving Company Bank Accounts") with one
or more Replacement Officers as the sole authorized signatory on each account.
Sequiam shall close all Sequiam Bank Accounts and transfer all funds remaining
in the Sequiam Bank Accounts to the Surviving Company Bank Accounts. As of
Closing, Wedge Net and Xxxxxxx shall cause the Replacement Officers to be the
sole authorized signatories on the Wedge Net Bank Accounts.
12. SURVIVAL; INDEMNIFICATION
12.1 SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
-----------------------------------------------------------
Notwithstanding any investigation conducted or notice or knowledge obtained by
or on behalf of any Party hereto, each covenant in this Agreement shall survive
the Closing without limitation as to time until fully performed and each
representation and warranty in this Agreement or in the Schedules or
certificates delivered pursuant to this Agreement shall survive the Closing.
12.2 INDEMNIFICATION BY SEQUIAM AND THE SEQUIAM SHAREHOLDERS. From and
-------------------------------------------------------
after the Closing Date, Sequiam and the Sequiam Shareholders shall, jointly and
severally, indemnify, hold harmless, protect and defend Wedge Net from and
against the following:
(a) any claim, demand, action, cause of action, loss, damage,
judgment, award, settlement or compromise, debt, responsibility, liability,
obligation, lien, encumbrance, cost or expense, including reasonable attorneys
fees, expert witness fees, accounting fees and related costs, as incurred
(collectively, "CLAIMS") arising out of, relating to or based upon or in
connection with any inaccuracy in, or breach of, any of the representations or
warranties, covenants or agreements of Sequiam and/or any of the Sequiam
Shareholders contained in or incorporated into this Agreement, in the Schedules
hereto or in certificates delivered pursuant to this Agreement;
(b) any and all Taxes (other than to the extent such Taxes
are reflected in the Sequiam balance sheet included in the Sequiam Financial
Statements) imposed on Sequiam in respect of its income, business, property or
operations or for which Sequiam may otherwise be liable for any period ending or
deemed to end prior to or on the date of the Sequiam Financial Statements; and
(c) any cost incurred by Sequiam in connection with this
Agreement and the transactions contemplated hereby.
12.3 WEDGE NET'S INDEMNITY. From and after the Closing Date, Wedge Net
----------------------
and Xxxxxxx shall, jointly and severally, indemnify, hold harmless, protect and
defend Sequiam and the Sequiam Shareholders from and against the following:
(a) any Claim arising out of, relating to or based upon or in
connection with any inaccuracy in, or breach of, any of the representations or
warranties, covenants or agreements of Wedge Net and/or Xxxxxxx contained in or
incorporated into this Agreement, in the Schedules hereto or in certificates
delivered pursuant to this Agreement; and
(b) any and all Taxes (other than to the extent such Taxes
are reflected in the Wedge Net balance sheet included in the Wedge Net Financial
Statements) imposed on Wedge Net in respect of its income, business, property or
operations or for which Wedge Net may otherwise be liable for any period ending
or deemed to end prior to or on the date of the Wedge Net Financial Statements;
and
(c) any cost incurred by Wedge Net in connection with this
Agreement and the transactions contemplated hereby.
13. TERMINATION OF AGREEMENT
13.1 TERMINATION. This Agreement may be terminated at any time prior
-----------
to the Closing as follows:
(a) by mutual written consent of Wedge Net, Sequiam and the
Sequiam
Shareholders;
(b) by Wedge Net or by Sequiam, by written notice to the
other Parties hereto, if the Closing shall not have occurred on the date as
established pursuant to Section 3.1 hereof (unless such event has been caused by
a breach of this Agreement by the Party seeking such termination);
(c) by Wedge Net or by Sequiam if a Governmental or
Regulatory Body has permanently enjoined or prohibited consummation of the
Merger and such court or government action is final and nonappealable;
(d) by Wedge Net if Sequiam or the Sequiam Shareholders have
failed to comply in any material respect with any of its covenants, agreements
or warranties under this Agreement that are required to be complied with prior
to the later of Closing or the date of such termination, or if any of the
representations of Sequiam or the Sequiam Shareholders are found to be false or
misleading and are not cured within ten (10) business days after receipt of
notice; or
(e) by Sequiam and the Sequiam Shareholders if Wedge Net or
Xxxxxxx has failed to comply in any material respect with any of its covenants,
agreements or warranties under this Agreement that are required to be complied
with prior to the later of Closing or the date of such termination, or if any of
the representations of Wedge Net or Xxxxxxx are found to be false or misleading
and are not cured within ten (10) business days after receipt of notice.
Should any non-defaulting Party terminate this Agreement pursuant to Section
13.1(d) or 13.1(e), then the defaulting Party, shall, notwithstanding Section
15.1 below, be jointly and severally liable for all damages caused to the other
Parties by the failure to close, subject to Article 14.
13.2 SURVIVAL AFTER TERMINATION. If this Agreement is terminated, no
----------------------------
Party shall have any further rights, duties or obligations thereafter arising
under this Agreement, except for the provisions of Section 9.6, Article 14, and
Sections 15.1, 15.3, 15.4 and 15.5, which provisions shall survive termination
of this Agreement.
14. LIMITATION OF LIABILITY AND REMEDY
14.1 LIMITATION OF LIABILITY. In no event will any Party be liable to
------------------------
any other Party for any lost profits, lost savings, or other special,
incidental, consequential or punitive damages suffered by such other Party
arising out of or related to any breach or default (or alleged breach or
default) under this Agreement, even if such Party has been advised of the
possibility of such damages. Additionally, in no event will any Party's total
liability to any other Party or Parties under any theory, including, but not
limited to, statutory, tort, negligence, breach of contract, breach of warranty,
or any other legal theory, exceed the amount of the actual and reasonable costs
incurred in connection with this Agreement and the Merger and any consideration
actually paid by such Party to such other Party under this Agreement. The
foregoing shall not limit liability for any "Third Party Claim" (defined below)
for which liability arises pursuant to
Article 12. Any Party (the "CLAIMANT") seeking to recover any liability,
damages, cost, expenses or other relief hereunder, including indemnification
pursuant to Article 12, from any other Party (the "RESPONDENT") must notify the
Respondent in writing (each, a "CLAIM NOTICE") of any Claim relating to (a) any
breach by such Respondent under this Agreement for which Claimant has (or
believes it has) a remedy against such Respondent or (b) any Claim brought
against the Claimant by any third person or entity for which such Respondent may
be liable pursuant to the indemnity provisions set forth in Article 12 (a "THIRD
PARTY CLAIM"), within one hundred eighty (180) days of such Claimant's knowledge
of the Claim, or the Claim shall be barred and the Claimant shall be deemed to
have waived any right to proceed against the Respondent with respect to such
Claim. Each Party will cooperate with any and all other Parties in all
reasonable respects in connection with the investigation and defense of any
Third Party Claim brought by a third person or entity. The Respondent shall have
sole control of the defense of any action on any such Third Party Claim and all
negotiations for its settlement or compromise; provided, however, each Party
shall have the right to retain its own counsel at its own cost and expense to
participate in the defense of any such Third Party Claim to protect such Party's
interests and no Party shall have the right to compromise or settle any Third
Party Claim brought against any other Party.
14.2 RECORDS AND COMMUNICATION. After delivery of a Claim Notice, so
---------------------------
long as any right to indemnification exists pursuant to Article 12, the affected
Parties each agree to retain all Books and Records related to such Claim Notice.
In each instance, each Party, upon request, shall have the right to be kept
fully informed by the Claimant and Respondent and their respective legal counsel
with respect to any legal proceedings. Any information or documents made
available to any Party hereunder and designated as confidential by the Party
providing such information or documents and which is not otherwise generally
available to the public and not already within the knowledge of the Party to
whom the information is provided (unless otherwise covered by the
confidentiality provisions of any other agreement among the Parties hereto, or
any of them), and except as may be required by applicable law, shall not be
disclosed to any third person (except for the representatives of the Party being
provided with the information, in which event the Party being provided with the
information shall request its representatives not to disclose any such
information which it otherwise required hereunder to be kept confidential).
Nothing contained in this Section 14.2 shall be deemed to waive or otherwise
impose upon the attorney-client privilege or any other privilege with respect to
confidential information or communications.
15. MISCELLANEOUS
15.1 EXPENSES. Each Party shall be solely responsible for their own
--------
legal and accounting fees and other expenses in connection with this Agreement,
the Merger and all other obligations and transactions contemplated herein,
unless otherwise specifically set forth in this Agreement.
15.2 FURTHER ASSURANCES. At any time and from time to time prior to or
------------------
after the Closing Date at the request of either Party, and without further
consideration, each of Sequiam, the Sequiam Shareholders, Wedge Net,
Acquisitions and Xxxxxxx agrees to take, or cause to be taken, all actions and
to do, or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, including, without limitation, the
obtaining of all necessary waivers, consents and approvals and the effecting of
all necessary registrations and filings, including, but not limited to,
submissions of information requested by governmental or regulatory bodies and
any other persons required to be obtained by them for the consummation of the
closing and the continuance in full force and effect of the permits, contracts
and other agreements referred to in this Agreement.
15.3 NOTICES. All notices, requests, demands and other communications
-------
required or permitted to be given hereunder shall be in writing and shall be
given personally, sent by facsimile transmission or sent by prepaid air courier
or certified or express mail, postage prepaid. Any such notice shall be deemed
to have been given (a) when received, if delivered in person, sent by facsimile
transmission and confirmed in writing within three (3) business days thereafter
or sent by prepaid air courier or (b) three (3) business days following the
mailing thereof, if mailed by certified first class mail, postage prepaid,
return receipt requested, in any such case as follows (or to such other address
or addresses as a Party may have advised the other in the manner provided in
this Section 15.3):
If to Sequiam or the Sequiam Shareholders:
Sequiam, Inc.
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attention: Nicolaas Van den Brekel, CEO
with a copy to:
Xxx, Xxxxxxx & Xxxxx llp
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Phone: 949/000-0000
Fax: 949/000-0000
Attention: Xxxxxxx X. Xxx, Esq.
If to Wedge Net or Xxxxxxx:
Wedge Net Experts, Inc.
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxx, President
with a copy to:
____________________________________________
____________________________________________
____________________________________________
15.4 ARBITRATION. Any dispute, controversy, or claim arising out of,
-----------
relating to, or in connection with, this Agreement or the agreements or
transactions contemplated by this Agreement shall be finally settled by binding
arbitration. The arbitration shall be conducted and the arbitrator chosen in
accordance with the rule of the American Arbitration Association in effect at
the time of the arbitration, except as they may be modified herein or by mutual
agreement of the Party participants. In connection with any such arbitration,
each Party shall be afforded the opportunity to conduct discovery in accordance
with the Federal Rules of Civil Procedure. The arbitration shall be held in
Orange County, California. Each of Sequiam, the Sequiam Shareholders, Wedge Net
and Xxxxxxx hereby irrevocably submits to the jurisdiction of the arbitrator in
Orange County, California, and waives any defense based upon any claim that such
Party is not subject personally to the jurisdiction of such arbitrator or the
court in Orange County, California, that such arbitration is brought in an
inconvenient format, or that such venue is improper.
(a) The arbitration award shall be in writing and shall be
final and binding on each of the Parties to this Agreement. The award may
include an award of costs, including reasonable attorneys' fees and
disbursements. Judgment upon the award may be entered by any court having
jurisdiction thereof or having jurisdiction over the Parties or their assets.
Sequiam and each of the Sequiam Shareholders, Wedge Net and Xxxxxxx acknowledge
and agree that by agreeing to these arbitration provisions each of the Parties
hereto is waiving any right that such Party may have to a jury trial with
respect to the resolution of any dispute under
this Agreement or the agreements or transactions contemplated hereby.
15.5 ATTORNEYS' FEES. In the event of any legal, equitable or
----------------
administrative action or proceeding (a "Proceeding") brought by any Party under
this Agreement, the prevailing Party shall be entitled to recover the reasonable
fees of its attorneys and any costs incurred in such Proceeding including costs
of appeal, if any, in such amount that the arbitrator, court or administrative
body having jurisdiction over such Proceeding may award.
15.6 PUBLICITY. No publicity release or announcement concerning this
---------
Agreement or the transactions contemplated hereby shall be made without advance
approval thereof by Wedge Net, Sequiam and the Sequiam Shareholders except as
may be required by applicable law.
15.7 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
-----------------
Schedules) and the agreements, certificates and other documents delivered
pursuant to this Agreement contain the entire agreement among the Parties with
respect to the transactions described herein, and supersede all prior
agreements, written or oral, with respect thereto.
15.8 WAIVERS AND AMENDMENTS. This Agreement may be amended,
------------------------
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the Parties or, in the case of a waiver,
by the Party waiving compliance. No delay on the part of any Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
15.9 GOVERNING LAW. To the extent that the construction, interpretation
-------------
or enforcement of any term, condition or other provision of this Agreement is
expressly addressed by or otherwise affected by the provisions of the State
Corporations Law, as amended from time to time, such term, condition or other
provision shall be construed, interpreted or enforced in accordance with the
State Corporations Law. Otherwise, this Agreement and the respective rights,
powers, privileges and authority and the respective duties, obligations and
liabilities of the Parties under this Agreement shall be governed by, and
construed, interpreted and enforced in accordance with, the laws of the State of
California, without giving effect to any principle or doctrine regarding
conflicts of laws.
15.10 BINDING EFFECT, NO ASSIGNMENT. This Agreement shall be binding
-------------------------------
upon and inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement is not assignable by any Party hereto without
the prior written consent of the other Parties hereto except by operation of law
and any other purported assignment shall be null and void.
15.11 COUNTERPARTS. This Agreement may be executed by the Parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all of the Parties hereto.
15.12 EFFECT OF DISCLOSURE ON SCHEDULES. Any item disclosed on any
-------------------------------------
Schedule to this Agreement shall only be deemed to be disclosed in connection
with (a) the specific representation and warranty to which such Schedule is
expressly referenced, (b) any specific representation and warranty which
expressly cross-references such Schedule and (c) any specific representation and
warranty to which any other Schedule to this Agreement is expressly referenced
if such other Schedule expressly cross-references such Schedule.
15.13 HEADINGS. The headings in this Agreement are for reference only,
--------
and shall not affect the interpretation of this Agreement.
15.14 SEVERABILITY OF PROVISIONS. If any provision or any portion of
----------------------------
any provision of this Agreement or the application of such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
15.15 CONSTRUCTION. As used in this Agreement, masculine, feminine or
------------
neuter gender and the singular or plural number shall each be deemed to include
the others where and when the context so dictates. As used in this Agreement,
knowledge by a Party expressly includes imputation of knowledge of any officer,
director or controlling shareholder of such Party and knowledge of any officer,
director or controlling shareholder of any subsidiary or parent of such Party.
As used in this paragraph, controlling shareholder means any shareholder holding
five percent (5%) or more of a corporation's common or collective voting stock.
[signatures begin on the following page]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
"WEDGE NET" "ACQUISITIONS"
WEDGE NET EXPERTS, INC., SEQUIAM ACQUISITIONS, INC.,
A CALIFORNIA CORPORATION A CALIFORNIA CORPORATION
By: By:
---------------------------------- ---------------------------------
Xxxxxxx X. Xxxxxxx, President Xxxxxxx X. Xxxxxxx, President
"XXXXXXX" "SEQUIAM"
SEQUIAM, INC.
A DELAWARE CORPORATION
--------------------------------------
XXXXXXX X. XXXXXXX,
an individual By:
---------------------------------
Xxxxxxxx X. Van den Brekel, CEO
"VAN DEN BREKEL" "XXXXXXXXXXX"
-------------------------------------- ------------------------------------
XXXXXXXX X. VAN DEN XXXXXX, XXXX X. XXXXXXXXXXX,
an individual an individual
"BREKEL" "ROONEY"
BREKEL GROUP, INC.,
A DELAWARE CORPORATION ------------------------------------
XXXXX X. XXXXXX, Trustee of the
Xxxxx X. Xxxxxx Living Trust
By:
---------------------------------
Xxxx X. Xxxxxxxxxxx, President
The schedules to this Agreement are excluded from this report but will be
provided to the Securities and Exchange Commission upon request.
