Document:

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                                                                   EXHIBIT 10.10

          TAX INDEMNIFICATION AND S CORPORATION DISTRIBUTION AGREEMENT

            This TAX INDEMNIFICATION AND S CORPORATION DISTRIBUTION AGREEMENT
(the "Agreement") is entered into as of March___, 2000 between OTG SOFTWARE,
INC., a Delaware corporation (the "Company"), and the persons listed on Schedule
A attached hereto (individually a "Stockholder" and collectively the
"Stockholders"). Capitalized terms not otherwise defined have the meanings
ascribed to them in Section 1.1.

            WHEREAS, the Company and the Stockholders have entered into this
Agreement as a condition to the Public Offering;

            WHEREAS, the Company has been an "S corporation" (as defined in
Section 1361(a)(1) of the Code) for federal tax purposes since March 4, 1992;

            WHEREAS, the Company and the Stockholders understand that the
Company's S corporation status will terminate upon the date of the Public
Offering (the "Termination Date"), and, as a result, the Company will be a "C
corporation" (as defined in Section 1361(a)(2) of the Code) beginning on the
Termination Date;

            WHEREAS, the Company will declare the Tax Dividend which will be
payable as soon as possible on or after the Closing Date;

            WHEREAS, the Company and the Stockholders wish to terminate this
Agreement such that it has no effect should the Public Offering not occur;

            NOW, THEREFORE, the parties agree as follows:

                                   DEFINITIONS

        1.1.    Definitions.  The following terms, as used herein, have the
following meanings:

            (a) "AA Account" means the Company's "accumulated adjustments
account," as defined in Section 1368(e)(1) of the Code, as of the close of
business on the day before the Termination Date.

            (b) "AAA Settlement Date" means the last day of the
"post-termination transition period," as defined in Section 1377(b) of the Code,
of the Company, except shall not include any extension of the post-termination
transition period pursuant to Section 1377(b)(l)(C) as the result of a
determination that the Company's election under Section 1362(a) had terminated
earlier than the Closing Date.

            (c) "Applicable Marginal Tax Rate" means the highest combined
marginal rate of federal, state and local income tax applicable to individuals
subject to taxation in the state in which the Company has its primary place of
business for the year of computation.

            (d) "Closing Date" means the date on which the Public Offering
closes.
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            (e) "Code" means the Internal Revenue Code of 1986, as amended.

            (f) "C Short Year" means that portion of the S Termination Year of
the Company beginning on the Termination Date and ending on the last day of the
S Termination Year.

            (g) "C Taxable Year" means any taxable year (or portion thereof) of
the Company, including the C Short Year, during which it is subject to taxation
as a C corporation as defined in Section 1361(a)(2) of the Code.

            (h) "Estimated Tax Dividend" means the estimated Tax Dividend
computed based upon a good faith determination of the Company as soon as
possible after the Closing Date.

            (i) "Final Determination" means the first to occur of

                (i) the expiration of 30 days after IRS acceptance of a Waiver
             of Restrictions on Assessment and Collection of Deficiency of Tax
             and Acceptance of Overassessment on IRS Form 870 or 870-AD (or any
             successor comparable form or the expiration of a comparable period
             with respect to any comparable agreement or form under the laws of
             other jurisdictions);

                (ii) a decision, judgment, decree, or other order by a court of
             competent jurisdiction that is not subject to further judicial
             review and has become final;

                (iii) the execution of a closing agreement under Section 7121 of
             the Code or the acceptance by the IRS of an offer in compromise
             under Section 7122 of the Code, or comparable agreements under the
             laws of other jurisdictions;

                (iv) the expiration of the time for filing a claim for refund or
             for instituting suit in respect for a claim for refund disallowed
             in whole or in part by the IRS or other relevant tax authority;

                (v) any other final disposition of the tax liability for such
             period by reason of the expiration of the applicable statute of
             limitations; or

                (vi) any other event that the parties agree is final and
             irrevocable determination of the liability at issue.

            (j) "Public Offering" means the public offering of the Company's
Common Stock pursuant to the Registration Statement on Form S-1 originally filed
by the Company with the Securities and Exchange Commission on December 23, 1999.

            (k) "Record Date" means the day prior to the date upon which the
Company's Registration Statement on Form S-1, as amended, which was initially
filed with the Securities and Exchange Commission on December 23, 1999, is
declared effective by the Securities and Exchange Commission.

                                      -2-
<PAGE>   3

            (l) "S Short Year" means that portion of the S Termination Year
beginning on the first day of such taxable year and ending on the day
immediately preceding the Termination Date.

            (m) "S Taxable Year" means any taxable year (or portion thereof) of
the Company, including the S Short Year, during which it is subject to taxation
as an S corporation as defined in Section 1361(a)(1) of the Code.

            (n) "S Termination Year" shall mean the fiscal year of the Company
that includes the Termination Date.

            (o) "Tax Dividend" means the dividend to be declared by the Company
in an amount equal to the aggregate federal, state, and local income tax payable
by the Stockholders on the income of the Company for the calendar years 1998 and
1999 and the S Short Year that passes through to the Stockholders pursuant to
Section 1366 of the Code, using the Applicable Marginal Tax Rate; provided
however that such amount shall not exceed the lesser of $1.6 million or the AA
Account.

            (p) "Taxing Authority" means the United States Internal Revenue
Service and any comparable state or foreign taxing authority.

            (q) "Termination Date" means the date on which the S corporation
status of the Company will terminate pursuant to Section 1362(d) of the Code,
which is expected to be the Closing Date.

                                    ARTICLE 2

           TERMINATION OF S CORPORATION STATUS, ALLOCATION OF INCOME,
          DECLARATION OF TAX DIVIDEND AND ADJUSTMENT OF ESTIMATED TAX
                                    DIVIDEND

            2.1 Termination of S Corporation Status. The Company and the
Stockholders understand that the Company's S corporation status will terminate
upon the consummation of the Public Offering.

            2.2 Pro Rata Allocation of Tax Items. The Company shall be required
to allocate the tax items described in Section 1362(e)(2)(A) of the Code between
the S Short Year and the C Short Year pursuant to the pro rata allocation rules
set forth in Section 1362(e)(2)(B) of the Code.

            2.3 Declaration of Tax Dividend. Prior to the Closing Date, the
Company shall declare the Tax Dividend, subject to the closing of the Public
Offering, to the stockholders of record on the Record Date payable as soon as
possible on or after the Closing Date in the amount of the Estimated Tax
Dividend.

                                      -3-
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            2.4 Adjustment to Estimated Tax Dividend.

            (a) Determination of Estimated Tax Dividend. The parties acknowledge
that the amount of the Estimated Tax Dividend will be based on good faith
determinations by the Company as of the Termination Date.

            (b) Adjustment of Estimated Tax Dividend. The parties agree that if
the Company determines after the Termination Date and on or before the AAA
Settlement Date that the Estimated Tax Dividend does not equal the amount of the
Tax Dividend, then:

                (i) if the amount of the Estimated Tax Dividend exceeds the
             amount of Tax Dividend, the Stockholders who received the Estimated
             Tax Dividend shall thereafter remit to the Company their pro-rata
             share of such excess no later than thirty (30) days after receiving
             notice from the Company that such amount is payable; and

                (ii) if the amount of the Tax Dividend exceeds the amount of the
             Estimated Tax Dividend, the Company shall thereafter distribute to
             the Stockholders their pro-rata shares of such excess within thirty
             (30) days following the date the Company determines an amount is
             payable pursuant to this Section 2.4(b)(ii).

            (c) Interest on Adjustment. Any payment due under this section shall
be increased by interest on the amount of such payment computed from the date of
the payment of the Estimated Tax Dividend until the date of payment pursuant to
this section. The interest rate shall be the Prime Rate of Fleet Bank (or its
successors) as adjusted from time to time.

                                    ARTICLE 3

                  TAX PAYMENTS AND INDEMNIFICATION OBLIGATIONS

            3.1 Liability for Taxes Incurred During S Short Year. Each
Stockholder covenants and agrees that: (i) the Stockholder will duly include, in
his own federal and state income tax returns, all items of income, gain, loss,
deduction, or credit attributable to the S Short Year in a manner consistent
with the Form 1120S and the schedules thereto (and the corresponding state
income tax forms and schedules) to be filed by the Company with respect to such
period; (ii) such returns shall be filed no later than the due date (including
extensions, if any) for filing such returns; and (iii) each Stockholder shall
pay any and all taxes required to be paid for its taxable year that includes the
S Short Year.

            3.2 Liability for Taxes Incurred During S Short Year and C Short
Year. The Company covenants and agrees that: (i) the Company shall be
responsible for and shall effect the filing of all federal and state income tax
returns for the Company with respect to the S Short year and the C Short Year;
(ii) such Company returns shall be accurately prepared and timely filed; and
(iii) the Company shall pay any and all taxes required to be paid by the Company
for the periods covered by such returns as required by applicable law.

                                      -4-
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            3.3 Stockholders Indemnification of Company for Tax Liabilities.

            (a) Adjustments Attributable to Company's S Status. If, based on a
Final Determination, the Company is deemed to have been a C corporation for
federal, state or local income tax purposes during any period in which it
reported (or intends to report) its taxable income as an S corporation, each
Stockholder agrees to contribute to the capital of the Company, subject to the
limitations contained in the last sentence of this Section 3.3(a) and in Section
3.3(b), an amount necessary to hold the Company harmless from any taxes (net of
any refunds) and interest arising from such Final Determination. Each
Stockholder's obligation under this Section 3.3(a) shall be several and not
joint and shall be limited to that percentage of the tax (net of any refunds)
and interest due and payable by the Company equal to the fraction, expressed as
a percentage, the numerator of which is the total distributions to such
Stockholder made by the Company from March 4, 1992 through and including the
Termination Date, plus the Tax Dividend and any adjustment thereto pursuant to
this Agreement, and the denominator of which is the total distributions made by
the Company to all Stockholders from March 4, 1992 through and including the
Termination Date, plus the Tax Dividend and any adjustment thereto pursuant to
this Agreement.

            (b) Limit on Indemnification Amount. Any payment by a Stockholder to
the Company pursuant to this Section 3.3 shall not exceed the amount of the
total distributions made to such Stockholder by the Company after January 1,
2000, plus the Tax Dividend and any adjustment thereto pursuant to this
Agreement, reduced by any taxes paid or payable by the Stockholders on the
distributions and increased by any refund of taxes and interest received by the
Stockholders with respect to the Company's S corporation earnings.

            (c) Time of Indemnification Payment. The Stockholders shall
contribute to the capital of the Company amounts set forth in this Section 3.3
within thirty (30) days after notice from the Company that a payment is due by
the Company to the appropriate Taxing Authority.

            3.4 Contests/Cooperation.

            (a) Contests. Each of the Company and the Stockholders agree that
(i) in the event that any of them receives notice, whether orally or in writing,
of any federal, state, local or foreign tax examinations, claims, settlements,
proposed adjustments or related matters that may affect in any way the liability
of any of such persons whether under this Agreement or otherwise, it shall
within ten days notify the other parties in writing thereof (provided that any
failure to give such notice shall not reduce a party's right to indemnification
under this Agreement except to the extent of actual damage incurred by the other
parties as a result of such failure), and (ii) the Company shall be entitled at
its reasonable discretion and sole expense to handle, control and compromise or
settle the defense of any matter of the Company or any Stockholder which may
give rise to a liability under this Agreement or a limitation of liability under
this Agreement, provided that the Stockholders may participate in all
conferences, meetings or proceedings with respect to the issue.

            (b) Cooperation. The parties will make available to one another, as
reasonably requested, and to any Taxing Authority, all information, records or
documents relating to the

                                      -5-
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liability for taxes covered by this Agreement and will preserve such
information, records or documents until the expiration of any applicable statute
of limitations or extensions thereof. The party requesting such information
shall reimburse the other party for all reasonable out-of-pocket costs incurred
in producing such information.

            (c) Claims for Refund. Each party hereto agrees to file a properly
completed claim with the appropriate Taxing Authority for a refund or an
abatement of taxes paid with respect to any matter which may give rise to a
liability under Section 3.4 of this Agreement.

            3.5 Costs.  Except to the extent otherwise provided herein, each
party shall bear its own costs in administering this Agreement.

            3.6 Correction of a Final Determination. In the event a party makes
a payment pursuant to this Agreement based on the expected outcome of a Final
Determination which subsequently is determined to have been incorrect, the
parties shall adjust the payments hereunder in order to reflect the subsequent
determination as if it was the Final Determination upon which the original
payment was based.

                                    ARTICLE 4

                                  MISCELLANEOUS

            4.1 Disputes. If the parties are, after negotiation in good faith,
unable to agree upon the appropriate application of this Agreement, the
controversy shall be settled by the accounting firm remaining on the list of
firms set forth on Schedule B hereto after the Company and the representative of
the Stockholders, commencing with the Company, shall have objected seriatim to
the other firms of the list (the "Accounting Firm"). The decision of the
Accounting Firm shall be final, and each of the Company and the Stockholders
agree immediately to pay to the other any amount due under this Agreement
pursuant to such decision. The expenses of the Accounting firm shall be borne
one-half by the Company and one-half by the Stockholders, in the same proportion
that the Stockholders share liability under Section 3.3 hereof, unless the
Accounting Firm specifies otherwise.

            4.2 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute an instrument representing the
Agreement between the parties hereto.

            4.3 Construction of Terms. Nothing herein expressed or implied is
intended, or shall be construed, to confer upon or give any person, firm or
corporation, other than the parties hereto or their respective successors and
assigns, any rights or remedies under or by reason of this Agreement.

            4.4 Governing Law. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with the
substantive laws of the Commonwealth of Delaware without regard to Delaware
choice of law rules.

                                      -6-
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            4.5 Amendment and Modification.  This Agreement may be amended,
modified or supplemented only by a written agreement executed by the parties.

            4.6 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties, nor
is this Agreement intended to confer upon any other person except the parties
any rights or remedies hereunder.

            4.7 Interpretation. The title, article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.

            4.8 Severability. In the event that any one or more of the
provisions of this Agreement shall be held to be illegal, invalid or
unenforceable in any respect, the same shall not in any respect affect the
validity, legality or enforceability of the remainder of this Agreement, and the
parties shall use their best efforts to replace such illegal, invalid or
unenforceable provisions with an enforceable provision approximating, to the
extent possible, the original intent of the parties.

            4.9 Entire Agreement. This Agreement embodies the entire agreement
and understanding of the parties hereto in respect to the subject matter
contained herein. There are no representations, promises, warranties, covenants,
or undertakings, other than those expressly set forth or referred to herein.
This Agreement supersedes all prior agreements and the understandings between
the parties with respect to such subject matter.

            4.10 Interest on Overdue Payments. Any payment pursuant to this
Agreement not made when due under this Agreement shall bear interest at the rate
of the Prime Rate of BankBoston (or its successors), as published from time to
time.

            4.11 Setoff. All payments to be made by any party under this
Agreement shall be made without setoff, counterclaim or withholding, all of
which are expressly waived.

            4.12 Notices. All notices provided for in this Agreement shall be
validly given if in writing and delivered personally or sent by registered mail,
postage prepaid

            if to the Company, to:

            Chief Financial Officer
            OTG Software, Inc.
            6701 Democracy Boulevard, Suite 800
            Bethesda, MD 20817

                                      -7-
<PAGE>   8

            copy to:

            Brent B. Siler, Esq.
            Hale and Dorr LLP
            11951 Freedom Drive, Suite 1400
            Reston, VA  20190

            if to any Stockholder, to:

            Name of Stockholder
            c/o Richard A. Kay
            President and Chief Executive Officer
            OTG Software, Inc.
            6701 Democracy Boulevard, Suite 800
            Bethesda, MD 20817

            4.14 Termination of Agreement.  This Agreement shall terminate and
be void, as if it never had been executed, if the Closing Date shall occur after
April 30, 1999.

                                      -8-
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            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                   OTG SOFTWARE, INC.

                                   By:
                                      --------------------------
                                      Ronald W. Kaiser
                                      Chief Financial Officer

                                   STOCKHOLDERS:

                                   ------------------------------
                                   Richard A. Kay

                                   ------------------------------
                                   Alexandra Kay

                                   ------------------------------
                                   The Amanda Jean Kay November 1999 Grantor
                                   Retained Annuity Trust
                                   dated November 10, 1999

                                   -------------------------------
                                   The Bradley Evan Kay November 1999 Grantor
                                   Retained Annuity Trust
                                   dated November 10, 1999

                                   -------------------------------
                                   The Brandon Kay June 1999 Grantor
                                   Retained Annuity Trust
                                   dated June 15, 1999

                                   -------------------------------
                                   The Brandon Kay June 1999 Grantor
                                   Retained Annuity Trust
                                   dated November 10, 1999

                                      -9-
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                                   -------------------------------
                                   F. William Caple

                                   -------------------------------
                                   Ronald W. Kaiser

                                   -------------------------------
                                   Gabriel A. Battista

                                   -------------------------------
                                   John Burton

                                   -------------------------------
                                   Joseph R. Chinnici

                                   -------------------------------
                                   Geaton A. DeCesaris, Jr.

                                   -------------------------------
                                   Scott Nickel

                                   -------------------------------
                                   Stewart Nickel

                                   -------------------------------
                                   Paul Matsko

                                   -------------------------------
                                   Robert Alan Depelteau

                                   -------------------------------
                                   Mark Hanson

                                      -10-
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                                   -------------------------------
                                   Angela Duffy

                                   -------------------------------
                                   JoAnn DeCesaris

                                   -------------------------------
                                   Elizabeth DeCesaris

                                   -------------------------------
                                   Kristin DeCesaris

                                   -------------------------------
                                   Maria DeCesaris

                                      -11-
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                                   SCHEDULE A

                              LIST OF STOCKHOLDERS

            Richard A. Kay

            Alexandra Kay

            The Amanda Jean Kay November 1999
            Grantor Retained Annuity Trust
            dated November 10, 1999

            The Bradley Evan Kay November 1999
            Grantor Retained Annuity Trust
            dated November 10, 1999

            The Brandon Kay June 1999 Grantor
            Retained Annuity Trust dated June 15, 1999

            The Brandon Kay June 1999 Grantor
            Retained Annuity Trust  dated November 10, 1999

            F. William Caple

            Ronald W. Kaiser

            Gabriel A. Battista

            John Burton

            Joseph R. Chinnici

            Geaton A. DeCesaris, Jr.

            Scott Nickel

            Stewart Nickel

            Paul Matsko

            Robert Alan Depelteau

            Mark Hanson

            Angela Duffy

            JoAnn DeCesaris

            Elizabeth DeCesaris

<PAGE>   13

            Kristin DeCesaris

            Maria DeCesaris

                                      -13-
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                                   SCHEDULE B

                            LIST OF ACCOUNTING FIRMS

            PricewaterhouseCoopers LLP

            KPMG Peat Marwick LLP

            Arthur Andersen LLP

            Deloitte & Touche LLP

            Ernst & Young LLP

                                      -14-<PAGE>   1
                                                                     EXHIBIT 4.5

[USi LOGO]                                                          CONFIDENTIAL

                             USINTERNETWORKING, INC.
                        2000 EMPLOYEE STOCK PURCHASE PLAN

                                   ARTICLE I.
                  PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN

1.1    Purpose and Scope

       The purpose of the USinternetworking, Inc. 2000 Employee Stock Purchase
Plan is to assist employees of USinternetworking, Inc. and its subsidiaries in
acquiring a stock ownership interest in the Company pursuant to a plan which is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Internal Revenue Code of 1986, as amended.

1.2    Administration of Plan

       The Plan shall be administered by the Committee. The Committee shall have
the power to make, amend and repeal rules and regulations for the interpretation
and administration of the Plan consistent with the qualification of the plan
under Section 423 of the Code, and the Committee also is authorized to change
the Option Periods, Offering Dates and Exercise Dates under the Plan by
providing written notice to all Employees at least 15 days prior to the date
following which such changes will take effect. The Committee may delegate
administrative tasks under the Plan to one or more Officers of the Company. The
Committee's interpretation and decisions in respect to the Plan shall be final
and conclusive.

                                   ARTICLE II.
                                   DEFINITIONS

       Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The singular pronoun shall include the plural where the context so indicates.

2.1    "Board" shall mean the Board of Directors of the Company.

2.2    "Code" shall mean the Internal Revenue Code of 1986, as amended.

2.3    "Committee" shall mean the Compensation Committee of the Board, which
Committee shall administer the Plan as provided in Section 1.2 above.

2.4    "Common Stock" shall mean shares of common stock of the Company.

2.5    "Company" shall mean USinternetworking, Inc.

2.6    "Compensation" shall mean the base salary, bonuses, overtime and
commissions paid to an Employee by the Company or a Subsidiary in accordance
with established payroll procedures.

                                   Page 1 of 8
<PAGE>   2

[USi LOGO]                                                          CONFIDENTIAL

2.7    "Eligible Employee" shall mean an Employee who (a) is customarily
scheduled to work at least 20 hours per week and (b) whose customary employment
is more than five (5) months in a calendar year.

2.8    "Employee" shall mean any employee of the Company or a Subsidiary.

2.9    "Exercise Date" shall mean each February 28 (or, each leap year, February
29) and August 31.

2.10   "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

2.11   "Fair Market Value" of a share of Common Stock as of a given date shall
mean (i) the closing price of the sale of Common Stock on the Nasdaq National
Market System ("Nasdaq") as of 4:00 P.M., New York time on such date or on the
immediately preceding trading date, or (ii) if Common Stock is not quoted on
Nasdaq, the fair market value of a share of Common Stock as established by the
Committee acting in good faith.

2.12   "Offering Date" shall mean each March 1 and September 1; provided,
however, that the first Offering Date under the Plan shall be March 24, 2000.

2.13   "Officer" shall mean an employee of the Company who is either an
executive officer or member of the management of the Company.

2.14   "Option Period" shall mean the period beginning on an Offering Date and
ending on the next succeeding Exercise Date.

2.15   "Option Price" shall mean the purchase price of a share of Common Stock
hereunder as provided in Section 4.1 below.

2.16   "Participant" shall mean any Eligible Employee who elects to participate.

2.17   "Plan" shall mean this USinternetworking, Inc. 2000 Employee Stock
Purchase Plan, as it may be amended from time to time.

2.18   "Plan Account" shall mean a bookkeeping account established and
maintained by the Company in the name of each Participant.

2.19   "Subsidiary" shall mean any corporation of which the Company or a
Subsidiary owns stock possessing 50% or more of the total combined voting power
of all classes of stock in the corporation.

                                   Page 2 of 8
<PAGE>   3

[USi LOGO]                                                          CONFIDENTIAL

                                  ARTICLE III.
                                  PARTICIPATION

3.1    Eligibility

       An Eligible Employee may participate in the Plan if immediately after the
applicable Offering Date, that Employee would not be deemed for purposes of
Section 423(b)(3) of the Code to possess 5% or more of the total combined voting
power or value of all classes of stock of the Company or any Subsidiary.

3.2    Election to Participate; Payroll Deductions

       (a)    An Eligible Employee may participate in the Plan only by means of
payroll deduction. An Eligible Employee may elect to participate in the Plan
during an Option Period by delivering to the Company in the calendar month
preceding the Offering Date on which such Option Period commences a written
payroll deduction authorization on a form prescribed by the Company; provided,
however that for the Option Period commencing on the March 24, 2000, an Eligible
Employee may elect to participate in the Plan at any time on or prior to the
March 24, 2000.

       (b)    Payroll deductions (i) shall be equal to at least 1%, but not more
than 15%, of the Participant's Compensation as of the Offering Date; (ii) must
equal at least five dollars ($5.00) per pay period; and (iii) may be expressed
either as (A) a whole number percentage or (B) a fixed dollar amount, subject to
the provisions of Sections 4.2 and 4.3 below. Amounts deducted from a
Participant's Compensation pursuant to this Section 3.2 shall be credited to the
Participant's Plan Account.

3.3    Leave of Absence

       During leaves of absence approved by the Company meeting the requirements
of Regulation Section 1.421-7(h)(2) under the Code, a Participant may continue
participation in the Plan by making cash payments to the Company on his or her
normal payday equal to his or her authorized payroll deduction.

                                   ARTICLE IV.
                               PURCHASE OF SHARES

4.1    Option Price

       The Option Price per share of the Common Stock sold to Participants
hereunder shall be 85% of the Fair Market Value of such share on either the
Offering Date or the Exercise Date of the Option Period, whichever is lower, but
in no event shall the Option Price per share be less than the par value per
share ($0.001) of the Common Stock.

                                   Page 3 of 8
<PAGE>   4

[USi LOGO]                                                          CONFIDENTIAL

4.2    Purchase of Shares

       (a)    On each Exercise Date on which he or she is employed, each
Participant will automatically and without any action on his or her part be
deemed to have exercised his or her option to purchase at the Option Price the
largest number of whole shares of Common Stock which can be purchased with the
amount in the Participant's Plan Account. The balance, if any, remaining in the
Participant's Plan Account (after exercise of his or her option) as of an
Exercise Date shall be carried forward to the next Option Period, unless the
Participant has elected to withdraw from the Plan pursuant to Section 6.1 below.

       (b)    As soon as practicable following each Exercise Date, the Company
will deliver to the Participant a certificate issued in his or her name for such
number of shares purchased by such Participant pursuant to subsection (a) above.
In the event the Company is required to obtain from any commission or agency
authority to issue any such certificate, the Company will seek to obtain such
authority. Inability of the Company to obtain from any such commission or agency
authority which counsel for the Company deems necessary for the lawful issuance
of any such certificate shall relieve the Company from liability to any
Participant except to refund to him or her the amount withheld.

4.3    Limitations on Purchase

       No Employee shall be granted an option under the Plan which permits his
or her rights to purchase Common Stock under the Plan or any other employee
stock purchase plan of the Company or any of its Subsidiaries to accrue at a
rate which exceeds $25,000 (as measured by the Fair Market Value of such Common
Stock at the time the option is granted) for each calendar year such option is
outstanding. For purposes of this Section 4.3, the right to purchase Common
Stock under an option accrues when the option (or any portion thereof) becomes
exercisable, and the right to purchase Common Stock which has accrued under one
option under the Plan may not be carried over to any other option.

4.4    Transferability of Rights

       An option granted under the Plan shall not be transferable and is
exercisable only by the Participant. No option or interest or right to the
option shall be available to pay off any debts, contracts or engagements of the
Participant or his or her successors in interest or shall be subject to
disposition by pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempt at disposition of the option shall have
no effect.

                                  Page 4 of 8
<PAGE>   5

[USi LOGO]                                                          CONFIDENTIAL

                                   ARTICLE V.
                       PROVISIONS RELATING TO COMMON STOCK

5.1    Common Stock Reserved

       Subject to adjustment as provided in Section 5.2, the maximum number of
shares of Common Stock that shall be made available for sale under this Plan
shall be 1,500,000, plus an annual increase on the first day of each of the
Company's fiscal years beginning in 2001 and ending in 2010, equal to the lesser
of (a) 1,000,000 shares, (b) 0.75% of the shares outstanding on the last day of
the immediately preceding fiscal year, or (c) such lesser number of shares as is
determined by the Board. Shares of Common Stock made available for sale under
this Plan may be authorized but unissued or reacquired shares reserved for
issuance under this Plan.

5.2    Adjustment for Changes in Common Stock

       In the event that adjustments are made in the number of outstanding
shares of Common Stock or the shares are exchanged for a different class of
stock of the Company by reason of stock dividend, stock split or other
subdivision, the Committee shall make appropriate adjustments in (a) the number
and class of shares or other securities that may be reserved for purchase
hereunder and (b) the Option Price of outstanding options.

5.3    Merger, Acquisition or Liquidation

       In the event of the merger or consolidation of the Company into another
corporation, the acquisition by another corporation of all or substantially all
of the Company's assets or 80% or more of the Company's then outstanding voting
stock or the liquidation or dissolution of the Company, the date of exercise
with respect to outstanding options shall be the business day immediately
preceding the effective date of such merger, consolidation, acquisition,
liquidation or dissolution unless the Committee shall, in its sole discretion,
provide for the assumption or substitution of such options in a manner complying
with Section 424(a) of the Code.

5.4    Insufficient Shares

       If the aggregate funds available for the purchase of Common Stock on any
Exercise Date would cause an issuance of shares in excess of the number provided
for in Section 5.1 above, (a) the Committee shall proportionately reduce the
number of shares that would otherwise be purchased by each Participant in order
to eliminate such excess, and (b) the Plan shall automatically terminate
immediately after such Exercise Date.

5.5    Rights as Stockholders

       With respect to shares of Common Stock subject to an option, a
Participant shall not be deemed to be a stockholder and shall not have any of
the rights or privileges of a stockholder. A

                                  Page 5 of 8
<PAGE>   6

[USi LOGO]                                                          CONFIDENTIAL

Participant shall have the rights and privileges of a stockholder when, but not
until, a certificate has been issued to him or her following exercise of his or
her option.

                                   ARTICLE VI.
                          TERMINATION OF PARTICIPATION

6.1    Cessation of Contributions; Voluntary Withdrawal

       (a)    A Participant may cease payroll deductions during an Option Period
by delivering written notice of such cessation to the Company. Upon any such
cessation, the Participant may elect either to withdraw from the Plan pursuant
to subsection (b) below or to have amounts credited to his or her Plan Account
held in the Plan for the purchase of Common Stock pursuant to Section 4.2. A
Participant who ceases contributions to the Plan during any Option Period shall
not be permitted to resume contributions to the Plan during that Option Period.

       (b)    A Participant may withdraw from the Plan at any time by written
notice to the Secretary of the Company prior to the close of business on an
Exercise Date. Within 21 days after the notice of withdrawal is delivered, the
Company shall refund the entire amount, if any, in a Participant's Plan Account
to him or her, at which time, the Participant's payroll deduction authorization,
his or her interest in the Plan and his or her option under the Plan shall
terminate. Any Eligible Employee who withdraws from the Plan may again become a
Participant in accordance with Section 3.2 above.

6.2    Termination of Eligibility

       (a)    If a Participant ceases to be eligible under Section 3.1 above for
any reason, the amount in such Participant's Plan Account will be refunded to
the Participant or his or her designated beneficiary or estate within 21 days of
his or her termination of employment or other cessation of eligibility.

       (b)    Upon payment by the Company to the Participant or his or her
beneficiary or estate of the remaining balance, if any, in Participant's Plan
Account, the Participant's interest in the Plan and the Participant's option
under the Plan shall terminate.

                                  ARTICLE VII.
                               GENERAL PROVISIONS

7.1    Condition of Employment

       Neither the creation of the Plan nor an Employee's participation therein
shall be deemed to create a contract of employment, any right of continued
employment or in any way affect the right of the Company or a Subsidiary to
terminate an Employee at any time with or without cause.

                                  Page 6 of 8
<PAGE>   7

[USi LOGO]                                                          CONFIDENTIAL

7.2    Amendment of the Plan

       (a)    The Board may amend, suspend or terminate the Plan at any time and
from time to time; provided, however, that without approval of the Company's
stockholders given within 12 months before or after action by the Board, the
Plan may not be amended to increase the maximum number of shares subject to the
Plan or change the designation or class of Eligible Employees.

       (b)    Upon termination of the Plan, the balance in each Participant's
Plan Account shall be refunded within 21 days of such termination.

7.3    Use of Funds; No Interest Paid

       All funds received by the Company by reason of purchase of Common Stock
under this Plan will be included in the general funds of the Company free of any
trust or other restriction and may be used for any corporate purpose. No
interest will be paid to any Participant or credited under the Plan.

7.4    Term; Approval by Stockholders

       The Plan shall terminate on the tenth anniversary of the date of its
initial approval by the stockholders of the Company, unless earlier terminated
by action of the Board. No option may be granted during any period of suspension
of the Plan nor after termination of the Plan. The Plan will be submitted for
the approval of the Company's stockholders within 12 months after the date of
the Board's initial adoption of the Plan. Options may be granted prior to such
stockholder approval; provided, however, that such options shall not be
exercisable prior to the time when the Plan is approved by the stockholders;
provided further that if such approval has not been obtained by the end of said
12-month period, all options previously granted under the Plan shall thereupon
be canceled and become null and void.

7.5    Effect Upon Other Plans

       The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary. Nothing in this
Plan shall be construed to limit the right of the Company or any Subsidiary (a)
to establish any other forms of incentives or compensation for employees of the
Company or any Subsidiary or (b) to grant or assume options otherwise than under
this Plan in connection with any proper corporate purpose, including, but not by
way of limitation, the grant or assumption of options in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

                                  Page 7 of 8
<PAGE>   8

[USi LOGO]                                                          CONFIDENTIAL

7.6    Conformity to Securities Laws

       Notwithstanding any other provision of this Plan, this Plan and the
participation in this Plan by any individual who is then subject to Section 16
of the Exchange Act shall be subject to any additional limitations set forth in
any applicable exemptive rule under Section 16 of the Exchange Act (including
any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law,
the Plan shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule.

7.7    Notice of Disposition of Shares

       The Company may require any Participant to give the Company prompt notice
of any disposition of shares of Common Stock, acquired pursuant to the Plan,
within two years after the applicable Offering Date or within one year after the
applicable Exercise Date with respect to such shares. The Company may direct
that the certificates evidencing shares acquired pursuant to the Plan refer to
such requirement.

7.8    Tax Withholding

       The Company shall be entitled to require payment in cash or deduction
from other compensation payable to each Participant of any sums required by
federal, state or local tax law to be withheld with respect to any purchase of
shares of Common Stock under the Plan or any sale of such shares.

7.9    Governing Law

       The Plan and all rights and obligations thereunder shall be construed and
enforced in accordance with the laws of the State of Delaware.

                                   * * * * * *

       I hereby certify that the foregoing USinternetworking, Inc. 2000 Employee
Stock Purchase Plan was duly approved by the Compensation Committee of the Board
of Directors of USinternetworking, Inc. on December 21, 1999.

       I hereby certify that the foregoing USinternetworking, Inc. 2000 Employee
Stock Purchase Plan was duly approved by the stockholders of USinternetworking,
Inc. on _________ ___, 2000.

       Executed on this ___ day of ___________, 2000.

                                                     ---------------------------
                                                             Secretary

                                  Page 8 of 8

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