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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No.5)*
U.S. TECHNOLOGIES INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
91272D309
(CUSIP Number)
STEPHEN A. BOUCHARD, ESQ.
FLEISCHMAN AND WALSH, L.L.P.
1400 SIXTEENTH STREET, N.W.
WASHINGTON, D.C. 20036
(202) 939-7911
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 12, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes.)
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
USV PARTNERS, LLC
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2. Check the Appropriate Box If A Member Of A Group* (a) [X]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds
00
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5. Check If Disclosure Of Legal Proceedings
Is Required Pursuant to Items 2(d) or 2(e). [ ]
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6. Citizenship Or Place Of Organization
Delaware
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7. Sole Voting Power
52,691,576
Number of ----------------------------------------
Shares 8. Shared Voting Power
Bene- 6,366,660
ficially ----------------------------------------
Owned 9. Sole Dispositive Power
by Each 59,058,236
Reporting ----------------------------------------
Person With: 10. Shared Dispositive Power
0
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11. Aggregate Amount Beneficially Owned By Each
Reporting Person
59,058,236
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12. Check Box If The Aggregate Amount In Row (11)
Excludes Certain Shares [ ]
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13. Percent Of Class Represented By Amount In Row (11)
42.11%
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14. Type Of Reporting Person
OO (limited liability company)
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
C. Gregory Earls
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2. Check the Appropriate Box If A Member Of A Group* (a) [X]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds
OO
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5. Check If Disclosure Of Legal Proceedings
Is Required Pursuant to Items 2(d) or 2(e). [ ]
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6. Citizenship Or Place Of Organization
U.S.
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7. Sole Voting Power
53,838,576
Number of ----------------------------------------
Shares 8. Shared Voting Power
Bene- 12,685,312
ficially ----------------------------------------
Owned 9. Sole Dispositive Power
by Each 66,523,888
Reporting ----------------------------------------
Person With: 10. Shared Dispositive Power
0
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11. Aggregate Amount Beneficially Owned By Each
Reporting Person
66,523,888
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12. Check Box If The Aggregate Amount In Row (11)
Excludes Certain Shares [ ]
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13. Percent Of Class Represented By Amount In Row (11)
46.98%
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14. Type Of Reporting Person
IN
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The statement on Schedule 13D filed on November 23,1998, as amended by
Amendment No.1 filed on February 22, 1999, Amendment No. 2 filed on April 12,
1999, Amendment No. 3 filed on May 21, 1999 ("Amendment No. 3") and Amendment
No. 4 filed on February 2, 2000 (collectively, the "Schedule 13D") on behalf of
USV Partners, LLC, a Delaware limited liability company ("USV"), and C. Gregory
Earls is hereby amended.
Item 3. Source and Amount of Funds or Other Considerations
Item 3 of Schedule 13D is hereby amended by adding the following:
On April 12, 2000, USV used corporate funds to effect the purchase of
125,000 shares of Series A Convertible Preferred Stock, $0.02 par value
("Series A Preferred"), of U.S. Technologies Inc. (the "Issuer") in a private
placement transaction for $1,250,000. Also on April 12, 2000, USV used
corporate funds to effect the purchase of 2,120 shares of the Issuer's Series C
Mandatorily Convertible Preferred Stock, par value $0.02 ("Series C Preferred")
for $2,120,000.
Item 5. Interest in Securities of the Issuer
Item 5 of Schedule 13D is hereby amended by adding the following:
(a), (b), (c) USV directly owns 6,366,152 shares of common stock, par
value $0.02, of the Issuer ("Common Stock"). As previously reported in
Amendment No. 3, on May 11, 1999, USV acquired warrants to purchase 500,000
shares of Common Stock ("Warrants"). Promptly after USV was issued the
Warrants, USV transferred the Warrants to the Earls Family Limited Partnership.
Also, as previously reported in Amendment No. 3, on May 11, 1999, USV purchased
500,000 shares of Series A Preferred. On April 12, 2000, USV purchased from the
Issuer an additional 125,000 shares of Series A Preferred in a private
placement transaction for $1,250,000. Each share of Series A Preferred is
convertible into the number of shares of Common Stock equal to $10 divided by
$0.122. Also on April 12, 2000, USV purchased 2,120 shares of Series C
Preferred for $2,120,000. Each shares of Series C Preferred is convertible into
the number of shares of Common Stock equal to $1000 divided by $1.45. Mr. Earls
is the sole member of the manager of USV and the President of the General
Partner of the Earls Family Limited Partnership.
Except as explained below with respect to the Charter Amendment
(defined and discussed below), each holder of Series A Preferred is entitled to
vote as if converted to Common Stock on all matters that require a vote of the
holders of the Issuer's voting capital stock, presently comprised of the
Issuer's Common
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Stock, Series A Preferred, the Issuer's Series B Mandatorily Convertible
Preferred Stock, $0.02 par value ("Series B Preferred"), and Series C
Preferred. See "Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer."
USV is the holder of all issued and outstanding shares of Series A
Preferred. Under the Certificate of Designations, Rights and Preferences, as
amended, setting forth the rights and preferences of the Series A Preferred,
USV has the right to convert its shares of Series A Preferred to Common Stock
at any time. Upon the conversion of all of the Series A Preferred, USV would be
entitled to receive 51,229,508 shares of Common Stock. USV and the Company
entered into an agreement, dated March 1, 2000 (the "Waiver Agreement"),
whereby USV waived its right to convert its shares of Series A Preferred until
an appropriate amendment to the Issuer's Restated Certificate of Incorporation
that increases the number of shares of Common Stock that the Issuer is
authorized to issue to an amount sufficient for all of the Issuer's outstanding
convertible securities, warrants and options to be converted or exercised (the
"Charter Amendment"). (The Waiver Agreement was previously filed with the
Securities and Exchange Commission as Exhibit 4.6 to the Issuer's Report on
Form 10-K for the year ended December 31, 1999.) USV has committed to convert
its Series A Preferred shares to Common Stock once the Charter Amendment is
effective.
The terms of the Series B Preferred and the Series C Preferred do not
permit the holders thereof to vote on the Charter Amendment, but otherwise
permit them to vote as if the Series B Preferred and Series C Preferred were
already converted to Common Stock, as previously indicated above. Accordingly,
the Charter Amendment will be presented for approval by the holders of
outstanding shares of Common Stock and Series A Preferred, voting together as a
single class. See "Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer."
In connection with the Issuer's recent acquisition of E2Enet, Inc.
("E2E"), USV, on behalf of the holders of Series B Preferred (who were the
stockholders of E2E before the acquisition), granted Mr. Earls an irrevocable
proxy to vote the 6,366,660 shares of Common Stock and the Series A Preferred
owned by USV in favor of the Charter Amendment. See "Item 6. Contracts,
Arrangements, Understandings or Relationships with Respect to Securities of the
Issuer." Accordingly, USV, for the benefit of the holders of the Series B
Preferred, shares voting power with respect to the Charter Amendment with Mr.
Earls for the 6,366,660 shares of outstanding Common Stock owned directly by
USV. See "Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer."
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USV's voting power through its ownership of Common Stock and Series A
Preferred and its commitment to vote for the Charter Amendment, all as
described above, assures that the Charter Amendment will be approved when
presented for stockholder approval. Although it is not presently expected that
the Charter Amendment will become effective within sixty days of the date
hereof, Mr. Earls, in his capacity as Co-Chairman and Co-Chief Executive
Officer of the Issuer, is likely to be in a position at least to influence and
certainly to know when the Charter Amendment will be presented to stockholders
and, thereafter, become effective. Accordingly, despite the Waiver Agreement,
USV and Mr. Earls have assumed, for purposes of this Schedule 13D, that all
shares of Series A Preferred, Series B Preferred and Series C Preferred will be
converted to Common Stock within sixty days of the date hereof.
If all of its shares of Series A Preferred and Series C Preferred were
converted, USV would directly own and have the sole power to dispose of
59,058,236 shares of Common Stock (52,691,576 shares that it would receive upon
conversion of its Series A Preferred and Series C Preferred shares, plus the
6,366,660 of Common Stock it now owns directly) and have the sole power to vote
52,691,576 shares of Common Stock (the shares it would receive upon conversion
of its Series A Preferred and Series C Preferred shares). Accordingly, USV
beneficially owns 59,058,236 shares of Common Stock, which constitutes 42.11%
of the 140,248,958 shares of Common Stock that would be outstanding if all of
the shares of Series A Preferred, Series B Preferred and Series C Preferred
were converted to Common Stock. Specifically, these 140,248,958 shares consist
of the following:
- the 29,444,278 shares of Common Stock reported as
outstanding on the Issuer's report on Form 10-K for the
year ended December 31, 1999;
- the 51,229,508 shares of Common Stock that USV will
receive upon the conversion of all of the shares of
Series A Preferred it owns;
- the 56,000,000 shares of Common Stock that the holders of the
Series B Preferred will receive upon their mandatory
conversion as described below; and
- the 3,575,172 shares of Common Stock that the holders of the
Series C Preferred will receive upon their mandatory
conversion as described below.
By virtue of his position as the sole member of the manager of USV,
the power of USV to vote and dispose of the shares of Common Stock it directly
owns and would directly own upon the conversion of the shares of Series A
Preferred and Series C
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Preferred it owns is exercised through Mr. Earls. Accordingly,
Mr. Earls may be deemed to be the beneficial owner of all of the
59,058,236 shares of Common Stock beneficially owned by USV.
Mr. Earls is also the President of the General Partner of the Earls
Family Limited Partnership, which holds Warrants to purchase 500,000 shares of
Common Stock. Each Warrant is exercisable for one share of Common Stock at a
price per share of $1.00 at any time at the option of the holder. Accordingly,
the Earls Family Limited Partnership beneficially owns 500,000 shares of Common
Stock.
By virtue of his position as the President of the General Partner of
the Earls Family Limited Partnership, the power of the Earls Family Limited
Partnership to vote and dispose of the shares of Common Stock it would own
directly upon the exercise of the Warrants it holds, is exercised through Mr.
Earls. Accordingly, Mr. Earls may be deemed to be the beneficial owner of all
of the 500,000 shares of Common Stock beneficially owned by the Earls Family
Limited Partnership.
Mr. Earls also owns a majority of the outstanding voting stock of
Equitable Production Funding, Inc., which directly owns 297,000 shares of
Common Stock. Accordingly, Mr. Earls is able, directly or indirectly, to direct
its voting of its shares of Common Stock, and so beneficially owns the 315,000
shares of Common Stock held by Equitable Production Funding, Inc.
Mr. Earls is also the beneficial owner of an additional 850,000 shares
of Common Stock, which he is entitled to purchase at any time upon the exercise
of employee stock options granted to him on November 5, 1999 under the Issuer's
1999 Stock Option Plan. These options carry an exercise price of $0.125 per
share, based on the closing sale price of the Common Stock on November 5, 1999,
and were fully vested at the time of grant.
On February 21, 2000, Mr. Earls was granted employee stock options to
purchase 250,000 shares of Common Stock. These options carry an exercise price
of $0.90 per share and vest pro rata on the first, second and third
anniversaries of the grant date. Because these options are not exercisable
within 60 days of the date hereof, the shares of Common Stock that may be
purchased upon the exercise of such options are not now deemed to be
beneficially owned by Mr. Earls.
In connection with the Issuer's recent acquisition of E2E,
James V. Warren, on behalf of the holders of the Series B
Preferred (who were the stockholders of E2E before the
acquisition), granted Mr. Earls an irrevocable proxy to vote the
6,318,652 shares of Common Stock that Mr. Warren owns directly in
favor of the Charter Amendment. See "Item 6. Contracts,
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Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer." Accordingly, Mr. Earls, for the
benefit of the holders of Series B Preferred, shares voting power
with respect to the Charter Amendment with Mr. Warren for the
6,318,652 shares of Common Stock owned directly by Mr. Warren.
See "Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer."
Based on the foregoing, Mr. Earls is the beneficial owner of
66,523,888 shares of Common Stock, which constitutes 46.98% of the 141,598,958
shares of Common Stock that would be outstanding, based on the sum of:
- the 140,248,958 shares of Common Stock that would be
outstanding if all of the shares of Series A Preferred,
Series B Preferred and Series C Preferred were converted to
Common Stock, as calculated above;
- the 500,000 shares of Common Stock that would be outstanding
and owned by the Earls Family Limited Partnership if the
Warrants were exercised in full; and
- the 850,000 shares of Common Stock that would be
outstanding and owned by Mr. Earls if he exercised his
presently exercisable stock options.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Item 6 of Schedule 13D is hereby amended by adding the following:
On April 12, 2000, the Company completed its acquisition of E2E, a
privately held Internet incubator company. The terms and conditions for the
Company's acquisition of E2E ("the E2E Acquisition") were contained in a
definitive acquisition agreement (the "E2E Acquisition Agreement"). The E2E
Acquisition Agreement was initially executed on February 21, 2000 and amended
on April 5, 2000 to provide for a merger rather than a share exchange. Upon the
completion of the E2E Acquisition, E2E became a wholly owned subsidiary of the
Issuer.
When the E2E Acquisition closed, E2E's former stockholders were issued
shares of the Issuer's newly created Series B Preferred. Upon their mandatory
conversion as described below, the shares of Series B Preferred Stock will be
converted into 56,000,000 shares of Common Stock.
The Issuer agreed, under the E2E Acquisition Agreement, to raise at
least $6,250,000 and up to $10,000,000 of new capital funds at or prior to the
closing of the E2E Acquisition.
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Accordingly, on the closing date of the E2E Acquisition, the Issuer sold, in
two private placement transactions, 125,000 shares of its Series A Preferred to
USV at a purchase price of $10 per share and 5,184 shares of its newly created
Series C Preferred at a purchase price of $1,000 per share. Of the 5,184 shares
of Series C Preferred issued, USV purchased 2,120 shares for $2,120,000.
The Issuer is required by the E2E Acquisition Agreement to call a
meeting of its stockholders to adopt the Charter Amendment, as previously
described in item 5 above. Upon the acceptance of the Charter Amendment for
filing by the Secretary of State of the State of Delaware, the Series B
Preferred and the Series C Preferred will automatically be converted into
shares of Common Stock. Pursuant to the Waiver Agreement discussed in Item 5
above, USV has also waived its right to convert its shares of Series A
Preferred until such time. USV has committed to convert its Series A Preferred
shares once the Charter Amendment is effective.
Pursuant to the E2E Acquisition Agreement, USV, James V. Warren and
Mr. Earls executed a Voting Agreement and Proxy, dated April 12, 2000 (the
"Proxy Agreement"), in favor of the Series B stockholders, with respect to the
Charter Amendment as previously described in item 3 above. (The Proxy Agreement
is attached to this Amendment No. 5 to the Schedule 13D as Exhibit A.)
As required by the E2E Acquisition Agreement, the Issuer, USV, Mr.
Warren, Northwood Ventures LLC and Northwood Capital LLC (together,
"Northwood"), and Jonathan J. Ledecky entered into a Voting Agreement, dated
April 12, 2000 (the "Voting Agreement"), with respect to the size and
composition of the Issuer's Board of Directors. (The Voting Agreement is
attached to this Amendment No. 5 to the Schedule 13D as Exhibit B.) Northwood
and Mr. Ledecky were E2E stockholders prior to the Issuer's acquisition of E2E.
The parties to the Voting Agreement agreed to vote all of their shares of
Common Stock, Series A Preferred, Series B Preferred and any and all securities
of the Issuer acquired by each of the parties after the date of the Voting
Agreement so that:
- the number of directors on the Issuer's Board will
be fixed at eight; and
- the Board will be composed of (i) four directors
designated by USV, including Gregory Earls, as
Chairman and Chief Executive Officer of the
Issuer, (ii) two directors designated by Mr.
Ledecky, and (iii) two directors designated by
Northwood.
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The Voting Agreement terminates on April 12, 2003.
As of April 12, 2000, the Issuer, USV and the Issuer's Series B
Preferred stockholders (who were the E2E stockholders before the Issuer's
acquisition of E2E) entered into an Amended and Restated Registration Rights
Agreement ("Registration Rights Agreement"). (The Registration Rights Agreement
is attached to this Amendment No. 5 to the Schedule 13D as Exhibit C.) The
Registration Rights Agreement is substantially identical to, but replaces, a
previous such agreement between the Issuer and USV. Also as of April 12, 2000,
the purchasers of the Series C Preferred became parties, by joinder, to the
Registration Rights Agreement. Pursuant to the Registration Rights Agreement,
the Issuer has agreed to provide USV and the other stockholders who are parties
to the Registration Rights Agreement certain demand and piggyback registration
rights with respect to the Common Stock that they own, including the shares of
Common Stock they will receive upon the conversion of the Series A Preferred,
Series B Preferred and Series C Preferred they own or pursuant to any stock
dividends or splits ("Registrable Securities"). Six months after the date on
which the Series B Preferred and Series C Preferred are converted into Common
Stock, the demand registration rights will be exercisable an unlimited number
of times, but may only be validly exercised pursuant to a request by holders of
Registrable Securities that constitute one-third of all of the Registrable
Securities. With respect to piggyback registration rights, if the Issuer at any
time proposes to register the Issuer's Securities for its own account
(excluding specific instances such as registration after an employee
stock-based plan)or on behalf of other shareholders of the Issuer, the holders
of Registrable Securities have the right to have their Registrable Securities
included in such registration. The demand and piggyback registration rights are
subject to certain underwriter cut-backs. The Registration Rights Agreement
terminates and the registration obligations expire on April 12, 2006.
Item 7. Materials to Be Filed as Exhibits
Exhibit A - Voting Agreement and Proxy, as of April 12, 2000, by and among USV,
James V. Warren, C. Gregory Earls in favor of holders of the
Issuer's Series B Mandatorily Preferred Stock
Exhibit B - Voting Agreement, as of April 12, 2000, by and among the Issuer,
USV, James V. Warren, Northwood Ventures LLC, Northwood Capital
Partners LLC and Jonathan J. Ledecky
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Exhibit C - Amended and Restated Registration Rights Agreement, dated as of
April 12, 2000, among the Issuer, USV and certain other
stockholders of the Issuer (including holders of the Issuer's
Series B and Series C Mandatorily Convertible Preferred Stock).
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this amendment is
true, complete and correct.
Dated: May 9, 2000
USV PARTNERS, LLC
By: USV Management, LLC,
its Manager
/s/ C. Gregory Earls
----------------------------------------------
By: C. Gregory Earls
Title: Sole Member
/s/ C. Gregory Earls
----------------------------------------------
By: C. Gregory Earls
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EXHIBIT A
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") 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;
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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.
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.
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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 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.
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IN WITNESS WHEREOF, USV, Warren and Earls have executed this Agreement as of the
date first written above.
USV Partners, LLC
By: USV Management, LLC
By /s/ C. Gregory Earls
---------------------------------
SOLE MEMBER
/s/ James V. Warren
---------------------------------
JAMES V. WARREN
/s/ C. Gregory Earls
---------------------------------
<PAGE> 5
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.
<PAGE> 1
EXHIBIT B
VOTING SHARES
<TABLE>
<CAPTION>
Shareholder Shares Held
- ----------- -----------
<S> <C>
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 Conversion of Options
6,318,652 Shares of Common Stock
</TABLE>
<PAGE> 2
EXHIBIT B
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") 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.
<PAGE> 3
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the Company and the Shareholders hereby agree as
follows:
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
-2-
<PAGE> 4
Shareholder shall have sold at least half of the Voting Shares owned by it or
him immediately following the Closing).
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 APRIL 12, 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
-3-
<PAGE> 5
Attn: C. Gregory Earls
Telephone: 202-466-3100
Facsimile: 202-466-4557
(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:
-4-
<PAGE> 6
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.
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.
-5-
<PAGE> 7
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-
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Voting
Agreement as of the date first written above.
<TABLE>
<S> <C>
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
</TABLE>
<PAGE> 1
Exhibit C
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
<PAGE> 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").
W I T N E S S E T H :
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") 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.
<PAGE> 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.
<PAGE> 4
"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 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.
<PAGE> 5
"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.
"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.
<PAGE> 6
"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.
"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,
<PAGE> 7
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 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,
<PAGE> 8
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 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
<PAGE> 9
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
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
<PAGE> 10
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;
(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
<PAGE> 11
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
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
<PAGE> 12
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 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
<PAGE> 13
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 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
<PAGE> 14
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 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
<PAGE> 15
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 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,
<PAGE> 16
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.
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.
<PAGE> 17
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 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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 ___ day of ______, 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:
