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EXHIBIT 2.5
STOCK PLEDGE AND GUARANTY AGREEMENT
OF KENNETH H. SMITH
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February
15, 1999, by and between KENNETH H. SMITH, an individual resident of the State
of Georgia (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 Pledgor in favor of Pledgee in the principal amount of
$1,234,832 (the "Note"), Pledgee has agreed to extend certain financial
obligations to Pledgor; and
WHEREAS, Pledgor is the owner of 3,000,000 shares of the common stock,
$.02 par value, of the Pledgee; and
WHEREAS, as a condition to Pledgee's willingness to extend the
financial accommodations to Pledgor evidenced by the Note, Pledgee has required
that Pledgor execute this Agreement in order to further secure the obligations
under the Note and under the agreements and personal guaranties provided by
Pledgor herein;
NOW, THEREFORE, in consideration of the premises and the covenants set
forth herein the parties hereto agree as follows:
25. Security for Obligations. This Agreement is given to Pledgee as
security for the full, prompt and complete performance and satisfaction
of the agreements and personal guaranties provided by Pledgor herein
and for the full, prompt and complete payment and performance in full
when due of the indebtedness under the Note (the obligations of Pledgor
hereunder and under the Note being referred to, collectively, as the
"Obligations").
26. Guaranties. The Pledgor hereby personally, primarily, fully and
unconditionally guarantees the full, prompt and complete performance
and satisfaction by Technology Manufacturing & Design, Inc., a Texas
corporation ("TMD") (51% of the voting stock of which is owned by GWP,
Inc., a Georgia corporation, which, as of the date hereof, is
wholly-owned by Pledgor) and by GWP, Inc. of the following:
(a) 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;
(b) The full, prompt and complete satisfaction and performance by
TMD of all of its obligations pursuant to Section 8.2 of the
Amended and Restated Stock Purchase Agreement between TMD and
GWP, Inc., dated as of October 5, 1998;
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(c) The maintenance by GWP, Inc., at all times during which the
Obligations remain outstanding or unsatisfied, of the
ownership and control of at least 51% of the voting shares and
voting control of TMD; provided that this provision shall be
deemed satisfied if Pledgee retains collateral under that
certain Stock Pledge and Guaranty Agreement between GWP, Inc.
and Pledgee, dated as of the date hereof (the "GWP Pledge
Agreement"), which, at all times, is equal to at least 51% of
the voting shares and voting control of TMD;
(d) The full, prompt and complete satisfaction and performance by
GWP, Inc., of all of its obligations and guaranties under and
pursuant to the GWP Pledge Agreement; and
(c) The full, prompt and complete satisfaction and performance by
TMD of all of its obligations under and pursuant to that
certain Agreement of Non-Dilution between TMD and Pledgee,
dated as of the date hereof (the "TMD Non-Dilution
Agreement").
Any failure of TMD or GWP, Inc. to fully, promptly and completely perform and
satisfy the obligations and performance guaranteed by the Pledgor hereby shall
be deemed a breach of the guaranties and agreements herein, and thereby, a
breach of the Obligations.
27. 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 3,000,000
shares of stock of U.S. Technologies Inc., $.02 par value,
described in, and evidenced by, certificates no(s). 8397,
8398, 8399, 8400, 8401, 8426, 8427, 8428, 8429, 8430, 8431,
8432, 8434 (the "Pledged Shares")and the said 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 non-cash proceeds of any and all of the
foregoing.
Upon and as of the execution of this Agreement, Pledgor has delivered
to Pledgee the certificate(s) representing the Pledged Shares, accompanied by
proper instruments of assignment duly executed in blank by Pledgor.
28. Representations and Warranties of Pledgor. Pledgor hereby represents
and warrants to Pledgee, as of the date hereof, that:
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(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 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.
The representations and warranties set forth in this Section 4 shall
survive the execution and delivery of this Agreement.
29. Voting and Dividend Rights.
(a) Unless and until the full, prompt and complete performance and
satisfaction of the Obligations has occurred:
(i) Pledgee, or its nominee or nominees, shall 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.
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30. 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.
(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.
(e) The Pledgor will fully, promptly and completely satisfy and
perform the obligations of Pledgor pursuant to Section 6 of
that certain Severance Agreement between Pledgor and Pledgee,
dated as of February 11, 1999.
31. Event of Default. Any of the following specified events shall
constitute an Event of Default under this Agreement:
(a) any breach by the Pledgor 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.
32. 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
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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.
33. 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.
(b) This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the state of Georgia.
34. 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.
35. 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.
36. 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.
37. 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.
38. 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
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unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
39. 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).
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"
/s/ Kenneth H. Smith (SEAL)
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KENNETH H. SMITH
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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