Business-Combination Transaction Communication — Rule 425
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FILED BY U.S. TECHNOLOGIES
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14A-12 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: ON-SITE SOURCING, INC.
(COMMISSION FILE NO. 0-20947)
U.S. TECHNOLOGIES INC.
FOR IMMEDIATE RELEASE - THURSDAY, SEPTEMBER 28, 2000
FOR MORE INFORMATION
U.S. Technologies Inc. - www.usxx.com On-Site Sourcing - www.onss.com
Holly Moskerintz, Communications, Jason Parikh, CFO, jparikh@onss.com
hollym@usxx.com 703-276-1123
Dana Rochelle, Investor Relations, drochelle@usxx.com
202-466-3100
U.S. TECHNOLOGIES AND ON-SITE SOURCING SIGN DEFINITIVE AGREEMENT
Washington, D.C. (September 28, 2000) - U.S. Technologies Inc. (NASDAQ BB:
USXX), an Internet enterprise developer and business-to-business technologies
integrator, today announced it has signed a definitive merger agreement to
acquire On-Site Sourcing (NASDAQ Small Cap: ONSS), a leading provider of digital
imaging, document management, and litigation reprographics services to law
firms, corporations, consulting firms, accounting firms and financial
institutions. Both companies' boards of directors have approved the definitive
agreement.
Under the terms of the definitive agreement, On-Site's stockholders will
exchange their shares for U.S. Technologies' shares and cash in a transaction
valued at $35 million for all outstanding shares and shares subject to issuance
pursuant to options outstanding, plus the assumption of On-Site debt. On-Site
stockholders can elect to receive U.S. Technologies' stock, cash, or a
combination of stock and cash subject to proration due to the cash limitation
and adjustment formula discussed below. The transaction is intended to be
tax-free to On-Site stockholders to the extent they receive shares of U.S.
Technologies' common stock. To ensure tax-free treatment of the transaction,
holders of at least 50% of the outstanding shares of On-Site common stock will
receive U.S. Technologies common stock. Accordingly, the aggregate cash
consideration paid at closing will be limited to the lesser of 50% of the number
of shares of On-Site common stock outstanding at closing or $12 million.
The exchange ratio for the stock portion of the merger consideration is subject
to an adjustment formula based on the average trading price of U.S.
Technologies' common stock during a twenty trading-day period ending three full
trading-days before the closing of the merger. If U.S. Technologies' average
stock price per share for the adjustment period is:
- less than $0.75, the value assigned to the U.S. Technologies'
common stock in the exchange ratio will be fixed at $0.75,
except that On-Site may terminate the merger agreement if the
average stock price during the adjustment period is below
$0.67.
- equal to or greater than $0.75 but less than $0.90, the value
assigned to the U.S. Technologies' common stock in the
exchange ratio will be the average stock price during the
adjustment period.
- equal to or greater than $0.90 but less than $1.15, the value
assigned to the U.S. Technologies' common stock in the
exchange ratio will be fixed at $1.00.
- equal to or greater than $1.15, the value assigned to the U.S.
Technologies' common stock in the exchange ratio will be fixed
at $1.15.
- MORE -
On-Site's publicly traded warrants to buy shares at $6.00 are expected to be
converted to U.S. Technologies' warrants, with the exercise price and number of
shares to be adjusted based on the stock conversion formula for the merger. The
expiration date of these warrants will be extended for one year to July 8, 2002.
All options outstanding at closing will be converted into options to purchase
U.S. Technologies' common stock, with the exercise price and number of shares to
be adjusted based on the stock conversion formula for the merger. In addition,
in connection with the closing, U.S. Technologies will make 3.6 million options
available for grant to employees of On-Site Sourcing.
On July 31, 2000, the companies had announced an Agreement in Principle which
called for On-Site's shareholders to exchange their shares for approximately
26.25 million U.S. Technologies' shares and $8.75 million in cash. Under the
terms of the definitive agreement, U.S. Technologies raised the cash component
of the deal to as much as $12 million and agreed to make the stock component
subject to adjustment within certain ranges of trading prices for U.S.
Technologies' common stock. Also, On-Site's two top executives, CEO Christopher
Weiler and Vice-President of Marketing Allen Outlaw, have agreed to elect to
receive only stock in the merger and will exchange all of their shares of
On-Site common stock for shares of U.S. Technologies' common stock. Both Weiler
and Outlaw will become members of the U.S. Technologies board of directors at
closing. The revised terms and the commitment to elect stock consideration from
Weiler and Outlaw increases the amount of cash consideration available for
On-Site's public shareholders by reducing the amount of current outstanding
shares eligible for the cash election by 571,000.
On-Site's directors and officers owning 23% of the outstanding On-Site shares
have agreed to vote for the merger. Owners of more than 50% of U.S. Technologies
voting securities have committed to voting for the merger. Closing will be
subject to usual conditions including necessary shareholder approvals and SEC
registration of securities to be issued in the merger, as well as adoption of
U.S. Technologies already announced charter amendment to increase the common
shares it is authorized to issue. The companies hope to complete these steps and
close the merger early next year.
"We believe this is an attractive transaction for our shareholders. We expect to
leverage U.S. Technologies' contacts in the business, technical and financial
communities to strengthen our operations following the acquisition," said Chris
Weiler, President and CEO of On-Site. Weiler further stated, "U.S. Technologies
has assembled an excellent management team and portfolio of associated companies
and I firmly believe that, as holders of U.S. Technologies stock, our
shareholders will enjoy many years of superior returns."
Gregory Earls, U.S. Technologies Co-Chairman and Co-CEO, said "we are quite
pleased with both the terms of the agreement and the opportunities that On-Site
is anticipated to provide for U.S. Technologies and our Associated Companies. We
are a vastly different company today than we were this time last year, and
believe this acquisition integrates well with our strategic plan and will
enhance our future prospects." The On-Site acquisition is part of U.S.
Technologies' strategic plan to combine leading edge Internet technology
companies with more traditional, established companies that will complement and
integrate the technologies of its emerging associated companies.
As part of its strategy, U.S. Technologies will continue to pursue opportunities
for formation of, or significant investments in, Internet technology companies
that develop scalable products and
- MORE -
services that are on the verge of going to market, and then support and nurture
these emerging companies in order to accelerate their establishment in the
marketplace.
Currently, U.S. Technologies has strategic investments in eight companies:
- PromiseMark, Inc. (www.promisemark.com) - the country's
premier provider of Internet and data related protection
plans. PromiseMark offers a suite of products that provide
protection to keep individual computer users up and running in
a world of growing online risks.
- Portris, LLC - a software company that develops technology
that revolutionizes team-oriented information management over
a network, allowing business groups to efficiently manage
large amounts of information via the Internet.
- OneMade Inc. (www.onemade.com) - the marketplace for all
things handmade, is the World's online arts and crafts
neighborhood dedicated to serving people with a passion for
handmade products. The company's website was launched in July
2000.
- Urban Box Office Network (www.ubo.net) - the next generation
media company that provides a unique on and off-line cultural
and commercial platform for the Urban Mindset. UBO defines the
Urban Mindset as a global community that shares common
interests in music, arts, sports, and fashion, and establishes
trends for the emerging worldwide market.
- MEI Software Systems, Inc. (www.meisoft.com) - a software
developer that enables associations to become e-associations
by providing leading edge Web technology to create custom,
robust vertical Web portal sites
- Buyline.net, Inc. - trading zone developer that partners with
community organizations to create, market, and operate
e-commerce enabled web communities. These partners include
publishers, trade and professional organizations, and
corporations with dealer/franchise networks.
- bluemercury, Inc. (www.bluemercury.com)- clicks & bricks
retailer that enhances the lifestyle of time-starved women by
offering a carefully edited selection of high quality,
indulgent, and innovative beauty and apothecary products
available both on their website and in their EFX retail
stores.
- WebMilestones.com (www.webobits.com) - online publisher of
information on life milestones. WebMilestones.com has launched
its first site, WebObits.com, designed to complement local
newspaper death notices and obituary services.
ON-SITE SOURCING
On-Site Sourcing provides digital imaging, document management, litigation
reprographics services, offset printing, and facilities management throughout
the East Coast. On-Site's clients include law firms, corporations, non-profit
organizations, accounting firms, financial institutions and other organizations.
On-Site currently operates in the New York City, Washington, D.C., Atlanta,
Philadelphia and Baltimore markets.
- MORE -
U.S. TECHNOLOGIES INC.
U.S. Technologies is an Internet enterprise developer of early stage and
emerging companies and is a business-to-business technologies integrator. The
company integrates the technologies of its Associated Companies with those of
established companies to give these companies a new opportunity to launch their
Internet-based products and services and to accelerate the growth and success of
its Associated Companies. U.S. Technologies has recently been named one of the
Top 50 technology companies to watch in the Washington, DC metro area by
LocalBusiness.com (formerly dbusiness.com).
This release contains "forward looking statements" concerning prospective future
events and results. Such prospective events include acquisitions and
investments, and prospects for such acquisitions and investments. U.S.
Technologies cautions that actual developments and results may differ materially
from its prospective future events. There can be no assurance that the
conditions necessary to completing any prospective event will occur. Additional
investments in the Company, or by the Company or an unrelated person in any of
the Company's associated companies, provide no assurance that the Company or
such associated company will succeed or that the Company's investments will be
recovered or that the Company or any of its associated companies will be
profitable. The Company's assets and operations, including results of
operations, would be affected materially by either occurrence of any such event
or the failure of any such event to occur, by the extent to which it and its
associated companies continue to have access to financing sources on reasonable
terms in order to pursue its and their business plans, by the success or failure
of the business plans of its associated companies, by economic conditions
generally and particularly in the developing e-commerce market, by competition
and technological changes in its and its associated companies' industries and
businesses, and by the results of its and its associated companies' operations
if and when operating. The Company's assembly and other outsourcing business
activities involve a limited number of facilities serving a limited number of
customers, all of which are subject to material changes outside the Company's
control. The Company is contemplating a sale or other disposition of this
business, but there can be no assurance either that any such sale or other
disposition will occur or as to the nature of the terms for any such sale or
other disposition.
This notice is not intended to constitute an offer to sell or an offer to buy
any securities. Any securities to be issued pursuant to the proposed merger
described in this press release will be issued pursuant to the applicable
provisions of the Securities Act of 1933. Investors are urged to read the
relevant documents to be filed with the Securities and Exchange Commission,
which will contain important information about the transaction. Investors can
obtain any document filed with the Commission for free at the Commission's web
site at http://www.SEC.GOV.
- END -
Dates Referenced Herein and Documents Incorporated by Reference
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