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EXHIBIT 2.4
STOCK PLEDGE AND GUARANTY AGREEMENT
OF GWP, INC.
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February
15, 1999, by and between GWP, INC., a Georgia corporation (the "Pledgor"), and
U.S. TECHNOLOGIES, INC., a Delaware corporation ("Pledgee").
WITNESSETH:
WHEREAS, pursuant to that certain promissory note, dated as of the date
hereof, executed by Kenneth H. Smith ("Smith"), the sole owner of all of the
capital stock of Pledgor, in favor of Pledgee, in the principal amount of
$1,234,832 (the "Note") and pursuant to the obligations, agreement and
guaranties of Smith pursuant to that certain stock pledge and guaranty
agreement, dated as of the date hereof, between Smith and Pledgee (the "Smith
Pledge"), Pledgee has agreed to extend certain financial obligations to Smith,
with respect to his purchase of all of the capital shares of Pledgor; and
WHEREAS, Pledgee, to the significant financial benefit of Smith and
Pledgor, has provided, and continues to provide, significant working capital to
Technology Manufacturing & Design, Inc., a Texas corporation ("TMD") and the
subsidiary of Pledgor (the "Working Capital Benefits"); and
WHEREAS, Pledgor is the owner of 15,250,000 shares of the common stock,
no par value, and 3,750,000 shares of the Series C Preferred Stock of TMD (the
"Pledged Shares"); and
WHEREAS, as a condition to Pledgee's willingness to extend the
financial accommodations to Smith evidenced by the Note, and in consideration of
the Working Capital Benefits and other valuable consideration, receipt of which
is hereby acknowledged, Pledgee has required that Pledgor execute this Agreement
in order to further secure the obligations of Smith under the Note and under the
Smith Pledge, and to secure Pledgor's obligations hereunder;
NOW, THEREFORE, in consideration of the premises and the covenants set
forth herein the parties hereto agree as follows:
10. Security for Obligations. This Agreement is given to Pledgee as
security for the full, prompt and complete performance and satisfaction
of the obligations, agreements and guaranties of Pledgor under this
Agreement and of Smith under the Smith Pledge, and for the full, prompt
and complete payment and performance in full when due of the
indebtedness under the Note (the obligations, agreements and guaranties
of Pledgor hereunder and of Smith under the Smith Pledge, and the
payment and performance of the Note, in full, when due, being referred
to, collectively, as the "Obligations").
11. Guaranties. The Pledgor hereby guarantees, primarily, fully and
unconditionally the following:
(a) The full, prompt and complete satisfaction and performance of
the obligations, including the payment of any principal or
interest which is due but unpaid, under the Note.
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(b) The full, prompt and complete payment of all outstanding
principal of, and accrued interest on, the Note, upon the
happening of any default under the Note which remains uncured
under the terms of the Note;
(c) The full, prompt and complete satisfaction and performance of
the obligations and guaranties of Smith under the Smith
Pledge;
(d) The full, prompt and complete satisfaction and performance by
TMD of all of its obligations under and pursuant to the Loan
and Security Agreement between TMD and Fidelity Funding, Inc.,
dated as of November 30, 1998;
(e) The full, prompt and complete satisfaction and performance by
TMD of all of its obligations under Section 8.2 of the Amended
and Restated Stock Purchase Agreement between TMD and Pledgor,
dated as of October 5, 1998;
(f) The full, prompt and complete satisfaction and performance by
Smith of his obligations under Section 6 of that certain
Severance Agreement, dated as of February 11, 1999, between
Smith and Pledgee; and
(g) The full, prompt and complete satisfaction and performance by
TMD of all of its obligations pursuant to that certain
Agreement of Non-Dilution, dated as of the date hereof,
between Pledgee and TMD.
Any failure of Smith or TMD to fully, promptly and completely perform and
satisfy the obligations and performance guaranteed by the Pledgor hereby shall
be deemed a breach of these guaranties and, thereby, a breach of the
Obligations.
12. Pledge of Collateral. Pledgor hereby pledges, assigns, grants a
security interest in, transfers and delivers unto Pledgee a continuing
security interest in each of the following (collectively, the
"Collateral"):
(a) all of Pledgor's right, title and interest in and to all of
the Pledged Shares described in, and evidenced by, certificate
no. 1 (Series C Preferred Stock) and certificate no. 101
(Common Stock), and the certificates representing the Pledged
Shares, and all dividends, cash, securities, instruments,
rights and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares, including,
without limitation, all additional shares of capital stock of
the issuer of the Pledged Shares from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares and the
certificates, if any, representing such additional shares (the
"Additional Shares");
(b) all other rights appurtenant to the property described in
clause (a) above (including, without limitation, voting
rights); and
(c) all cash and noncash proceeds of any and all of the foregoing.
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Simultaneously with the execution of this Agreement, Pledgor has
delivered to Pledgee all of the certificates representing the Pledged Shares,
accompanied by proper instruments of assignment duly executed in blank by
Pledgor.
13. Representations and Warranties of Pledgor. Pledgor hereby represents
and warrants to Pledgee, as of the date hereof, that:
(a) Pledgor is the sole holder of record and beneficial owner of
the Pledged Shares, free and clear of any pledge,
hypothecation, assignment, lien, charge, claim, security
interest, option, preference, priority or other preferential
arrangement of any kind or nature whatsoever created by
Pledgor ("Lien") thereon or affecting the title thereto other
than as created by this Agreement.
(b) Pledgor has the right and all requisite authority to pledge,
assign, grant a security interest in, transfer and deliver the
Collateral to Pledgee as provided in this Agreement.
(c) This Agreement has been duly executed and delivered by Pledgor
and constitutes the legal, valid and binding obligation of
Pledgor, enforceable against Pledgor in accordance with its
terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of
equity.
(d) No consent, approval, authorization or other order of any
person is required for (i) the execution and delivery of this
Agreement by Pledgor or the delivery by Pledgor of the
Collateral to Pledgee as provided herein, or (ii) for the
exercise by Pledgee of the voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in
connection with the disposition of the Collateral by laws
affecting the offering and sale of securities generally.
(e) Upon the delivery to Pledgee of the certificates representing
the Pledged Shares, Pledgee will have a valid and perfected
security interest therein subject to no prior lien.
(f) The Pledged Shares constitute at least 51% of the voting
securities and voting control of TMD, and Pledgor will cause
the Collateral to consist, at all times prior to the full,
prompt and complete satisfaction and performance of the
Obligations, of the capital shares of TMD, which are equal to
at least 51% of the voting securities and voting control of
TMD.
The representations and warranties set forth in this Section 4 shall
survive the execution and delivery of this Agreement.
14. Voting and Dividend Rights.
(a) Unless and until an Event of Default (as hereinafter defined)
has occurred and is continuing during the term of this
Agreement:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the
Pledged Shares or any part thereof for any purpose
not inconsistent with the terms of this Agreement.
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(ii) Pledgor shall be entitled, from time to time, to
collect and receive for Pledgor's own use all cash
dividends (except cash dividends paid or payable in
respect of the total or partial liquidation of an
issuer) paid on the Pledged Shares; provided,
however, that until actually paid, all rights to such
dividends shall remain subject to the Lien of this
Agreement and that all dividends (other than cash
dividends governed by the immediately preceding
subparagraph) and all other distributions (other than
said cash dividends) in respect of any of the
Collateral, whenever paid or made, shall be delivered
to Pledgee and held by it subject to the Lien created
by this Agreement.
(b) If any Event of Default shall have occurred and be continuing,
at its option and election evidenced by a writing given to
Pledgor, and whether or not Pledgee exercises any available
option to declare any Obligation due and payable or seeks or
pursues any other relief or remedy available to such holder
under this Agreement or the Obligations:
(i) Pledgee, or its nominee or nominees, may have the
sole and exclusive right to exercise all voting,
consensual and other powers of ownership pertaining
to the Pledged Shares and may exercise such powers in
such manner as Pledgee, in its sole discretion, shall
determine to be necessary, appropriate or advisable,
and, if Pledgee shall so request in writing, Pledgor
agrees to execute and deliver to Pledgee such other
and additional powers, authorizations, proxies,
dividends and such other documents as Pledgee may
reasonably request from time to time to secure to
Pledgee the rights, powers and authorities intended
to be conferred upon Pledgee by this subsection (b);
and
(ii) all dividends and other distributions on the Pledged
Shares shall be paid directly to Pledgee and retained
by it as part of the Pledged Shares, subject to the
terms of this Agreement, and, if Pledgee shall so
request in writing, Pledgor agrees to execute and
deliver to the Pledgee from time to time appropriate
additional dividend, distribution and other orders
and documents to that end.
15. Covenants. Pledgor covenants and agrees that:
(a) Pledgor will not, without the prior written consent of
Pledgee, sell, assign, transfer, mortgage, pledge or otherwise
encumber any of Pledgor's rights in or to the Collateral or
any dividends or other distributions or payments with respect
thereto or grant a Lien on any thereof.
(b) Pledgor will, at Pledgor's own expense, execute, acknowledge
and deliver all such instruments and take all such action as
Pledgee from time to time may reasonably request in order to
ensure to Pledgee the benefits of the first priority Lien on
and to the Collateral intended to be created by this
Agreement.
(c) Pledgor will defend the title to the Collateral and the Lien
of Pledgee thereon against the claim of any person claiming
against or through Pledgor and will maintain and preserve such
Lien so long as this Agreement shall remain in effect.
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(d) Pledgor will cause the Collateral to consist, at all times, of
voting securities of TMD which are equal to at least 51% of
the voting securities and voting control of TMD.
16. Event of Default. Any of the following specified events shall
constitute an Event of Default under this Agreement:
(a) any breach by the Pledgor or Smith of the Obligations;
(b) any representation, warranty or statement made by Pledgor in
connection with this Agreement shall have been false or
misleading in any material respect when made; or
(c) any failure by Pledgor to observe or perform any covenant or
agreement set forth in this Agreement.
17. Remedies.
(a) Upon the occurrence of an Event of Default, or at any time
during the term of this Agreement at which such Event of
Default is continuing, Pledgee is hereby authorized and
empowered, at its election and in addition to those rights and
remedies provided it in Section 5 of this Agreement, to
transfer and register in its or its nominee's name the whole
or any part of the Collateral, in which case Pledgee shall be
credited with a payment towards the Obligations in an amount
equal to the value of the Collateral so transferred.
(b) Pledgor agrees that Pledgor will not interfere with any right,
power and remedy of Pledgee provided for in this Agreement or
now or hereafter existing at law or in equity or by statute or
otherwise, or the exercise or beginning of the exercise by
Pledgee of any one or more such rights, powers or remedies. No
failure or delay on the part of Pledgee to exercise any such
right, power or remedy, and no notice or demand which may be
given to or made upon Pledgor by Pledgee with respect to any
such remedies, shall operate as a waiver thereof, or limit or
impair Pledgee's right to take any action or to exercise any
power or remedy hereunder without notice or demand, or
prejudice Pledgee's rights as against Pledgor in any respect.
(c) The rights and remedies of Pledgee hereunder and under the
Note are cumulative and concurrent and may be pursued
separately, successively or together at the sole discretion of
Pledgee and may be exercised as often as the occasion thereof
shall arise. The failure to exercise any such right or remedy
shall in no event be construed as a waiver or release thereof.
18. Miscellaneous.
(a) This Agreement shall be binding upon Pledgor and Pledgor's
successors and assigns, and shall inure to the benefit of, and
be enforceable by, Pledgee and its successors, transferees and
assigns. None of the terms or provisions of this Agreement may
be waived, altered, modified or amended except in writing duly
signed for and on behalf of Pledgee and Pledgor.
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(b) This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the state of Georgia.
19. Pledgee Appointed Attorney-in-Fact; Indemnity. Pledgee, its successors
and assigns, is hereby appointed the attorney-in-fact, with full power
of substitution, of Pledgor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any
instruments which such attorney-in-fact may deem necessary or advisable
to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable while the Obligations remain
outstanding and coupled with an interest.
20. No Waiver. No failure on the part of Pledgee to exercise, and no delay
on the part of Pledgee in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by Pledgee of any right, power or remedy hereunder
preclude any other or further right, power or remedy. The remedies
herein provided are cumulative and are not exclusive of any remedies
provided by law.
21. Further Assurances. At Pledgor's expense, Pledgor will do all such
acts, and will furnish to Pledgee all such financing statements,
certificates and other documents and will do or cause to be done all
such other things as Pledgee may reasonably request from time to time
in order to give full effect to this Agreement and to secure the rights
intended to be granted to Pledgee hereunder.
22. Notices. All communications required or otherwise provided under this
Agreement shall be in writing and shall be deemed given when delivered
to the address provided below such party's signature (as may be amended
by notice from time to time), by hand, by courier or express mail, or
by registered or certified United States mail, return receipt
requested, postage prepaid.
23. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
24. Attorney's Fees. If any action or proceeding relating to this Agreement
or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to
recover reasonable attorney's fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be
entitled).
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
and Guaranty Agreement to be duly executed under seal as of the date first above
written.
"PLEDGOR"
GWP, INC.
By: /s/ Kenneth H. Smith
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Name: Kenneth H. Smith
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Title: President and Chief Executive Officer
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Address: 3901 Roswell Road, Suite 300
Marietta, Georgia 30062
"PLEDGEE"
U.S. TECHNOLOGIES INC.
By: /s/ John P. Brocard
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Name: John P. Brocard
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Title: Executive Vice President
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Address: 3901 Roswell Road, Suite 300
Marietta, Georgia 30062
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