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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 15, 1999
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U.S. Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-15960 73-1284747
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
3901 Roswell Road, Suite 300, Marietta, Georgia 30062
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 565-4311
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Not applicable
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to that certain Severance Agreement (the "Severance
Agreement") entered into on February 11, 1999, between U.S. Technologies Inc.
(the "Company") and Kenneth H. Smith, the former President and Chief Executive
Officer of the Company ("Smith"), the Company sold to Smith all of the Company's
interest in the Company's wholly-owned subsidiary, GWP, Inc., a Georgia
corporation ("GWP"). GWP is the owner of 51% of the voting shares of Technology,
Manufacturing & Design, Inc., a Texas corporation ("TMD"), which shares GWP
acquired on October 5, 1998.
The sale of GWP, including the 51% interest in TMD owned by GWP, was
concluded on February 15, 1999, at which time Smith executed a personal
Promissory Note (the "Promissory Note") in the amount of $1,234,832 as payment
of the purchase price of the Company's interest in GWP. This amount reflects the
Company's estimate of the investment by the Company in GWP and TMD through
February 11, 1999. The Severance Agreement provides that the amount of the
Promissory Note is subject to adjustment based on the findings of BDO Seidman,
LLP, the independent auditors of the Company, with respect to the total
investment by the Company in GWP and TMD through February 11, 1999, and that
such findings of BDO Seidman, LLP shall be conclusive as to the amount of the
Company's investment and the amount of the adjustment, if any, to the Promissory
Note. The Promissory Note is secured by a pledge by Smith of 3,000,000 shares of
the Company's common stock, which pledge also secures a personal guaranty by
Smith of certain obligations of the Company with respect to TMD. In addition,
GWP has pledged of all of its shares of TMD to secure a guaranty by GWP of
certain obligations of the Company with respect to TMD.
Immediately following the execution of the Severance Agreement by
Smith, the board of directors of TMD, consisting of Smith and Larry Little,
caused the Company to file a bankruptcy petition pursuant to Chapter 11 of the
Bankruptcy Code.
Following the execution of the Severance Agreement, Smith paid
$875,199.52 to the Company, as repayment of certain of loans from the Company to
Smith.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Exhibits:
2.1 Severance Agreement entered into February 11, 1999 by and
between the Company and Kenneth H. Smith.
2.2 Promissory Note dated as of February 15, 1999 in the principal
amount of $1,234,832 executed by Kenneth H. Smith in favor of
the Company
2.3 Agreement of Non-Dilution entered into February 15, 1999
between TMD and the Company.
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2.4 Stock Pledge and Guaranty Agreement of GWP, Inc. dated as of
February 15, 1999 by and between GWP, Inc. and the Company.
2.5 Stock Pledge and Guaranty Agreement of Kenneth H. Smith dated
as of February 15, 1999 by and between the Company and Kenneth
H. Smith.
2.6 Stock Purchase Agreement entered into as of February 15, 1999
by and between the Company and Kenneth H. Smith.
(b) Pro Forma Financial Information:
At the present time, it is impractical to provide the pro forma
financial information relative to the TMD disposition as required by Article 11
of Regulation S-K and this Item 7 of Form 8-K. The Company will file such pro
forma financial information under cover of Form 8-K/A as soon as practicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
U.S. TECHNOLOGIES INC.
Dated: February 26, 1999 By: /s/ C. Gregory Earls
-------------------------
C. Gregory Earls
President and Chief
Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. Description of Exhibit
----------- ----------------------
<S> <C>
2.1 Severance Agreement entered into February 11, 1999 by and
between the Company and Kenneth H. Smith.
2.2 Promissory Note dated as of February 15, 1999 in the principal
amount of $1,234,832 executed by Kenneth H. Smith in favor of
the Company
2.3 Agreement of Non-Dilution entered into February 15, 1999
between TMD and the Company.
2.4 Stock Pledge and Guaranty Agreement of GWP, Inc. dated as of
February 15, 1999 by and between GWP and the Company.
2.5 Stock Pledge and Guaranty Agreement of Kenneth H. Smith dated
as of February 15, 1999 by and between the Company and Kenneth
H. Smith.
2.6 Stock Purchase Agreement entered into as of February 15, 1999
by and between the Company and Kenneth H. Smith.
</TABLE>
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EXHIBIT 2.1
U.S. Technologies Inc.
February 11, 1999
Mr. Kenneth H. Smith
President and Chief Executive Officer
U.S. Technologies Inc.
3901 Roswell Road, Suite 300
Marietta, GA 30062
Re: Offer of U.S. Technologies Inc. (the "Company") of Severance
Terms and Conditions
Dear Ken:
In reviewing your proposal of the compensation and other benefits to be
paid to you by the Company as consideration for your resignation as President
and Chief Executive Officer of the Company and as a controlling director of the
Company, I have considered what I believe to be the best interests of the
Company and its shareholders, including the significant benefits to be derived
by the Company from the avoidance of shareholder and creditor lawsuits and from
the potential avoidance of the imminent bankruptcy of the Company. Based upon
these considerations and based upon my consultations with the outside
accountants for the Company and the outside legal counsel for the Company, I
hereby, on behalf of the Company, as I have been specifically empowered by the
Board of Directors of the Company to do, offer the following terms and
conditions for your severance from employment with the Company:
(b) The Company will retain you as an independent contractor for
consulting services, as needed by the Company, for six months
and will pay to you for such consulting services the aggregate
amount of $125,000, in six equal installments, commencing on
the later date of (i) 30 days after the date of your
resignation as an officer and director of the Company, and
(ii) the date of the repayment of your indebtedness to the
Company, as provided below, with each additional installment
to be paid 30 days following the payment of the most recent
installment; provided that the payments contemplated hereby
will be reduced by any amounts owed by you to the Company over
and above the repayment contemplated by Section 4 and Section
5 below. Further, you will assist with the transition of
management and with other Company matters, as may be requested
by the Board of Directors of the Company. The payments for
your consulting services will be reported on IRS Form 1099.
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(c) The Company will pay to you the aggregate amount of $4,800, in
twelve equal installments, as payment of a portion of your
lease payments due on a certain Mercedes Benz automobile, such
installments to commence on the later date of (i) 30 days
after the date of your resignation as both an officer and
director of the Company and (ii) the date of the repayment of
your indebtedness to the Company, as provided below, with each
additional installment to be paid 30 days following the
payment of the most recent installment. The lease will be
reassigned to you by the Company and you will be responsible
for all insurance coverages required for the automobile and
for the lease.
(d) The Company will sell to you the laptop computer currently
used by you and owned by the Company, for a purchase price
equal to the book value of said laptop computer;
(e) You agree to sell 3,366,152 shares of the common stock, $.02
par value, of the Company, and to apply all of the proceeds
thereof as repayment of all or a portion of the outstanding
balance of loans due from you to the Company;
(f) The Company, upon 30 days following the effective date of your
resignation as an officer and director, and upon repayment of
the amount contemplated in Section 4 above, will reimburse you
in the amount any and all of your unpaid out-of-pocket
expenses attributable to the business of the Company, less any
amounts owed to the Company over and above the repayment
amount paid pursuant to Section 4 above, including any accrued
interest on your loans to the Company or other amounts due and
owing to the Company;
(g) Upon and as of the effective date of your resignation as an
officer and director of the Company, you will purchase, and
the Company will sell to you, GWP, Inc., the Company's
wholly-owned subsidiary which currently owns 51% of the voting
shares of Technology Manufacturing & Design, Inc. ("TMD"), in
a transaction to be concluded as soon as possible following
the effective date of your resignation as an officer and
director of the Company and the repayment of your indebtedness
to the Company, and upon such terms and conditions as are
acceptable to legal counsel to the Company and are not
inconsistent with the terms and conditions of this offer, such
terms and conditions to include:
(a) You agree to execute a personal, non-exculpated
promissory note, in the amount of $1,234,832,
representing the total existing investment, plus
expenses, of the Company in GWP, Inc. (the "Note"),
such Note to bear interest at the prime rate plus 200
basis points (as such prime rate is published from
time to time in the Wall Street Journal), with
interest to be payable quarterly, the first payment
thereof being six months from the date of the Note
(in the amount of the accrued
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interest thereon to date), with the
principal thereof to be repaid in equal
installments of $411,610.67, payable at the
end of each 12-month period, beginning on
the date of the Note, with no prepayment
penalty thereon;
(b) You hereby pledge, pursuant to this
agreement, 3,000,000 shares of the common
stock of the Company to the performance of
your obligations hereunder this Section 6
and, further, to the repayment of the Note
under the terms of a stock pledge and
guaranty agreement which are acceptable to
the legal counsel to the Company and which
are not inconsistent with the terms and
conditions hereof; such pledge to also
secure your personal guaranty of the
satisfaction of certain existing obligations
of TMD (the "Obligations") which are
presently guaranteed by the Company,
including, but not limited to, the payment
of the Fidelity Funding, Inc. loan, pursuant
to the Loan and Security Agreement between
TMD and Fidelity Funding, Inc., dated as of
November 30, 1998, and the performance of
the purchase price payment to the minority
shareholders of TMD pursuant to Section 8.2
of the Amended and Restated Stock Purchase
Agreement between TMD and GWP, Inc. dated as
of October 5, 1998. You agree that any
subsequent defaults of TMD with respect to
the Obligations will constitute a default
under the Note;
(c) GWP, Inc. will pledge its shares of TMD to
secure the Note and the performance by TMD
of the Obligations and such pledge shall
contain such anti-dilution covenants as are
acceptable to legal counsel to the Company
and which shall assure that the collateral
pledged by GWP, Inc. will always equal 51%
of the voting stock of TMD;
(d) You and GWP, Inc. will each guarantee the
performance by TMD of the Obligations, and
GWP, Inc. and TMD will each guarantee the
repayment of your Note;
(e) As additional collateral for the repayment
of the Note and the performance by TMD of
the Obligations, you will give to C. Gregory
Earls, or to such other proxy holder chosen
by the Board of Directors of the Company,
your irrevocable proxy, which shall be
deemed to be coupled with an interest, with
respect to all of your shares, pledged or
otherwise, of common stock of the Company.
Such proxy shall terminate immediately upon
the later to occur of (i) the repayment of
the Note with all interest thereon; and (ii)
the satisfaction by TMD of the Obligations;
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(f) The amount of the Note shall be adjusted, if
necessary, to reflect the total amount of
investment and expenses of the Company in
GWP, Inc. and TMD, Inc., as determined by
BDO Siedman, LLP, CPAs, independent auditors
of the Company, and such determination of
said amount shall be deemed conclusive as
between the parties; and
(g) You, GWP, Inc. and TMD will agree to provide
such additional assurances as may be deemed
necessary by legal counsel to the Company in
the event that the Company shall deem itself
insecure with respect to the repayment of
the Note and the performance by TMD of the
Obligations. Further, you agree that BDO
Seidman, LLP, CPA's will conduct the annual
audit for TMD, at the expense of TMD, for
1998 and for each fiscal year in which the
Note and the Obligations are outstanding and
unsatisfied.
(h) You agree that, for a period of three years, commencing on the
effective date of your resignation as an officer and director
of the Company, you will not directly or indirectly engage in
or carry on, either individually or as a stockholder,
director, officer, consultant, independent contractor,
employee, agent, member or otherwise of or through any
corporation, partnership, association, joint venture, firm,
individual or otherwise, or in any other capacity, the
business of prison-based manufacturing and/or services
anywhere in the United States; provided, that there shall be
no restriction upon your engaging in the business of the
prison-based manufacturing of electronics anywhere outside the
State of Texas.
(i) You agree that you will not, for a period of three years,
commencing on the effective date of your resignation as an
officer and director of the Company, call upon, recruit,
solicit, or assist others in calling upon, recruiting or
soliciting any person who is or was an employee of the Company
and its subsidiaries, for the purpose of having such person
work in any other corporation, association, or business
engaged in providing products or services of the same or
similar kind as those offered by the Company.
This letter constitutes the offer of the Company with respect to your
severance compensation and benefits. This offer will be deemed to have been
accepted upon (i) receipt of your effective, unconditional resignation, in
writing, (ii) your repayment of the amount contemplated by Section 4 above, and
(iii) your delivery, pursuant to the pledge requirements of Section 6(b) hereof,
of 3,000,000 shares of your common stock of the Company, along with a stock
power of attorney
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endorsed in blank relating to said shares, on or before 5:00 p.m. Eastern
Standard Time on February 12, 1999.
Very truly yours,
U.S. TECHNOLOGIES INC.
/s/ John P. Brocard
-----------------------------------------
John P. Brocard, Executive Vice President
and General Counsel
Accepted this 15th day of February, 1999
/s/ Kenneth H. Smith
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Kenneth H. Smith
cc: James C. Melton
C. Gregory Earls
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EXHIBIT 2.2
$1,234,832 Atlanta, Georgia
February 15, 1999
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned (hereinafter sometimes referred to
as "Maker"), promises to pay to the order of U.S. Technologies Inc. ("UST"), a
Delaware corporation, its successors and assigns, including any subsequent
assignee or holder of this Note, hereinafter referred to, collectively, as
"Holder", at its principal office at 3901 Roswell Road, Suite 300, Marietta,
Georgia 30062, or at such other place or to such other person or persons as
Holder shall designate in writing, the principal sum of One Million Two Hundred
Thirty-four Thousand Eight Hundred Thirty-two and No/100 Dollars
($1,234,832.00), with interest thereon.
This Note is secured by and is subject to the benefits and security
provided by, and the terms and conditions of, that certain stock pledge and
guaranty agreement, by and between Maker and UST, of even date herewith ("Smith
Pledge Agreement"), and that certain stock pledge agreement, by and between GWP,
Inc. and UST, of even date herewith ("GWP Pledge Agreement") as well as the
relevant terms of that certain severance agreement entered into between Maker
and UST on February 11, 1999 ("Severance Agreement").
Interest shall be computed on the outstanding balance from day to day
on the basis of actual days elapsed, and a year of 360 days consisting of 12
months having 30 days each, at the prime rate (as published from time to time in
the Wall Street Journal) plus 200 basis points. The interest accrued hereunder
shall be payable in quarterly installments, beginning on the fifteenth (15th)
day of August, 1999, six months following the date of this Note, and in the
amount of the accrued interest thereon to date, and, thereafter, continuing on
the fifteenth (15th) day of the first month of each succeeding three-month
period until all principal, interest, penalties and other charges, if any, due
and payable hereunder have been paid in full.
The principal hereunder shall be repaid in equal installments of
$411,610.67, payable at the end of each 12-month period, beginning on the date
of this Note. The principal amount of this Note and any accrued unpaid interest
shall be due and payable in full on the fifteenth (15th) day of February, 2002.
Payments, as made, shall be applied first to the payment of accrued but
unpaid interest, then to penalties and late charges, if any, and the balance of
said payments shall be applied to principal. Principal, interest, penalties and
late charges shall be payable in lawful money of the United States
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of America. All interest and principal payments shall be made by federal wire
funds or checks issued by a United States commercial bank or a United States
savings bank.
Maker shall be permitted to prepay the Note, in part or in full,
together with accrued and unpaid interest to the date of such prepayment, and
all other accrued but unpaid late charges or penalties, if any, without premium
or penalty for such prepayment.
Should a default occur under any of the terms and conditions contained
herein, and in any such event, the entire unpaid principal sum evidenced by this
Note, with all accrued and unpaid interest then due, shall, at the option of the
Holder and without notice or demand, except as expressly provided in this Note,
become due and may be collected forthwith pursuant to the terms of the Pledge
Agreement, time being of the essence of this Note. It is further agreed that the
failure of Holder to exercise this right of accelerating the maturity of the
debt, or indulgence granted from time to time, shall in no event be considered
as a waiver of such right of acceleration or estop the holder from exercising
such right.
If a default shall occur under this Note, as a result of a failure by
Maker to pay when due any sum of money required to be paid by this Note, Holder
shall not exercise any of its rights and remedies under this Note without first
giving to Maker written notice of such monetary default and an opportunity for
five (5) calendar days following the date of such notice by Holder to cure such
monetary default. If any other default, not involving nonpayment by Maker of a
sum of money, shall occur under this Note, Holder shall not exercise any of its
rights and remedies under this Note without first giving to Maker written notice
of such non-monetary default and an opportunity for fifteen (15) calendar days
following the date of such notice by Holder to cure such non-monetary default.
Notwithstanding the foregoing, Holder shall have no obligation to give more than
one (1) monetary default notice or more than one (1) non-monetary default
notices for a non-monetary default in any 365 day period.
Default events under this Note shall include the following:
1. Failure to pay any indebtedness evidenced by this Note,
whether for principal or interest, when such indebtedness
becomes due for whatever reason;
2. Failure of Technology Manufacturing & Design, Inc., a Texas
corporation ("TMD") (51% of the voting shares of which are
owned by GWP, Inc., a Georgia company which is wholly-owned by
Maker) to satisfy or perform, fully, promptly, and completely,
its obligations pursuant to the November 30, 1998 Loan and
Security Agreement between TMD and Fidelity Funding, Inc., or
pursuant to the Agreement of Non-Dilution between TMD and UST
(the "TMD Non-Dilution Agreement");
3. Failure of TMD to satisfy and perform, fully, promptly, and
completely, the purchase price payment to the minority
shareholders of TMD pursuant to Section 8.2 of the
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Amended and Restated Stock Purchase Agreement between TMD and
GWP, Inc., dated as of October 5, 1998.
4. The occurrence of any event of default, or the occurrence of
any event which, upon the passage of time, would constitute an
event of default, under any agreement between the Maker and
UST, between GWP, Inc. and UST, or between TMD and UST,
including, but not limited to, the Smith Pledge Agreement, the
GWP Pledge Agreement, the Severance Agreement and the TMD
Non-Dilution Agreement.
Should this Note be collected by law or through an attorney-at-law, all
costs of collection, including reasonable attorneys' fees actually incurred,
shall be paid by Maker.
Notwithstanding any provision contained herein, the total liability of
Maker for payment of interest, including late charges or other fees pursuant to
this Note, or any other instrument evidencing the indebtedness evidenced by this
Note, shall not exceed the maximum amount of such interest permitted by
applicable law to be charged, and if any payments by Maker include interest in
excess of such maximum amount, Holder shall apply such excess to the reduction
of the unpaid principal amount due pursuant hereto.
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be sufficient if in writing and delivered
in person (including by overnight courier service) or sent by United States
Certified Mail, return receipt requested, postage prepaid, to the party being
given such notice at the following addresses:
Maker: Kenneth H. Smith
2310 Edgemere Lake Circle
Marietta, Georgia 30062
Holder: U.S. Technologies Inc.
3901 Roswell Road, Suite 300
Marietta, GA 30062
Any party may change said address for notice to another address in the
continental United States by giving the other party hereto thirty (30) days
prior written notice of such change of address. Notice given as herein provided
above shall be deemed given on the date of its deposit (via certified mail) in
the United States mail or delivery in person, as the case may be, and, unless
sooner received, shall be deemed received by the party to whom it is addressed
on the fifth calendar day following the date on which said notice is deposited
in the mail. Refusal to accept delivery of any notice or inability to deliver
notice as a result of an address change of which no notice is given shall be
deemed receipt.
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Maker hereby waives and renounces for itself and its legal
representatives, successors and assigns, all rights to the benefits of any
statute of limitations and any moratorium, reinstatement, marshaling,
forbearance, valuation, stay, extension, redemption, appraisement, exemption and
homestead now provided, or which may hereafter be provided, by the Constitution
and laws of the United States of America and of any state thereof, against the
enforcement and collection of the obligation evidenced by this Note.
This Note shall be governed by, enforced and interpreted in accordance
with the laws of the State of Georgia.
The word "undersigned," as used herein, shall include the successors
and permitted assigns of Maker. The word "Holder" as used herein shall include
any transferees and assignees of Holder, and all rights of Holder shall inure to
the benefit of the successors and assigns of Holder.
IN WITNESS WHEREOF, Maker has executed and sealed this Note the day and
year first above written.
MAKER:
/s/ Kenneth H. Smith (SEAL)
------------------------------------------
Kenneth H. Smith
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EXHIBIT 2.3
AGREEMENT OF NON-DILUTION
This Agreement of Non-Dilution (the "Agreement") is entered into, as of
the 15th day of February, 1999, between Technology Manufacturing & Design, Inc.,
a Texas corporation ("TMD") and U.S. Technologies Inc., a Delaware corporation
("UST").
WHEREAS, UST intends to sell all of its capital shares of GWP Inc.. a
Georgia corporation, and the parent corporation of TMD, to Kenneth H. Smith
("Smith") for the purchase price of $1,234,832, which purchase price shall be
payable by the purchase-money, promissory note of Smith (the "Purchase-Money
Note"); and
WHEREAS, UST has extended and continues to make available, to TMD
certain financial resources which constitute the working capital of TMD (the
"Working Capital Resources"); and
WHEREAS, TMD desires that UST sell all of its capital shares of GWP
Inc. to Smith and that said Working Capital Resources continue to be made
available to TMD; it is therefore
AGREED, that in consideration of the aforementioned Working Capital
Resources and other good and valuable consideration, receipt of which is hereby
acknowledged:
5. TMD acknowledges and agrees that GWP, Inc. has pledged all of
the shares of the capital stock of TMD, currently owned by
GWP, Inc., to UST, as security for the payment of the interest
and principal under the Purchase-Money Note and for the
performance and satisfaction of certain other obligations of
Smith and SWP, Inc. (the "Collateral");
6. TMD acknowledges and agrees that said Collateral constitutes
51% of the voting stock and voting control of TMD;
7. TMD acknowledges and agrees that UST, Smith and GWP, Inc. have
agreed and acknowledged that the Collateral, at all times
prior to the repayment of the Note and the satisfaction of
certain other obligations of Smith and GWP, Inc. to UST, shall
constitute 51% of the voting stock and voting control of TMD;
8. TMD, at all time prior to the repayment of the Note and the
satisfaction of the other obligations of Smith and GWP, Inc.
to UST, shall take any and all actions and measures necessary
to insure that the Collateral constitutes at least 51% of the
voting stock and voting control of TMD and shall take no
actions of any kind which would dilute the voting shares and
voting control of the Collateral;
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9. TMD further acknowledges and agrees that a violation of the
terms of this Agreement shall constitute an event of default
under the Note and, thereby, will enable UST to exercise its
remedies thereunder, and under certain other agreements
between UST and Smith and UST and GWP, Inc., with respect to
the Collateral.
IN WITNESS WHEREOF, parties have executed this Agreement as of the date
first above written.
U.S. TECHNOLOGIES INC.
By: /s/ John P. Brocard
--------------------------------------
John P. Brocard
Executive Vice President
TECHNOLOGY MANUFACTURING & DESIGN, INC.
By: /s/ Kenneth H. Smith
---------------------------------------
Kenneth H. Smith
Chief Executive Officer
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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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<PAGE> 3
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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<PAGE> 4
(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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<PAGE> 5
(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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<PAGE> 6
(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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<PAGE> 7
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
---------------------------------------------
Name: Kenneth H. Smith
-----------------------------------------
Title: President and Chief Executive Officer
-----------------------------------------
Address: 3901 Roswell Road, Suite 300
Marietta, Georgia 30062
"PLEDGEE"
U.S. TECHNOLOGIES INC.
By: /s/ John P. Brocard
------------------------------------------
Name: John P. Brocard
--------------------------------------
Title: Executive Vice President
--------------------------------------
Address: 3901 Roswell Road, Suite 300
Marietta, Georgia 30062
-22-
<PAGE> 1
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;
<PAGE> 2
(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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<PAGE> 3
(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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<PAGE> 4
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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<PAGE> 5
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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<PAGE> 6
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)
--------------------------------
KENNETH H. SMITH
Address: 3901 Roswell Road, Suite 300
Marietta, Georgia 30062
"PLEDGEE"
U.S. TECHNOLOGIES, INC.
By: /s/ John P. Brocard
------------------------------------
Name: John P. Brocard
--------------------------------
Title: Executive Vice President
--------------------------------
Address: 3901 Roswell Road, Suite 300
Marietta, Georgia 30062
-28-
<PAGE> 1
EXHIBIT 2.6
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
the 15th day of February, 1999, by and between U.S. TECHNOLOGIES, INC., a
Delaware corporation (the "Seller") and KENNETH H. SMITH (the "Purchaser").
The Seller and the Purchaser in consideration of the premises and the
mutual promises and representations hereinafter set forth, hereby agree as
follows:
1. PURCHASE AND SALE OF STOCK. Subject to the terms and
conditions hereinafter set forth, the Seller shall, and does hereby, sell,
transfer, convey and deliver to Purchaser, and Purchaser shall, and does hereby,
purchase from the Seller, FIVE HUNDRED (500) shares of the common stock, of GWP,
Inc., a Georgia corporation (the "Company") (collectively, the "Purchased
Shares"). Such sale, transfer, conveyance and delivery shall be evidenced by a
duly endorsed stock power of attorney relating to the applicable share
certificates. The consummation of the transactions contemplated hereby shall be
completed on the date hereof.
2. CONSIDERATION. In consideration of the sale, transfer,
conveyance and delivery of the Purchased Shares, and in reliance upon the
representations made herein by the Seller, the Purchaser shall pay to the Seller
the sum of ONE MILLION TWO HUNDRED THIRTY-FOUR THOUSAND EIGHT HUNDRED THIRTY-TWO
and NO/100 Dollars ($1,234,832.00) (the "Purchase Price").
3. METHOD OF PAYMENT. Seller hereby authorizes Purchaser to
deliver to Seller, in full payment of the Purchase Price, his personal,
non-exculpated promissory note, dated as of the date hereof, in the form and
with such terms as contained in Exhibit A hereto, together with his
fully-executed stock pledge and guaranty agreement, dated as of the date hereof,
in the form and with such terms as contained in Exhibit B hereto, and with the
collateral required thereby; and together with the fully executed stock pledge
and guaranty agreement of GWP, Inc., dated as of the date hereof, in the form
and with such terms as contained in Exhibit C hereto, and with the collateral
required thereby; and together with the fully-executed Agreement of Non-Dilution
of Technology Manufacturing & Design, Inc. dated as of the date hereof, in the
form and with such terms as contained in Exhibit D hereto, dated as of the date
hereof; and together with such other documentation, as deemed necessary in the
reasonable opinion of legal counsel to the Seller, to effect the intent of such
aforementioned documents, including an irrevocable proxy and stock powers
endorsed in blank.
4. REPRESENTATIONS OF SELLER. In order to induce Purchaser to
enter into this Agreement and consummate the transactions contemplated herein,
the Seller represents and warrants to the Purchaser that the Purchased Shares
are the same shares, and all of the shares, of GWP, Inc. common stock purchased
by the Seller from Purchaser pursuant to that certain Stock Purchase Agreement
between Seller and Purchaser, dated as of October 5, 1998, and are free and
clear of all liens, claims, charges, security interests and other encumbrances,
provided, however, that Seller, in providing these representations and
warranties, has relied entirely and solely upon the representations and
warranties of Purchaser contained in said Stock Purchase Agreement.
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<PAGE> 2
5. GOVERNING LAW. This Agreement shall be governed in its
enforcement, construction and interpretation by the laws of the State of
Georgia.
6. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns,
heirs and personal representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"SELLER"
U.S. TECHNOLOGIES INC.
By: /s/ John P. Brocard
----------------------------------------------------
Name: John P. Brocard
Title: Executive Vice President and General Counsel
"PURCHASER"
/s/ Kenneth H. Smith (SEAL)
------------------------------------------
KENNETH. H. SMITH
Acknowledged:
TECHNOLOGY MANUFACTURING & DESIGN, INC.
By: /s/ Kenneth H. Smith
----------------------------------------------------
Name: Kenneth H. Smith
Title: President and Chief Executive Officer
GWP, Inc.
By: /s/ Kenneth H. Smith
----------------------------------------------------
Name: Kenneth H. Smith
Title: President and Chief Executive Officer
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