<PAGE>   1
                                                                     EXHIBIT 4.2


               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
               OF SERIES C MANDATORILY CONVERTIBLE PREFERRED STOCK
                            OF U.S. TECHNOLOGIES INC.


         U.S. Technologies Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "CORPORATION"), by its
Co-Chief Executive Officer,

         DOES HEREBY CERTIFY:

         FIRST: That pursuant to authority expressly vested in the Board of
Directors of the Corporation by the provisions of its Restated Certificate of
Incorporation (the "CHARTER"), the Corporation's Board of Directors, duly
adopted by unanimous written consent on April 7, 2000, the following resolution
providing for the designations and issuance of 8,750 shares of Series C
Mandatorily Convertible Preferred Stock, par value $0.02 per share:

                  RESOLVED, that this Board of Directors, pursuant to the
                  authority expressly vested in it by the provisions of the
                  Corporation's Restated Certificate of Incorporation and the
                  General Corporation Law of the State of Delaware, hereby
                  authorizes the issuance from time to time of a series of
                  preferred stock, par value $0.02 per share, of the Corporation
                  and hereby fixes the designation, voting powers, preferences
                  and relative, participating , optional and other rights and
                  the qualifications, limitations or restrictions thereof, in
                  addition to those set forth in said Restated Certificate of
                  Incorporation.

1.       DESIGNATION AND AMOUNT

         This series of preferred stock shall be designated as "Series C
Mandatorily Convertible Preferred Stock" and shall have a par value of $0.02 per
share (the "SERIES C PREFERRED"). The number of authorized shares constituting
the Series C Preferred shall be 8,750 shares. Shares of the Series C Preferred
shall have a stated value of $1000 per share (the "STATED VALUE"). The
Corporation may issue fractional shares of the Series C Preferred. All equity
securities of the Corporation ranking as to dividends or distributions of assets
on Liquidation (as defined below) of the Corporation junior to the Series C
Preferred, including the Corporation's Common Stock, par value $0.02 per share
(the "COMMON STOCK"), are sometimes hereinafter referred to as "JUNIOR
SECURITIES."

2.       LIQUIDATION PREFERENCE

         In the event of any bankruptcy, liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary (a "LIQUIDATION"), each
holder of the Series C Preferred (the "PREFERRED C HOLDER") at the time thereof
shall be entitled to receive, prior and in preference to any distribution of any
of the assets or funds of the Corporation to the holders of the Common Stock or


<PAGE>   2


other Junior Securities by reason of their ownership of such stock, an amount
per share of Series C Preferred equal to the Stated Value plus any accrued and
unpaid dividends to the date of Liquidation (or such lesser amount required by
Section 4 of the Corporation's Charter). If, upon a Liquidation, the assets and
funds of the Corporation legally available for distribution among the Preferred
C Holders and the holders of any other capital stock of the Corporation ranking,
as to Liquidation, on a parity with the Series C Preferred, including but not
limited to the Series A Convertible Preferred Stock and the Series B Mandatorily
Convertible Preferred Stock (the "PARITY STOCK"), shall be insufficient to pay
in full the Liquidation preference of the Series C Preferred and liquidating
payments on any Parity Stock (in either case, or such lesser amounts as required
by Section 4 of the Corporation's Charter), then no assets or funds shall be
distributed to the Preferred C Holders or to the holders of any Parity Stock
except to the extent that such assets or funds shall be distributed among the
Preferred C Holders and the holders of any Parity Stock ratably in accordance
with the respective amounts which would be payable upon Liquidation on the
Series C Preferred and any Parity Stock if all amounts payable thereon were
payable in full (or such lesser amounts as required by Section 4 of the
Corporation's Charter). Subject to the rights of the holders of shares of any
series or class or classes of stock ranking, as to Liquidation, senior to the
Series C Preferred, upon Liquidation, after payment of the Liquidation
preference of the Series C Preferred and Parity Stock determined pursuant to
this Section 2, the remaining assets of the Corporation legally available for
distribution shall be distributed ratably to the holders of Junior Securities,
including the Common Stock.

3.       VOTING RIGHTS

         Except as otherwise required by law, each Preferred C Holder shall be
entitled to vote on all matters together with the holders of shares of the
Common Stock (including, for purposes of this Section 3, any other securities of
the Corporation that are entitled to vote with the holders of shares of Common
Stock) and not as a separate class, at any annual or special meeting of
stockholders of the Corporation, and may act by written consent in the same
manner as the Common Stock, in either case upon the following basis: each
Preferred C Holder shall be entitled to such number of votes as shall be equal
to the whole number of shares of Common Stock into which such holder's aggregate
number of shares of Series C Preferred are convertible (pursuant to Section 5
hereof) immediately after the close of business on the record date fixed for
such meeting or the effective date of such written consent. Notwithstanding the
foregoing, the Preferred C Holders will not be entitled to vote or take action
at a meeting of the Corporation's stockholders, the purpose of which includes
the approval by the holders of Common Stock of an amendment to the Corporation's
Charter ("CHARTER AMENDMENT") to increase the number of shares of Common Stock
the Corporation is authorized to issue to an amount sufficient to permit the
conversion to Common Stock of all of the Corporation's then-outstanding shares
of all of its authorized and designated series of convertible preferred stock,
which includes the Series C Preferred, and any other then-outstanding securities
and options or similar rights issued by the Corporation, which are convertible
into or otherwise permit the holder thereof to purchase or otherwise receive
shares of Common Stock.

4.       MANDATORY CONVERSION

         (a)      MANDATORY CONVERSION. By virtue of the filing with and
acceptance of the Charter Amendment by the Secretary of State of the State of
Delaware and without any action on the part

                                       -2-

<PAGE>   3


of the Preferred C Holders, as of the date the Charter Amendment is filed with
and accepted by the Secretary of State of the State of Delaware (the "CONVERSION
DATE"), all of the issued and outstanding shares of the Series C Preferred shall
be converted into fully-paid and nonassessable shares of Common Stock. The
number of shares of Common Stock into which each share of Series C Preferred
shall be converted shall be the product obtained by multiplying the Conversion
Rate then in effect (determined as provided in Section 4(b)) by the number of
shares of Series C Preferred being converted.

         (b)      CONVERSION RATE. The conversion rate for conversion of the
Series C Preferred (the "CONVERSION RATE") shall be the quotient obtained by
dividing the Stated Value by $1.45 (the "CONVERSION PRICE").

         (c)      PROCEDURES FOR MANDATORY CONVERSION.

                  (i)      On the Conversion Date, the Corporation will mail to
each Preferred C Holder (A) a letter of transmittal, which shall specify the
Conversion Date and notify such holder that his, her or its shares of Series C
Preferred have been converted to Common Stock (the "CONVERSION NOTICE") and (B)
instructions, which shall specify the procedures for surrender of such holder's
certificates representing ownership of Series C Preferred ("PREFERRED
CERTIFICATES") in exchange for certificates representing ownership of Common
Stock ("COMMON STOCK CERTIFICATES"). Promptly after receipt of the Conversion
Notice, each Preferred C Holder shall surrender such holder's Preferred
Certificates, duly endorsed for transfer, at any time during normal business
hours, to the Corporation at its principal office or at such other office or
agency then maintained by it for such purpose and designated in the Conversion
Notice, accompanied by any instrument of transfer in form reasonably
satisfactory to the Corporation and to any conversion agent, duly executed by
the registered Preferred C Holder or by such holder's duly authorized attorney.
As promptly as practicable after the surrender for conversion of any Preferred
Certificates in the manner provided in the preceding sentence but in any event
within five (5) business days after receipt of the Preferred Certificates, the
Corporation will deliver or cause its transfer agent to deliver to the holder of
such Preferred Certificates, Common Stock Certificates representing the
aggregate number of shares of Common Stock issuable upon such conversion, issued
in such name or names as such holder may direct. Such conversion shall be deemed
to have been made as of the Conversion Date, and all rights of the Preferred C
Holder, with respect to such holder's shares of Series C Preferred, shall cease
at such time and the person or persons in whose name or names the Preferred
Certificates are registered, or after delivery of the Preferred Certificates for
conversion pursuant hereto the person or persons in whose name or names the
Common Stock Certificates are to be issued, shall be treated for all purposes as
having become the record holder or holders thereof at such time.

                  (ii)     The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of shares of Series C
Preferred. At the Corporation's discretion, in the event the Corporation
determines not to issue fractional shares, then in lieu of any fractional shares
to which the Preferred C Holder would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the Current Market Price (as
defined below).

                  (iii)    The issuance of Common Stock Certificates upon
conversion shall be made without charge for any issue, stamp or other similar
tax in respect of such issuance. However, if any


                                       -3-

<PAGE>   4


such Common Stock Certificate is to be issued in a name other than that of the
holder of record of the shares converted, the person or persons requesting the
issuance thereof shall pay to the Corporation the amount of any such tax which
may be payable in respect of any transfer involved in such issuance or shall
establish, to the satisfaction of the Corporation, that such tax has been paid
or is not payable.

                  (iv)     "Current Market Price" means the average of the daily
Closing Prices per share of Common Stock for the fifteen (15) consecutive
trading days immediately prior to such date. The "Closing Price" per share of
Common Stock for each day shall be the last sale price, regular way, before 5:00
p.m., or in case no such sale takes place on such day, the average closing bid
and asked prices, regular way, in either case, as reported on the NASD OTC
Bulletin Board or any successor stock exchange or quotation system on which the
Common Stock is then primarily listed or traded. If on any such trading day or
days such securities are not quoted by any such organization, such trading day
or days shall be replaced for purposes of the foregoing calculation by the
requisite trading day or days preceding the commencement of such fifteen (15)
day trading day period on which such securities are so quoted.

         (d)      RESERVATION OF STOCK ISSUABLE UPON MANDATORY CONVERSION. Until
the Conversion Date, the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion to Common Stock of all of
the outstanding shares of the Corporation's authorized and designated series of
convertible preferred stock, including the Series C Preferred, and the other
outstanding securities and options or similar rights issued by the Corporation,
which are convertible into or otherwise permit the holder thereof to purchase or
otherwise receive shares of Common Stock. The Corporation shall take any such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose, including, without limitation, approving
the Charter Amendment and taking other appropriate board action, submitting the
Charter Amendment to the Corporation's stockholders for their approval,
recommending the Charter Amendment and any other such increase to the
Corporation's stockholders, holding shareholders meetings, and soliciting votes
and proxies in favor of the Charter Amendment and any other such increase to
obtain the requisite shareholder approval.

         (e)      REORGANIZATION, MERGER OR SALE OF THE CORPORATION.

                  (i)      Notwithstanding any other provision hereof, in case
of (A) any reorganization or any reclassification of the capital stock of the
Corporation or (B) any sale of the Corporation if such transaction does not
constitute a Liquidation, then, at the election of each Preferred C Holder,
concurrently with the consummation of such reorganization, reclassification or
sale of the Corporation, provision shall be made so that each share of Series C
Preferred shall thereafter be convertible into the number of shares of stock or
other securities or property (including cash) to which a holder of the number of
shares of Common Stock deliverable upon conversion of such share of Series C
Preferred would have been entitled assuming conversion on the day immediately
prior to the initial announcement of the transaction or a proposed transaction
that ultimately resulted in the transaction. In any case, appropriate adjustment
(as determined by the Corporation's Board of Directors) shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the Preferred C Holders, to the end that the provisions
set forth herein shall


                                       -4-

<PAGE>   5


thereafter be applicable, as nearly as equivalent as is practicable, in relation
to any shares of stock or the securities or property (including cash) thereafter
deliverable upon the conversion of the shares of Series C Preferred.

                  (ii)     In case of any merger, consolidation,
reclassification or other similar reorganization, to the extent the Corporation
is not the surviving entity, the Series C Preferred shall be converted into or
exchanged for and shall become shares of the surviving corporation having, in
respect of the surviving corporation, substantially the same powers, preferences
and relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereon, that the Series C Preferred
has immediately prior to such transaction.

5.       RESTRICTIONS ON DIVIDENDS, STOCK SPLITS AND DISTRIBUTIONS

         The Corporation shall not at any time or from time to time after the
date that the first share of the Series C Preferred is issued until after the
Conversion Date: (i) declare or pay any dividends on or make other distributions
in respect of any of its capital stock, including, but not limited to, dividends
paid or payable in cash, the capital stock of the Corporation, or any other
property; (ii) effect a stock-split or any other subdivision of the outstanding
Common Stock; or (iii) effect a combination of the outstanding shares of Common
Stock into a smaller number of shares.

         SECOND:  That such determination of the designations, preferences and
the relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, relating to the Series C Preferred, was
duly made by the Corporation's Board of Directors pursuant to the provisions of
the Corporation's Charter, and in accordance with the provisions of Section 151
of the General Corporation Law of the State of Delaware, as amended.








                     [REMAINDER OF PAGE INTENTIONALLY BLANK]


                                       -5-

<PAGE>   6


         IN WITNESS WHEREOF, U.S. Technologies Inc. has caused this Certificate
of Designations to be executed this 7th day of April, 2000.



                                             U.S. TECHNOLOGIES INC.


                                             By: /s/ C. Gregory Earls
                                                --------------------------------
                                             C. Gregory Earls,
                                             Co-Chief Executive Officer


                                       -6-