-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TZGzSaapZSraIBF1ImXwRUZ6yxmQ3JYoUDPdKsxf1yxINbzTCy9XU7VA68VAfuWR hOlgkMfxTL/MoYaP0rDHrw== 0000950144-00-005542.txt : 20000428 0000950144-00-005542.hdr.sgml : 20000428 ACCESSION NUMBER: 0000950144-00-005542 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000427 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S TECHNOLOGIES INC CENTRAL INDEX KEY: 0000810130 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 731284747 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-15960 FILM NUMBER: 610344 BUSINESS ADDRESS: STREET 1: 2001 PENNSYLVANIA AVE NW STE 675 STREET 2: SUITE 300 CITY: WASHINGTON STATE: DC ZIP: 20006 BUSINESS PHONE: 7705654311 MAIL ADDRESS: STREET 1: 3901 ROSWELL ROAD STREET 2: SUITE 300 CITY: MARIETTA STATE: GA ZIP: 30062 FORMER COMPANY: FORMER CONFORMED NAME: CAREAMERICA INC DATE OF NAME CHANGE: 19890720 8-K 1 U.S. TECHNOLOGIES INC. 1 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 April 27, 2000 Date of Report (Date of earliest event reported) U.S. Technologies Inc. (Exact name of Registrant as Specified in Charter)
Delaware 0-15960 73-1284747 (State or Other (Commission (IRS Employer Jurisdiction of File Number) Identification No.) Incorporation)
2001 Pennsylvania Avenue, NW, Suite 675, Washington, DC 20006 (Address of principal executive offices including zip code) (202) 466-3100 (Registrant's telephone number, including area code) Not applicable (Former name or address, if changed since last report) 2 INFORMATION TO BE INCLUDED IN THE REPORT ITEM 2. Effective April 12, 2000, U.S. Technologies Inc. a Delaware corporation (the "Registrant"), completed its previously announced acquisition of Internet incubator company E2Enet, Inc.("E2Enet") pursuant to the terms of that certain Stock Exchange Agreement, dated as of February 21, 2000 (the "Exchange Agreement"), entered into by and between the Registrant, E2Enet, and certain E2Enet stockholders, as amended by the Amendment to Stock Exchange Agreement, dated April 5, 2000, entered into by and between the Registrant, U.S. Technologies Acquisition Sub, Inc., E2Enet, Northwood Ventures LLC ("Northwood Ventures"), Northwood Capital Partners LLC ("Northwood Capital"), Jonathan J. Ledecky ("Ledecky") and other E2Enet stockholders (the "Exchange Agreement Amendment"; references to the Exchange Agreement herein mean such agreement as so amended unless otherwise specifically indicated). The Registrant's new voting Series B mandatorily convertible preferred shares with an aggregate liquidation preference of $11.2 million were issued in exchange for all of the outstanding capital stock of E2Enet. The Registrant acquired E2Enet's stock and assumed its liabilities in connection with the exchange. The preferred shares are to be converted into 56 million shares of common stock after Registrant stockholders approve an amendment to the Registrant's charter authorizing additional shares of common stock. As a result of the merger between E2Enet and the Registrant's acquisition subsidiary, E2Enet was merged into a wholly owned subsidiary of the Registrant and the subsidiary's name was subsequently changed to E2Enet. E2Enet has made early stage investments in several development stage business-to-business (B2B) and business-to-consumer (B2C) e-commerce businesses. The Registrant's merger of E2Enet resulted in the Registrant indirectly owning equity interests in the following companies: Buyline.net, Incorporated ("Buyline"). Buyline is a developer of B2B e-commerce applications, and is developing a proprietary Internet software program designed to be a universal platform for entry-level B2B e-commerce, linking buyers and sellers. Buyline's application for RFP/RFQ technology (Request for Proposal/Request for Quotation) will be used in a full range of on-line advertising, on Internet-based directories, and in commercial web sites. VIPRO Corporation ("Vipro"). Vipro is an Internet surety company, which provides repair guarantees against viruses that harm computers. Vipro has e-commerce relationships with a leading 3 Internet utility company, a credit card association, one of the largest warranty claims administrators in the world and over 170 Internet service providers. Urban Box Office Network, Inc. ("UBO"). UBO is a developer of networked multi-media web sites that will provide e-commerce services to participants interested in urban culture, information, entertainment and products. OneMade, Inc. ("OneMade"). OneMade is a developer of an e-commerce community that will serve participants in the arts, crafts, and hobby industries. OneMade intends to connect wholesalers, retailers, consumers and artists in these fields. bluemercury, Inc. ("bluemercury"). bluemercury operates an e-commerce site for upscale cosmetic products and accessories. It intends to pursue a "clicks and bricks" strategy by also acquiring high-end cosmetic specialty retailers. MEI Sofware Systems, Inc. ("MEI"). MEI provides customized software systems to manage the databases of trade associations, professional associations, fund-raising organizations and chambers of commerce. In connection with the E2Enet acquisition, the Registrant entered into certain additional agreements as called for by the Exchange Agreement. Registrant, USV Partners, LLC ("USV Partners"), James V. Warren ("Warren"), Northwood Ventures, Northwood Capital and Ledecky entered into a voting agreement regarding the designation of nominees and election of members to the Registrant's board of directors. The voting agreement provides that the number of directors on the board shall be established at eight directors, composed of: a) four directors designated by USV Partners, including C. Gregory Earls ("Earls") as Chairman and Chief Executive Officer of the Registrant; b) two directors designated by Ledecky; and c) two directors designated by Northwood Ventures and Northwood Capital. As previously announced, upon completion of the E2Enet acquisition, the board was expanded to include, in addition to Earls and Warren, the following individuals: Sen. George J. Mitchell, former Senator from Maine and Senate Majority Leader; Hon. William H. Webster, former Director of both the FBI and CIA, and is currently a senior partner at the law firm of Milbank, Tweed, Hadley & McCloy; Rick Rickertsen, partner at Thayer Capital; 4 Hal Wilson and Peter Schiff, Managing Directors of Northwood Ventures and Northwood Capital; and Arthur Maxwell, president of Affordable Interior Systems, Inc. USV Partners and Warren also agreed and provided a proxy for the benefit of E2Enet stockholders who became Registrant stockholders, to vote in favor of amending the Registrant's charter in order to increase the number of authorized shares of common stock of the Registrant necessary for the Registrant's Series A, B and C preferred shares to be fully converted into common stock (the "Charter Amendment"). The Registrant, USV Partners, Northwood Capital, Northwood Ventures, Ledecky and other holders of the Registrant's Series B and C preferred stock, entered into an agreement regarding registration rights for the Series A, Series B, and Series C preferred stock and common stock into which they are to be converted. Collectively, the stockholders party to the agreement have the right on three occasions to compel the Registrant to register their respective shares at the expense of the Registrant and rights on other occasions to have such registration effected at the expense of the holders. These stockholders also have unlimited registration rights to be combined, at the Registrant's expense, with certain registrations of any equity securities by the Registrant (Piggyback Rights), subject to restrictions which might be imposed by an underwriter for the sale of such shares. The foregoing summaries do not comport to be complete. The relevant agreements are exhibits hereto and incorporated herein by reference. See Item 7(c). ITEM 5. OTHER EVENTS In connection with and as a condition to completing the Registrant's acquisition of E2Enet, on April 12, 2000, the Registrant completed the private placement of $5,184,000 of voting Series C mandatorily convertible preferred stock and USV Partners purchased an additional $1,250,000 of voting Series A convertible preferred stock. The Registrant plans to seek to raise additional capital through the offering of up to an 5 additional $3,566,000 of Series C preferred shares. All Series C preferred shares will automatically convert, once the Charter Amendment is effective, into shares of the Registrant's common stock at $1.45 per share of common stock. USV Partners also intends to convert its Series A preferred shares into shares of the Registrant's common stock when the Charter Amendment is effective. USV Partners is an affiliate of Earls. The new funds will be used primarily to finance payment of costs incurred and liabilities assumed in connection with the E2Enet merger and related business transactions, additional investments in new and existing Internet businesses that focus on B2B commerce, and working capital requirements. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired. At the present time, it is impractical to provide the financial information relative to the E2Enet merger pursuant to paragraph a4 and b2 of Item 7 of Current Report Form 8-K. The Registrant will file such financial information under cover of a Form 8-K/A within sixty days of the date of this report. (c) Exhibits. 2.1 Stock Exchange Agreement, dated February 21, 2000, among U.S. Technologies Inc., E2Enet, Inc. and Certain Stockholders of E2Enet, Inc.(incorporated by reference to Exhibit 2.1 to Registrant's Report on Form 8-K filed February 28, 2000). 2.2 Amendment to the Stock Exchange Agreement, dated April 5, 2000, entered into by and between U.S. Technologies Inc., U.S. Technologies Acquisition Sub, Inc., E2Enet, Inc., Northwood Ventures LLC, Northwood Capital Partners LLC, Jonathan J. Ledecky and other E2Enet, Inc. stockholders (incorporated by reference to Exhibit 2.5 to the Registrant's Form 10-K filed April 10, 2000). 6 2.3 Voting Agreement, dated April 12, 2000, among U.S. Technologies Inc., USV Partners, LLC, James V. Warren, Northwood Ventures, LLC, Northwood Capital Partners, LLC and Jonathan J. Ledecky. 2.4 Voting Agreement and Proxy, dated April 12, 2000, among USV Partners, LLC, James V. Warren and C. Gregory Earls for the benefit of the holders of the Registrant's Series B Preferred Stock. 2.5 Amended and Restated Registration Rights Agreement, dated April 12, 2000, among U.S. Technologies Inc., USV Partners, LLC, Northwood Capital Partners LLC, Northwood Ventures LLC, Jonathan J. Ledecky and certain other stockholders of U.S. Technologies Inc. 4.1 Certificate of Designations, Preferences and Rights of Series B Mandatorily Convertible Preferred Stock of U.S. Technologies Inc. 4.2 Certificate of Designations, Preferences and Rights of Series C Mandatorily Convertible Preferred Stock of U.S. Technologies Inc. 99.1 Press Release of April 12, 2000, announcing completion of the acquisition of E2Enet, Inc. and related financings. 7 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. By: /s/ Gregory Earls ------------------------ Gregory Earls Co-Chairman and Co-Chief Executive Officer Dated: April 27, 2000 Washington, DC 8 INDEX TO EXHIBITS FILED HEREWITH --------------------------------
Exhibit Number Description - ------- ----------- 2.3 Voting Agreement, dated April 12, 2000, among U.S. Technologies Inc., USV Partners, LLC, James V. Warren, Northwood Ventures, LLC, Northwood Capital Partners, LLC and Jonathan J. Ledecky. 2.4 Voting Agreement and Proxy, dated April 12, 2000 among USV Partners, LLC, James V. Warren and C. Gregory Earls for the benefit of the holders of the Registrant's Series B Preferred Stock. 2.5 Amended and Restated Registration Rights Agreement, dated April 12, 2000, among U.S. Technologies Inc., USV Partners, LLC, Northwood Capital Partners LLC, Northwood Ventures LLC, Jonathan J. Ledecky and certain other stockholders of U.S. Technologies, Inc. 4.1 Certificate of Designations, Preferences and Rights of Series B Mandatorily Convertible Preferred Stock of U.S. Technologies Inc. 4.2 Certificate of Designations, Preferences and Rights of Series C Mandatorily Convertible Preferred Stock of U.S. Technologies Inc. 99.1 Press Release of April 12, 2000, announcing completion of the acquisition of E2Enet, Inc. and related financings.
EX-2.3 2 VOTING AGREEMENT DATED 4/12/00 1 EXHIBIT 2.3 VOTING AGREEMENT THIS VOTING AGREEMENT (the "Agreement") is made as of this 12th day of April, 2000, by and among U.S. Technologies Inc., a Delaware corporation (the "Company"), USV Partners, LLC, a Delaware limited liability company ("USV"), James V. Warren ("Warren"), Northwood Ventures LLC, a New York limited liability company ("Northwood Ventures"), Northwood Capital Partners LLC, a New York limited liability company ("Northwood Capital") and Jonathan J. Ledecky ("Ledecky") (USV, Warren, Northwood Ventures, Northwood Capital and Ledecky hereinafter referred to collectively as the "Shareholders"). RECITALS WHEREAS, each of USV and Warren is the owner of certain shares of the Company's common stock, par value $0.02 per share (the "Common Stock"), the Company's Series A Convertible Preferred Stock, par value $0.02 per share (the "Series A Stock"), and/or warrants (the "Warrants") to purchase shares (subject to adjustment pursuant to the terms thereof) of the Common Stock; WHEREAS, the Company has entered into a Stock Exchange Agreement dated as of February 21, 2000, as amended by the Amendment to Stock Exchange Agreement dated as of April 5, 2000 (together, the "Stock Exchange Agreement"), with E2Enet, Inc. ("E2E"), U.S. Technologies Acquisition Sub, Inc. and those persons (including Northwood Capital, Northwood Ventures and Ledecky) who as of the closing of the merger contemplated therein (the "Closing") will own, collectively, all of the issued and outstanding shares of the capital stock of E2E (the "E2E Stockholders"); WHEREAS, pursuant to the Stock Exchange Agreement, the Company is issuing to the E2E Stockholders at the Closing shares of the Company's Series B Convertible Preferred Stock, par value $0.02 per share (the "Series B Stock"), of which the majority will be owned, collectively, by Northwood Capital, Northwood Ventures and Ledecky; WHEREAS, the execution and delivery of this Agreement, setting forth the agreement of the parties hereto with respect to the size and composition of the Board of Directors of the Company (the "Board"), is a condition to the Closing; WHEREAS, the restated bylaws of the Company provide that the Board shall consist of not less than one (1) nor more than fifteen (15) members, and provides that the number of directors shall be determined by resolution of the Board or by the shareholders of the Company at an annual meeting; and WHEREAS, the Shareholders desire to set forth their agreement with respect to the designation of nominees to be elected to the Board and the voting of shares of the Company's capital stock in the election of directors, as set forth herein. NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Company and the Shareholders hereby agree as follows: 2 1. SHARES SUBJECT TO AGREEMENT. Each Shareholder agrees to hold all of its or his shares of Common Stock, Series A Stock, Series B Stock, Common Stock issuable upon exercise of the Warrants and upon conversion of the Series A Stock and Series B Stock, and any and all securities of the Company legally or beneficially acquired by each of the Shareholders after the date hereof (hereinafter referred to as the "Voting Shares") subject to, and to vote the Voting Shares in accordance with, the provisions of this Agreement. 2. BOARD OF DIRECTORS. (a) Each of the Shareholders hereby agrees to vote all of its or his Voting Shares and to take all other necessary or desirable actions within its or his control, and the Company hereby agrees to take all necessary and desirable actions within its control (including, without limitation, calling special meetings of the Board and of its shareholders), so that: (i) the number of directors on the Board shall be established at eight (8) directors; and (ii) such Board shall be composed of (A) four (4) directors designated by USV, including C. Gregory Earls as Chairman and Chief Executive Officer of the Company; (B) two (2) directors designated by Ledecky; and (C) two (2) directors designated by Northwood Ventures and Northwood Capital. (b) The obligations of the Shareholders pursuant to this Section 2 shall include the shareholder vote, if any, to amend the Certificate of Incorporation or Bylaws of the Company currently in effect as required to effect the intent of this Agreement. In the event any director elected pursuant to the terms hereof ceases to serve as a member of the Board, the Company and the Shareholders agree to take all such action as is reasonable and necessary, including the voting of Voting Shares by the Shareholders, to cause the election or appointment of such other substitute person to the Board as may be designated in accordance with the terms of this Agreement. The Company shall promptly give the Shareholders written notice of any election to or appointment of, or change in the composition of, the Board. Each of the Shareholders and the Company agrees not to take any actions which would materially and adversely affect the provisions of this Agreement and the intention of the parties with respect to the composition of the Board as herein stated. (c) Each of the Shareholders and the Company represents that it or he has not granted and is not a party to any proxy, voting agreement or similar arrangement which is inconsistent with or conflicts with the provisions of this Agreement, and no holder of Voting Shares shall grant any proxy or become party to any voting agreement or similar arrangement which is inconsistent with or conflicts with the provisions of this Agreement. 3. TERMINATION. Unless earlier terminated by written agreement of the Shareholders that have rights and obligations hereunder, this Agreement shall terminate upon the third (3rd) anniversary hereof (it being agreed that no Shareholder shall have any rights or obligations hereunder once such Shareholder shall have sold at least half of the Voting Shares owned by it or him immediately following the Closing). 3 4. SUCCESSORS IN INTEREST. (a) The provisions of this Agreement shall be binding upon all transferees or assignees of the Voting Shares; provided, however, that transferees or assignees that acquire Voting Shares through open-market, non-negotiated transactions shall not be subject to the provisions of this Agreement. The Company shall not permit the transfer of any of the Voting Shares on its books or issue a new certificate representing any of the Voting Shares unless and until the person to whom such security is to be transferred shall have executed a written agreement, substantially in the form of this Agreement, pursuant to which such person becomes a party to this Agreement and agrees to be bound by all the provisions hereof as if such person were a Shareholder on the date hereof; provided, however, that transferees or assignees that acquire Voting Shares through open-market, non-negotiated transactions shall not be subject to the provisions of this Agreement. (b) In addition to any other legends that are required, either by agreement or by federal or state securities laws, each certificate representing any of the Voting Shares shall be marked by the Company with a legend reading as follows: THE SHARES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A VOTING AGREEMENT DATED AS OF _________________, 2000, BY AND AMONG U.S. TECHNOLOGIES INC. AND CERTAIN HOLDERS OF THE OUTSTANDING CAPITAL STOCK OF SUCH CORPORATION (A COPY OF WHICH MAY BE OBTAINED FROM SUCH CORPORATION). BY ACCEPTING ANY INTEREST IN SUCH SHARES, THE PERSON HOLDING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL OF THE PROVISIONS OF SUCH AGREEMENT. 5. ENFORCEABILITY. Each of the Shareholders and the Company expressly agrees that this Agreement shall be specifically enforceable in any court of competent jurisdiction in accordance with its terms. 6. NOTICES. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, return receipt requested, or otherwise delivered by hand or by messenger or sent by facsimile, addressed: (a) if to the Company, to: U.S. Technologies Inc. c/o U.S. Viewing Corporation 2001 Pennsylvania Avenue, NW Suite 675 Washington, DC 20006 Attn: C. Gregory Earls Telephone: 202-466-3100 Facsimile: 202-466-4557 4 (b) if to USV, to: USV Partners, LLC c/o U.S. Viewing Corporation 2001 Pennsylvania Avenue, N.W., Suite 675 Washington, D.C. 20006 Attn: C. Gregory Earls Telephone: (202) 466-3100 Facsimile: (202) 466-4557 (c) if to Warren, to: James V. Warren c/o U.S. Technologies Inc. 6525 The Corners Parkway, Suite 300 Norcross, Georgia 30092 Telephone: (770) 613-0322 Facsimile: (770) 662-5228 (d) if to Northwood Ventures, to: Northwood Ventures LLC 485 Underhill Boulevard, Suite 205 Syosset, NY 11791 Attn: Henry T. Wilson Telephone: 516-364-5544 Facsimile: 516-364-0879 (e) if to Northwood Capital, to: Northwood Capital Partners LLC 485 Underhill Boulevard, Suite 205 Syosset, NY 11791 Attn: Henry T. Wilson Telephone: 516-364-5544 Facsimile: 516-364-0879 (f) if to Ledecky, to: Jonathan J. Ledecky 1400 34th Street, N.W. Washington, D.C. 20007 Telephone: 202-965-2020 Facsimile: 202-342-9090 or to such other address as any such party shall have furnished to the other parties hereto in accordance with this Section 6. If notice is provided by mail, notice shall be deemed to be given five (5) days following proper deposit with the United States mail. If notice is delivered by hand or by messenger or sent by facsimile, notice shall be deemed to be given upon receipt. 5 7. DELAYS IN EXERCISING RIGHTS. No delay in exercising or failure to exercise any right, power or remedy accruing to any party hereto upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach or default under this Agreement, or any waiver on the part of any party hereto of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing or as provided in this Agreement. All remedies, either under this Agreement or by law or otherwise afforded to any party hereto, shall be cumulative and not alternative. 8. COUNTERPARTS. This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall constitute an original enforceable against the party actually executing such counterpart, and all of which together shall constitute one and the same instrument. 9. ADDITIONAL SHARES. In the event that subsequent to the date of this Agreement any shares of capital stock or other securities of the Company are issued on or in exchange for any of the Voting Shares by reason of any stock dividend, stock split, consolidation of shares, reclassification or consolidation involving the Company, such shares or other securities shall be deemed to be covered by and subject to the terms of this Agreement. 10. SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision, and the parties hereto agree to replace such provision with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such provisions. 11. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its principles of choice of law or conflict of laws. 12. ENTIRE AGREEMENT. This Agreement constitutes the full and entire understanding and agreement between any and among all of the parties hereto regarding the subject matter hereof and supersedes all prior agreements with regard to the subject matter hereof. Without limiting the generality of the foregoing, each of the Company, USV and Warren hereby acknowledges and agrees that this Agreement supersedes all prior agreements between any or among all of the Company, USV and Warren (whether pursuant to the Investment Agreement dated as of July 16, 1998, between the Company and USV, pursuant to the Management Agreement dated as of November 29, 1999, among the Company, Warren and J.L. (Skip) Moore, or otherwise) with regard to the subject matter hereof. 6 IN WITNESS WHEREOF, the parties hereto have executed this Voting Agreement as of the date first written above. U.S. TECHNOLOGIES INC. USV PARTNERS, LLC By: USV Management, LLC By: /s/ C. Gregory Earls By: /s/ C. Gregory Earls ----------------------------------- ------------------------------- C. Gregory Earls, Co-Chairman C. Gregory Earls, Sole Member and Co-Chief Executive Officer NORTHWOOD VENTURES LLC NORTHWOOD CAPITAL PARTNERS LLC By: /s/ Henry T. Wilson By: /s/ Henry T. Wilson ----------------------------------- ---------------------------------- Henry T. Wilson, Managing Director Henry T. Wilson, Managing Director /s/ James V. Warren /s/ Jonathan J. Ledecky - -------------------------------------- ---------------------------------- JAMES V. WARREN JONATHAN J. LEDECKY EX-2.4 3 VOTING AGREEMENT AND PROXY DATED 4/12/00 1 EXHIBIT 2.4 VOTING AGREEMENT AND PROXY THIS VOTING AGREEMENT (the "Agreement") is made as of this 12th day of April, 2000, by and among USV Partners, LLC, a Delaware limited liability company ("USV"), James V. Warren ("Warren") and C. Gregory Earls ("Earls"), in favor of those persons (the "E2E Stockholders") who will own all of the issued and outstanding shares of capital stock of E2Enet, Inc. ("E2E") at or prior to the closing of the merger contemplated by the Stock Exchange Agreement dated as of February 21, 2000, as amended by the Amendment to Stock Exchange Agreement dated as of April 5, 2000, among E2E, U.S. Technologies Inc. (the "Company"), U.S. Technologies Acquisition Sub, Inc. and the E2E Stockholders (as amended, the "Stock Exchange Agreement"). RECITALS WHEREAS, each of USV and Warren is the owner of certain shares of the Company's common stock, par value $0.02 per share (the "Common Stock"), the Company's Series A Convertible Preferred Stock, par value $0.02 per share (the "Series A Stock"), and/or warrants (the "Warrants") to purchase shares (subject to adjustment pursuant to the terms thereof) of the Common Stock; WHEREAS, pursuant to the Stock Exchange Agreement, the Company is issuing to the E2E Stockholders at the closing of the merger contemplated therein (the "Closing") shares of the Series B Convertible Preferred Stock of the Company, par value $0.02 per share (the "Series B Stock"); WHEREAS, as a condition to the Closing, the Company is raising additional capital of at least $6,250,000, for which the Company will issue at or following the Closing shares of its Series C Convertible Preferred Stock, par value $0.02 per share (the "Series C Stock"), and additional shares of the Series A Stock; WHEREAS, it is contemplated in connection with the Stock Exchange Agreement that the Series A Stock, Series B Stock, and Series C Stock will convert automatically into shares of Common Stock (pursuant to the terms of their respective certificates of designations) upon the availability of authorized Common Stock for conversion; WHEREAS, the Stock Exchange Agreement requires the Company, as promptly as practicable after the Closing, to hold an annual meeting of its shareholders to consider and vote on, among other things, amendment of the Company's Restated Certificate of Incorporation dated December 3 1997, to increase the number of shares of authorized Common Stock (the "Charter Amendment"), which will enable the automatic conversion of the Series A Stock, Series B Stock and Series C Stock into Common Stock; WHEREAS, USV and Warren desire to vote for the Charter Amendment, subject to the terms and conditions set forth herein; and WHEREAS, USV, Warren and Earls desire to enter into an agreement to be specifically enforceable against each of them pursuant to which they agree to take the actions specified herein. 2 NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth herein, USV, Warren and Earls agree as follows: 1. Voting Agreement. Each of USV and Warren agrees at the next duly called shareholders' meeting of the Company called to consider, among other things, approval of the Charter Amendment to vote any and all of its or his shares of Common Stock, shares of Series A Stock, shares of Common Stock issuable upon exercise of the Warrants and upon conversion of the Series A Stock and other shares of capital stock and other securities of the Company, whether now owned or hereafter acquired (the "Voting Shares"), in favor of the Charter Amendment. 2. Irrevocable Proxy. In order to insure the voting of USV and Warren in accordance with this Agreement, each of USV and Warren agrees to execute an irrevocable proxy simultaneously with the execution hereof in the form of Exhibit A attached hereto granting to Earls the right to vote, or to execute and deliver shareholder written consents, in respect of all of its or his Voting Shares. It is understood and agreed that such irrevocable proxy relates solely to voting in favor of the Charter Amendment. 3. Changes in Common Stock. In the event that subsequent to the date of this Agreement any shares of capital stock or other securities of the Company are issued on or in exchange for any of the Voting Shares by reason of any stock dividend, stock split, consolidation of shares, reclassification or consolidation involving the Company, such shares or other securities shall be deemed to be covered by and subject to the terms of this Agreement. 4. Representations of USV and Warren. Each of USV and Warren hereby represents and warrants that (a) it or he is the record owner as of the date hereof and owns and has the right to vote the number of Voting Shares set forth opposite its or his name on Exhibit B attached hereto, (b) such number of Voting Shares set forth opposite its or his name on Exhibit B constitutes all of the shares of capital stock and other securities of the Company held by it or him as of the date hereof, (c) it or he has full power to enter into this Agreement and has not, prior to the date of this Agreement, executed or delivered any proxy or entered into any other voting agreement or similar arrangement other than one which has expired or terminated prior to the date hereof or which is superseded by this Agreement and the irrevocable proxy granted hereunder, and (d) it or he will not take any action inconsistent with the purpose and provisions of this Agreement. 5. Enforceability. Each of USV, Warren and Earls expressly agrees that this Agreement shall be specifically enforceable in any court of competent jurisdiction in accordance with its terms against each of the parties hereto. 6. Termination. This Agreement shall terminate and be void and of no effect upon shareholder approval of the Charter Amendment. 7. Indemnification. Each of USV and Warren hereby agrees jointly and severally to indemnify, defend and hold harmless Earls from any and all claims, liabilities, obligations or expenses he incurs (including attorneys' fees and expenses) in connection with his being 3 designated as and his actions in connection with carrying out his duties as proxy for USV and Warren. 9. Proxy Holder. Earls hereby agrees to act as proxy for USV and Warren subject to the terms and conditions set forth herein. 10. General Provisions. (a) Other than the E2E Stockholders, this Agreement is intended for the benefit of the Company, USV, Warren and Earls and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. (b) This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its principles of choice of law or conflict of laws. (c) This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall constitute an original enforceable against the party actually executing such counterpart, and all of which together shall constitute one and the same instrument. (d) If any provision of this Agreement shall be declared void or unenforceable by any court or administrative board of competent jurisdiction, such provision shall be deemed to have been severed from the remainder of this Agreement and this Agreement shall continue in all respects to be valid and enforceable. (e) No waivers of any breach of this Agreement extended by any party hereto to any other party shall be construed as a waiver of any rights or remedies of any other party hereto or with respect to any subsequent breach. (f) Whenever the context of this Agreement shall so require, the use of the singular number shall include the plural and the use of any gender shall include all genders. IN WITNESS WHEREOF, USV, Warren and Earls have executed this Agreement as of the date first written above. USV PARTNERS, LLC /s/ James V. Warren By: USV MANAGEMENT, LLC ----------------------------------- JAMES V. WARREN By: /s/ C. Gregory Earls /s/ C. Gregory Earls --------------------------------- ----------------------------------- C. Gregory Earls C. GREGORY EARLS Sole Member 4 EXHIBIT A IRREVOCABLE PROXY U.S. TECHNOLOGIES INC. KNOW ALL MEN BY THESE PRESENTS, that the undersigned (hereinafter referred to as the "Shareholder"), agrees to and does hereby grant and convey to C. Gregory Earls an irrevocable proxy pursuant to the provisions of Section 212 of the Delaware General Corporation Law to vote, or to execute and deliver written consents or otherwise act with respect to, all of the Voting Shares of the Shareholder in accordance with the terms of that certain Voting Agreement made as of ___________, 2000, among the Shareholder, certain other shareholders of the Company and C. Gregory Earls (the "Voting Agreement") in connection with the Charter Amendment. All capitalized terms used herein and not otherwise defined shall have the respective meanings given to them in the Voting Agreement. The Shareholder hereby affirms that this Proxy is given as a condition of the Voting Agreement and as such is coupled with an interest and is irrevocable. It is further directed by the Shareholder that this Proxy shall be exercised by C. Gregory Earls at the Company's next duly called annual or special shareholders' meeting (the "Meeting"), and any adjournments thereof, which considers the approval of the Charter Amendment by his voting the shares represented hereby in accordance with the terms of the Voting Agreement. This Proxy shall expire simultaneously with the termination of the Voting Agreement. DATED this__________ day of _______________, 2000. - ----------------------------- Signature - ----------------------------- Print Name INSTRUCTIONS: Print full legal name in the space provided. Sign exactly as name is printed below signature line. When stock is issued in two or more names, all should sign. If signing as attorney, administrator, executor, trustee, guardian or other fiduciary, give full title as such. A corporation should sign by authorized officer. 5 EXHIBIT B VOTING SHARES
Shareholder Shares Held - ----------- ----------- USV PARTNERS, LLC 500,000 SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF WARRANT 625,000 SHARES OF SERIES A PREFERRED CONVERTIBLE STOCK 6,366,152 SHARES OF COMMON STOCK JAMES V. WARREN 1,500,000 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF OPTIONS 6,318,652 SHARES OF COMMON STOCK
EX-2.5 4 AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 2.5 =============================================================================== AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT among U.S. TECHNOLOGIES INC., USV PARTNERS, LLC, NORTHWOOD CAPITAL PARTNERS LLC, NORTHWOOD VENTURES LLC, JONATHAN J. LEDECKY and CERTAIN OTHER SHAREHOLDERS OF U.S. TECHNOLOGIES INC. Dated as of April 12, 2000 =============================================================================== 2 AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as of this 12th day of April, 2000, by and among U.S. Technologies Inc., a Delaware corporation (the "Company"), USV Partners, LLC, a Delaware limited liability company ("USV"), Northwood Capital Partners LLC, a New York limited liability company ("Northwood Capital"), Northwood Ventures LLC, a New York limited liability company ("Northwood Ventures"), Jonathan J. Ledecky ("Ledecky") and the other holders of shares of the capital stock or other securities of the Company that are parties hereto, including those that are added as parties by joinder (the "Other Preferred Holders") (each of USV, Northwood Capital, Northwood Ventures, Ledecky and the Other Preferred Holders, an "Investor," and together the "Investors"). WITNESSETH: WHEREAS, USV is the owner of certain shares of the Company's Series A Convertible Preferred Stock, par value $0.02 per share (the "Series A Convertible Preferred Stock"), the Company's common stock, par value $0.02 per share (the "Common Stock"), and warrants (the "Warrants") to purchase 500,000 shares (subject to adjustment pursuant to the terms thereof) of the Common Stock; WHEREAS, the Company has entered into a Stock Exchange Agreement dated as of February 21, 2000, as amended by the Amendment to Stock Exchange Agreement dated as of April 5, 2000 (together, the "Stock Exchange Agreement"), with E2Enet, Inc. ("E2E"), U.S. Technologies Acquisition Sub, Inc. and those persons (including Northwood Capital, Northwood Ventures and Ledecky) who as of the closing of the merger contemplated therein (the "Closing") will own, collectively, all of the issued and outstanding shares of the capital stock of E2E (the "E2E Stockholders"); WHEREAS, pursuant to the Stock Exchange Agreement, the Company is issuing to the E2E Stockholders at the Closing shares of the Company's Series B Convertible Preferred Stock, par value $0.02 per share (the "Series B Convertible Preferred Stock"), with an aggregate stated value equal to $11,200,000; WHEREAS, as a condition to the Closing, the Company is raising additional capital of at least $6,250,000, for which the Company is issuing at or following the Closing shares of the Company's Series C Convertible Preferred Stock, par value $0.02 per share (the "Series C Convertible Preferred Stock"), and additional shares of the Series A Convertible Preferred Stock; WHEREAS, the Company and USV have entered into a Registration Rights Agreement dated as of July 16, 1998 (the "USV Registration Rights Agreement"), pursuant to which the Company agreed to register shares of Common Stock as set forth therein; and WHEREAS, in connection with the Company's execution of the Stock Exchange Agreement and the transactions contemplated therein, the Company and USV have agreed to amend and restate the USV Registration Rights Agreement, and the Company has agreed, on the terms and conditions set forth herein, to register shares of Common Stock as set forth below. 3 NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree that the USV Registration Rights Agreement shall be superseded and replaced in its entirety by this Agreement, and the Parties hereto further agree as follows: ARTICLE I. DEFINITIONS 1.1 Definitions. As used herein, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Action or Proceeding" means any action, suit, arbitration, proceeding or Governmental Authority investigation or audit. "Advice" has the meaning given it in Section 3.2 of this Agreement. "Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Applicable Securities Authority" means the Commission or any other Governmental Authority with which a registration statement or similar form must be filed to issue securities under the Applicable Securities Laws. "Applicable Securities Law" means each Law applicable to the purchase and sale of securities of the Company, including, without limitation, the Securities Act, the Exchange Act and "Blue Sky" laws and the rules and regulations promulgated thereunder. "Blocking Notice" has the meaning given it in Section 3.2 of this Agreement. "Business Day" means any Day other than a Saturday, Sunday or public holiday or the equivalent for banks under the laws of Washington, DC. "Commission" means the United States Securities and Exchange Commission or any other U.S. federal agency at the time administering the Securities Act. "Common Stock" has the meaning given it in the recitals. "Company Registration Notice" means a request to include Registrable Securities in a registration initiated by the Company pursuant to Section 2.3 hereof (a) made in writing, (b) by a Holder of Registrable Securities, and (c) specifying the number of Registrable Securities to be offered for sale pursuant to such registration (which may be any or all of the Registrable Securities owned by such Holder). "Day" means a calendar day. "Demand Registration" means a registration pursuant to Section 2.1 hereof and sale pursuant to such registration, under the Applicable Securities Laws, of all or substantially all of the Registrable Securities that are the subject of a Qualifying Request, which sale shall be made 4 pursuant to a firm commitment underwritten secondary offering arranged for by the Company, unless the requirement of a firm commitment underwriting is waived in writing by the Holders of a majority of the Registrable Securities that are the subject of such Qualifying Request. "E2E Stockholders" has the meaning given it in the recitals. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time. "Governmental Authority" means any nation or government, any state or other political subdivision thereof and any court, panel, judge, board, bureau, commission, agency or other entity, body or other Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to such government. "Holder" means any Investor and any Transferee that has become a Party to this Agreement by executing a joinder agreement in the form attached hereto as Exhibit A. "Indemnified Party" has the meaning given it in Section 5.3 of this Agreement. "Indemnifying Party" has the meaning given it in Section 5.3 of this Agreement. "Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law in any country, or any state, province, county, city or other political subdivision thereof. "Order" means any writ, judgment, decree, injunction or similar order of any Governmental Authority (in each case whether preliminary or final). "Party" means a party to this Agreement. "Person" means and includes any individual, partnership, joint venture, corporation, trust, limited liability company, joint stock company, unincorporated organization, association or other entity and includes any Governmental Authority. "Piggyback Notice" means a request to include Registrable Securities in a registration pursuant to Section 2.2 hereof (a) made in writing, (b) by a Holder of Registrable Securities, and (c) specifying the number of Registrable Securities to be offered for sale pursuant to such registration (which may be any or all of the Registrable Securities owned by such Holder) and the intended disposition thereof. "Preferred Shares" means the Series A Shares, Series B Shares and Series C Shares. "Qualifying Request" means a request for a Demand Registration (a) made in writing, (b) by the Holder or Holders of Registrable Securities constituting one third (1/3) of all Registrable Securities, (c) specifying the number of Registrable Securities to be offered for sale pursuant to the Demand Registration, and (d) specifying whether the Company is to arrange for a public sale in a firm commitment underwritten secondary offering of the Registrable Securities that are the subject of such request. "Registering Shareholder" has the meaning given it in Section 2.2(a) of this Agreement. 5 "Registrable Security" means each share of Common Stock (a) into which a Preferred Share is convertible, (b) for which a Warrant is exercisable, (c) into which or for which any other security of the Company held by a Holder is convertible or exercisable, (d) otherwise held by a Holder, and (e) received with respect to a Preferred Share, Warrant, or Registrable Security pursuant to any stock dividend, stock split, recapitalization or similar event; provided, however, that (i) a Holder of Preferred Shares or of a Warrant or of any other security of the Company convertible into or exercisable for Common Stock shall be deemed to be the Holder of the Registrable Securities attributable to such Preferred Shares or Warrant or other security; and (ii) any Registrable Security will cease to be a Registrable Security when (A) such Registrable Security has been transferred pursuant to an effective registration statement or Rule 144 under the Securities Act or any comparable Applicable Securities Law covering such Registrable Security (but not including any transfer exempt from registration under any Applicable Securities Law), (B) such Registrable Security is no longer held of record by a Holder, or (C) such Registrable Security has ceased to be outstanding. "Registration Statement" has the meaning given it in Section 3.1(a). "Requesting Holder" has the meaning given it in Section 2.3(a) of this Agreement. "Requesting Piggyback Holder" has the meaning given it in Section 2.2(a) of this Agreement. "Securities Act" means the United States Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time. "Series A Convertible Preferred Stock" has the meaning given it in the recitals. "Series B Convertible Preferred Stock" has the meaning given it in the recitals. "Series C Convertible Preferred Stock" has the meaning given it in the recitals. "Series A Shares" means the shares of Series A Convertible Preferred Stock purchased by USV and any additional or replacement shares of preferred or common stock issued with respect to Series A Shares upon any stock dividend, stock split, recapitalization or similar event. "Series B Shares" means the shares of Series B Convertible Preferred Stock acquired by the E2E Stockholders pursuant to the Stock Exchange Agreement and any additional or replacement shares of preferred or common stock issued with respect to Series B Shares upon any stock dividend, stock split, recapitalization or similar event. "Series C Shares" means the shares of Series C Convertible Preferred Stock purchased by investors in the Company as contemplated by the Share Exchange Agreement and any additional or replacement shares of preferred or common stock issued with respect to Series C Shares upon any stock dividend, stock split, recapitalization or similar event. "Shareholder" means any holder of equity securities of the Company. "Stock Exchange Agreement" has the meaning given it in the recitals. 6 "Transfer" means, as applicable, (i) a sale, transfer, assignment, pledge, hypothecation or other disposition or encumbrance of capital stock or an interest therein, or (ii) to sell, transfer, assign, pledge, hypothecate or otherwise dispose or encumber capital stock or an interest therein. "Transferee" means any Person to which Registrable Securities are Transferred by a Holder, in each case in accordance with the terms of such securities or the certificate of designations, purchase agreement or other document designating, evidencing or otherwise relating to such securities, as the case may be. "Warrants" has the meaning given it in the recitals. 1.2 Interpretation. Unless otherwise expressly provided herein, (a) defined terms in the singular include the plural and vice versa, and the masculine, feminine and neuter gender include all genders; (b) the words "hereof," "herein" and "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (c) the words "include," "includes," and "including" mean include, includes and including "without limitation" and "without limitation by specification"; (d) references to any Person shall be construed as a reference to such Person and any permitted successors or assigns of such Person; (e) references to "consent" shall mean prior consent evidenced in writing; (f) terms such as "satisfactory to ______," "acceptable to _________," "in such manner as ______ may determine," "to ______'s satisfaction," and phrases of similar import authorize and permit such Party to approve, disapprove, act or decline to act, unless otherwise specified herein, in its reasonable discretion without unreasonable delay or condition; and (g) references to Sections refer to Sections of this Agreement. ARTICLE II. REGISTRATION RIGHTS 2.1 Demand Registrations. (a) Following the date that is six (6) months after the date on which the Series B Shares and Series C Shares are converted into Common Stock as contemplated by the Stock Exchange Agreement, the Holders of Registrable Securities shall be entitled to require the Company to effect from time to time Demand Registration of the Registrable Securities pursuant to Qualifying Requests. If a Qualifying Request is made by fewer than all Holders of Registrable Securities, copies of the Qualifying Request shall be distributed by the Company to all Holders who are not Parties to such Qualifying Request within five Business Days after it is received by the Company. Each such Holder shall be entitled to join in the Qualifying Request by delivering written notice to the Company within ten Business Days after its receipt of a copy of the Qualifying Request from the Company. Such notice shall specify the number of Registrable Securities that each such Holder elects to include in the Qualifying Request and, if the Qualifying Request does not already include such a requirement, whether such Holder requires the Company to arrange for public sale in a firm commitment underwritten secondary offering of the Registrable Securities that are the subject of the Qualifying Request. (b) Within 90 Days after receiving a Qualifying Request from any Holder of Registrable Securities, the Company shall (i) prepare and file a registration statement under the Applicable Securities Laws covering the Registrable Securities which are the subject of such request, (ii) use its best efforts to cause such registration statement to become effective promptly thereafter and (iii) take appropriate steps to complete all other requirements for registration or qualification of the Registrable Securities under the Applicable Securities Laws. (c) The Company shall use its best efforts to arrange for public sale in a firm commitment underwritten secondary offering of the Registrable Securities that are the subject of 7 a Qualifying Request delivered pursuant to Section 2.1(a), unless the requirement of a firm commitment underwriting is waived in writing by a majority of the Holders of the Registrable Securities that are subject to such Qualifying Request. The Holders of a majority of the Registrable Securities that are the subject of such Qualifying Request shall have the right to designate the managing underwriter(s) of any such offering, subject to the consent of the Company, which consent shall not be unreasonably withheld. Except as the Holders having delivered or joined in a Qualifying Request may consent in writing, the Company will not file with the Applicable Securities Authority any other registration statement with respect to its Common Stock (other than a registration effected on Form S-4, Form S-8 or any successor forms thereto), whether for its own account or that of other stockholders, from the date of receipt of the Qualifying Request until the completion of the period of distribution of the Registrable Securities contemplated thereby. (d) If the Company grants any demand registration rights to another Person, the Company shall include within such demand registration rights an obligation on behalf of such Person to notify the Company in writing of its intent to exercise its demand registration rights at least 30 Days prior to such exercise. Immediately after receipt of such notice but in no event later than three Days after receipt thereof, the Company shall deliver a copy of such notice to the Holders. If the Holders exercise their demand registration rights hereunder prior to the exercise of the demand registration rights held by the Person providing such notice, the Registrable Securities sought to be registered by the Holders shall be included in the registration statement and any associated offering prior to the securities sought to be registered by such other Person. 2.2 "Piggyback" Registrations. (a) If at any time the Company proposes or agrees to register any of its securities (other than securities registered on Form S-4 or Form S-8 or any successor forms thereto) for the account of any Shareholder (each a "Registering Shareholder"), then in each such case the Company shall, not later than five Days after deciding or agreeing to register such shares, give written notice thereof to each Holder of Registrable Securities (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities). If, within 30 Days of the receipt by the Holders of any such written notice, any Holder (each a "Requesting Piggyback Holder") delivers to the Company a Piggyback Notice, subject to Section 2.4 hereof, the Company shall include in such registration statement the Registrable Securities specified in such Piggyback Notice. The Company shall have the right to designate the managing underwriter(s) of any such offering, subject to the consent of the Registering Shareholders and the Requesting Piggyback Holders, which consents shall not be unreasonably withheld. (b) If, at any time prior to the filing of a registration statement in connection with a registration described in Section 2.2(a) above, the Registering Shareholders withdraw their request for registration or the Company determines for any reason either not to register any securities or to delay registration of such securities, the Company may, at its election, give written notice of such withdrawal by the Registering Shareholders or determination by the Company to each Requesting Piggyback Holder and, thereupon, in the case of a withdrawal by the Registering Shareholders or a determination not to register by the Company, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. No registration effected under this Section 2.2 shall relieve the Company of its obligations to effect any registration upon request under Section 2.1, nor shall any registration hereunder be deemed to have been effected pursuant to Section 2.1. 2.3 Company Registration. (a) If, at any time or from time to time, the Company shall determine to register any of its securities for its own account, the Company will promptly 8 give the Holders of Registrable Securities written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities). If, within 30 Days of the receipt by the Holders of any such written notice, any Holder (each a "Requesting Holder") delivers to the Company a Company Registration Notice, subject to Section 2.4 hereof, the Company shall include in such registration statement the Registrable Securities specified in such Company Registration Notice. (b) If, at any time after giving written notice of its intention to register any securities and prior to filing of a registration statement in connection with such registration, the Company shall determine for any reason either not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each Requesting Holder and, thereupon, in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. No registration effected under this Section 2.3 shall relieve the Company of its obligations to effect any registration upon request under Section 2.1, nor shall any registration hereunder be deemed to have been effected pursuant to Section 2.1. 2.4 Managing Underwriter Cut-Backs. If any registration pursuant to this Section 2 contemplates an underwritten offering and the managing underwriter(s) advise the Company and the Holders requesting that the Company register Registrable Securities pursuant to this Section 2 in writing that the inclusion in the registration statement of some or all of the Registrable Securities sought to be registered by such Holders creates a significant risk that the price per share that such Holders and the Company will derive from such registration will be adversely affected or that the number of shares or securities sought to be registered is too large a number to be reasonably sold, the Company will include in such registration statement such number of shares or securities as the Company and such Holders are so advised in writing can be sold in such offering without such an effect, as follows and in the following order of priority: (a) with respect to registrations pursuant to Section 2.1, first, the Registrable Securities of each Holder that delivered or joined in a Qualifying Request on a pro rata basis in proportion to the number of Registrable Securities sought to be registered; and second, the number of shares or securities sought to be registered by any other Shareholders who have a contractual, incidental "piggyback" right to include such securities in the registration statement; (b) with respect to registrations pursuant to Section 2.2, first, the securities sought to be registered by the Registering Shareholders; second, on a pro rata basis in proportion to the number of Registrable Securities sought to be registered, the Registrable Securities of each of the Requesting Piggyback Holders; and third, the number of shares or securities sought to be registered by any other Shareholders who have a contractual, incidental "piggyback" right to include such securities in the registration statement; and (c) with respect to registrations pursuant to Section 2.3, first, the number of shares or securities sought to be registered by the Company; and second, on a pro rata basis in proportion to the number of Registrable Securities sought to be registered, the Registrable Securities of each of the Requesting Holders. 2.5 Other Registration Rights. Except as provided herein, no Person has any right of any nature to require the Company to register Common Stock of the Company owned by such Person, and the Company shall not enter into any agreement offering registration rights that are superior to the rights set forth in Sections 2.1, 2.2 and 2.3 without the prior written consent of the 9 Holders of a majority of the Registrable Securities, which consent shall not be unreasonably withheld. 2.6 Conversion of Registrable Securities. Preferred Shares, Warrants and other securities of the Company convertible into or exercisable for Common Stock shall be deemed automatically converted into or exercised for their corresponding Registrable Securities immediately before the sale of such Registrable Securities pursuant to a Registration Statement. Any unpaid portion or the exercise price for Registrable Securities attributable to the Warrants or any other warrants shall be deducted from the proceeds of the sale and paid to the Company at the closing of such sale. Upon such automatic conversion, such converted or exercised Preferred Shares, Warrants and other securities of the Company shall be deemed to be canceled and shall cease to be outstanding. ARTICLE III. REGISTRATION PROCEDURES 3.1 Company Obligations. Whenever the Holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, the Company will: (a) prepare and furnish to the Holders drafts of each registration statement to an Applicable Securities Authority pertaining to any securities of the Company (each a "Registration Statement"), any prospectus, amendment or supplement thereto and any document incorporated by reference therein, which documents will be subject to the review and comments of each Holder as to matters regarding such Holder; file each Registration Statement and use its best efforts to cause such Registration Statement to become effective; notify each Holder of Registrable Securities of the effectiveness of each Registration Statement; and furnish to the Holders such number of copies of such Registration Statement, each amendment and supplement thereto (including any exhibits thereto), the prospectus included in such Registration Statement (including each preliminary prospectus), the documents incorporated by reference therein and such other documents as any Holder may reasonably request; (b) use its best efforts to maintain the effectiveness of each registration statement filed pursuant to this Agreement, and take such other steps as are required by Applicable Securities Laws to maintain the registration or qualification in effect either (i) until such time as all Registrable Securities registered pursuant to the registration statement have been sold or (ii) for a period of 180 days, whichever is shorter. Each Holder shall provide written notice to the Company within 15 Days after it has sold all of its Registrable Securities registered pursuant to this Agreement; (c) notify the Holders in writing of the occurrence of an event requiring the preparation of a supplement or amendment to a prospectus and promptly prepare and file with the Applicable Securities Authority any such supplement or amendment; (d) use its best efforts to register or qualify the Registrable Securities registered pursuant to a Registration Statement under such other Applicable Securities Laws as any Holder may reasonably request and do any and all other acts which may be reasonably necessary or advisable to enable any such Holder to consummate the disposition of its Registrable Securities under such Applicable Securities Laws, except that the Company shall not be required to qualify to do business as a foreign corporation, subject itself to taxation or consent to general service of process in any jurisdiction where it is not currently obligated to be so qualified, in accordance with and subject to the terms and conditions contained herein; 10 (e) cause all such Registrable Securities to be listed or quoted on each securities exchange or market on which similar securities issued by the Company are then listed; (f) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of the applicable Registration Statement; (g) enter into such customary agreements (including underwriting agreements in customary form) in order to expedite or facilitate the disposition of such Registrable Securities; (h) make available for inspection by any underwriter participating in any disposition pursuant to a Registration Statement, and any attorney, accountant or other agent retained by any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such underwriter, attorney, accountant or agent in connection with such Registration Statement; and (i) otherwise use its best efforts to comply with all Applicable Securities Laws. 3.2 Suspension of Effectiveness. At least five Business Days prior to any disposition of Registrable Securities, a Holder shall advise the Company of the dates on which such disposition is expected to commence and terminate, the number of Registrable Securities expected to be sold, the method of disposition and such other information as the Company may reasonably request in order to supplement the related prospectus in accordance with the Applicable Securities Laws. The Company may suspend dispositions under the registration statement and notify the Holder that it may not sell the Registrable Securities pursuant to any registration statement or prospectus (a "Blocking Notice") if (a) the Company's management determines in its reasonable good faith judgment that the Company's obligation to ensure that such registration statement and prospectus are current and complete would require the Company to take actions that might reasonably be expected to have a detrimental effect on any proposal, negotiations or plan by the Company or any of its subsidiaries to engage in any acquisition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer, reorganization or similar transaction or (b) the Company determines that the registration statement, the prospectus, any amendment or supplement thereto, or any document incorporated by reference therein contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or requires the making of any additions to or changes in the registration statement or the prospectus in order to make the statements therein not misleading; provided that such suspension may not exceed 60 days. Each Holder agrees by acquisition of the Registrable Securities that, upon receipt of a Blocking Notice from the Company, such Holder shall not dispose of, sell or offer for sale any Registrable Securities pursuant to a registration statement until such Holder receives (a) copies of the supplemented or amended prospectus, or a written determination from counsel for the Company that such disclosure is not required due to subsequent events, (b) notice in writing (the "Advice") from the Company that the use of the prospectus may be resumed and (c) copies of any additional or supplemental filings that are incorporated by reference in the prospectus. If so directed by the Company in connection with any Blocking Notice, each Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the prospectus covering such Registrable Securities that was current immediately prior to the time of receipt of such Blocking Notice. In the event the Company shall give any Blocking Notice, the time regarding the effectiveness of a registration statement set forth in Section 2.1 shall be extended by the number of Days during the period from and including the 11 date of the giving of such Blocking Notice to and including the date when the Holder shall have received the copies of the supplemented or amended prospectus, the Advice and any additional or supplemental filings that are incorporated by reference in the prospectus or the supplemental prospectus, as the case may be. Delivery of a Blocking Notice and the related suspension of any registration statement in accordance with the terms of this Section 3.2 shall not constitute a default under this Agreement. ARTICLE IV. REGISTRATION EXPENSES; HOLDBACK 4.1 Company Expenses. Except as provided in Section 4.2, all fees and expenses incident to the Company's performance of or compliance with this Agreement shall be borne by the Company, including, without limitation, the following fees and expenses: (a) all Applicable Securities Authority, self-regulatory organization, stock exchange and other registration and filing fees and listing fees; (b) the fees and expenses of the Company's compliance with securities or "Blue Sky" laws (including reasonable fees and disbursements of counsel in connection with "Blue Sky" qualifications of the Registrable Securities); (c) printing expenses; (d) all underwriting discounts and commissions not attributable to the sale of Registrable Securities; (e) the fees and disbursements of counsel for the Company and of one firm of counsel for the selling Holders, collectively, in each relevant jurisdiction; (f) the fees and expenses of independent certified public accountants; (g) the fees and expenses of underwriters and other persons retained by the Company in connection with a registration; (h) fees of transfer agents and registrars; and (i) messenger and delivery expenses; provided, however, in connection with Demand Registration pursuant to Section 2.1, the Company shall pay such fees and expenses only with respect to the first three (3) times such right is exercised (but provided that any registration at the Company's expense begun pursuant to Section 2.1 that is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities that are the subject of a Qualifying Request shall not count toward the three (3) Demand Registrations at the Company's expense if the Holders that delivered or joined in the Qualifying Request reimburse the Company for all out-of-pocket expenses incurred by the Company in connection with such withdrawn registration). In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance obtained by the Company, and the expenses and fees for listing or authorizing for quotation the securities to be registered on each securities exchange on which any Registrable Securities are then listed or quoted. 4.2 Holder Expenses. The selling Holders shall pay all underwriting discounts and commissions attributable to the sale of Registrable Securities and all of the selling Holders' internal expenses incurred in connection with any offering (including, without limitation, all salaries and expenses of the selling Holders' officers and employees performing legal or accounting duties, but excluding fees and expenses of the selling Holders' counsel that are payable by the Company under Section 4.1). 4.3 Restrictions on Public Sale by Holder of Registrable Securities. To the extent not inconsistent with applicable Law, each Holder whose securities are included in a registration statement agrees not to effect any public sale or distribution of the issue being registered or a similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the Securities Act, during the 14 days prior to, and during the 90-day period beginning on, the effective date of such registration statement (except as part of such registration), if and to the extent requested by either the 12 Company in the case of a non-underwritten public offering or if and to the extent requested by the managing underwriter(s) in the case of an underwritten public offering. 4.4 Restrictions on Public Sale by the Company and Others. The Company agrees not to effect any public sale or distribution of any securities similar to those being registered, or any securities convertible into or exchangeable for such securities (other than any such sale or distribution of such securities in connection with any merger or consolidation by either the Company or any subsidiary thereof or in connection with the sale of the capital stock or all or substantially all of the assets of any other Person or in connection with an employee stock option plan or benefit plan), during the 14 days prior to, and during the 90-day period beginning on, the effective date of any registration statement in which the Holders are participating or the commencement of a public distribution of the Registrable Securities. ARTICLE V. INDEMNIFICATION; CONTRIBUTION 5.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless each Holder, each of such Holder's officers, directors, partners, employees and agents, and each Person controlling any such Persons and, if requested by any underwriter, such underwriter and each person who controls such underwriter from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation, any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, and any of the foregoing incurred in settlement of any litigation, commenced or threatened) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus contained therein or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of or based upon any violation by the Company of any Applicable Securities Law applicable to the Company and relating to action or inaction by the Company in connection with any registration, qualification or compliance required hereunder, or arising out of or based upon the Company's breach of any representation, warranty, covenant or agreement contained in this Agreement; provided, however, that the Company shall not be liable in any such case to the extent any of such losses, claims, damages, liabilities or expenses arise out of, or are based upon, any such untrue statement or omission or allegation thereof based upon information furnished in writing to the Company by such Holder expressly for use therein. In addition to any other information furnished in writing to the Company, expressly for use therein, by the Holder, the information in the registration statement under the caption "Selling Shareholders" (or any similarly captioned section containing the information required pursuant to Item 507 of Regulation S-K promulgated pursuant to the Securities Act) shall be deemed information furnished in writing to the Company by the Holder; provided that the Company has complied with its obligations pursuant to Section 3.1(a). 5.2 Indemnification by Holders. Each Holder agrees severally to indemnify and hold harmless the Company, its directors and officers and each person, if any, who controls the Company and, if requested by any underwriter, such underwriter and each person who controls such underwriter to the same extent as the foregoing indemnity from the Company, but only with respect to information furnished in writing by such Holder, or on its behalf, expressly for use in a Registration Statement or prospectus relating to Registrable Securities, any amendment or supplement thereto or any preliminary prospectus, and provided that the obligation of each Holder to indemnify will be several and not joint. Each Holder's indemnity obligations under this 13 Section 5.2 and contribution obligations under Section 5.4 shall be limited, in the aggregate, to the net sales proceeds actually received by it in connection with the applicable offering. 5.3 Conduct of Indemnification Proceedings. If any Action or Proceeding (including any governmental investigation) shall be brought or asserted against any Person entitled to indemnification under Section 5.1 or 5.2 above (an "Indemnified Party") in respect of which indemnity may be sought from any Party who has agreed to provide such indemnification (an "Indemnifying Party") and the Indemnifying Party acknowledges in writing to the Indemnified Party that the Indemnified Party is entitled to indemnity by the Indemnifying Party hereunder, the Indemnifying Party shall assume the defense of such Action or Proceeding, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all expenses. Such Indemnified Party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (a) the Indemnifying Party has agreed to pay such fees and expenses, or (b) such Indemnified Party shall have been advised by counsel that there is an actual or potential material conflict of interest on the part of counsel employed by the Indemnifying Party to represent such Indemnified Party. If counsel advises the Indemnified Party of such a conflict of interest, or if the Indemnifying Party fails to acknowledge in writing that the Indemnified Party is entitled to indemnity hereunder, the Indemnifying Party shall not have the right to assume the defense of such Action or Proceeding on behalf of such Indemnified Party and, upon written notice to the Indemnifying Party, the Indemnified Party may employ separate counsel at the expense of the Indemnifying Party; it being understood, however, that the Indemnifying Party shall not, in connection with any one Action or Proceeding or separate but substantially similar or related Actions or Proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all such Indemnified Parties, which firm shall be designated in writing by such Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Action or Proceeding or any threatened Action or Proceeding effected without its written consent, but if settled with its written consent or if there be a final judgment for the plaintiff in any such Action or Proceeding, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. The failure of any Indemnified Party to give prompt notice of a claim for indemnification hereunder shall not limit the Indemnifying Party's obligations to indemnify under this Agreement, except to the extent such failure is prejudicial to the ability of the Indemnifying Party to defend the action. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement unless (x) there is no finding or admission of any violation of any rights of any Person and no effect on any other claims that may be made against any Indemnified Party, (y) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party and (z) such judgment or settlement includes as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation. 5.4 Contribution. If the indemnification provided for in this Article V is unavailable to any Indemnified Party in respect of any losses, claims, damages, liabilities or judgments referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the extent permitted by applicable Law contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities and judgments in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other, in connection with the matters which resulted in such 14 losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative fault of any Indemnifying Party on the one hand and of any Indemnified Party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such Party, and the Parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. No person guilty of fraudulent misrepresentation (within the meaning of subsection 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 5.5 Survival. The indemnity and contribution agreements contained in this Article V shall remain operative and in full force and effect with respect to any sales of Registrable Securities made pursuant to a Registration Statement regardless of (a) any termination of this Agreement, (b) any investigation made by or on behalf of any Indemnified Party or by or on behalf of the Company, and (c) the consummation of the sale or successive resale of the Registrable Securities. ARTICLE VI. MISCELLANEOUS 6.1 Rules 144 and 144A. The Company covenants that following the registration of Registrable Securities it will file any reports required to be filed by it under the Securities Act and the Exchange Act so as to enable Holders holding Registrable Securities to sell such Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rules 144 and 144A under the Securities Act, as each such Rule may be amended from time to time, or (b) any similar rule or rules hereafter adopted by the Commission. Upon the request of any such Holder, the Company will forthwith deliver to such Holder a written statement as to whether it has complied with its obligation pursuant to this Section 6.1 to file any reports required to be filed by it under the Securities Act and the Exchange Act. In connection with any transfer pursuant to this Section 6.1, upon the written request of the Company, the Holder shall furnish to the Company such information so that the Company may ensure that the Holder has complied with the limitations set forth in Rules 144 and 144A or any similar rule or rules hereafter adopted by the Commission. 6.2 Dispute Resolution. (a) All disputes, controversies, and claims directly or indirectly arising out of or in relation to this Agreement or the validity, interpretation, construction, performance, breach or enforceability of this Agreement shall be finally, exclusively and conclusively settled by binding arbitration, as provided in this Section 6.2, under the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") which are then in effect. (b) The arbitral tribunal shall be composed of three arbitrators, one or whom shall be appointed by the Company, one of whom shall be appointed by the Holders that are parties to the dispute, controversy or claim, and the third of whom shall be appointed by the two arbitrators designated by the parties. The arbitration proceedings shall be conducted in the English language, and all documents not in English submitted by any party must be accompanied by an English translation. The arbitration proceedings shall be conducted and any arbitral award shall be made in Washington, D.C. (c) The Parties agree: (i) that the arbitral tribunal shall have no authority to award punitive damages or any damages other than those recoverable in accordance with this 15 Agreement (which may include reasonable attorneys' fees and other costs of arbitration); (ii) to be bound by any arbitral award or Order resulting from any arbitration conducted hereunder and that any such award or Order shall be a reasoned award, shall be in writing, shall specify the factual and legal basis for the award, and shall be final and binding; (iii) not to commence, procure, participate in, or otherwise be involved as a party in any claim, Action or Proceeding that might result in any Order concerning a dispute hereunder (except for initiating Actions or Proceedings to obtain a judgment recognizing or enforcing an arbitral award or Order and except for applications, claims, Actions or Proceedings by the Parties seeking interim, interlocutory or other provisional relief in any court having jurisdiction, but only on the ground that the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief); (iv) that any monetary award shall be made and payable in U.S. Dollars, in each case through a bank selected by the recipient of the award, together with interest thereon at the lesser of the one year London Interbank Offered Rate (LIBOR), as appearing in the Reuters screen, plus five percent, or the maximum interest rate permissible under applicable Law, from the date the award is granted to but excluding the date it is paid in full; and (v) that judgment on any arbitral award or Order resulting from an arbitration conducted under this Section 6.2 may be entered in any court of competent jurisdiction having jurisdiction thereof or having jurisdiction over any Party or any of its assets. (d) The Company and the Holders hereby irrevocably waive and exclude all rights of appeal, challenge, or recourse to any court from any arbitral award or Order resulting from any arbitration conducted under this Section 6.2 (except for initiating Actions or Proceedings to obtain a judgment recognizing or enforcing an arbitral award or Order and except for Actions or Proceedings seeking interim, interlocutory or other provisional relief in any court having jurisdiction, but only on the ground that the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief). Each of the Parties to this Agreement hereby consents to the non-exclusive jurisdiction of any court of competent jurisdiction in the State of Delaware for all Actions or Proceedings to obtain a judgment recognizing or enforcing an arbitral award or Order and waives any defense or opposition to such jurisdiction. (e) The arbitrators, in their discretion, may consolidate two or more arbitrations or claims between any of the Parties arising pursuant to this Agreement or any other agreement among the parties or to which the Holders or Shareholders are a party into one arbitration, may terminate any such consolidation and/or may establish other arbitration proceedings for different claims that may rise in any one arbitration. Notwithstanding the foregoing, the arbitrators shall consolidate arbitrations and/or claims if they determine that it would be more efficient to consolidate such arbitrations and/or claims than to continue them separately and (i) there are matters of fact or law that are common to the arbitrations and/or claims to be consolidated, (ii) there are related payment and performance obligations considered in the arbitrations and/or claims to be consolidated, and/or (iii) there is a danger of inconsistent awards. (f) Each Party shall bear its own expenses in connection with the arbitration provided in this Section 6.2, provided that the fees of the arbitrators shall be divided equally between the Parties. 6.3 Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given, other than as mutually agreed upon in writing by the Company and the Holders. 16 6.4 Notices. Any notices or communications required or permitted hereunder shall be in writing and shall be delivered by facsimile, courier, hand or first class (registered or certified) mail to each Party at the address(es) indicated for such Party on the signature pages to this Agreement. Any Party may, upon written notice given in accordance with this Section 6.4 to the other Parties, designate another address or Person for receipt of notices hereunder. All notices, claims, demands and other communications hereunder shall be deemed given (a) in the case of a facsimile transmission, when received by recipient in legible form and sender has received an electronic confirmation of receipt of the transmission; (b) in the case of delivery by a standard overnight courier, upon the date of delivery indicated in the records of such courier; (c) in the case of delivery by hand, when delivered by hand; or (d) in the case of delivery by first class (registered or certified) mail, upon the expiration of five (5) Business Days after the Day when mailed (postage prepaid, return receipt requested). 6.5 Successors and Assigns; New Parties. A Holder may assign, without the Company's consent, and shall be deemed to have assigned, such Holder's rights and benefits with respect to the Registrable Securities that are transferred to a Transferee. A Transferee that becomes bound by the terms of this Agreement by its execution of a joinder agreement in the form attached hereto as Exhibit A shall retain the rights and benefits of the transferor and become a Holder under this Agreement. The Company may not assign any rights, benefits or obligations under this Agreement without prior written consent of a majority of the Holders. This Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of the Company and the Holders. 6.6 Counterparts; Facsimile. This Agreement may be executed in any number of identical counterparts and it shall not be necessary for each Party to execute each of such counterparts, but when each has executed and delivered one or more of such counterparts, the several parts, when taken together, shall be deemed to constitute one and the same instrument, enforceable against each Party in accordance with its terms. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart executed by the Party against whom enforcement of this Agreement is sought. Signatures transmitted by facsimile shall be binding as evidence of a Party's agreement to be bound by the terms and conditions hereof. 6.7 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 6.8 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to its principles of choice of law or conflict of laws. 6.9 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never constituted a part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. 6.10 Entire Agreement. This Agreement is intended by the Parties as the final expression of their agreement and is intended to be a complete and exclusive statement of their agreement and understanding in respect of the subject matter contained herein. This Agreement 17 supersedes all prior agreements and understandings between the Parties with respect to such subject matter, including without limitation the USV Registration Rights Agreement, and all provisions of, rights granted under and covenants made in the USV Registration Rights Agreement are hereby waived, released and terminated in their entirety and shall have no further force or effect. 6.11 Third Party Beneficiaries. Other than Indemnified Parties not a party hereto, this Agreement is intended for the benefit of the Company, the Holders and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 6.12 Obligations Several; Independent Nature of Each Holder's Rights. Each obligation of any Holder is several and no such Holder shall be responsible for the obligations of any other Holder. Nothing contained herein, and no action taken by any Holder pursuant hereto, shall be deemed to constitute any Holders as a partnership, an association, a joint venture or any other kind of entity. Each Holder shall be entitled to protect and enforce its rights arising out of this Agreement without notice to or the consent of any other Person, except as specifically provided herein, and it shall not be necessary for any other such Holder to be joined as an additional party in any proceeding for such purpose. 6.13 Nonwaiver. No course of dealing or delay or failure to exercise any right, power or remedy hereunder on the part of any Holder shall operate as a waiver of or otherwise prejudice such Holder's rights, powers or remedies. 6.14 Remedies. The Company and the Holders acknowledge that the remedies at law in the event of any default or threatened default in the performance of or compliance with any of the terms of this Agreement are not and will not be adequate and that, to the fullest extent permitted by law and equity, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise without requiring any bond or other security, unless otherwise required by applicable law (which cannot be waived). 6.14 New Parties. During the term of this Agreement, the Company may, upon the prior written consent of the Holders of a majority of the Registrable Securities, permit any additional Person to become a party to this Agreement by executing a joinder agreement in the form attached hereto as Exhibit A; provided, however, that such consent shall not be required for the joinder of any E2E Stockholder and any holder of Series C Shares that is not a party hereto as of the date hereof. 6.15 Termination. All rights granted hereunder shall expire and this Agreement shall terminate on the earlier of (i) the written consent of the Holders, and (ii) the sixth (6th) anniversary of the date hereof. 18 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written. U.S. TECHNOLOGIES INC. By: /s/ C. Gregory Earls ------------------------------------------ Name: C. Gregory Earls Title: Co-Chairman and Co-CEO Address: 3901 Roswell Road, Suite 300 Marietta, GA 30062 Phone: (770) 565-4311 Fax: (770) 565-8815 USV PARTNERS, LLC By: USV MANAGEMENT, LLC By: /s/ C. Gregory Earls ------------------------------------------ Name: C. Gregory Earls Title: Sole Member Address: c/o U.S. Viewing Corporation 2001 Pennsylvania Avenue, NW Suite 675 Washington, DC 20006 Phone: (202) 466-3100 Fax: (202) 466-4557 19 NORTHWOOD CAPITAL PARTNERS LLC By: /s/ Henry T. Wilson ------------------------------------------ Name: Henry T. Wilson Title: Managing Director Address: 485 Underhill Boulevard Suite 205 Syosset, NY 11791 Phone: (516) 364-5544 Fax: (516) 364-0879 NORTHWOOD VENTURES LLC By: /s/ Henry T. Wilson ------------------------------------------ Name: Henry T. Wilson Title: Managing Director Address: 485 Underhill Boulevard Suite 205 Syosset, NY 11791 Phone: (516) 364-5544 Fax: (516) 364-0879 /s/ Jonathan J. Ledecky ------------------------------------------ JONATHAN J. LEDECKY Address: 1400 34th Street, N.W. Washington, D.C. 20007 Phone: (202) 965-2020 Fax: (202) 342-9090 20 EXHIBIT A FORM OF JOINDER AGREEMENT This Joinder Agreement (the "JOINDER AGREEMENT") is entered into as of the date written below among the undersigned (the "JOINING PARTY") and the parties to the Amended and Restated Registration Rights Agreement dated as of the 12th day of April, 2000 (the "REGISTRATION RIGHTS AGREEMENT"), among U.S. Technologies Inc., a Delaware corporation (the "COMPANY"), and certain holders of the capital stock and other securities of the Company. Capitalized terms used but not defined herein shall have the meanings given such terms in the Registration Rights Agreement. The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Registration Rights Agreement and shall have all of the rights and obligations of a "HOLDER" under the Registration Rights Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Registration Rights Agreement. This Joinder Agreement may be executed by facsimile. IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of this day ______ of _______________, 2000. - ------------------------------- Name: Address: Telephone: Facsimile: EX-4.1 5 CERTIFICATE OF DESIGNATIONS (SERIES B) 1 EXHIBIT 4.1 CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES B MANDATORILY CONVERTIBLE PREFERRED STOCK OF U.S. TECHNOLOGIES INC. U.S. Technologies Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "CORPORATION"), by its Co-Chief Executive Officer, DOES HEREBY CERTIFY: FIRST: That pursuant to authority expressly vested in the Board of Directors of the Corporation by the provisions of its Restated Certificate of Incorporation (the "CHARTER"), the Corporation's Board of Directors duly adopted by unanimous written consent on April 6, 2000, the following resolution providing for the designations and issuance of 112,000 shares of Series B Mandatorily Convertible Preferred Stock, par value $0.02 per share: RESOLVED, that this Board of Directors, pursuant to the authority expressly vested in it by the provisions of the Corporation's Restated Certificate of Incorporation and the General Corporation Law of the State of Delaware, hereby authorizes the issuance from time to time of a series of preferred stock, par value $0.02 per share, of the Corporation and hereby fixes the designation, voting powers, preferences and relative, participating, optional and other rights and the qualifications, limitations or restrictions thereof, in addition to those set forth in said Restated Certificate of Incorporation. 1. DESIGNATION AND AMOUNT This series of preferred stock shall be designated as "Series B Mandatorily Convertible Preferred Stock" and shall have a par value of $0.02 per share (the "SERIES B PREFERRED"). The number of authorized shares constituting the Series B Preferred shall be 112,000 shares. Shares of the Series B Preferred shall have a stated value of $100.00 per share (the "STATED VALUE"). The Corporation may issue fractional shares of the Series B Preferred. All equity securities of the Corporation ranking as to dividends or distributions of assets on Liquidation (as defined below) of the Corporation junior to the Series B Preferred, including the Corporation's Common Stock, par value $0.02 per share (the "COMMON STOCK"), are sometimes hereinafter referred to as "JUNIOR SECURITIES." 2. LIQUIDATION PREFERENCE In the event of any bankruptcy, liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (a "LIQUIDATION"), each holder of the Series B Preferred (the "PREFERRED B HOLDER") at the time thereof shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of the Common Stock or other Junior Securities by reason of their ownership of such stock, an amount per share of Series B 2 Preferred equal to the Stated Value plus any accrued and unpaid dividends to the date of Liquidation (or such lesser amount required by Section 4 of the Corporation's Charter). If, upon a Liquidation, the assets and funds of the Corporation legally available for distribution among the Preferred B Holders and the holders of any other capital stock of the Corporation ranking, as to Liquidation, on a parity with the Series B Preferred, including but not limited to the Series A Convertible Preferred Stock and the Series C Mandatorily Convertible Preferred Stock (the "PARITY STOCK"), shall be insufficient to pay in full the Liquidation preference of the Series B Preferred and liquidating payments on any Parity Stock (in either case, or such lesser amounts as required by Section 4 of the Corporation's Charter), then no assets or funds shall be distributed to the Preferred B Holders or to the holders of any Parity Stock except to the extent that such assets or funds shall be distributed among the Preferred B Holders and the holders of any Parity Stock ratably in accordance with the respective amounts which would be payable upon Liquidation on the Series B Preferred and any Parity Stock if all amounts payable thereon were payable in full (or such lesser amounts as required by Section 4 of the Corporation's Charter). Subject to the rights of the holders of shares of any series or class or classes of stock ranking, as to Liquidation, senior to the Series B Preferred, upon Liquidation, after payment of the Liquidation preference of the Series B Preferred and Parity Stock determined pursuant to this Section 2, the remaining assets of the Corporation legally available for distribution shall be distributed ratably to the holders of Junior Securities, including the Common Stock. 3. VOTING RIGHTS (a) Prior to the Conversion Date (as defined below), the Corporation shall not, without first obtaining the affirmative vote or written consent of the holders of a majority of the shares of Series B Preferred then outstanding, voting as a single class: (i) repurchase, purchase or otherwise acquire any Common Stock or other Junior Securities for any consideration (or pay or make available any moneys, whether by means of a sinking fund or otherwise, for the repurchase of any shares of Common Stock or other Junior Securities); (ii) after the date that the first share of Series B Preferred is issued, authorize or permit the Corporation or any of its subsidiaries (A) to issue, other than to a Preferred B Holder, any equity securities or securities convertible into or exchangeable for equity securities or any securities granting the holder an option to acquire any such securities, each at a price below the Current Market Price (as defined below), or (B) to issue any stock of the Corporation with the same preference and priority as the Series B Preferred or with a preference or priority senior to the Series B Preferred; (iii) authorize or effect, in a single transaction or through a series of related transactions, a consolidation, merger or business combination of the Corporation with any other Person, a spin-off or recapitalization of the Corporation, the Liquidation of the Corporation or the sale, lease, exchange or other transfer of all or substantially all of the assets of the Corporation to any other Person, or the adoption of any plan for the same; (iv) amend, repeal, modify or supplement any provision of the Charter, the Corporation's Bylaws in effect on the date hereof or any successor articles of incorporation or bylaws, other than effecting the Charter Amendment (as defined below); -2- 3 (v) amend, repeal, modify or supplement or in any other manner affect or change the terms, designations, preferences or rights of the Series B Preferred set forth herein; (vi) authorize or permit the Corporation to (A) make an assignment for the benefit of creditors, (B) file a petition in bankruptcy, (C) petition or apply to any tribunal for appointment of a receiver, custodian or any trustee for it or for a substantial part of its assets, or (D) commence any proceeding under any bankruptcy, reorganization or arrangement or readjustment of debt law or statute in any jurisdiction; (vii) authorize or permit the Corporation to change materially the type of business conducted by it or contemplated to be conducted by it as of the date hereof; (viii) authorize or permit the Corporation to enter into any transaction with any affiliate (other than a wholly owned subsidiary) or shareholder or authorize or permit the amendment, extension or renewal of such a transaction other than on arm's-length terms; and (ix) authorize or permit the Corporation to acquire any equity interest in any other Person, other than (i) VIPRO Corporation ("VIPRO") pursuant to that certain Stock Purchase Agreement, dated March 13, 2000, by and among the Corporation, VIPRO, Northwood Ventures LLC and Northwood Capital Partners LLC, and (ii) Buyline.net, Incorporated ("BUYLINE"), in connection with the transactions contemplated by that certain Agreement in Principle, dated as of February 28, 2000, between the Corporation and Buyline. "Person" means and includes any individual, partnership, joint venture, corporation, trust, limited liability company, joint stock company, unincorporated organization, any government entity or any political subdivision or agency thereof, or any other entity. (b) Except as otherwise required by law, each Preferred B Holder shall be entitled to vote on all other matters together with the holders of shares of the Common Stock (including, for purposes of this Section 3(b), any other securities of the Corporation that are entitled to vote with the holders of shares of Common Stock) and not as a separate class, at any annual or special meeting of stockholders of the Corporation, and may act by written consent in the same manner as the Common Stock, in either case upon the following basis: each Preferred B Holder shall be entitled to such number of votes as shall be equal to the whole number of shares of Common Stock into which such holder's aggregate number of shares of Series B Preferred are convertible (pursuant to Section 4 hereof) immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent. Notwithstanding the foregoing, the Preferred B Holders will not be entitled to vote or take action at a meeting of the Corporation's stockholders, the purpose of which includes the approval by the holders of Common Stock of an amendment to the Corporation's Charter ("CHARTER AMENDMENT") to increase the number of shares of Common Stock the Corporation is authorized to issue to an amount sufficient to permit the conversion to Common Stock of all of the Corporation's then-outstanding shares of all of its authorized and designated series of convertible preferred stock, which includes the Series B Preferred, and any other then-outstanding securities and options or similar rights issued by the Corporation, which are convertible into or otherwise permit the holder thereof to purchase or otherwise receive shares of Common Stock. -3- 4 4. MANDATORY CONVERSION (a) MANDATORY CONVERSION. By virtue of the filing with and acceptance of the Charter Amendment by the Secretary of State of the State of Delaware and without any action on the part of the Preferred B Holders, as of the date the Charter Amendment is filed with and accepted by the Secretary of State of the State of Delaware (the "CONVERSION DATE"), all of the issued and outstanding shares of the Series B Preferred shall be converted into Common Stock. The number of shares of Common Stock into which each share of Series B Preferred shall be converted shall be the product obtained by multiplying the Conversion Rate then in effect (determined as provided in Section 4(b)) by the number of shares of Series B Preferred being converted. The Corporation shall take all such actions as are necessary to insure that the shares of Common Stock issued with respect to such conversion shall be validly issued, fully paid and non-assessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof. (b) CONVERSION RATE. The conversion rate for conversion of the Series B Preferred (the "CONVERSION RATE") shall be the quotient obtained by dividing the Stated Value by .20 (the "CONVERSION PRICE"). (c) PROCEDURES FOR MANDATORY CONVERSION. (i) On the Conversion Date, the Corporation will mail to each Preferred B Holder (A) a letter of transmittal, which shall specify the Conversion Date and notify such holder that his, her or its shares of Series B Preferred have been converted to Common Stock (the "CONVERSION NOTICE") and (B) instructions, which shall specify the procedures for surrender of such holder's certificates representing ownership of Series B Preferred ("PREFERRED CERTIFICATES") in exchange for certificates representing ownership of Common Stock ("COMMON STOCK CERTIFICATES"). Promptly after receipt of the Conversion Notice, each Preferred B Holder shall surrender such holder's Preferred Certificates, duly endorsed for transfer, at any time during normal business hours, to the Corporation at its principal office or at such other office or agency then maintained by it for such purpose and designated in the Conversion Notice, accompanied by any instrument of transfer in form reasonably satisfactory to the Corporation and to any conversion agent, duly executed by the registered Preferred B Holder or by such holder's duly authorized attorney. As promptly as practicable after the surrender for conversion of any Preferred Certificates in the manner provided in the preceding sentence but in any event within five (5) business days after receipt of the Preferred Certificates, the Corporation will deliver or cause its transfer agent to deliver to the holder of such Preferred Certificates Common Stock Certificates representing the aggregate number of shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made as of the Conversion Date, and all rights of the Preferred B Holder, with respect to such holder's shares of Series B Preferred, shall cease at such time and the person or persons in whose name or names the Preferred Certificates are registered, or after delivery of the Preferred Certificates for conversion pursuant hereto the person or persons in whose name or names the Common Stock Certificates are to be issued, shall be treated for all purposes as having become the record holder or holders thereof at such time. (ii) The Corporation shall not be required to issue fractional shares of Common Stock upon conversion of shares of Series B Preferred. At the Corporation's discretion, in the event -4- 5 the Corporation determines not to issue fractional shares, then in lieu of any fractional shares to which the Preferred B Holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the Current Market Price (as defined below). (iii) The issuance of Common Stock Certificates upon conversion shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. However, if any such Common Stock Certificate is to be issued in a name other than that of the holder of record of the shares converted, the person or persons requesting the issuance thereof shall pay to the Corporation the amount of any such tax which may be payable in respect of any transfer involved in such issuance or shall establish, to the satisfaction of the Corporation, that such tax has been paid or is not payable. (iv) "CURRENT MARKET PRICE" means the average of the daily Closing Prices per share of Common Stock for the fifteen (15) consecutive trading days immediately prior to such date. The "Closing Price" per share of Common Stock for each day shall be the last sale price, regular way, before 5:00 p.m., or in case no such sale takes place on such day, the average closing bid and asked prices, regular way, in either case, as reported on the NASD OTC Bulletin Board or any successor stock exchange or quotation system on which the Common Stock is then primarily listed or traded. If on any such trading day or days such securities are not quoted by any such organization, such trading day or days shall be replaced for purposes of the foregoing calculation by the requisite trading day or days preceding the commencement of such fifteen (15) day trading day period on which such securities are so quoted. (d) RESERVATION OF STOCK ISSUABLE UPON MANDATORY CONVERSION. Until the Conversion Date, the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion to Common Stock of all of the outstanding shares of the Corporation's authorized and designated series of convertible preferred stock, including the Series B Preferred, and the other outstanding securities and options or similar rights issued by the Corporation, which are convertible into or otherwise permit the holder thereof to purchase or otherwise receive shares of Common Stock. The Corporation shall take any such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, approving the Charter Amendment and taking other appropriate board action, submitting the Charter Amendment to the Corporation's stockholders for their approval, recommending the Charter Amendment and any other such increase to the Corporation's stockholders, holding shareholders meetings, and soliciting votes and proxies in favor of the Charter Amendment and any other such increase to obtain the requisite shareholder approval. (e) REORGANIZATION, MERGER OR SALE OF THE CORPORATION. (i) Notwithstanding any other provision hereof, in case of (A) any reorganization or any reclassification of the capital stock of the Corporation or (B) any sale of the Corporation if such transaction does not constitute a Liquidation, then, at the election of each Preferred B Holder, concurrently with the consummation of such reorganization, reclassification or sale of the Corporation, provision shall be made so that each share of Series B Preferred shall thereafter be -5- 6 convertible into the number of shares of stock or other securities or property (including cash) to which a holder of the number of shares of Common Stock deliverable upon conversion of such share of Series B Preferred would have been entitled assuming conversion on the day immediately prior to the initial announcement of the transaction or a proposed transaction that ultimately resulted in the transaction. In any case, appropriate adjustment (as determined by the Corporation's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Preferred B Holders, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as equivalent as is practicable, in relation to any shares of stock or the securities or property (including cash) thereafter deliverable upon the conversion of the shares of Series B Preferred. (ii) In case of any merger, consolidation, reclassification or other similar reorganization, to the extent the Corporation is not the surviving entity, the Series B Preferred shall be converted into or exchanged for and shall become shares of the surviving corporation having, in respect of the surviving corporation, substantially the same powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereon, that the Series B Preferred has immediately prior to such transaction. 5. RESTRICTIONS ON DIVIDENDS, STOCK SPLITS AND DISTRIBUTIONS The Corporation shall not at any time or from time to time after the date that the first share of the Series B Preferred is issued until after the Conversion Date: (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock, including, but not limited to, dividends paid or payable in cash, the capital stock of the Corporation, or any other property; (ii) effect a stock-split or any other subdivision of the outstanding Common Stock; or (iii) effect a combination of the outstanding shares of Common Stock into a smaller number of shares. 6. REMEDIES (a) The Corporation acknowledges that the remedies at law of each Preferred B Holder in the event of any failure of the Corporation in the performance of or compliance with any of the terms hereof are not and will not be adequate and that, to the fullest extent permitted by law and equity, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise without requiring any holder to post a bond or other security, unless otherwise required by applicable law. (b) Any Preferred B Holder shall be entitled to recover from the Corporation the reasonable attorneys' fees and expenses incurred by such holder in connection with such holder's enforcement of any obligation of the Corporation hereunder. (c) No failure or delay on the part of any Preferred B Holder in exercising any right, power or remedy hereunder or under applicable law or otherwise shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or thereunder. -6- 7 The remedies provided herein are cumulative and not exclusive of any remedies provided by law or otherwise. SECOND: That such determination of the designations, preferences and the relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, relating to the Series B Preferred was duly made by the Corporation's Board of Directors pursuant to the provisions of the Corporation's Charter, and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, as amended. [REMAINDER OF PAGE INTENTIONALLY BLANK] -7- 8 IN WITNESS WHEREOF, U.S. Technologies Inc. has caused this Certificate of Designations to be executed this 7th day of April, 2000. U.S. TECHNOLOGIES INC. By: /s/ C. Gregory Earls ----------------------------- C. Gregory Earls, Co-Chief Executive Officer -8- EX-4.2 6 CERTIFICATE OF DESIGNATIONS (SERIES C) 1 EXHIBIT 4.2 CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES C MANDATORILY CONVERTIBLE PREFERRED STOCK OF U.S. TECHNOLOGIES INC. U.S. Technologies Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "CORPORATION"), by its Co-Chief Executive Officer, DOES HEREBY CERTIFY: FIRST: That pursuant to authority expressly vested in the Board of Directors of the Corporation by the provisions of its Restated Certificate of Incorporation (the "CHARTER"), the Corporation's Board of Directors, duly adopted by unanimous written consent on April 7, 2000, the following resolution providing for the designations and issuance of 8,750 shares of Series C Mandatorily Convertible Preferred Stock, par value $0.02 per share: RESOLVED, that this Board of Directors, pursuant to the authority expressly vested in it by the provisions of the Corporation's Restated Certificate of Incorporation and the General Corporation Law of the State of Delaware, hereby authorizes the issuance from time to time of a series of preferred stock, par value $0.02 per share, of the Corporation and hereby fixes the designation, voting powers, preferences and relative, participating , optional and other rights and the qualifications, limitations or restrictions thereof, in addition to those set forth in said Restated Certificate of Incorporation. 1. DESIGNATION AND AMOUNT This series of preferred stock shall be designated as "Series C Mandatorily Convertible Preferred Stock" and shall have a par value of $0.02 per share (the "SERIES C PREFERRED"). The number of authorized shares constituting the Series C Preferred shall be 8,750 shares. Shares of the Series C Preferred shall have a stated value of $1000 per share (the "STATED VALUE"). The Corporation may issue fractional shares of the Series C Preferred. All equity securities of the Corporation ranking as to dividends or distributions of assets on Liquidation (as defined below) of the Corporation junior to the Series C Preferred, including the Corporation's Common Stock, par value $0.02 per share (the "COMMON STOCK"), are sometimes hereinafter referred to as "JUNIOR SECURITIES." 2. LIQUIDATION PREFERENCE In the event of any bankruptcy, liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (a "LIQUIDATION"), each holder of the Series C Preferred (the "PREFERRED C HOLDER") at the time thereof shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of the Common Stock or 2 other Junior Securities by reason of their ownership of such stock, an amount per share of Series C Preferred equal to the Stated Value plus any accrued and unpaid dividends to the date of Liquidation (or such lesser amount required by Section 4 of the Corporation's Charter). If, upon a Liquidation, the assets and funds of the Corporation legally available for distribution among the Preferred C Holders and the holders of any other capital stock of the Corporation ranking, as to Liquidation, on a parity with the Series C Preferred, including but not limited to the Series A Convertible Preferred Stock and the Series B Mandatorily Convertible Preferred Stock (the "PARITY STOCK"), shall be insufficient to pay in full the Liquidation preference of the Series C Preferred and liquidating payments on any Parity Stock (in either case, or such lesser amounts as required by Section 4 of the Corporation's Charter), then no assets or funds shall be distributed to the Preferred C Holders or to the holders of any Parity Stock except to the extent that such assets or funds shall be distributed among the Preferred C Holders and the holders of any Parity Stock ratably in accordance with the respective amounts which would be payable upon Liquidation on the Series C Preferred and any Parity Stock if all amounts payable thereon were payable in full (or such lesser amounts as required by Section 4 of the Corporation's Charter). Subject to the rights of the holders of shares of any series or class or classes of stock ranking, as to Liquidation, senior to the Series C Preferred, upon Liquidation, after payment of the Liquidation preference of the Series C Preferred and Parity Stock determined pursuant to this Section 2, the remaining assets of the Corporation legally available for distribution shall be distributed ratably to the holders of Junior Securities, including the Common Stock. 3. VOTING RIGHTS Except as otherwise required by law, each Preferred C Holder shall be entitled to vote on all matters together with the holders of shares of the Common Stock (including, for purposes of this Section 3, any other securities of the Corporation that are entitled to vote with the holders of shares of Common Stock) and not as a separate class, at any annual or special meeting of stockholders of the Corporation, and may act by written consent in the same manner as the Common Stock, in either case upon the following basis: each Preferred C Holder shall be entitled to such number of votes as shall be equal to the whole number of shares of Common Stock into which such holder's aggregate number of shares of Series C Preferred are convertible (pursuant to Section 5 hereof) immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent. Notwithstanding the foregoing, the Preferred C Holders will not be entitled to vote or take action at a meeting of the Corporation's stockholders, the purpose of which includes the approval by the holders of Common Stock of an amendment to the Corporation's Charter ("CHARTER AMENDMENT") to increase the number of shares of Common Stock the Corporation is authorized to issue to an amount sufficient to permit the conversion to Common Stock of all of the Corporation's then-outstanding shares of all of its authorized and designated series of convertible preferred stock, which includes the Series C Preferred, and any other then-outstanding securities and options or similar rights issued by the Corporation, which are convertible into or otherwise permit the holder thereof to purchase or otherwise receive shares of Common Stock. 4. MANDATORY CONVERSION (a) MANDATORY CONVERSION. By virtue of the filing with and acceptance of the Charter Amendment by the Secretary of State of the State of Delaware and without any action on the part -2- 3 of the Preferred C Holders, as of the date the Charter Amendment is filed with and accepted by the Secretary of State of the State of Delaware (the "CONVERSION DATE"), all of the issued and outstanding shares of the Series C Preferred shall be converted into fully-paid and nonassessable shares of Common Stock. The number of shares of Common Stock into which each share of Series C Preferred shall be converted shall be the product obtained by multiplying the Conversion Rate then in effect (determined as provided in Section 4(b)) by the number of shares of Series C Preferred being converted. (b) CONVERSION RATE. The conversion rate for conversion of the Series C Preferred (the "CONVERSION RATE") shall be the quotient obtained by dividing the Stated Value by $1.45 (the "CONVERSION PRICE"). (c) PROCEDURES FOR MANDATORY CONVERSION. (i) On the Conversion Date, the Corporation will mail to each Preferred C Holder (A) a letter of transmittal, which shall specify the Conversion Date and notify such holder that his, her or its shares of Series C Preferred have been converted to Common Stock (the "CONVERSION NOTICE") and (B) instructions, which shall specify the procedures for surrender of such holder's certificates representing ownership of Series C Preferred ("PREFERRED CERTIFICATES") in exchange for certificates representing ownership of Common Stock ("COMMON STOCK CERTIFICATES"). Promptly after receipt of the Conversion Notice, each Preferred C Holder shall surrender such holder's Preferred Certificates, duly endorsed for transfer, at any time during normal business hours, to the Corporation at its principal office or at such other office or agency then maintained by it for such purpose and designated in the Conversion Notice, accompanied by any instrument of transfer in form reasonably satisfactory to the Corporation and to any conversion agent, duly executed by the registered Preferred C Holder or by such holder's duly authorized attorney. As promptly as practicable after the surrender for conversion of any Preferred Certificates in the manner provided in the preceding sentence but in any event within five (5) business days after receipt of the Preferred Certificates, the Corporation will deliver or cause its transfer agent to deliver to the holder of such Preferred Certificates, Common Stock Certificates representing the aggregate number of shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made as of the Conversion Date, and all rights of the Preferred C Holder, with respect to such holder's shares of Series C Preferred, shall cease at such time and the person or persons in whose name or names the Preferred Certificates are registered, or after delivery of the Preferred Certificates for conversion pursuant hereto the person or persons in whose name or names the Common Stock Certificates are to be issued, shall be treated for all purposes as having become the record holder or holders thereof at such time. (ii) The Corporation shall not be required to issue fractional shares of Common Stock upon conversion of shares of Series C Preferred. At the Corporation's discretion, in the event the Corporation determines not to issue fractional shares, then in lieu of any fractional shares to which the Preferred C Holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the Current Market Price (as defined below). (iii) The issuance of Common Stock Certificates upon conversion shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. However, if any -3- 4 such Common Stock Certificate is to be issued in a name other than that of the holder of record of the shares converted, the person or persons requesting the issuance thereof shall pay to the Corporation the amount of any such tax which may be payable in respect of any transfer involved in such issuance or shall establish, to the satisfaction of the Corporation, that such tax has been paid or is not payable. (iv) "Current Market Price" means the average of the daily Closing Prices per share of Common Stock for the fifteen (15) consecutive trading days immediately prior to such date. The "Closing Price" per share of Common Stock for each day shall be the last sale price, regular way, before 5:00 p.m., or in case no such sale takes place on such day, the average closing bid and asked prices, regular way, in either case, as reported on the NASD OTC Bulletin Board or any successor stock exchange or quotation system on which the Common Stock is then primarily listed or traded. If on any such trading day or days such securities are not quoted by any such organization, such trading day or days shall be replaced for purposes of the foregoing calculation by the requisite trading day or days preceding the commencement of such fifteen (15) day trading day period on which such securities are so quoted. (d) RESERVATION OF STOCK ISSUABLE UPON MANDATORY CONVERSION. Until the Conversion Date, the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion to Common Stock of all of the outstanding shares of the Corporation's authorized and designated series of convertible preferred stock, including the Series C Preferred, and the other outstanding securities and options or similar rights issued by the Corporation, which are convertible into or otherwise permit the holder thereof to purchase or otherwise receive shares of Common Stock. The Corporation shall take any such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, approving the Charter Amendment and taking other appropriate board action, submitting the Charter Amendment to the Corporation's stockholders for their approval, recommending the Charter Amendment and any other such increase to the Corporation's stockholders, holding shareholders meetings, and soliciting votes and proxies in favor of the Charter Amendment and any other such increase to obtain the requisite shareholder approval. (e) REORGANIZATION, MERGER OR SALE OF THE CORPORATION. (i) Notwithstanding any other provision hereof, in case of (A) any reorganization or any reclassification of the capital stock of the Corporation or (B) any sale of the Corporation if such transaction does not constitute a Liquidation, then, at the election of each Preferred C Holder, concurrently with the consummation of such reorganization, reclassification or sale of the Corporation, provision shall be made so that each share of Series C Preferred shall thereafter be convertible into the number of shares of stock or other securities or property (including cash) to which a holder of the number of shares of Common Stock deliverable upon conversion of such share of Series C Preferred would have been entitled assuming conversion on the day immediately prior to the initial announcement of the transaction or a proposed transaction that ultimately resulted in the transaction. In any case, appropriate adjustment (as determined by the Corporation's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Preferred C Holders, to the end that the provisions set forth herein shall -4- 5 thereafter be applicable, as nearly as equivalent as is practicable, in relation to any shares of stock or the securities or property (including cash) thereafter deliverable upon the conversion of the shares of Series C Preferred. (ii) In case of any merger, consolidation, reclassification or other similar reorganization, to the extent the Corporation is not the surviving entity, the Series C Preferred shall be converted into or exchanged for and shall become shares of the surviving corporation having, in respect of the surviving corporation, substantially the same powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereon, that the Series C Preferred has immediately prior to such transaction. 5. RESTRICTIONS ON DIVIDENDS, STOCK SPLITS AND DISTRIBUTIONS The Corporation shall not at any time or from time to time after the date that the first share of the Series C Preferred is issued until after the Conversion Date: (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock, including, but not limited to, dividends paid or payable in cash, the capital stock of the Corporation, or any other property; (ii) effect a stock-split or any other subdivision of the outstanding Common Stock; or (iii) effect a combination of the outstanding shares of Common Stock into a smaller number of shares. SECOND: That such determination of the designations, preferences and the relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, relating to the Series C Preferred, was duly made by the Corporation's Board of Directors pursuant to the provisions of the Corporation's Charter, and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, as amended. [REMAINDER OF PAGE INTENTIONALLY BLANK] -5- 6 IN WITNESS WHEREOF, U.S. Technologies Inc. has caused this Certificate of Designations to be executed this 7th day of April, 2000. U.S. TECHNOLOGIES INC. By: /s/ C. Gregory Earls -------------------------------- C. Gregory Earls, Co-Chief Executive Officer -6- EX-99.1 7 PRESS RELEASE 1 EXHIBIT 99.1 (BW)(DC-U.S.-TECHNOLOGIES)(USXX) U.S. Technologies Completes Acquisition of Internet Incubator Company E2Enet, Inc. and Private Placements of Preferred Stock Business Editors/Hi-Tech Writers WASHINGTON--(BUSINESS WIRE)--April 12, 2000-- Company to call Annual Meeting to Approve Charter Amendment U.S. Technologies Inc. (NASDAQ BB:USXX) announced today that it has completed the previously announced acquisition of Internet incubator company E2Enet, Inc. ("E2Enet"). As previously announced, E2Enet has made early stage investments in several development stage business-to-business (B2B) and business-to-consumer (B2C) e-commerce businesses. As previously disclosed, shares of the Company's new voting Series B mandatorily convertible preferred stock with an aggregate liquidation preference of $11.2 million were issued in exchange for all of the outstanding capital stock of E2Enet. Those preferred shares are to be converted into 56 million shares of common stock after Company stockholders approve an amendment to the Company's charter authorizing additional shares of common stock, all as previously announced. U.S. Technologies also announced that it has completed the private placement of more than $5,184,000 of voting Series C mandatorily convertible preferred stock. U.S. Technologies anticipates raising additional capital through the further issuance of the offering of Series C preferred shares in the coming weeks. All Series C preferred shares will automatically convert, once the charter amendment is effective, into shares of U.S. Technologies common stock at $1.45 per share of common stock. USV Partners also purchased an additional $1,250,000 of voting Series A convertible preferred stock. USV has committed to convert these and all of its other Series A preferred shares into common stock when the charter amendment is effective. "We are delighted that the E2Enet acquisition has closed and that we were able to complete the U.S. Technologies private placement of new Series C preferred shares," said Gregory Earls, U.S. Technologies Co-Chairman and Co-CEO. "We are excited about the investment opportunities being presented to U.S. Technologies and the progress that is being made by the companies in which E2Enet has investments," said Earls U.S. Technologies' acquisition of E2Enet includes equity ownership interests in the following companies: Buyline.net, Inc. ("Buyline"). Buyline is a developer of B2B e-commerce applications, and is developing a proprietary Internet software program designed to be a universal platform for entry-level B2B e-commerce, linking buyers and sellers. Buyline's 2 application for RFP/RFQ technology (Request for Proposal/Request for Quotation) will be used in a full range of on-line advertising, on Internet based directories, and in commercial web sites. VIPRO Corporation ("Vipro"). Vipro is an Internet surety company, which provides repair guarantees against viruses that harm computers. The Company has e-commerce relationships with a leading Internet utility company, a credit card association, one of the largest warranty claims administrators in the world and over 170 Internet service providers. Urban Box Office Network, Inc. ("UBO"). UBO is a developer of networked multi-media web sites that will provide e-commerce services to participants interested in urban culture, information, entertainment and products. OneMade, Inc. ("OneMade"). OneMade is a developer of an e-commerce community that will serve participants in the arts, crafts, and hobby industries. OneMade intends to connect wholesalers, retailers, consumers and artists in these fields. bluemercury, Inc. ("bluemercury"). bluemercury operates an e-commerce site for upscale cosmetic products and accessories. It intends to pursue a "clicks and bricks" strategy by also acquiring high-end cosmetic specialty retailers. MEI Sofware Systems, Inc. ("MEI"). MEI provides customized software systems to manage the databases of trade associations, professional associations, fund-raising organizations and chambers of commerce. The Company also confirmed that it will call an Annual Meeting for the purpose of electing its new slate of Board of Directors, adopting the previously described charter amendment, and any other appropriate business matters. The Company expects to have completed all work and related filings necessary to permit that meeting to be held this summer. About U.S. Technologies In addition to its ownership of E2Enet, U.S. Technologies provides assembly services on an outsourcing basis to other companies and related financial and management services. The Company currently operates an electronic assembly and manufacturing facility in Texas, a furniture manufacturing plant in California and a motorcycle assembly plant in Florida. U.S. Technologies can be contacted at www.usxx.com. This release contains "forward looking statements" concerning prospective future events and results. Such prospective events include acquisitions and investments, and prospects for such acquisitions and investments. U.S. Technologies cautions that actual developments and results may differ materially from its 3 prospective future events. There can be no assurance that the conditions necessary to completing any prospective event will occur. Additional investments by the Company or an unrelated person either in any company that is a part of the investment portfolio of the Company's proposed Internet incubator or in such incubator provide no assurance that such portfolio company or such incubator will succeed or that the Company's or the incubator's investments will be recovered or profitable. The Company's assets and operations, including results of operations, would be affected materially by either occurrence of any such event or the failure of any such event to occur, by the extent to which it and portfolio companies continue to have access to financing sources on reasonable terms in order to pursue its and their business plans, by the success or failure of the business plans of its Internet incubator and the portfolio companies, by economic conditions generally and particularly in the developing e-commerce market, by competition and technological changes in its and the portfolio companies' industries and businesses, and by the results of its and the portfolio companies operations if and when operating. -----END PRIVACY-ENHANCED MESSAGE-----