VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated as of March 10, 2000, by and
among Netgateway, Inc., a Delaware corporation ("Parent"), Galaxy Acquisition
Corp., a Delaware corporation and wholly owned subsidiary of Parent (the "Sub"),
and John J. Poelman ("Stockholder").
WITNESSETH:
WHEREAS, immediately prior to the execution of this Agreement, Parent, Sub
and Galaxy Enterprises, Inc., a Nevada corporation (the "Company") have entered
into an Agreement and Plan of Merger of even date herewith (the "Merger
Agreement"), pursuant to which the parties thereto have agreed, upon the terms
and subject to the conditions set forth therein, to merge Sub with and into the
Company (the "Merger"); and
WHEREAS, as of the date hereof, Stockholder is the record and beneficial
owner of 980,213 Existing Shares (as defined hereinafter) of the common stock,
$0.07 par value, of the Company (the "Company Common Stock"); and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required Stockholder to agree, and Stockholder has agreed,
to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
Section 1. Certain Definitions. In addition to the terms defined elsewhere
herein, capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement. For purposes of this
Agreement:
(a) "Existing Shares" means shares of the Company Common Stock owned
beneficially and of record by Stockholder as of the date hereof.
(b) "Securities" means the Existing Shares together with any shares of the
Company Common Stock or other securities of the Company acquired by Stockholder
in any capacity after the date hereof and prior to the termination of this
Agreement whether upon the exercise of options, warrants or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares or the like, gift, bequest, inheritance or as a successor in
interest in any capacity or otherwise. Notwithstanding the foregoing, nothing in
this Agreement shall be deemed to give rise to any obligation on the part of
Stockholder to exercise or convert any option, warrant or other convertible
security.
Section 2. Representations And Warranties of Stockholder. Stockholder
represents and warrants to Parent and Sub as follows:
(a) Ownership of Shares. Stockholder is the sole record and beneficial
owner of (i) the Existing Shares and (ii) Company Options to purchase 200,000
shares of Company Common Stock at a price of $0.83 per share ("Stockholder
Options"). On the date hereof, the Existing Shares constitute all of the shares
of the Company Common Stock owned of record or beneficially owned by
Stockholder. Except for the Pledge Agreement (as defined below), there are no
outstanding options or other rights to acquire from Stockholder or obligations
of Stockholder to sell or to acquire, any shares of the Company Common Stock.
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 5, 7 and 8 hereof (subject to
Pledge Agreements dated January 7, 2000 and February 4, 2000 in favor of Parent
("Pledge Agreement")), sole power of disposition, sole power of conversion, sole
power to demand appraisal rights and sole power to agree to all of the matters
set forth in this Agreement, in each case with respect to all of the Existing
Shares with no limitations, qualifications or restrictions on such rights,
subject to applicable securities laws and the terms of this Agreement.
(b) Power; Binding Agreement. Stockholder has the legal capacity, power and
authority to enter into and perform all of Stockholder's obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by
Stockholder and constitutes a valid and binding agreement of Stockholder,
enforceable against Stockholder in accordance with its terms except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief maybe subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(c) No Conflicts. Except as contemplated by the Merger Agreement, no filing
with, and no permit, authorization, consent or approval of, any Governmental or
Regulatory Authority is necessary for the execution of this Agreement by
Stockholder and the consummation by Stockholder of the transactions contemplated
hereby, none of the execution and delivery of this Agreement by Stockholder, the
consummation by Stockholder of the transactions contemplated hereby or
compliance by Stockholder with any of the provisions hereof shall (i) conflict
with or result in any breach of any organizational documents applicable to
Stockholder, (ii) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
Stockholder is a party or by which Stockholder or any of its properties or
assets may be bound, or (iii) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to Stockholder or any of
Stockholder's properties or assets, except in the case of clauses (ii) and (iii)
where the failure to obtain such permits, authorizations, consents or approvals
or to make such filings, or where such violations, breaches or defaults would
not, individually or in the aggregate, materially impair the ability of
Stockholder or the Company to consummate the transactions contemplated by the
Merger Agreement, this Agreement or the other agreements executed in connection
therewith.
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(d) No Encumbrance. Except as permitted by this Agreement, the Existing
Shares are now and, at all times during the term hereof, the Securities will be,
held by Stockholder, or by a nominee or custodian for the benefit of
Stockholder, free and clear of any Liens, except for the Pledge Agreement and
any Liens arising hereunder.
(e) No Finder's Fees. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Stockholder.
(f) Reliance by Parent. Stockholder understands and acknowledges that
Parent is entering into, and causing Sub to enter into, the Merger Agreement in
reliance upon Stockholder's execution and delivery of this Agreement.
Section 3. Representations And Warranties of Parent And Sub. Each of Parent
and Sub hereby, jointly and severally, represents and warrants to Stockholder as
follows:
(a) Power; Binding Agreement. Parent and Sub each has the corporate power
and authority to enter into and perform all of its obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by
each of Parent and Sub and constitutes a valid and binding agreement of Parent
and Sub, enforceable against each of Parent and Sub in accordance with its
terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(b) No Conflicts. Except as contemplated by the Merger Agreement, no filing
with, and no permit, authorization, consent or approval of, any Governmental or
Regulatory Authority is necessary for the execution of this Agreement by Parent
and Sub and the consummation by Parent and Sub of the transactions contemplated
hereby, and none of the execution and delivery of this Agreement by each of
Parent and Sub, the consummation by each of Parent and Sub of the transactions
contemplated hereby or compliance by each of Parent and Sub with any of the
provisions hereof shall (i) conflict with or result in any breach of any
provision of the respective certificates of incorporation or by-laws of Parent
and Sub, (ii) require any filing with, or permit, authorization, consent or
approval of, any Governmental or Regulatory Authority, (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its Subsidiaries or any of their properties or
assets, except in the case of clauses (ii), (iii) and (iv) where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings, or where such violations, breaches or defaults would not, individually
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or in the aggregate, materially impair the ability of Parent or Sub to
consummate the transactions contemplated by the Merger Agreement, this Agreement
or any other agreements executed in connection therewith.
Section 4. Disclosure. Stockholder hereby agrees to permit Parent to
publish and disclose in the Registration Statement and the Proxy
Statement/Prospectus (including all documents and schedules filed with the
Securities and Exchange Commission), and any press release or other disclosure
document which Parent, in its sole discretion determines to be necessary or
desirable in connection with the Merger and any transactions related thereto,
Stockholder's identity and ownership of the Company Common Stock and the nature
of Stockholder's commitments, arrangements and understandings under this
Agreement.
Section 5. Transfer And Other Restrictions. Prior to the termination of
this Agreement, Stockholder agrees not to, directly or indirectly:
(i) except pursuant to the terms of the Merger Agreement and the Pledge
Agreement, offer for sale, sell, transfer, tender, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, sale, transfer,
tender, pledge, encumbrance, assignment or other disposition of any or all of
the Securities or any interest therein except as provided in Section 6 hereof;
(ii) grant any proxy, power of attorney, deposit any of the Securities into
a voting trust or enter into a voting agreement or arrangement with respect to
the Securities except as provided in this Agreement; or
(iii) take any other action that would make any representation or warranty
of Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing its obligations under this
Agreement.
Section 6. Voting of the Company Common Stock. Stockholder hereby agrees
that, during the period commencing on the date hereof and continuing until the
first to occur of (a) the Effective Time or (b) termination of this Agreement in
accordance with its terms, at any meeting (whether annual or special and whether
or not an adjourned or postponed meeting) of the holders of the Company Common
Stock, however called, or in connection with any written consent of the holders
of the Company Common Stock, Stockholder will appear at the meeting or otherwise
cause the Securities to be counted as present thereat for purposes of
establishing a quorum and vote or consent (or cause to be voted or consented)
the Securities:
(A) in favor of the adoption of the Merger Agreement and the approval of
other actions contemplated by the Merger Agreement and this Agreement and any
actions required in furtherance thereof and hereof; and
(B) against any action or agreement that would result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or this Agreement.
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Except for the Pledge Agreement, Stockholder may not enter into any
agreement or understanding with any person the effect of which would be
inconsistent with or violative of any provision contained in this Section 6.
Section 7. Proxy. Subject to the Pledge Agreement:
(a) Stockholder hereby irrevocably grants to, and appoints, Parent, Roy W.
Camblin III, Donald M. Corliss, Jr., or any of them in their respective
capacities as officers of Parent and any individual who shall hereafter succeed
to any such office of Parent and each of them individually, such Stockholder's
proxy and attorney-in-fact (with full power of substitution), for and in the
name, place and stead of Stockholder, to vote the Securities, or grant a consent
or approval in respect of the Securities, in connection with any meeting of the
stockholders of the Company, as specified in Section 6 hereof.
(b) Stockholder represents that any other proxies heretofore given in
respect of the Existing Shares are not irrevocable, and that such proxies are
hereby revoked.
(c) Stockholder understands and acknowledges that Parent is entering into
the Merger Agreement in reliance upon such Stockholder's execution and delivery
of this Agreement. Stockholder hereby affirms that the irrevocable proxy set
forth in this Section 7 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of Stockholder under this Agreement. Stockholder hereby further
affirms that the irrevocable proxy is coupled with an interest and may not be
revoked under any circumstances. Stockholder hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of the Laws of the State of Nevada.
Section 8. Stop Transfer; Legend.
(a) Stockholder agrees with, and covenants to, Parent that Stockholder will
not request that the Company register the transfer (book-entry or otherwise) of
any certificate or uncertificated interest representing any of the Securities,
unless such transfer is made in compliance with this Agreement.
(b) In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of share or the like other than pursuant
to the Merger, the term "Existing Shares" will be deemed to refer to and include
the shares of the Company Common Stock as well as all such stock dividends and
distributions and any shares into which or for which any or all of the
Securities may be changed or exchanged and appropriate adjustments shall be made
to the terms and provisions of this Agreement.
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(c) Stockholder will promptly after the date hereof surrender to the
Company all certificates representing the Securities, the Company will place the
following legend on such certificates in addition to any other legend required
thereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER PURSUANT TO AND OTHER PROVISIONS OF A VOTING AGREEMENT, DATED
AS OF MARCH 8, 2000, BY AND AMONG NETGATEWAY, INC., GALAXY ACQUISITION
CORP. AND JOHN J. POELMAN."
Section 9. Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the Merger Agreement. Each party shall promptly consult with
the other and provide any necessary information and material with respect to all
filings made by such party with any Governmental or Regulatory Authority in
connection with this Agreement and the Merger Agreement and the transactions
contemplated hereby and thereby.
Section 10. Termination. This Agreement shall terminate on the earliest of
(a) thirty (30) days following the termination of the Merger Agreement pursuant
to Article XII thereof, (b) the mutual agreement of the parties hereto to
terminate this Agreement, or (c) the Effective Time.
Section 11. Miscellaneous.
(a) Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
(b) Successors and Assigns. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
parties hereto. This Agreement shall be binding upon, inure to the benefit of
and be enforceable by each party and such party's respective heirs,
beneficiaries, executors, representatives and permitted assigns.
(c) Amendment and Modification. This Agreement may not be amended, altered,
supplemented or otherwise modified or terminated except upon the execution and
delivery of a written agreement executed by the parties hereto.
(d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by an overnight courier service to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
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If to Parent or Sub, to:
Netgateway, Inc.
300 Oceangate, 5th Floor
Long Beach, CA 90802
Attention: Craig Gatarz, Esq.
Facsimile No.: 562-308-0021
with a copy to:
Nida & Maloney, LLP
800 Anacapa Street
Santa Barbara, CA 93101
Attention: C. Thomas Hopkins, Esq.
Telecopy No.: 805-568-1955
If to Stockholder, to:
John J. Poelman
c/o Galaxy Enterprises, Inc.
754 East Technology Avenue
Orem, Utah 84907
Telecopy No.: (801) 228-9762
with a copy to:
Parsons Behle & Latimer, P.C.
One Utah Center
201 South Main Street, Suite 1800
P.O. Box 45898
Salt Lake City, UT 84145-0898
Attn: Brent Christensen, Esq.
Telecopy: (801) 536-6111
(e) Severability. Any term or provision of this Agreement which is held to
be invalid, illegal or unenforceable in any respect in any jurisdiction shall,
as to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
(f) Specific Performance. Each of the parties hereto recognizes and
acknowledges a breach by it of any covenants or agreements contained in this
Agreement will cause the other party to sustain damages for which it would not
have an adequate remedy at law for money, damages, and therefore in the event of
any such breach the aggrieved party shall be entitled to the remedy of specified
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performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
(g) No Waiver. The failure of any party hereto to exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, will not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
(h) No Third Party Beneficiaries. This Agreement is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
(i) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California, without giving effect to
the principles of conflict of law thereof.
(j) Descriptive Heading. The descriptive headings used herein are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
(k) Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
(l) Further Assurances. From time to time, at any other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further lawful action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
(m) Fiduciary Duties. Nothing contained in this Agreement shall be deemed
to apply to or limit or restrict in any manner, the obligations of Stockholder
under or with respect to the exercise or discharge of his fiduciary duties as an
officer and director of the Company. The parties hereto agree that this Section
11(m) shall not in any way limit or impair the benefits provided to Parent
pursuant to this Agreement.
(n) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
[signature page follows]
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IN WITNESS WHEREOF, Parent, Sub, and Stockholder have caused this Agreement
to be duly executed as of the day and year first written above.
NETGATEWAY, INC.,
a Delaware corporation
By: ____________________________
Name:
Title:
GALAXY ACQUISITION CORP.,
a Delaware corporation
By: ____________________________
Name:
Title:
_________________________________
JOHN J. POELMAN,
in his individual capacity