Exhibit 2.1
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TERMINATION AND RELEASE AGREEMENT
This TERMINATION AND RELEASE AGREEMENT (this "Termination Agreement"),
is made and entered into this 14th day of January, 2002, by and between
Netgateway, Inc., a Delaware corporation (the "Netgateway"), Category 5
Technologies, Inc., a Nevada corporation ("Category 5"), and C5T Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Category 5
("Merger Sub"). Netgateway, Category 5, and Merger Sub are sometimes
collectively referred to herein as the "Parties." Defined terms not otherwise
defined in this Termination Agreement, shall have the meaning set forth in the
Merger Agreement (as defined below).
RECITALS
WHEREAS, on October 23, 2001, Netgateway, Category 5, and Merger Sub
entered into that certain Agreement and Plan of Merger whereby Merger Sub would
merger with and into Netgateway and Netgateway would become a wholly owned
subsidiary of Category 5 (the "Merger Agreement");
WHEREAS, in connection with the negotiations surrounding the Merger
Agreement, Category 5 and Netgateway entered into a Confidentiality Agreement,
which the parties executed on October 11, 2001 and is attached hereto as Exhibit
A (the "Confidentiality Agreement");
WHEREAS, the respective boards of directors of Category 5 and
Netgateway believe that the Merger (as defined in the Merger Agreement) is no
longer in the bests interests of their respective stockholders; and
WHEREAS, pursuant to Section 8.1 of the Merger Agreement, the Merger
Agreement may be terminated at any time prior to the Effective Time by mutual
written consent of Category 5 and Netgateway.
NOW, THEREFORE, in consideration of the covenants and agreements herein
set forth and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties do hereby agree as
follows:
1. Termination of Merger Agreement. Effective immediately, Category 5
and Netgateway hereby abandon the Merger and all other transactions contemplated
by the Merger Agreement and mutually terminate the Merger Agreement pursuant to
Section 8.1 thereof. Notwithstanding the provisions of Sections 5.3(c), 6.13,
and 8.5, and Article IX of the Merger Agreement, none of the provisions of the
Merger Agreement shall survive termination of the Merger Agreement hereunder.
Notwithstanding anything to the contrary contained in the Merger Agreement, no
Released Party (as hereinafter defined) shall have any liability or obligation
under the Merger Agreement, including without limitation, as a result of any
action or failure to act in connection with the Merger Agreement.
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2. Publicity; Survival of Confidentiality Agreement.
(a) The Parties shall not make any public statement regarding this
Termination Agreement until 6:00 a.m. New York time on January 14, 2002. At that
time, Category 5 and Netgateway shall issue a joint press release in the form,
and containing the contents, of Exhibit B to this Termination Agreement.
(b) The Parties agree that the effective date of the
Confidentiality Agreement is October 11, 2001.
(c) The Confidentiality Agreement shall remain in full force and
effect in accordance with its terms. In addition, all Confidential Information
(as defined in the Confidentiality Agreement) exchanged pursuant to the terms of
the Confidentiality Agreement or the Merger Agreement shall continue to be
subject to the Confidentiality Agreement.
(d) Pursuant to Section 6 of the Confidentiality Agreement, within
five (5) business days from the execution of this Termination Agreement,
Category 5 and Netgateway shall return to the other party all originals, copies,
reproductions and summaries of the Confidential Information (electronic or
otherwise), or certify destruction of the same. On or before five (5) business
days from the execution of this Termination Agreement, Category 5 and Netgateway
shall certify in writing that they have satisfied their respective obligations
under Sections 2 and 6 of the Confidentiality Agreement.
3. Fees and Expenses.
(a) Each Party shall bear its own costs and expenses heretofore or
hereafter incurred by each Party in connection with or relating to this
Termination Agreement, the Merger Agreement, and the transactions contemplated
hereby and thereby, except as follows:
(i) in connection with the termination of the Merger
Agreement, Netgateway shall pay to Category 5 an expense reimbursement fee (the
"Expense Reimbursement Fee") in the amount of $260,630.87. The Expense
Reimbursement Fee shall be paid by Netgateway as set forth below in this
subsection 3(a)(i).
(u) During the six (6) month period following the
date of this Termination Agreement, Netgateway shall pay to Category 5 a payment
in the amount of One Hundred Dollars ($100.00) for each and every merchant
account that Category 5 establishes for Netgateway or any of Netgateway's
customers (the "Merchant Account Establishment Payment"). For each and every
merchant account that is actually established for Netgateway or its customer(s),
and for which Category 5 receives the Merchant Account Establishment Payment,
Category 5 shall credit the Expense Reimbursement Fee in the amount of Fifty
Dollars ($50.00). Commencing on February 1, 2001, and on the first business day
of the month for each month thereafter until paid in full or accelerated as set
forth below, Netgateway shall pay to Category 5 a payment in the minimum amount
of $20,000 less any Merchant Account Establishment Payments or Subsequent
Merchant Account Establishment Payments (as defined below) paid to Category 5 by
Netgateway in the immediately preceding month.
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(v) In the event the entire Expense Reimbursement Fee
is not paid in full on or before July 12, 2002, during the next three (3) month
period ending on October 11, 2002, Netgateway shall pay to Category 5 a payment
in the amount of Two Hundred Dollars ($200.00) for each and every merchant
account that Category 5 establishes for Netgateway or any of its customers (the
"Subsequent Merchant Account Establishment Payment"). For each and every
merchant account that is actually established for Netgateway or its customer(s)
and for which Category 5 receives the Subsequent Merchant Account Establishment
Payment, Category 5 shall credit the Expense Reimbursement Fee in the amount of
One Hundred Fifty Dollars ($150.00).
(w) Each of the Initial Merchant Account
Establishment Payments and the Subsequent Merchant Account Establishment
Payments, as well as all other Expense Reimbursement Fee payments, shall be paid
to Category 5 in immediately available funds. Notwithstanding anything to the
contrary herein, any amount of the Expense Reimbursement Fee not paid in full on
or before October 12, 2002 shall then be due and payable on such date by
Netgateway. Once the Expense Reimbursement Fee is paid in full, Netgateway shall
have no further obligation to purchase merchant accounts from Category 5 and
Category 5 shall have no further obligation to provide such merchant accounts to
Netgateway or its customers.
(x) Category 5 may reject any merchant account
offered by Netgateway if each of the conditions and requirements set forth on
Exhibit C (except as modified and set forth in the Provider Agreement to be
negotiated hereafter) are not satisfied, in which case, Netgateway shall
properly prepare the required documentation and resubmit the application to
Category 5. Category 5 may also reject other merchant account applications if
those applications are rejected by Category 5's financing sources. In the event
Catgegory 5 rejects any properly prepared merchant account application,
Netgateway may seek to have a merchant account established by any other merchant
account provider of its choice.
(y) It is the intent of Netgateway to resell Category
5 merchant accounts and will begin such sales as soon as practically possible so
long as selling the current Category 5 product can be integrated into
Netgateway's offerings and that all logistical, customer service, technology
challenges, etc. can be adequately addressed. Category 5 management will work
with Netgateway in the effort to integrate the Category 5 merchant account
product into Netgateway's business model. Or, in the alternative, Netgateway
will begin to sell a Category 5 product if it is one that is identical to the
current product being sold by Netgateway in all respects. In the interim,
Netgateway will pay Category 5 for each Merchant account sold, regardless of
origin, until such time as the Category 5 product can be adapted to Netgateway's
business model and technology. Except with regard to rejected merchant account
applications as provided in the immediately preceding paragraph, until the
entire Expense Reimbursement Fee has been paid in full by Netgateway, Category 5
shall be the exclusive provider to Netgateway and its customers of merchant
accounts and the parties hereto shall work in good faith to negotiate and
execute a definitive agreement within two (2) weeks from the date of this
Termination Agreement providing for Category 5 to be the exclusive provider to
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Netgateway and its customers of merchant accounts, which definitive agreement
will contain customary terms and conditions (the "Provider Agreement"). In the
event the Provider Agreement is not executed within such time, this Agreement
and its provisions shall remain in full force and effect, including the
provision providing for Category 5 to be Netgateway's (and Netgateway's
customers') exclusive provider of merchant accounts under the terms hereof.
(z) Upon Netgateway entering into any agreement
providing for any merger, consolidation, share exchange, recapitalization,
business combination, other similar transaction acquisition, the sale of all or
substantially all of Netgateway's assets, a debt or equity (or combination
thereof) financing of $1,000,0000 or more, the unpaid balance of the Expense
Reimbursement Fee shall be immediately due and payable to Category 5. In the
event Netgateway fails to pay the minimum monthly fee of $20,000 as set forth
herein, the entire unpaid balance of the Expense Reimbursement Fee shall become
immediately due and payable upon five (5) days written notice.
(ii) Any portion of the Expense Reimbursement Fee which is
not paid when due shall bear interest at the rate of eighteen percent (18%) per
annum from the due date thereof until the same is paid in full (the aggregate of
such interest being referred to hereafter as "Default Interest"). Default
Interest shall be due and payable immediately upon any default under this
Termination Agreement. Any Default Interest shall be calculated on a 360-day
year with respect to the unpaid Expense Reimbursement Fee balance and, in all
cases, shall be computed for the actual number of days in the period for which
Default Interest is charged, which period shall consist of 365-days on an annual
basis.
(b) Netgateway acknowledges that the agreements contained in
Section 3(a) are an integral part of the transactions contemplated by this
Termination Agreement, and that, without these agreements, Category 5 and Merger
Sub would not have entered into this Termination Agreement. Accordingly, if
Netgateway fails to promptly pay the amounts due pursuant to Section 3, and, in
order to obtain such payment, Category 5 commences a suit which results in a
judgment against Netgateway for the fees and costs forth in this Section 3,
Netgateway shall pay to Category 5 its costs and expenses (including, attorneys'
fees) in connection with such suit, together with interest from the date of
breach of this Termination Agreement on such amounts owed at the rate of
eighteen percent (18%) per annum from the due date thereof until the same is
paid in full.
4. Release of Claims. Effective immediately, each of Category 5, on the
one hand, and Netgateway, on the other hand, and each of their respective
predecessors, successors, subsidiaries and assigns (and any of the present and
former officers, directors and employees of each of the foregoing) (each, a
"Releasing Party"), in their capacity as such, hereby covenants not to xxx and
forever releases and discharges Category 5 and Netgateway, respectively (and
each of their respective present and former directors, officers,
representatives, advisors (including but not limited to financial advisors),
attorneys, accountants, employees, agents, parents, subsidiaries, affiliated
persons and entities, predecessors, successors and assigns and heirs, executors
and administrators and all persons acting in concert with any such party) (each,
a "Released Party") from all manner of claims, actions, causes of action or
suits, at law or in equity, known or unknown, which each now has or hereafter
can, shall or may have by reason of any matter, cause or thing whatsoever
relating to or arising out of the Merger Agreement or the agreements or
instruments ancillary thereto or the transactions contemplated thereby, or any
action or failure to act under the Merger Agreement or in connection therewith,
or in connection with the events leading to the abandonment of the Merger and
any other transactions contemplated by the Merger Agreement and the mutual
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termination of the Merger Agreement, excepting only any claim, action, cause of
action or suit arising (i) out of an undertaking or promise contained in this
Termination Agreement, (ii) after the date of this Termination Agreement, by
virtue of obligations under the Confidentiality Agreement, or (iii) with respect
to any statements made or actions taken after the date of this Termination
Agreement.
5. Representations and Warranties.
(a) Category 5 represents to Netgateway that Category 5 has all
requisite corporate power and authority to enter into this Termination Agreement
and to take the actions contemplated hereby. The execution and delivery of this
Termination Agreement and the actions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Category 5,
including approval of the Category 5 Board of Directors. This Termination
Agreement has been duly executed and delivered by Category 5 and Merger Sub and
constitutes a valid and binding agreement of Category 5 and Merger Sub,
enforceable against them in accordance with its terms.
(b) Netgateway represents to Category 5 and Merger Sub that
Netgateway has all requisite corporate power and authority to enter into this
Termination Agreement and to take the actions contemplated hereby. The execution
and delivery of this Termination Agreement and the actions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Netgateway, including approval of the Netgateway Board of Directors. This
Termination Agreement has been duly executed and delivered by Netgateway and
constitutes a valid and binding agreement of Netgateway, enforceable against it
in accordance with its terms. Netgateway represents to Category 5 and Merger Sub
that an Acquisition Proposal has not been made nor any person has publicly
announced an intention (whether or not conditional) to make a bona fide
Acquisition Proposal in respect of Netgateway or any of its subsidiaries since
October 23, 2001 through the date of this Termination Agreement. "Acquisition
Proposal" means any inquiry, offer or proposal regarding any of the following
involving Netgateway or any of its subsidiaries: (i) any merger, consolidation,
share exchange, recapitalization, business combination or other similar
transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of all or substantially all the assets of Netgateway and its
subsidiaries, taken as a whole, in a single transaction or series of related
transactions; (iii) any tender offer or exchange offer for 20% or more of the
outstanding shares of a class of capital stock of Netgateway or the filing of a
registration statement under the Securities Act of 1933, as amended, in
connection therewith; or (iv) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing.
6. No Disparagement. Netgateway and its subsidiaries, officers, board
of directors, attorneys, agents, employees, successors or assigns shall at all
times hereafter refrain from making any disparaging or negative statements
concerning Category 5, its subsidiaries, officers, boards of directors,
attorneys, agents, employees, successors or assigns, either publicly or
privately. Category 5 and its subsidiaries, officers, board of directors,
attorneys, agents, employees, successors or assigns shall at all times hereafter
refrain from making any disparaging or negative statements concerning
Netgateway, its subsidiaries, officers, boards of directors, attorneys, agents,
employees, successors or assigns, either publicly or privately. Except as
required by applicable law or applicable listing requirements or regulations, in
the event either Category 5 or Netgateway is asked to respond to the abandoned
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acquisition of Netgateway by Category 5, both parties shall only state that
after additional evaluation of the necessary integration and other issues
associated with the merger of Netgateway with Category 5, the companies felt
that the merger at that time would not be in the best interests of either
company."
7. Specific Performance. The Parties agree that irreparable damage
would occur in the event that any of the provisions of Section 6 of this
Termination Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of Section 6 of
this Termination Agreement and to enforce specifically the terms and provisions
of Section 6 of this Termination Agreement in any court of the United States
located in the State of Utah or in Utah state court, this being in addition to
any other remedy to which they are entitled at applicable law or in equity. In
addition, each of the Parties hereto (a) consents to submit itself to the
personal jurisdiction of any federal court located in the State of Utah or any
Utah state court in the event any dispute arises out of this Termination
Agreement or any of the transactions contemplated hereby, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that it will not bring any
action relating to this Termination Agreement or any of the transactions
contemplated hereby in any court other than a federal or state court sitting in
the State of Utah.
8. Miscellaneous.
(a) Entire Agreement; Assignment.
(i) This Termination Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement between the
parties hereto in respect of the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, between the parties
in respect of the subject matter hereof, other than the Confidentiality
Agreement.
(ii) Neither this Termination Agreement nor any of the
rights, interests or obligations hereunder shall be assigned or transferred,
except by operation of law (including by merger or consolidation), without the
prior written consent of the other parties. Any assignment in violation of the
preceding sentence shall be null and void.
(b) Notices. All notices, requests, instructions or other
documents to be given under this Termination Agreement shall be in writing and
shall be deemed given (i) five business days following sending by registered or
certified mail, postage prepaid, (ii) when sent if sent by facsimile; provided,
however, that the facsimile is promptly confirmed by telephone confirmation
thereof, (iii) when delivered, if delivered personally to the intended
recipient, and (iv) one business day following sending by overnight delivery via
a national courier service, and in each case, addressed to a party at the
following address for such party:
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if to Category 5 or
Merger Sub, to: Category 5 Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to: Xxxxx & Xxxxxx, L.L.P.
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Telephone No.: (000) 000-0000
if to Netgateway, to: Netgateway, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to: Xxxxxxx Xxxxx & Xxxxxxx
000 X. Xxxx Xxxxxx, Xxxxx #0000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx III
Facsimile: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address or facsimile number as the person to whom
notice is given may have previously furnished to the other in writing
in the manner set forth above.
(c) Governing Law. This Termination Agreement shall be governed by
and construed in accordance with the Laws of the State of Utah, without giving
effect to the choice of law principles thereof.
(d) Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Termination Agreement.
(e) Parties in Interest. This Termination Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and nothing in this Termination Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Termination Agreement.
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(f) Severability. The provisions of this Termination Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Termination Agreement, or the
application thereof to any person or any circumstance, is invalid or
unenforceable, (i) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (ii) the
remainder of this Termination Agreement and the application of such provision to
other persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
(g) Counterparts. This Termination Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties. The Parties
agree that delivery of executed signature pages by facsimile shall be sufficient
to render this Termination Agreement effective.
(h) Joint Drafting. The parties have participated jointly in the
negotiation and drafting of this Termination Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Termination
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Termination Agreement.
(i) Cooperation. The Parties shall cooperate with each other and
promptly prepare and file all necessary documentation to withdraw all
applications, notices, petitions and filings made with, and shall use their
reasonable best efforts to terminate the proceedings before, any governmental
authority in connection with the Merger Agreement. Category 5 is authorized to
file a notice of withdrawal with the SEC relating to the Registration Statement
on Form S-4.
(j) Amendment and Modification. This Termination Agreement may be
amended, modified, and supplemented only by a written document executed by the
Parties which specifically states that it is an amendment, modification or
supplement to this Termination Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Termination
Agreement to be duly executed on its behalf as of the date first above written.
NETGATEWAY, INC.,
a Delaware corporation
/s/ Xxxxxx Xxxxxxx
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By:Xxxxxx Xxxxxxx
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Its:Director
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CATEGORY 5 TECHNOLOGIES, INC.,
a Nevada corporation
/s/ Xxxxxxx X. Xxxxx
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By:Xxxxxxx X. Xxxxx
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Its:Chief Executive Officer
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C5T ACQUISITION CORP.,
a Delaware corporation
/s/ Xxxxxxx X. Xxxxx
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By: Xxxxxxx X. Xxxxx
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Its:President
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EXHIBIT A
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Confidentiality Agreement
NON-DISCLOSURE AGREEMENT
THIS NON-DISCLOSURE AGREEMENT (this "Agreement") is entered into as of
the ____day of _______, 2001 between Category 5 Technologies, Inc, a Nevada
corporation ("Category 5"), and Netgateway, Inc., a ______________ corporation
("Company").
Premises
The parties to this Agreement are presently discussing a possible
business transaction or relationship between them. In the course of such
discussion, the parties anticipate that they will share certain confidential and
proprietary information to each other that must not be disclosed to third
parties. The parties agree that any such disclosure would be detrimental to the
operations, and would cause irreparable harm, to the party whose confidential
and proprietary information is disclosed. The parties wish to enter into this
Agreement to provide for protection of all confidential and proprietary
information that may be disclosed in the course of discussing a possible
business transaction or relationship.
Agreement
NOW THEREFORE, in consideration of the foregoing premises, which are
incorporated herein, and the mutual promises and covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Category 5 and Company intend to disclose to each other (and either
or both of Category 5 and the Company may have disclosed to the other prior to
the date hereof) information, which may include Confidential Information, for
the purpose of evaluating a possible business transaction or relationship
between them.
The term "Confidential Information" shall mean any and all nonpublic
information, whether tangible or intangible (and including, without limitation,
written or printed documents and computer disks, tapes, files, or programs,
whether machine or user readable), which is disclosed by a party (the
"disclosing party") to the other party (the "receiving party") before, on or
after the date of this Agreement. Confidential Information includes, without
limitation, information relating to the disclosing party's business plan and
actual or proposed operations, released or unreleased disclosing party software
or hardware, technical processes, the marketing or promotion of any disclosing
party product or service, disclosing party's business policies or practices,
financial information, pricing information, and information received from others
(including both affiliates of the disclosing party and unaffiliated third
parties) that the disclosing party is obligated to treat, or elects to treat, as
confidential. Confidential Information disclosed to receiving party by any of
disclosing party's agents is covered by this Agreement.
2. The receiving party acknowledges the value to the disclosing party
of all Confidential Information. With respect to Confidential Information, the
receiving party shall:
(a) Use the Confidential Information only for the purpose of evaluating
a possible business transaction or relationship between the parties and for
no other purpose;
(b) Restrict disclosure of the Confidential Information solely to those
employees with a "need to know" and not disclose it to any other person or
entity without the prior written consent of the disclosing party;
(c) Execute written agreements with its employees sufficient to enable
it to comply with all the provisions of this Agreement, if appropriate;
(d) Make only the number of copies of the Confidential Information
necessary to disseminate the information to those employees who are
entitled to have access to it, and ensure that all confidentiality notices
and trademark or copyright notices set forth on the Confidential
Information are reproduced in full on such copies; and
(e) Safeguard the Confidential Information with reasonable care to
avoid unauthorized disclosure of the Confidential Information, using not
less than the same degree of care as the receiving party uses to protect
its own Confidential Information from unauthorized disclosure.
For the purpose of this Agreement only, "employees" includes third
parties retained for temporary legal, financial consulting, administrative,
clerical or programming support. A "need to know" means that the employee
requires the Confidential Information in order to perform his or her
responsibilities in connection with the evaluation by the receiving party of the
possible business transaction between the parties.
3. The obligations in Paragraph 2 shall not apply to any Confidential
Information that the receiving party can demonstrate:
(a) Is or becomes generally available to the public through no breach
of this Agreement;
(b) Was previously known by the receiving party without any obligations
to hold it in confidence;
(c) Is received from a third party which the receiving party reasonably
believes, after due inquiry, is free to disclose such information without
restriction;
(d) Is independently developed by the receiving party without the use
of Confidential Information of the disclosing party; or
(e) Is approved for release by written authorization of the disclosing
party, but only to the extent of and subject to such conditions as may be
imposed in such written authorization.
4. Either party may disclose Confidential Information which is, on the
reasonable advice of counsel, required to be disclosed by law or legal process,
provided that such party agrees (i) to notify the other party immediately of the
existence, terms and circumstances surrounding any such requirement, (ii) to
cooperate with the other party's efforts to take legally available steps to
resist or narrow such requirement, and (iii) to furnish only such portion of the
information as it is legally compelled to disclose and to exercise its best
efforts to obtain a protective order or other reliable assurances that
confidential treatment will be accorded to such Confidential Information as is
required to be disclosed.
5. The receiving party agrees that it will not reverse engineer,
decompile or disassemble any software disclosed to the receiving party
hereunder.
6. Confidential Information, including all originals, copies,
reproductions and summaries thereof, shall be deemed the property of the
disclosing party. Within five (5) business days of a written request by the
disclosing party, the receiving party shall return to the disclosing party all
originals, copies, reproductions and summaries of Confidential Information or,
at the disclosing party's option, certify destruction of the same. The receiving
party shall also, within five (5) business days of a written request by the
disclosing party, certify in writing that it has satisfied its obligations under
Paragraphs 2 and 6 of this Agreement.
7. Both parties agree that an impending or existing violation of any
provision of this Agreement would cause the disclosing party irreparable injury
for which it would not have adequate remedy at law, and that the disclosing
party shall be entitled to seek immediate injunctive relief prohibiting such
violation, in addition to any other rights and remedies available to it.
8. Nothing contained in this Agreement or in any discussions undertaken
or disclosures made in connection hereto shall (a) be deemed a commitment to
engage in any business relationship, contract or future dealing with the other
party, or (b) limit any party's right to conduct similar discussions or perform
similar work to that undertaken pursuant hereto, so long as such discussions or
work do not violate this Agreement.
9. No patent, copyright, trademark or other proprietary right or
license is granted by this Agreement or any disclosure hereunder. No warranties
of any kind are given with respect to the Confidential Information disclosed
under this Agreement or any use thereof, except as may be otherwise agreed to in
writing.
10. This Agreement shall be effective as of the date first written
above and shall continue until the parties cease discussions or enter into a
definitive agreement regarding a possible business transaction. All obligations
undertaken and rights provided hereunder with respect to Confidential
Information disclosed at any time prior to the termination of this Agreement
pursuant to the preceding sentence shall survive termination of this Agreement.
11. This Agreement may not be assigned (including without limitation by
operation of law) by either party without the prior written consent of the
other. No permitted assignment shall relieve a party of the obligations
hereunder prior to the assignment. Any assignment in violation of this Paragraph
shall be void. This Agreement shall be binding upon the parties and their
respective permitted successors and assigns.
12. If any provision of this Agreement shall be held invalid or
unenforceable, such provision shall be deemed deleted from this Agreement and
replaced by a valid and enforceable provision which so far as possible achieves
the parties' intent in agreement to the original provision. The remaining
provisions of the Agreement shall continue in full force and effect.
13. Each party warrants that it has the authority to enter into this
Agreement and to lawfully make the disclosures contemplated hereunder.
14. This Agreement represents the entire understanding between the
parties with respect to the subject matter hereof and supersedes all prior
communications, agreements and understandings relating thereto. The provisions
of the Agreement may not be modified, amended, or waived, except by a written
instrument duly executed by both parties. This Agreement shall be governed in
all respects by the domestic laws of the State of Utah without regard to the
conflicts of law rules thereof.
Category 5 Technologies, Inc.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------
Title: President
------------------------------
Company:
Netgateway, Inc.
By:/s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
------------------------------
Title:President
------------------------------
EXHIBIT B
---------
Joint Press Release
For Release: Immediate
Category 5 Technologies and Netgateway Terminate Merger Agreement
Salt Lake City and Orem, Utah (January 15, 2002)/PRNewswire - Category
5 Technologies, Inc. (OTCBB: CFVT) and Netgateway, Inc. (OTCBB: NGWY) today
announced the termination, by mutual agreement, of the merger agreement they
signed on October 23, 2001.
Pursuant to the terms of the Termination and Release Agreement executed
by the parties on January 14, 2002, Category 5 and Netgateway terminated merger
discussions and abandoned Category 5's acquisition of Netgateway. Category 5
said it would withdraw the Form S-4 Registration Statement currently pending
before Securities and Exchange Commission.
In connection with the termination and abandonment of the merger,
Xxxxxxx X. Xxxxx, Chief Executive Officer of Category 5 and Xxxxxx Xxxxx, Chief
Executive Officer of Netgateway, stated that "after additional evaluation of the
necessary integration and other issues associated with the merger of Netgateway
with Category 5, we felt that the merger at the present time would not be in the
best interests of either company."
About Category 5 Technologies
-----------------------------
Category 5 Technologies is a leader in using technology to make small
and medium-sized businesses more efficient in their marketing and profitable in
their operations. Category 5 provides marketing tools and commerce enabling
technology services to small and medium-sized businesses in the United States
and internationally. From e-commerce platforms, web sites, shopping carts,
merchant accounts and payment plug-ins, to communications and promotion tools,
Category 5 enables both brick and mortar as well as Internet businesses to
operate more efficiently and profitably, and to gain and retain new customers.
Category 5 continues to seek synergistic companies, technologies and platforms
for acquisition.
About Netgateway
----------------
Netgateway is a leading technology and training company delivering
eServices to small businesses and entrepreneurs. Netgateway provides eServices
and training to over 100,000 customers annually. Netgateway enables companies of
all sizes to extend their business to the Internet quickly, effectively -- with
minimal investment. Netgateway develops, hosts, licenses, and supports a wide
range of Internet applications. Netgateway (xxx.xxxxxxxxxx.xxx) is located at
000 Xxxxxxxxxx Xxx., Xxxx, XX 00000.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------
This press release contains forward looking statements within the
meaning of the "safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such forward-looking
statements with respect to revenues, earnings, performance, strategies,
prospects and other aspects of the businesses of Category 5 and Netgateway are
based on current expectations that are subject to risk and uncertainties. It is
important to note that actual results could differ materially from such
forward-looking statements. These include statements include that the merger at
the present time would not be in the best interests of either company. A number
of factors could cause actual results or outcomes to differ materially from
those indicated by such forward looking statements, such as the risk factors
listed from time to time in Category 5's SEC reports, including but not limited
to the transition report on Form 10-KSB/T for the transition period from January
1, 2001 to June 30, 2001 and Netgateway's SEC reports, including but not limited
to its annual report on form 10-K for the year ended June 30, 2001.
###
Contacts:
Xxxxxxxx X. Xxxxxxx Xxxxxx Xxxxx
President, Financial Officer Chairman and Chief Executive Officer
and Chief Accounting Officer Netgateway, Inc.
Category 5 Technologies, Inc. 000 Xxxx Xxxxxxxxxx Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000 Xxxx, Xxxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000 801-227-0004
000-000-0000 xxxxxx@xxxxxxxxxx.xxx
xxxxxxxx@x0xxxxxxxxxxxx.xxx
EXHIBIT C
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Check-in List for New Accounts
Sole Proprietorships
[ ] Voided Check
[ ] Signature Verification
[ ] Mini Application
[ ] Main Application
[ ] Processing Application
Partnerships
[ ] Voided Check
[ ] Signature Verification
[ ] Mini Application
[ ] Main Application
[ ] Processing Application
[ ] Business Data
Corporations
[ ] Voided Check
[ ] Signature Verification
[ ] Mini Application
[ ] Main Application
[ ] Processing Application
[ ] Business Data
Descriptions:
-------------
Voided Check. Name on check must match the name on the application. If
a business name is listed then we will need business information listed below.
The voided check must be imprinted (no counter checks). If a counter check is
provided then a bank letter is required. The signature on the voided check must
match all other signatures throughout the application
Signature Verification. All signatures on all applications must match.
If not all signatures are the same, or if the voided check is unsigned, a copy
of a driver's license or passport or military ID is required.
Mini-Application. This application must have name, DOB, SS#, home phone
number, business phone number, physical address of merchant (no P.O. Boxes),
email address, name of employer, occupation, employer phone number and address.
Main Application. Must be signed in all the appropriate locations and
match the other signatures. It must be dated the correct date of seminar. Must
contain data such as card swipe percentages, average ticket, type of business,
discount rate, transaction fees and trade references.
Processing Application. Must be signed and match the other signatures
and dated the correct date of the seminar.
Partnerships and Corporations: Must exhibit adequate ownership to sign.
An officer of a corporation must sign. Must provide a copy of their
advertisement, an average sales ticket, tax identification number, what
percentage ownership signer has, and what business type.
Bank Letter: If a bank letter is necessary due to non-imprinted checks,
it must be on bank letterhead, and include merchant name, routing number,
account number, and be signed by a bank representative with their title listed.
Name on bank account must match the applicant name.
Trusts: Need complete copy of trust paperwork and the business
information shown under "Partnerships and Corporations."
Non-Profits: Need complete copy of articles of incorporation and
non-profit paperwork. Must also provide letter from IRS confirming non-profit
status and the business information shown under "Partnerships and Corporations."
