-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S/Nedj6/T+XoL6N+OtJF6h3siDr/51I96J523mc/lgZTeXmSz/WJI8MvGcBtV4/I tHsGsjuhl3Thu5jmPJbGuw== 0000899140-03-000238.txt : 20030306 0000899140-03-000238.hdr.sgml : 20030306 20030306104532 ACCESSION NUMBER: 0000899140-03-000238 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20030306 GROUP MEMBERS: WARBURG PINCUS &CO. GROUP MEMBERS: WARBURG PINCUS LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INDUS INTERNATIONAL INC CENTRAL INDEX KEY: 0001041333 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943273443 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-51511 FILM NUMBER: 03594030 BUSINESS ADDRESS: STREET 1: 60 SPEAR ST CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 4159045000 MAIL ADDRESS: STREET 1: 60 SPEAR STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 FORMER COMPANY: FORMER CONFORMED NAME: INDUS TSW INC DATE OF NAME CHANGE: 19970619 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS INVESTORS LP CENTRAL INDEX KEY: 0000929658 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133549187 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 SC 13D/A 1 w1162987b.txt AMENDMENT NO. 4 TO SCHEDULE 13D - -------------------------------------------------------------------------------- SEC Potential persons who are to respond to the collection of information contained in this form 1746 (11-02) are not required to respond unless the form displays a currently valid OMB control number. - -------------------------------------------------------------------------------- - ------------------------------- OMB APPROVAL - ------------------------------- OMB Number: 3235-0145 - ------------------------------- Expires: December 31, 2005 - ------------------------------- Estimated average burden hours per response . . . . . 11 - ------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Amendment No. 4) Under the Securities Exchange Act of 1934 Indus International, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.001 - -------------------------------------------------------------------------------- (Title of Class of Securities) 45578L100 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Scott A. Arenare, Esq. Managing Director and General Counsel Warburg Pincus LLC 466 Lexington Avenue New York, New York 10017 (212) 878-0600 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Jeffrey R. Poss, Esq. Willkie Farr & Gallagher 787 Seventh Avenue New York, NY 10019-6099 (212) 728-8000 March 5, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D/A, and is filing this schedule because of ss.ss.240.13d-l(e), 240.13d-l(f) or 240.13d-1(g), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 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 ("Act") 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). SCHEDULE 13D - --------------------- ------------------ CUSIP No. 45578L100 Page 1 of 11 Pages - --------------------- ------------------ - ----------- -------------------------------------------------------------------- 1 NAME OF REPORT PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Warburg, Pincus Investors, L.P. - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 14,814,743 (See Item 5) OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 14,814,743 (See Item 5) - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 14,814,743 (See Item 5) - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35.22% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ----------- -------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- ------------------ CUSIP No. 45578L100 Page 2 of 11 Pages - --------------------- ------------------ - ----------- -------------------------------------------------------------------- 1 NAME OF REPORT PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Warburg Pincus LLC - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 14,814,743 (See Item 5) OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 14,814,743 (See Item 5) - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 14,814,743 (See Item 5) - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35.22% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO (LIMITED LIABILITY COMPANY) - ----------- -------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- ------------------ CUSIP No. 45578L100 Page 3 of 11 Pages - --------------------- ------------------ - ----------- -------------------------------------------------------------------- 1 NAME OF REPORT PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Warburg Pincus & Co. - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 14,814,743 (See Item 5) OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 14,814,743 (See Item 5) - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 14,814,743 (See Item 5) - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35.22% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ----------- -------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. Page 4 of 11 Pages Pursuant to Rule 13d-2 promulgated under the Exchange Act, this Amendment No. 4 amends the Schedule 13D filed on September 4, 1997, as amended on September 8, 1997 , September 9, 1998 and January 13, 1999 (such Schedule 13D as amended, the "Old Schedule 13D/A") by Warburg, Pincus Investors, L.P. ("WPI"), a Delaware limited partnership, Warburg Pincus LLC, a New York limited liability company (formerly known as E.M. Warburg, Pincus & Co., LLC.)("WP LLC") and Warburg Pincus & Co., a New York general partnership ("WP," and together with WPI and WP LLC, the "Reporting Entities"). The Reporting Entities are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The agreement among the Reporting Entities to file jointly (the "Joint Filing Agreement") is attached hereto as Exhibit 1. Unless the context otherwise requires, references herein to the "Common Stock" are to shares of common stock, par value $0.001 per share of Indus International, Inc., a Delaware corporation ("Indus International" or the "Company"). Each Reporting Entity disclaims beneficial ownership of all shares of Common Stock, other than those reported herein as being owned by it. Item 3. Source and Amount of Funds or Other Consideration. Item 3 of the Old Schedule 13D/A is hereby amended by adding the following: The Financing Purchase Agreement - -------------------------------- Pursuant to a Purchase Agreement, dated as of February 12, 2003, by and among WPI, the other purchasers named therein (collectively with WPI, the "Financing Purchasers") and the Company (the form of which is attached hereto as Exhibit 2) (the "Financing Purchase Agreement"), WPI purchased 72,666 shares of the Company's Common Stock at a price of $1.50 per share (the "Financing Common Stock") and a Convertible Promissory Note of the Company, dated March 5, 2003 in the aggregate principal amount of $4,891,001.00 at face value (the form of which is attached hereto as Exhibit 3) (the "Financing Note", and together with the Financing Common Stock, the "Financing Securities"), with the purchase price paid in cash on February 13, 2003 into an escrow account. On March 5, 2003, the Company satisfied all of its closing conditions required to be performed by it under the Financing Purchase Agreement and the purchase price was released to the Company from the escrow account (the "Financing Closing"). Following the date on which the Company's stockholders vote in favor of the proposed issuance of Common Stock issuable upon conversion of the Financing Note, which vote shall occur prior to May 12, 2003 (the "Financing Stockholder Approval"), the Financing Note shall be convertible into 3,260,667 shares of Common Stock based on an initial conversion price of $1.50, subject to certain adjustments as set forth in the Financing Note (the "Financing Conversion Price"). In addition, on the date of such conversion (the "Financing Conversion Date") any accrued, but unpaid, interest on the Financing Note will be paid to WPI or its permitted transferees in the form of Common Stock based on the Financing Conversion Price. The total amount of funds required to purchase the Financing Securities at the Financing Closing by WPI pursuant to the Financing Purchase Agreement was $5,000,000 and was furnished from the working capital of WPI. No additional funds were required to acquire beneficial ownership of the Financing Securities reported on this Schedule 13D/A. Page 5 of 11 Pages Item 4. Purpose of Transaction. Item 4 of the Old Schedule 13D/A is hereby amended by adding the following: Financing Purchase Agreement - ---------------------------- The purchases by WPI of the Financing Securities were effected both because of the Reporting Entities' belief that the Company represents an attractive investment based on the Company's business prospects and strategy and to help finance the Company's acquisition of the Energy and Utilities Solutions business of Systems & Computer Technology Corporation. Depending on prevailing market, economic and other conditions, the Reporting Entities may from time to time acquire additional shares of capital stock of the Company or engage in discussions with the Company concerning future acquisitions of shares of capital stock of the Company or further investments by them in the Company. The Reporting Entities intend to review their investment in the Company on a continuing basis and, depending upon the price and availability of shares of the Company's capital stock, subsequent developments affecting the Company, the Company's business and prospects, other investment and business opportunities available to the Reporting Entities, general stock market and economic conditions, tax considerations and other factors considered relevant, may decide at any time to increase or to decrease the size of their investment in the Company. Pursuant to the terms of the Financing Purchase Agreement, the Company has agreed to prepare and file with the SEC, within 30 days after the Financing Closing, a registration statement on Form S-3 covering the shares of Common Stock sold at the Financing Closing pursuant to the Financing Purchase Agreement (the "Financing Purchasers Shares") for the benefit of the Financing Purchasers and their permitted transferees, including WPI. Pursuant to the terms of the Financing Purchase Agreement, the Company has agreed to prepare and file with the SEC, within 30 days after the Financing Conversion Date, a registration statement on Form S-3 covering the shares of Common Stock issuable upon conversion of all the Convertible Promissory Notes, including the Financing Note, issued at the Financing Closing pursuant to the Financing Purchase Agreement (the "Financing Purchasers Conversion Shares") for the benefit of the Financing Purchasers and their permitted transferees, including WPI. The Financing Note was issued to WPI on March 5, 2003 and will mature on December 4, 2003. The Financing Note bears interest at a rate of 8% per annum, payable semi-annually on every six month anniversary of the Financing Closing, with interest to begin accruing as of the Financing Closing. On the Financing Conversion Date, the Financing Note will be automatically converted into Common Stock based on the Financing Conversion Price and any accrued, but unpaid, interest on the Financing Note will be paid to WPI or its permitted transferees in the form of Common Stock based on the Financing Conversion Price. The Financing Note contains customary anti-dilution rights, including adjustments to the number of Common Stock for which the Financing Note is exercisable and the Financing Conversion Price immediately following the occurrence of such events as stock dividends, subdivisions or combinations of the Common Stock. Assuming all of the accrued interest on the Financing Note has been paid in cash as of the Financing Conversion Date and no adjustments have occurred, the Financing Note will convert into 3,260,667 shares of Common Stock. Page 6 of 11 Pages Except as set forth above in this statement, none of the Reporting Entities nor, to the best of their knowledge, any person listed in Item 2 of the Old Schedule 13D/A has any plans or proposals that relate to or would result in: (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board of Directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company's business or corporate structure; (g) changes in the Company's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. Item 5 of the Old Schedule 13D/A is hereby amended by adding the following: The Financing Purchase Agreement - -------------------------------- (a) As described in Item 3, pursuant to the Financing Purchase Agreement, subject to the receipt of the Financing Stockholder Approval and assuming all of the accrued interest on the Financing Note has been paid in cash as of the Financing Conversion Date and no adjustments have occurred, the Financing Note held by WPI will automatically convert into an aggregate of 3,260,667 shares of Common Stock. Assuming the full conversion of all convertible promissory notes issued pursuant to the Financing Purchase Agreement, in each case assuming all of the accrued interest on all such notes issued thereunder has been paid in cash as of the Financing Conversion Date and no adjustments have occurred, and further assuming that no other shares of Common Stock were sold by the Company in the interim, then after such conversion each of the Reporting Entities would be deemed to own 34.93% of the Company's then outstanding Common Stock and each of the Directors would be deemed to own 34.99% of the Company's then outstanding Common Stock based on 35,238,361 shares of the Company's Common Stock outstanding as of February 12, 2003 and 6,826,664 shares of the Company's Common Stock issued to the Financing Purchasers on March 5, 2003 pursuant to the Financing Purchase Agreement. The Reporting Entities are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Exchange Act. Each Reporting Entity disclaims beneficial ownership of all shares of Common Stock, other than those reported herein as being owned by it. (b) WPI has the power to vote or to direct the vote and to dispose or to direct the disposition of the 14,814,743 shares of Common Stock it may be deemed to beneficially own as Page 7 of 11 Pages of the Financing Closing. Each of the Reporting Entities shares with WPI the power to vote or to direct the vote and to dispose or to direct the disposition of the 14,814,743 shares of Common Stock it may be deemed to beneficially own as of the Financing Closing. (c) Other than the acquisition of the Financing Securities at the Financing Closing, no transactions in the Common Stock were effected during the last sixty days by the Reporting Entities or any of the persons set forth in Item 2 of the Old Schedule 13D/A. (d) Except as set forth in this Item 5, no person other than each respective record owner referred to herein of Financing Securities is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such Financing Securities. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to the Securities of the Issuer. Item 6 of the Old Schedule 13D/A is hereby amended by adding the following: The Financing Purchase Agreement - -------------------------------- Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting Entities have entered into an agreement, attached hereto as Exhibit 1, with respect to the joint filing of this statement and any amendment or amendments hereto. The Financing Purchase Agreement was entered into as of February 12, 2003 and is described in Item 3, Item 4 and Item 5 above. The summary of the Financing Purchase Agreement in this Schedule 13D/A is qualified in its entirety by reference to the Financing Purchase Agreement, a copy of which is attached as Exhibit 2 hereto. Pursuant to the Registration Rights Registration Rights Agreement, dated as of February 12, 2003, by and among WPI, the other Financing Purchasers named therein and the Company (the form of which is attached hereto as Exhibit 4) (the "Registration Rights Agreement for Financing Purchasers Shares"), the Company will file with the SEC as soon as practicable after the Financing Closing, and in no event later than 30 days thereafter, a shelf registration statement on Form S-3 pursuant to SEC Rule 415 (the "Registration Statement for Financing Purchasers Shares") under the Securities Act relating to the resale by the Financing Purchasers of the Financing Purchasers Shares. The Company shall use its commercially reasonable efforts to cause such Registration Statement for Financing Purchasers Shares to be declared effective promptly and to be maintained effective until the earlier of (i) the date on which all of the Financing Purchasers Shares have been resold under the Registration Statement for Financing Purchasers Shares, and (ii) the date on which all of the Financing Purchasers Shares may be traded by the applicable Financing Purchasers without restriction (the "Effectiveness Period for Financing Purchasers Shares"). Should the Registration Statement for Financing Purchasers Shares not be declared effective or should its effectiveness lapse prior to the end of the Effectiveness Period for Financing Purchasers Shares, then the Financing Purchasers holding Financing Purchasers Shares and their permitted transferees shall have Page 8 of 11 Pages demand registration rights (if requested by Financing Purchasers holding more than 30% of the Financing Purchasers Shares not so resold) and unlimited "piggy-back" registration rights, in each case as set forth in the Registration Rights Agreement for Financing Purchasers Shares. The summary of the Registration Rights Agreement for Financing Purchasers Shares in this Schedule 13D/A is qualified in its entirety by reference to Registration Rights Agreement for Financing Purchasers Shares. Pursuant to the Registration Rights Registration Rights Agreement, dated as of February 12, 2003, by and among WPI, the other Financing Purchasers named therein and the Company (the form of which is attached hereto as Exhibit 5) (the "Registration Rights Agreement for Financing Purchasers Conversion Shares"), the Company will file with the SEC as soon as practicable after the Closing, and in no event later than 30 days thereafter, a shelf registration statement on Form S-3 pursuant to SEC Rule 415 (the "Registration Statement for Financing Purchasers Conversion Shares," and, together with the Registration Statement for Financing Purchasers Shares, the "Financing Registration Statements") under the Securities Act relating to the resale by the Financing Purchasers of the Financing Purchasers Conversion Shares. The Company shall use its commercially reasonable efforts to cause such Registration Statement for Financing Purchasers Conversion Shares to be declared effective promptly and to be maintained effective until the earlier of (i) the date on which all of the Financing Purchasers Conversion Shares have been resold under the Registration Statement for Financing Purchasers Conversion Shares, and (ii) the date on which all of the Financing Purchasers Conversion Shares may be traded by the applicable Financing Purchasers without restriction (the "Effectiveness Period for Financing Purchasers Conversion Shares"). Should the Registration Statement for Financing Purchasers Conversion Shares not be declared effective or should its effectiveness lapse prior to the end of the Effectiveness Period for Financing Purchasers Conversion Shares, then the Financing Purchasers holding Financing Purchasers Conversion Shares and their permitted transferees shall have demand registration rights (if requested by Financing Purchasers holding more than 30% of the Financing Purchasers Conversion Shares not so resold) and unlimited "piggy-back" registration rights, in each case as set forth in the Registration Rights Agreement for Financing Purchasers Conversion Shares. The summary of the Registration Rights Agreement for Financing Purchasers Conversion Shares in this Schedule 13D/A is qualified in its entirety by reference to the Registration Rights Agreement for Financing Purchasers Conversion Shares. Except as described herein, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 of the Old Schedule 13/A or between such persons and any other person with respect to any securities of the Company. Item 7. Material to be Filed as Exhibits. 1. Joint Filing Agreement dated September 9, 1998 between the Reporting Entities (Incorporated by reference to Exhibit 5 of Amendment No. 1 to the Reporting Entities' Schedule 13D filed on September 9, 1997). 2. Form of Purchase Agreement, dated February 12, 2003, by and among Indus International, Inc, Warburg, Pincus Investors, L.P. and the other purchasers ascribed thereto. Page 9 of 11 Pages 3. Form of Convertible Promissory Note, dated March 5, 2003, by Indus International, Inc. in the name of Warburg, Pincus Investors, L.P. in the aggregate principal amount of $4,891,001.00 at face value. 4. Form of Registration Rights Registration Rights Agreement for Shares of Indus International, Inc., dated February 12, 2003, by and among Indus International, Inc., Warburg, Pincus Investors, L.P. and the other purchasers ascribed thereto. 5. Form of Registration Rights Registration Rights Agreement for Convertible Shares of Indus International, Inc., dated February 12, 2003, by and among Indus International, Inc., Warburg, Pincus Investors, L.P. and the other purchasers ascribed thereto. Page 10 of 11 Pages SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: March 6, 2003 WARBURG, PINCUS INVESTORS, L.P. By: Warburg Pincus & Co., General Partner By: /s/ Scott A. Arenare ------------------------------- Name: Scott A. Arenare Title: Managing Director and General Counsel Dated: March 6, 2003 WARBURG PINCUS & CO. By: /s/ Scott A. Arenare ------------------------------- Name: Scott A. Arenare Title: Managing Director and General Counsel Dated: March 6, 2003 WARBURG PINCUS LLC By: /s/ Scott A. Arenare ------------------------------- Name: Scott A. Arenare Title: Managing Director and General Counsel Page 11 of 11 Pages EXHIBIT INDEX 1. Joint Filing Agreement dated September 9, 1998 between the Reporting Entities (Incorporated by reference to Exhibit 5 of Amendment No. 1 to the Reporting Entities' Schedule 13D filed on September 9, 1997). 2. Form of Purchase Agreement, dated February 12, 2003, by and among Indus International, Inc, Warburg, Pincus Investors, L.P. and the other purchasers ascribed thereto. 3. Form of Convertible Promissory Note, dated March 5, 2003, by Indus International, Inc. in the name of Warburg, Pincus Investors, L.P. in the aggregate principal amount of $4,891,001.00 at face value. 4. Form of Registration Rights Registration Rights Agreement for Shares of Indus International, Inc., dated February 12, 2003, by and among Indus International, Inc., Warburg, Pincus Investors, L.P. and the other purchasers ascribed thereto. 5. Form of Registration Rights Registration Rights Agreement for Convertible Shares of Indus International, Inc., dated February 12, 2003, by and among Indus International, Inc., Warburg, Pincus Investors, L.P. and the other purchasers ascribed thereto. EX-2 4 w1175102a.txt FORM OF PURCHASE AGREEMENT EXHIBIT 2 --------- FORM OF PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the "Agreement") is dated as of February 12, 2003 by and between Indus International, Inc., a Delaware corporation located at 3301 Windy Ridge Parkway, Atlanta, Georgia 30339 (the "Company"), and each of the various purchasers (each, a "Purchaser", and collectively, the "Purchasers") identified on, and a party to, an executed copy of the Subscription Agreement to which this Agreement is an Exhibit (the "Subscription Agreement"). SECTION 1 Sale of Common Stock and Convertible Notes Subject to the terms and conditions hereof, the Company has offered, and will issue and sell (the "Offering") to the Purchasers, and the Purchasers will, severally and not jointly, buy from the Company, upon acceptance by the Company of the Subscription Agreements, (i) a total of up to 6,871,480 shares of the common stock, $0.001 par value per share, of the Company (the "Common Stock") for the purchase price of $1.50 per share, with each Purchaser, severally and not jointly, purchasing the number of shares of Common Stock for the aggregate cash purchase price indicated in the Subscription Agreement, and (ii) a total of up to $20,000,000 in aggregate principal amount of the Company's 8% convertible notes due 2003 (the "Convertible Notes"), with each Purchaser, severally and not jointly, purchasing the principal amount of Convertible Notes indicated in the Subscription Agreement. The shares of Common Stock to be issued and sold by the Company and purchased by the Purchasers pursuant to this Agreement are herein referred to as the "Shares," and the Convertible Notes to be issued and sold by the Company and purchased by the Purchasers pursuant to this Agreement are herein referred to as the "Notes." Together, the Shares and Notes to be purchased by the Purchasers pursuant to this Agreement are herein referred to as the "Securities." This Agreement and each Purchaser's obligation hereunder are not conditioned on the sale of any minimum number of Shares or any minimum aggregate principal amount of Notes. The Securities will be offered and sold without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and Regulation D thereunder. The Company has prepared and delivered to each Purchaser copies of a Confidential Private Placement Memorandum, dated as of the date hereof, (as it may be amended or supplemented, and including the exhibits and/or schedules thereto and the information incorporated therein by reference, the "Offering Document"). The Company has entered into a Purchase Agreement, dated as of the date hereof (the "Acquisition Agreement"), pursuant to which the Company has agreed to acquire (the "Acquisition") all of the outstanding common stock of SCT Utility Systems, Inc., a Delaware corporation ("SCT"), as well as certain assets owned by affiliates of SCT and used in SCT's business. The Company will use the proceeds from the sale of the Securities to fund the Acquisition and for related fees and expenses. The Company has entered into an Escrow Agreement, dated as of the date hereof (the "Escrow Agreement"), by and between the Company, and The Bank of New York, as escrow agent (the "Escrow Agent"), pursuant to which the Company will deposit, or direct the deposit, with the Escrow Agent the proceeds from the sale of the Securities, which funds (the "Escrow Funds") will be held by the Escrow Agent pending their application in accordance with the provisions of the Escrow Agreement. 1 The Purchasers of Shares (and any subsequent permitted transferees) will be entitled to the benefits of a Registration Rights Agreement, to be dated as of the date hereof (as attached to the Subscription Agreement as Exhibit B, the "Registration Rights Agreement for Shares"), by and among the Company and the Purchasers. Pursuant to the Registration Rights Agreement for Shares, the Company will file with the Securities and Exchange Commission (the "SEC" or the "Commission") as soon as practicable after the Closing, and in no event later than 30 days thereafter, a shelf registration statement on Form S-3 pursuant to SEC Rule 415 (the "Registration Statement for Shares") under the Securities Act relating to the resale of the Shares by the Purchasers. The Company shall use its commercially reasonable efforts to cause such Registration Statement for Shares to be declared effective promptly and to be maintained effective until the earlier of (i) the date on which all of the Shares have been resold under the Registration Statement for Shares, and (ii) the date on which all of the Shares may be traded by the Purchasers without restriction (the "Effectiveness Period for Shares"). Should the Registration Statement for Shares not be declared effective or should its effectiveness lapse prior to the end of the Effectiveness Period for Shares, then the Purchasers of Shares shall have demand registration rights (if requested by Purchasers of Shares holding more than 30% of the Shares not so resold) and unlimited "piggy-back" registration rights, in each case as set forth in the Registration Rights Agreement for Shares. The Purchasers of Notes (and any subsequent permitted transferees) will be entitled to the benefits of a Registration Rights Agreement, to be dated as of the date hereof (as attached to the Subscription Agreement as Exhibit C, the "Registration Rights Agreement for Conversion Shares," and, together with the Registration Rights Agreement for Shares, the "Registration Rights Agreements"), by and among the Company and the Purchasers, for the purpose of registering the shares (the "Conversion Shares") of Common Stock that the Purchasers of Notes may receive upon the conversion of their Notes following the Company's receipt of the requisite stockholder approval in accordance with the terms hereof and of the Note. Pursuant to the Registration Rights Agreement for Conversion Shares, the Company will file with the SEC as soon as practicable after the Closing, and in no event later than 30 days thereafter, a shelf registration statement on Form S-3 pursuant to SEC Rule 415 (the "Registration Statement for Conversion Shares," and, together with the Registration Statement for Shares, the "Registration Statements") under the Securities Act relating to the resale of the Conversion Shares by the Purchasers. The Company shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective promptly and to be maintained effective until the earlier of (i) the date on which all of the Conversion Shares have been resold under the Registration Statement for Conversion Shares, and (ii) the date on which all of the Conversion Shares may be traded by the Purchasers without restriction (the "Effectiveness Period for Conversion Shares"). Should the Registration Statement for Conversion Shares not be declared effective or should its effectiveness lapse prior to the end of the Effectiveness Period for Conversion Shares, then the Purchasers of Notes shall have demand registration rights (if requested by Purchasers of Notes holding more than 30% of the Conversion Shares not so resold) and unlimited "piggy-back" registration rights, in each case as set forth in the Registration Rights Agreement for Conversion Shares. SECTION 2 Funding; Escrow; Closing; Delivery 2.1. Funding and Escrow. The closing of the Purchasers' commitment, and the Purchasers' delivery of funds (the "Funding"), to purchase the Securities for which they have subscribed in the Subscription Agreement, shall be held at the offices of Alston & Bird LLP, counsel to the Company, or at such other place upon which the Company and the Purchasers shall agree. At Funding, the Purchasers shall, severally and not jointly, pay the purchase price (as to each Purchaser, the "Purchase Price") for their Securities by wire transfer to an account designated by the Escrow Agent. The Escrow Agent will 2 hold and disburse the Escrow Funds pursuant to the terms of the Escrow Agreement. The Funding shall occur simultaneously with or immediately after the execution and delivery of this Agreement by the Purchasers and the Company, or on such later date as the Company and the Purchasers may agree. 2.2. Closing and Delivery. The issuance and delivery of the Securities is conditioned upon, and shall occur simultaneously with, or immediately after, the closing of the Acquisition (together, the "Closing"). In the event that the Acquisition is not closed on or prior to March 14, 2003, the "drop dead" date of the Acquisition under the Acquisition Agreement (the "Expiration Date"), then the Closing of the sale of the Securities will not occur, and the Escrow Agent shall disburse to each Purchaser, his or her Purchase Price, together with his or her pro rata share of any interest earned on the Escrow Funds while held by the Escrow Agent. At the Closing, or within a reasonable period of time thereafter, the Company will deliver to each Purchaser, as applicable (i) a certificate, registered in the name of such Purchaser as shown in the appropriate Subscription Agreement, for the number of Shares to be purchased by such Purchaser, and/or (ii) a Notes, registered in the name of such Purchaser as shown in the appropriate Subscription Agreement, for the aggregate principal amount of Notes to be purchased by such Purchaser. SECTION 3 Representations and Warranties of the Company The Company represents, warrants and covenants to the Purchasers and the Placement Agent as follows: 3.1. Organization and Standing; Articles and By-Laws. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to carry on it business as now conducted and to own, lease and operate its properties and assets. The Company is duly qualified or licensed to transact business as a foreign corporation in good standing in the states of the United States and foreign jurisdictions where the character of its properties and assets or the nature or conduct of its business requires it to be so qualified or licensed, except for such jurisdictions in which the failure to be so qualified or licensed is not reasonably likely to have, individually or in the aggregate, a material adverse effect on the financial position, business or results of operations of the Company and its subsidiaries taken as a whole (a "Material Adverse Effect"). The term "Material Adverse Effect" does not include the impact of (i) changes in laws of general applicability or interpretations thereof by courts or other Governmental Authorities (as defined below), or (ii) changes in generally accepted accounting principals as in effect in the United States ("GAAP"). The Company has made available to each of the Purchasers true and correct copies of the Company's Articles of Incorporation, as amended and/or restated and as in effect on the date hereof (the "Articles of Incorporation"), and the Company's Bylaws, as in effect on the date hereof (the "Bylaws"). The Company owns 100% of all shares of capital stock and other equity interests in each of its subsidiaries free and clear of all security interests, liens, pledges or negative pledges, charges, encumbrances, mortgages, hypothecations, adverse claims or equities (each, a "Lien"). 3.2. Corporate Power. The Company has the corporate power and authority necessary to execute, deliver and perform this Agreement and to execute, deliver and perform the Escrow Agreement and the agreements set forth as Exhibits hereto (collectively with this Agreement, the "Agreements"), and at Funding to sell, and at Closing to issue, the Securities as set forth in the Agreements, and to carry out and perform its obligations under the Agreements. 3.3. Subsidiaries. The Company has those subsidiaries or affiliated companies shown on Schedule 3.3 hereto, and does not otherwise own or control, directly or indirectly, any equity interest in any corporation, association or business entity, other than as shown on Schedule 3.3 hereto. Each 3 subsidiary of the Company that is a corporation has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its properties and to conduct its business and is duly registered, qualified and authorized to transact business and is in good standing in each jurisdiction in which the conduct of its business or the nature of its properties requires such registration, qualification or authorization, except where such failure to so qualify or register would not be reasonably likely to have a Material Adverse Effect. All of the issued and outstanding capital stock of each subsidiary has been duly authorized and validly issued, is fully paid and non-assessable, and is owned by the Company free and clear of any Lien. 3.4. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of 100,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock (the "Preferred Stock"). As of February 3, 2003, there were 35,237,403 shares of Common Stock issued and outstanding, and no shares of Preferred Stock issued and outstanding. No other shares of capital stock are issued and outstanding. As of February 3, 2003, there were options and warrants outstanding issued by the Company to purchase an aggregate of 9,600,244 and 304,533 shares of Common Stock, respectively. All of the outstanding shares of Common Stock and Preferred Stock are, and all of the Shares and Conversion Shares, when issued, will be, duly authorized, validly issued, fully paid and nonassessable, and all such shares were, and the Shares and any Conversion Shares, will be, issued in material compliance with all applicable federal and state securities laws, including available exemptions therefrom, and none of such issuances were, and the issuance of the Shares and any Conversion Shares will not be, made in violation of any pre-emptive or other rights. The Company has reserved 14,585,631 shares of Common Stock for issuance pursuant to its stock option and stock purchase plans and existing outstanding warrants and an adequate number of shares of Common Stock for the conversion of the Notes. Except as set forth above or on Schedule 3.4, there are no options, warrants or other rights (including conversion, pre-emptive or other rights) or agreements outstanding to purchase any of the Company's authorized and unissued capital stock. 3.5. Authorization; Valid Issuance. (a) All corporate action on the part of the Company, its officers, directors and stockholders, if any, necessary for the authorization, execution, delivery and performance of the Agreements by the Company, and for the authorization, the sale, issuance and delivery of the Securities has been taken or will be taken prior to the Funding or the Closing, as appropriate. The Agreements have been duly executed and delivered by the Company, and represent legal, valid and binding obligations of the Company, enforceable against it in accordance with their respective terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium or similar laws affecting the enforcement of creditors' rights generally, and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought (the "Bankruptcy and Equity Exception")). The Board of Directors of the Company (the "Board of Directors") has taken all action necessary to render inapplicable, as it related to the Investor, the provisions of Section 203 of the General Corporation Law of the State of Delaware. (b) The Shares being purchased by the Purchasers hereunder will, upon issuance pursuant to the terms hereof and upon payment therefor, be duly authorized and validly issued, fully paid and non-assessable shares of Common Stock, free of preemptive or similar rights. Upon their issuance in accordance with the terms hereof and of the Notes, the Conversion Shares will be duly authorized, validly issued, fully paid and non-assessable shares of Common Stock, free of all preemptive or similar rights. (c) Subject to the accuracy of the representations made by the Purchasers in Section 5 hereof, the Securities and any Conversion Shares will be issued to the Purchasers in compliance with applicable exemptions from (i) the registration and prospectus delivery requirements of the Securities Act, and (ii) 4 the registration and qualification requirements of all applicable securities laws of the states of the United States. 3.6. Reports and Financial Statements. The Company has delivered, as exhibits to the Offering Document, to the Purchasers prior to the execution of this Agreement a copy of the Company's Annual Report on Form 10-K for the year ended December 31, 2001, the Company's Quarterly Reports on Form 10-Q that have been filed for all quarters ended since December 31, 2001, if any, the definitive proxy statement for the Company's 2002 annual meeting of stockholders, if filed with the Commission as of the date hereof, and will deliver any Current Reports on Form 8-K filed since December 31, 2001 (as such documents have since the time of their filing been amended or supplemented, and together with all reports, documents and information filed on or after the date first written above through the date of Closing with the SEC, including all information incorporated therein by reference, collectively, the "SEC Reports"). The SEC Reports (a) complied and will comply as to form in all material respects with the requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (b) did not, at the time of their filing, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 3.7. Disclosures. The Offering Document, including all exhibits thereto, as amended or supplemented, did not and will not, as of the date thereof through the Closing, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has provided to each prospective offeree of the Securities who has requested further information concerning the Company and its subsidiaries such information (to the extent that such information is available or can be acquired and made available to prospective Purchasers without unreasonable effort or expense and to the extent the provision thereof is not prohibited by applicable law). 3.8. No Integration. Neither the Company nor its affiliates (as defined in Rule 501(b) under the Securities Act) ("Affiliates") has, directly or through any authorized agent, during the six month period ending on the date of this Agreement, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) in a manner that would cause the offer and sale of the Securities or Conversion Shares, if any, to fail to be entitled to the exemption afforded by Rule 506 of Regulation D, or under Section 4(2) of the Securities Act. 3.9. No Public Offering. Neither the Company nor its Affiliates has engaged, in connection with the offering of the Securities or Conversion Shares, if any, (i) in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, (ii) in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act, (iii) in any action which would violate applicable state securities, or "blue sky," laws, or in any directed selling efforts within the meaning of SEC Regulation S. 3.10. Conformity of Descriptions. The Shares conform, and the Conversion Shares, when issued, will conform in all material respects to the descriptions of the Company's Common Stock contained in the Company's SEC Reports and other filings with the SEC. 3.11. No Conflicts. The execution, delivery and performance of the Agreements, the issuance and delivery of the Securities, and the Conversion Shares, when issued, by the Company and the consummation by the Company of the transactions contemplated herein and in the other Agreements do not and will not (i) conflict with or violate any provision of the Articles of Incorporation, Bylaws or other organizational documents of the Company or any of its subsidiaries, (ii) conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to 5 other individual, partnership, joint stock company, corporation, trust, unincorporated organization, government agency or political subdivision (each of the foregoing, a "Person") any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture, patent, license or instrument (whether evidencing a Company debt or otherwise) to which the Company or any of its subsidiaries is a party or by which any property or asset of the Company or any of its subsidiaries is bound or affected, except for such defaults that would not, individually or in the aggregate, result in a Material Adverse Effect, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or any of its subsidiaries is subject (including federal and state securities laws and regulations and the rules and regulations of the principal market, system or exchange on which the Common Stock is traded, quoted or listed), or by which any material assets of the Company or any of its subsidiaries is bound or affected. 3.12. Consents and Approvals. Except as set forth on Schedule 3.12, no notice to, filing with, or consent of any federal, state, county, local, foreign or other governmental, public or regulatory agencies, authorities (including self-regulatory authorities), courts, instrumentalities, commissions, boards or bodies having jurisdiction over the Company and its subsidiaries ("Governmental Authorities") or any third party is necessary for the consummation by the Company or any of its subsidiaries of the transactions contemplated by the Agreements, other than (i) the filing of the Registration Statements with the Commission in accordance with the appropriate Registration Rights Agreements, (ii) the application(s) or any letter(s) acceptable to Nasdaq for the listing or quoting of the Shares and the Conversion Shares, if applicable, on Nasdaq (and with any other national securities exchange or automated quotation system or market on which the Common Stock is then traded, listed or quoted), and the notice, if any, required by Nasdaq, (iii) any filings, notices or registrations under applicable state securities laws, (iv) the disclosure requirements of the Exchange Act, and the disclosure requirements of Item 701 of SEC Regulation S-K, (v) filing a Form D and a Form 8-K in respect of the sale and issuance of the Securities with the Commission (collectively, the "Required Approvals"), and (vi) filing a Proxy Statement with the Commission for the solicitation of the approval of, and obtaining the approval of, the Company's stockholders to convert the Notes into Conversion Shares. 3.13. Proceedings. There is no action, suit, hearing, claim, notice of violation, arbitration or other proceeding, hearing or investigation (each, a "Proceeding") pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its subsidiaries or any of their respective assets before or by any Governmental Authority or any arbitrator, which (i) adversely affects or challenges the legality, validity or enforceability of any of the Agreements, (ii) could reasonably be expected to, individually or in the aggregate, have or result in a Material Adverse Effect, or (iii) if adversely decided, could reasonably be expected to have a material adverse effect on, or delay the issuance of, the Securities or the Conversion Shares, if any, or the consummation of the transactions contemplated by the Agreement. The foregoing includes, without limitation, any such action, suit, proceeding or investigation that questions this Agreement or seeks to delay or prevent the consummation of the transactions contemplated hereunder or the right of the Company to execute, deliver and perform under same. The Company is not a party to or subject to the provisions of any order, writ, injunction, judgment or decree of any Governmental Authority that is reasonably likely to have a Material Adverse Effect before or after consummation of the transactions contemplated by this Agreement. No action, suit, proceeding, claim, investigation or inquiry by the Company or any subsidiary is currently pending nor does the Company intend to initiate any action, suit, proceeding, claim, investigation or inquiry, in each case, that if resolved in a manner adverse to the Company, is reasonably likely to have a Material Adverse Effect. 3.14. No Default or Violation. Except for those that would not, individually or in the aggregate, result in a Material Adverse Effect, none of the Company or any of its subsidiaries is in (i) default under 6 or in violation of any indenture, loan or other credit agreement or any other agreement or instrument to which any of them is a party or by which any of them or their respective assets or properties is bound, or (ii) violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any arbitrator or Governmental Authority applicable to it. None of the Company or any of its subsidiaries is in default under, or in violation of, its articles of incorporation, bylaws or other organizational documents or in default under or in violation of any of the listing or quotation requirements of Nasdaq (or of any other national securities exchange or automated quotation system or market on which the Common Stock is then traded, listed or quoted) as in effect on the date hereof, and the Company is not aware of any facts which could reasonably lead to de-listing or suspension of trading in the Common Stock by Nasdaq (or any other national securities exchange or automated quotation system or market on which the Common Stock is then traded, listed or quoted) in the foreseeable future. The business of the Company and its subsidiaries is not being conducted in violation of any law, statute, ordinance, rule or regulation of any Governmental Authority, except where such violations have not resulted or are not reasonably likely to result, individually or in the aggregate, in a Material Adverse Effect. None of the Company or any of its subsidiaries is in breach of any agreement where such breach, individually or in the aggregate, is reasonably likely to have a Material Adverse Effect. 3.15. Broker's Fees. The Company has incurred no liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payments in connection with the Agreements or the transactions contemplated therein, other than fees payable to C.E. Unterberg, Towbin, as the exclusive placement agent of the Company for the Offering (the "Placement Agent"), and the Company shall indemnify and hold harmless the Purchasers from and against any such claims. 3.16. Listing Compliance. The only securities exchange or automated quotation system or market on which the Common Stock is traded is Nasdaq, and the Company has no other securities listed or traded on any other securities exchange or automated quotation system or market. Except as set forth on Schedule 3.16, the Company has not in the three (3) years preceding the date hereof received notice (written or oral) from Nasdaq (or any other national securities exchange or automated quotation system or market on which the Common Stock is then traded, listed or quoted) to the effect that the Company is not in compliance in all material respects with the listing or maintenance requirements of any such market, exchange or trading facility. After giving effect to the transactions contemplated by the Agreements, the Company is and will be in compliance with all such maintenance requirements. 3.17. Intellectual Property Rights. The Company and its subsidiaries own or possess adequate rights or licenses to use material (A) patents (and any renewals and extensions thereof), patent rights (and any applications therefor), rights of priority and other rights in inventions; (B) trademarks, service marks, trade names and trade dress, and all registrations and applications therefor and all legal and common-law equivalents of any of the foregoing; (C) copyrights and rights in mask works (and any applications or registrations for the foregoing, and all renewals and extensions thereof), common-law copyrights and rights of authorship including all rights to exploit any of the foregoing in any media and by any manner and means now known or hereafter devised; (D) industrial design rights, and all registrations and applications therefor; (E) rights in data, collections of data and databases, and all legal or common-law equivalents thereof; (F) rights in domain names and domain name reservations; (G) rights in trade secrets, proprietary information and know-how (collectively with all licenses and other agreements providing Company or its subsidiaries with the right to use any item of the type referred to in clauses (A) through (G) (collectively, "Intellectual Property Rights") which are necessary for use in connection with their business as now conducted and as described in the SEC Reports, except for those Intellectual Property Rights the absence of which would not, individually or in the aggregate, result in a Material Adverse Effect. None of the Company or any of its subsidiaries has knowledge that any of them has infringed on any of the Intellectual Property Rights of any Person and, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, none of the Company or any of its 7 subsidiaries is infringing on any of the Intellectual Property Rights of any Person. Except as disclosed in the Offering Document, there is no Proceeding that is pending, or to the Company's knowledge, is threatened against, the Company regarding the infringement of any of the Intellectual Property Rights. The Company is not, to its knowledge, making unauthorized use of any confidential information or trade secrets of any third party, and the Company has not received any notice of any asserted infringement (nor is the Company aware of any reasonable basis for any third party asserting an infringement) by the Company of, any rights of a third party with respect to any Intellectual Property Rights that, individually or in the aggregate, would have a Material Adverse Effect. The Company and its subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights. 3.18. Registration Rights; Rights of Participation. Except as set forth on Schedule 3.18, the Company has not granted or agreed to grant to any Person any rights (including "piggy-back" registration rights) to have any securities of the Company registered with the Commission or any other Governmental Authority which have not been satisfied. Except as set forth on Schedule 3.18, no Person, including current or former stockholders of the Company, underwriters, brokers or agents, has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Agreements or to require that the Company include any such securities in the registration of Shares or Conversion Shares as contemplated herein. With respect to the agreements evidencing the rights set forth on Schedule 3.18 hereto, the Company has complied in all respects with the provisions therein regarding any right of first refusal, preemptive right, right of participation, or any similar right of a stockholder or any other third party to participate in the transactions contemplated by the Agreements, including, but not limited to, notice, consent and waiver requirements. 3.19. Form S-3 Eligibility. The Company meets the requirements for use of the SEC's registration statement on Form S-3 under the Securities Act relating to the resale of the Shares and Conversion Shares by the Purchasers and is eligible for filing and maintaining registration statements on Form S-3 relating to the resale of the Shares and Conversion Shares by the Purchasers. 3.20. Absence of Certain Changes. Since the date of the financial statements included in the Company's most recent Quarterly Report on Form 10-Q, Annual Report on Form 10-K, or latest Current Report on Form 8-K, whichever is more recent, last filed prior to the date of this Agreement, the Company and its subsidiaries have conducted their business only in the ordinary course of such business consistent with past practice and there has not been (i) any Material Adverse Effect, (ii) any material commitment, contractual obligation, borrowing, capital expenditure or transaction (each, a "Commitment") entered into by the Company or any of its subsidiaries, other than (a) Commitments in the ordinary course of business, (b) this Agreement, and (c) the Acquisition Agreement and any other Commitments contemplated thereby, (iii) any action taken which, if taken after the date hereof, would constitute a material breach of any provision or covenant herein, or (iv) any material change in the Company's accounting principles, practices or methods other than as required by concurrent changes in GAAP. 3.21. Books and Records. The minute books and other records of the Company and its subsidiaries contain in all material respects accurate records of all Company board, committee and stockholders' meetings and accurately reflect in all material respects all other corporate action of the stockholders and directors and any committees thereof of the Company and its subsidiaries and all actions of the directors of the Company's subsidiaries, in each case since January 1, 2001. 3.22. No Manipulation of Stock. The Company has not taken, in violation of applicable law, any action designed to or that might reasonably be expected to cause or result in stabilization or 8 manipulation of the price of the Common Stock to facilitate the transactions contemplated hereby or the sale or resale of the shares of Common Stock. 3.23. Company Not an "Investment Company." The Company has been advised of the rules and requirements under the Investment Company Act of 1940, as amended (the "Investment Company Act"). The Company is not, and immediately after receipt of payment for the Securities will not be, an "investment company" or an entity "controlled" by an "investment company" within the meaning of the Investment Company Act. 3.24. Labor Relations. Neither the Company nor its subsidiaries is party to any collective bargaining agreement covering any individual who performs services as an employee primarily for the Company or any of its subsidiaries (including such persons who are on an approved leave of absence, vacation, short-term disability or otherwise treated as an active employee of the Company or any of its subsidiaries, "Employees"), and there are no controversies or unfair labor practice proceedings pending or, to the Company's knowledge, threatened between the Company or any of its subsidiaries and any of their current or former Employees or any labor or other collective bargaining unit representing any current or former Employee of the Company or any of its subsidiaries that would reasonably be expected to result in a labor strike, dispute, slow-down or work stoppage or otherwise have a Material Adverse Effect. To the Company's knowledge, no organizational effort is presently being made or, to the Company's knowledge, threatened by or on behalf of any labor union. 3.25. Employee Benefits. (a) "Benefit Plans" shall mean (i) all "employee pension benefit plans," as defined in section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), established, maintained, or contributed to by the Company or its subsidiaries for the benefit of any employees or agents of the Company or its subsidiaries; (ii) all "employee welfare benefit plans," as defined in section 3(1) of ERISA, established, maintained, or contributed to by the Company or its subsidiaries for the benefit of any employees or agents of the Company or its subsidiaries; and (iii) to the knowledge of the Company, all other material incentive, employment, supplemental retirement, severance, deferred compensation and other employee benefit plans, programs, agreements and arrangements established, maintained, or contributed to by the Company or its subsidiaries for the benefit of any employees or agents of the Company or its subsidiaries, without regard to the coverage of any such plan, program, agreement or arrangement by ERISA or any provision of the Internal Revenue Code of 1986, as amended (the "Code"). (b) Each of the Benefit Plans has been administered in accordance with its terms and any federal, state or local statute, law, ordinance, regulation, order, writ, injunction, directive, judgment or decree applicable to the Company, its subsidiaries, or any of their respective properties, or assets, as the case may be (including, where applicable, ERISA and the Code), except where the failure to so administer such Benefit Plan would not have a Material Adverse Effect. (c) Each of the Benefit Plans intended to be "qualified" within the meaning of section 401(a) of the Code has been determined by the United States Internal Revenue Service to be so qualified, except where the failure to so qualify such Benefit Plan would not have a Material Adverse Effect. 3.26. Environmental Matters. (a) The Company and its subsidiaries are in compliance with all applicable Federal, state, and local laws and regulations relating to Releases or threatened Releases of Hazardous Materials or otherwise relating to the generation, treatment, storage, transport or handling of Hazardous Materials, 9 except where failure to be in compliance would not have a Material Adverse Effect; and, to the Company's knowledge, there is no Environmental Claim pending or threatened against the Company or its subsidiaries which would have a Material Adverse Effect. (b) For the purpose of this section (i), "Environmental Claim" means any claim, action, demand, order, or written notice by or on behalf of, any Governmental Entity or Person alleging potential liability arising out of, based on or resulting from the violation of any Environmental Law or permit; (ii) "Hazardous Materials" means all substances defined as hazardous substances in the Comprehensive Environmental Response, Compensation and Liability Act; and (iii) "Release" has the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act. 3.27. Taxes. (a) Except as otherwise disclosed in Schedule 3.27 hereto, (i) the Company has filed (or joined in the filing of) when due all Tax Returns required by applicable law to be filed with respect to the Company and all Taxes shown to be due on such Tax Returns have been paid; (ii) all such Tax Returns were true, correct and complete in all material respects as of the time of such filing; or (iii) any liability of the Company for Taxes not yet due and payable, or which are being contested in good faith, in each case as of December 31, 2001, has been accrued or reserved for on the financial statements of the Company in accordance with GAAP, in each case except that any such failure to file or pay Taxes would not result in a Material Adverse Effect. (b) No current or former subsidiary of the Company has ever been a member of any "affiliated group" (within the meaning of Section 1504(a) of the Code) included in any consolidated federal income Tax Return filed with the Internal Revenue Service other than an affiliated group of which the Company is the common parent. 3.28. Insurance. All insurance policies carried by the Company or any subsidiary or covering the Company's properties are in full force and effect, and, to the Company's knowledge, no notice of cancellation has been given with respect to any such policy, except where the lapse of such coverage or cancellation of such policy would not reasonably be expected to have a Material Adverse Effect. The insurance coverage provided by such policies is provided by insurers that, to the knowledge of the Company, are solvent and is in such amount and types of coverage which are adequate and customary for the industries in which the Company operates. 3.29. Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain assets accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, except for any controls the absence of which would not result in a Material Adverse Effect. 3.30. Bylaws. The Company's Bylaws provide that all matters submitted to a meeting of stockholders, including the vote relating to the issuance of the Conversion Shares, shall require the affirmative vote of a majority of the total number of votes cast, present in person or by proxy. 10 SECTION 4 Covenants of the Company The Company hereby covenants with the Purchasers and the Placement Agent as follows: 4.1. Offering Limitations. None of the Company or any of its Affiliates will solicit any offer to buy or offer to sell shares of Common Stock or securities convertible into or exchangeable for Common Stock by means of any form of general solicitation or general advertising (as such terms are used in Regulation D under the Securities Act) in any manner involving a public offering (within the meaning of Section 4(2) of the Securities Act) prior to the later of the effective dates of the Registration Statements. 4.2. Integration. None of the Company or any of its Affiliates will offer, sell or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) in a manner that would cause the offer and sale of the Securities to fail to be entitled to the exemption from registration afforded by Rule 506 of Regulation D and Section 4(2), of the Securities Act. 4.3. Disclosures. Subject to Section 8.14, as applicable, the Company, promptly following the Closing will (i) issue a press release announcing the sale of the Securities through the Placement Agent, (ii) file such press release and other appropriate information with the SEC on a Form 8-K, and (iii) include in the filing of its next Form 10-Q or Form 10-K, as applicable, appropriate disclosures relating to the sale of the Securities, including, without limitation, the disclosure required by Item 701 of Regulation S-K. Within one business day following Closing, the Company shall also file with the SEC on a Form 8-K, under Item 9 thereof, any and all material nonpublic information (as such term is used under Regulation FD) regarding the Company, the Offering and/or the Acquisition that was or has been provided by the Company, or duly authorized agents or representatives acting on its behalf, to Purchasers. 4.4. Use of Proceeds. The Company will use the proceeds from the sale of the Securities in the manner specified in the Offering Document under the caption "Use of Proceeds." 4.5. Compliance. The Company has complied in all respects with the provisions of those agreements which evidence the rights set forth on Schedule 3.18 regarding any right of first refusal, preemptive right, right of participation, or any similar right of a stockholder or any other third party to participate in the transactions contemplated by the Agreements, including, but not limited to, any notice, consent and waiver requirements. The Company has performed the timely notification of all affected Persons and has either (i) solicited and obtained the appropriate consent and waiver from such Person, or (ii) affirmatively received notice of participation in the transactions contemplated by the Agreements from each of the affected Persons. For purposes of the immediately preceding sentence only, the failure of any such affected Person to exercise its rights or participate in the transactions contemplated by the Agreements during any specified exercise or participation period shall be deemed a waiver by the affected Person of such rights. 4.6. Proxy Statement. The Company shall use its reasonable best efforts to prepare and file with the SEC, as promptly as practicable after the date hereof but in no event later than 30 days after the Closing, preliminary proxy materials with respect to a meeting of the stockholders for the purpose of approving the issuance of the Conversion Shares as contemplated by this Agreement. Thereafter, the Company shall as promptly as possible file with the SEC the definitive proxy statement and acting through its Board of Directors, (i) call a special meeting of stockholders or the Company's Annual Meeting of stockholders to be held at the earliest practicable date but in no event later than 90 days after the Closing and (ii) include in the proxy statement the recommendation of its Board of Directors that holders of the Common Stock approve the issuance of the Conversion Shares as contemplated by this 11 Agreement. If the Company calls a special meeting of stockholders pursuant to this Section 4.6, neither prior to nor at such special meeting shall the Company put forth any matter, other than approving the issuance of the Conversion Shares as contemplated by this Agreement, to the holders of Common Stock for their approval without the prior written consent of the Purchasers. SECTION 5 Representations, Warranties and Covenants of the Purchasers Each Purchaser, severally and not jointly, hereby represents, warrants and covenants to the Company with respect to the purchase of Securities by such Purchaser as follows: 5.1. Experience. Such Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, and the Purchaser is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. 5.2. Qualified Institutional Buyer; Accredited Investor. Such Purchaser is a "qualified institutional buyer," as defined in Rule 144A of the Securities Act, or an "accredited investor," as defined in SEC Regulation D promulgated pursuant to the Securities Act (an "Accredited Investor"). 5.3. Rule 144. Such Purchaser acknowledges that the Shares must be held indefinitely unless subsequently registered for resale under the Securities Act or unless an exemption from such registration is available, and that the Notes must be held indefinitely unless and until converted into Conversion Shares upon stockholder approval, and such Conversion Shares are subsequently registered for resale under the Securities Act or unless an exemption from such registration is available. Such Purchaser is aware of the provisions of the SEC's Rule 144 promulgated under the Securities Act, which permit limited resale of securities purchased in a private placement, subject to the satisfaction of certain conditions, including, among other things, (i) the existence of a public market for the securities, (ii) the availability of certain current public information about the Company, (iii) the resale occurring not less than one year after a party has purchased and fully paid for the security to be sold, (iv) the sale being effected through a "broker's transaction" or in a transaction directly with a "market maker," and (v) the number of securities being sold during any three-month period not exceeding specified limitations. 5.4. Confidential Access to Information. Such Purchaser has had an opportunity to discuss the Company's business, management and financial affairs with its management. It has also had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction. Such Purchaser understands that such discussions, as well as any written information issued by the Company, were intended to describe certain aspects of the Company's business and prospects. Pursuant to a confidentiality agreement, as contemplated by the SEC's Regulation FD, such Purchaser acknowledges that it has been provided access to material, non-public information and that the Purchaser will keep all such information confidential except to the extent it becomes public through no fault of the Purchaser or to the extent compelled to produce such information as a result of a court order or subpoena. Further, the Purchaser acknowledges and understands that the fact that the Company is seeking to effect the private placement of the Shares and Notes is itself material, non-public information, and disclosure of such information or use of such information by the Purchasers or anyone receiving such information from the Purchasers in connection with the purchase, sale or trade of the Company's securities (other than use by the Purchasers in acquiring the Shares and/or the Notes), or any hedging, derivative or similar transactions or activities involving the Company's securities, is a violation of securities laws. Neither such inquiries nor any other due diligence investigation conducted by such Purchaser or any of its advisors or representatives shall modify, amend or affect such Purchaser's right to rely on the Company's 12 representations, warranties and covenants contained herein or in the other Agreements. The Purchaser understands that its investment in the Shares and/or Notes involves a high degree of risk. 5.5 Organization; Authorization. The Purchaser is either (i) an individual who hereby certifies that he or she is an Accredited Investor who possesses the legal capacity, understanding and financial ability necessary and appropriate to enter into, and bear the risks of, the transactions contemplated hereby, or (ii) a corporation, a limited liability company or a partnership duly formed, validly existing and in good standing under the laws of the jurisdiction of its organization. Such Purchaser, if a corporation, a limited liability company or a partnership, has the requisite power and authority, to enter into and to consummate the transactions contemplated by the Agreements and otherwise to carry out its obligations under the Agreements. The purchase by such Purchaser of the Shares and/or Notes hereunder has been duly authorized by all necessary action on the part of such Purchaser. This Agreement, when executed and delivered by such Purchaser, will constitute a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to the Bankruptcy and Equity Exception. 5.6. Restrictive Legend. Such Purchaser understands that the certificates evidencing the Shares, Notes and Conversion Shares, will bear the following legends when issued: "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES, OR "BLUE SKY," LAWS OF ANY STATE OR OTHER DOMESTIC OR FOREIGN JURISDICTION. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION AND RESALE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO A REGISTRATION STATEMENT IN EFFECT UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR A WRITTEN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE FOR SUCH TRANSACTIONS UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS." In addition, the Purchasers acknowledge that each certificate for Shares, Notes and Conversion Shares shall bear any additional legend required by any other applicable domestic or foreign securities or blue sky laws. In the case of the Shares, the certificates representing such shares shall also bear the following legend: "THE HOLDER OF THESE SHARES, AND ANY PERMITTED TRANSFEREE THEREOF UNDER THE SUBSCRIPTION AGREEMENT, BY AND BETWEEN SUCH HOLDER AND INDUS INTERNATIONAL, INC. (THE "COMPANY") PURSUANT TO WHICH THESE SHARES WERE ISSUED AND SOLD (THE "SUBSCRIPTION AGREEMENT"), IS PROHIBITED FROM VOTING THESE SHARES TO APPROVE OR DISAPPROVE THE CONVERSION OF THE NOTES (AS DEFINED IN THE SUBSCRIPTION AGREEMENT) INTO CONVERSION SHARES (AS DEFINED IN THE SUBSCRIPTION AGREEMENT), AND SHALL ABSTAIN FROM VOTING ON SUCH MATTER. A COPY OF THE SUBSCRIPTION AGREEMENT MAY BE OBTAINED AT NO CHARGE UPON WRITTEN REQUEST TO THE COMPANY." 13 The Company will direct its transfer agent and registrar to maintain stop transfer instructions on record for the Shares, Notes and Conversion Shares until it has been notified by the Company, upon the advice of counsel, that such instructions may be waived consistent with the Securities Act and applicable domestic and foreign securities laws. Such stop transfer instructions will limit the method of sale of the Shares, Notes and Conversion Shares, consistent with Rule 144 or other available exemptions from registration under the Securities Act. Any transfers other than pursuant to a registration statement under the Securities Act will require an opinion of counsel reasonably satisfactory to the Company and its counsel prior to such transfers. 5.7. No Governmental Review. Each Purchaser understands that no United States federal or state agency or any other government or governmental agency or authority has passed upon or made any recommendation or endorsement of the Shares, the Notes, the Conversion Shares or the contents of the Offering Document. 5.8. Residency. Such Purchaser is a resident of the jurisdiction set forth immediately below such Purchaser's name on the Subscription Agreement. 5.9. Investment Intent. Such Purchaser is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. Such Purchaser understands and agrees that the Securities have not been registered under the Securities Act by reason of the exemption from the registration provisions of the Securities Act contained in Rule 506 of Regulation D and Section 4(2) of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Purchaser's representations, warranties and covenants as expressed herein, which are being relied upon by the Company and the Placement Agent. 5.10. No Manipulation. Neither such Purchaser nor, to the Purchaser's knowledge, any of its directors, officers, managers, subsidiaries, controlling persons or other affiliates has taken, or presently plans to take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, or which has constituted, under the Exchange Act, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. 5.11 Voting of Shares. Each of the Purchasers hereby understands and agrees that such Purchaser, or its permitted transferee hereunder, as appropriate, is strictly prohibited from voting any of the Shares to approve or disapprove the conversion of the Notes into Conversion Shares, and each such Purchaser or permitted transferee shall abstain from voting any Shares on such matter. SECTION 6 Conditions to Purchasers' Obligations to Close The obligation of each Purchaser to close the Offering is subject to the fulfillment, as of the date of Closing, of the following conditions, any of which may be waived by each such Purchaser: 6.1. Representations and Warranties Correct. The representations and warranties by the Company contained herein qualified as to materiality shall be true and correct (in light of such qualification(s)) and those not so qualified shall be true and correct in all material respects as of the date hereof and at and as of the Closing as though such representations and warranties were made at and as of such date unless limited by their terms to a prior date. 14 6.2. Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the Closing shall have been performed or complied with in all material respects. 6.3. No Injunction. No statute, rule, regulation, order, decree, ruling or injunction shall have been enacted, entered, promulgated, endorsed or threatened or is pending by or before any Governmental Authority of competent jurisdiction which in any material respect restricts, prohibits or threatens to restrict or prohibit the consummation of any of the transactions contemplated by the Agreements. 6.4. No Suspensions of Trading in Common Stock. The trading in the Common Stock shall not have been restricted or suspended by the Commission, Nasdaq or any other market or exchange where such Common Stock is traded (except for any suspension of trading of limited duration solely to permit dissemination of material information regarding the Company). 6.5 Adverse Changes. Since the date of this Agreement, no event which has had or could reasonably be expected to have a Material Adverse Change shall have occurred. The term "Material Adverse Change" shall mean an event, change or occurrence that individually, or together with any other event, change or occurrence, has a material adverse impact on the Company or its subsidiaries' financial position, business or results of operations, taken as a whole; provided, however, that the term "Material Adverse Change" shall not include the impact of (a) changes in laws of general applicability or interpretations thereof by courts or other Governmental Authorities, or (b) changes in GAAP; (c) actions or omissions required of the Company by the terms of the Acquisition Agreement; (d) changes in conditions or events that are generally applicable to the industry in which the Company operates or the economy in general in jurisdictions in which Company operates; (e) seasonal fluctuations in the Company's performance; or (f) the effects, including, without limitation, effects on relations and business with customers, suppliers and employees, that are a direct result of the transactions contemplated or permitted under the Acquisition Agreement. 6.6. Litigation. No Proceeding shall have been instituted or threatened against the Company that could reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. 6.7. Compliance Certificate. The Company shall have delivered to the Purchasers a certificate of the Company executed by the President of the Company, dated as of the Closing, certifying to the fulfillment of the conditions specified in Section 6 of this Agreement. 6.8. Secretary's Certificate. The Company shall have delivered to the Purchasers a certificate of the Company executed by an officer of the Company, dated as of the Closing, certifying (i) resolutions adopted by the Board of Directors of the Company authorizing the execution of the Agreements, the issuance of the Securities, the filing of the Registration Statements, and the transactions contemplated hereby; (ii) the Articles of Incorporation and Bylaws of the Company, each as amended, and copies of the third party consents, approvals and filings required in connection with the consummation of the transactions contemplated by the Agreements; and (iii) such other documents relating to the transactions contemplated by the Agreements as the Purchasers may reasonably request. 6.9. Opinion of Counsel. At the Closing, the Purchasers and the Placement Agent shall have received the opinion of Alston & Bird LLP, as counsel to the Company, dated as of Closing, in the form set forth below to the effect that: (a) The Company is validly existing and in good standing under the laws of the State of Delaware, with corporate power and authority to carry on its business as now conducted and to own, lease and operate its assets and properties and to enter into and perform its obligations under 15 this Agreement, the Subscription Agreement, the Registration Rights Agreement, the Escrow Agreement and the other documents and agreements to be executed by the Company in connection with the Closing (collectively, the "Operative Documents"); (b) The execution, delivery and performance by the Company of each of the Operative Documents to which the Company is a party have been duly authorized by the Company; (c) No consent or other action by, or filing or registration with, any Governmental Authority is required for (i) the execution and delivery by the Company of the Operative Documents, (ii) the offer, sale, and issuance of the Securities in accordance with the Operative Documents, (iii) the performance by the Company of its obligations under the Operative Documents, except such as may be required (a) in connection with the registration under the Securities Act of the Securities pursuant to the appropriate Registration Rights Agreements (including any filing with the National Association of Securities Dealers, Inc.), (b) under the "blue sky" or securities laws of any jurisdiction in connection with the purchase and sale or resale of the Shares or Conversion Shares; (c) to provide notice and application to list or quote the Shares and the Conversion Shares, if applicable, on Nasdaq (and with any other national securities exchange or automated quotation system or market on which the Common Stock is then traded, listed or quoted), (d) to satisfy the disclosure requirements of the Exchange Act, and the disclosure requirements of Item 701 of SEC Regulation S-K, (v) to file a Form D and a Form 8-K in respect of the sale and issuance of the Securities with the Commission (collectively, the "Required Approvals"), and (vi) to file a Proxy Statement with the Commission for the solicitation of the approval of, and obtaining the approval of, the Company's stockholders for the issuance of the Conversion Shares. (d) Neither the execution and delivery of this Agreement or the other Operative Documents, nor the consummation by the Company of the transactions contemplated hereby or thereby (including the issuance, sale and delivery of the Securities and any Conversion Shares (other than with respect to the delivery in book-entry form of Shares and any Conversion Shares)), nor compliance by the Company with any of the provisions hereof or thereof, will (i) constitute or result in a default under, or require any consent pursuant to any contract or permit of the Company listed on Schedule A to the opinion, (ii) conflict with or result in a breach of any provision of the Certificate of Incorporation or Bylaws of the Company, or any federal or state law, rule or regulation known to such counsel of any court or federal, state or other regulatory board or body or administrative agency having jurisdiction over the Company or over its properties or business, or (iii) conflict with or constitute a default under any judgment, writ, decree or order known to such counsel to be applicable by its terms to the Company; (e) This Agreement, the Escrow Agreement, the Registration Rights Agreement for Shares, and, assuming the requisite stockholder approval is received for conversion of the Notes into Conversion Shares, the Registration Rights Agreement for Conversion Shares, each have been duly authorized, executed and delivered by the Company, and, assuming the due execution and delivery thereof by the Purchasers where applicable, no other corporate action is necessary to authorize such execution, delivery or performance, and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be subject to the Bankruptcy and Equity Exception; (f) When issued to a Purchaser against payment therefor in accordance with the Agreement and other Operative Documents, each Security and each Conversion Share will be 16 duly and validly authorized and issued, fully paid and nonassessable, and the Purchasers, as holders thereof, will not be subject to personal liability by reason of being such holders; (g) To the knowledge of such counsel, there is no action, suit, investigation or proceeding pending or threatened against the Company or any of its properties or assets by or before any court, arbitrator or Governmental Authority, department, commission, board, bureau, agency or instrumentality, which questions the validity of the Agreement, any Security or any of the Conversion Shares or any action taken or to be taken pursuant hereto or thereto; (h) The Company is not an "investment company" or a company "controlled by" or required to register as an investment company as such terms are defined in the 1940 Act or the PUHC Act, and the SEC's rules and regulations thereunder; and (i) Assuming the accuracy of the Purchasers' representations and warranties in Section 5 of this Agreement, the accuracy of the Company's representations and warranties in Sections 3.8 and 3.9 of this Agreement, and the Company's and the Purchasers' satisfaction of their respective covenants hereunder, the offer, sale and issuance of the Securities and the Conversion Shares, if any, as contemplated by the Agreements is exempt from the registration requirements under Section 5 of the Securities Act. Such opinions may be subject to such assumptions, qualifications and limitations as are customary. Without limiting the foregoing, such counsel (i) need not express any opinion with regard to the application of laws of any jurisdiction other than the Federal law of the United States and the relevant corporate act of the State where the issuer is organized, (ii) may rely, as to matters of fact, to the extent appropriate on representations or certificates of responsible officers of the Company and certificates of public officials, (iii) may express no opinion as to the effect of (a) bankruptcy, insolvency, reorganization, arrangements, fraudulent transfer, moratorium or similar laws relating to or affecting the rights of creditors and (b) general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, the exercise of judicial discretion, and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, (iv) may express no opinion as to compliance with the anti-fraud or information delivery provisions of applicable securities laws, (v) may express no opinion as to compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (vi) may express no opinion as to the enforceability of the indemnification provisions of the Operative Documents to the extent the provisions thereof may be subject to limitations of public policy and the effect of applicable statutes and judicial decisions. 6.10 Other Documents. The Company shall have delivered to each Purchaser such other documents relating to the transactions contemplated by the Agreements as the Purchasers or their counsel may reasonably request. 6.11. Acquisition. The Company shall have entered into the Acquisition Agreement pursuant to which the Company will consummate the Acquisition and all conditions to closing of the Acquisition shall have been satisfied or waived by the Company. 6.12. Listing Approvals. The Company shall have obtained any necessary approvals for the listing of the Shares and Conversion Shares on Nasdaq. 6.13. Registration Rights Agreement. The Company and the Purchasers shall have executed, entered into and delivered the Registration Rights Agreements, as applicable to each such Purchaser. 17 6.14. Escrow Agreement. The Company shall have entered into the Escrow Agreement and deposited with the Escrow Agent, or arranged for the deposit by the Purchasers with the Escrow Agent of, the proceeds from the sale of the Securities. SECTION 7 Conditions to the Company's Obligations to Close The Company's obligation to close the Offering is subject to the fulfillment as of the date of Closing, of the following conditions, any of which may be waived by the Company: 7.1. Representations. The representations and warranties made by the Purchasers herein shall be true and correct in all material respects on the dates made and on the date of Closing. 7.2. Performance by the Purchasers. Each Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Agreements to be performed, satisfied or complied with by such Purchaser at or before the Closing. 7.3. No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated, endorsed or threatened or is pending by or before any Governmental Authority of competent jurisdiction which prohibits or threatens to prohibit the consummation of any of the transactions contemplated by the Agreements. 7.4. Closing of the Acquisition; Receipt of Escrow Funds. All conditions to closing of the Acquisition shall have been satisfied or waived by the Company, and the Company shall have received the Escrow Funds from the Escrow Agent. SECTION 8 Miscellaneous 8.1. Governing Law. (a) This Agreement shall be governed in all respects by the laws of the State of Delaware, without giving effect to the conflict of law rules thereof to the extent that the application of the law of another jurisdiction would be required thereby. (b) Each of the parties hereto acknowledges and agrees that damages will not be an adequate remedy for any material breach or violation of this Agreement if such material breach or violation would cause immediate and irreparable harm (an "Irreparable Breach"). Accordingly, in the event of a threatened or ongoing Irreparable Breach, each party hereto shall be entitled to seek, in any state or federal court in the State of Delaware, equitable relief of a kind appropriate in light of the nature of the ongoing or threatened Irreparable Breach, which relief may include, without limitation, specific performance or injunctive relief; provided, however, that if the party bringing such action is unsuccessful in obtaining the relief sought, the moving party shall pay the non-moving party's reasonable costs, including attorney's fees, incurred in connection with defending such action. Such remedies shall not be the parties' exclusive remedies, but shall be in addition to all other remedies provided in this Agreement, and this provision shall survive the termination of this Agreement. 18 8.2. Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Purchasers and the closing of the transactions contemplated hereby until the three year anniversary date of the Closing. 8.3. Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto, provided that the rights of the Purchasers to purchase the Shares and/or Notes shall not be assignable without the consent of the Company, not to be unreasonably withheld, other than to Affiliates. Upon issuance of the Notes, the rights, interests or obligations of (i) the Company thereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of the holders of a majority in principal amount of the Notes and (ii) each Holder thereunder may be assigned to any of its Affiliates. 8.4. Amendment and Waiver. This Agreement may not be amended or waived except in writing executed by the party against which such amendment or waiver is sought to be enforced. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify or amend any part of this Agreement or any rights or obligations of any person under or by reason of this Agreement. 8.5. Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by United States mail, postage prepaid, by reliable overnight delivery service such as UPS or FedEx, or by facsimile transmission, or otherwise delivered by hand or by messenger, addressed (a) if to any Purchaser, at the Purchaser's address set forth on the Subscription Agreement, or at such other address as such Purchaser shall have furnished to the Company in writing in the manner set forth herein, with a copy to the Purchasers' Counsel listed below, (b) if to any other holder of any shares, at such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of such shares who has so furnished an address to the Company, with a copy to the Purchasers' Counsel listed below, or (c) if to the Company, one copy should be sent to the Company at the address listed below, in each case with a copy to the Placement Agent at the address also listed below. In the event that any notice or other communication is sent by facsimile transmission to the Company, such transmission shall be followed immediately by overnight delivery to the Company of such notice or other communication. Company: Placement Agent: - -------- ---------------- Indus International, Inc.. C.E. Unterberg, Towbin 3301 Windy Ridge Parkway 350 Madison Avenue Atlanta, Georgia 30339 New York, New York 10017 Attention: Adam Battani Attention: Mark G. Hadlock Facsimile: (770) 989-4488 Facsimile: (212) 389-8401 with a copy to: with a copy to: - --------------- --------------- Company Counsel: Placement Agent Counsel: Alston & Bird LLP Mayer, Brown, Rowe & Maw One Atlantic Center 1675 Broadway, Suite 1900 1201 West Peachtree Street New York, New York 10019 Atlanta, Georgia 30309-3424 Attention: Ronald S. Brody Attention: Scott Ortwein Facsimile: (212) 262-1910 Facsimile: (404) 253-8376 19 Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered, or if by facsimile transmission, as indicated by the facsimile imprint date. 8.6. Delays or Omissions; Rights Cumulative. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Purchaser upon any breach or default of the Company under the Agreements shall impair any such right, power or remedy of such Purchaser, 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 Purchaser 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. All remedies, either under this Agreement or by law or otherwise afforded to any Purchaser, shall be cumulative and not alternative. 8.7. Expenses. The Company shall pay the reasonable and documented fees and expenses incurred by Purchasers in connection with the transactions contemplated hereby including, without limitation, legal expenses of Willkie Farr & Gallagher, as counsel to Warburg, Pincus Investors, L.P., and accounting fees, which transaction fees will be reasonably and customary for transactions of this type ("Transaction Fees"). Payments due pursuant to this Section 8.7 will be made at the Closing, in the event the Closing occurs, or if the Closing does not occur then upon termination of this Agreement, and in any event, any remaining payments will be made not later than 30 days after a bill for such fees and expenses has been sent by any Purchaser to the Company. The obligations under this Section 8.7 will survive any termination of this Agreement. 8.8 Subscription Agreement; Counterparts. Persons may become parties to this Agreement by executing the Subscription Agreement, which may be executed in two or more identical counterparts and by facsimile, each of which shall be deemed an original and all of which shall constitute one and the same agreement. Any signature that is delivered by facsimile transmission shall be valid and binding, with the same force and effect as if an original, manually signed counterpart. 8.9. Severability. In the event that any provision of this Agreement is unenforceable, the remaining provisions shall continue in full force and effect. 8.10. Section Headings, etc. The titles and subtitles used in this Agreement are used for convenience only and are not considered in construing or interpreting this Agreement. As used herein, any gender shall include all other genders, and the singular shall include the plural and vice versa. The terms "include," "including" and similar terms shall mean include without limitation, whether by enumeration or otherwise. 8.11. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and no other person is intended to or shall have any rights hereunder whether as a third party beneficiary or otherwise. 8.12. Independent Nature of Purchasers' Obligations and Rights. The obligations of each Purchaser hereunder are several and not joint with the obligations of the other Purchasers hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. The obligations of each Purchaser are not conditioned upon the action of any other Purchaser. Nothing contained herein or in any other agreement or document delivered at the Closing, and 20 no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of Person, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to protect and enforce its rights, including, without limitation, the rights arising out of the Agreements, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. 8.13. Further Assurances; Cooperation. Each party shall do and perform, and shall cooperate with and assist each other to do or perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other parties may reasonably request in order to carry out the intent and accomplish the purposes of the Agreements and the consummation of the transactions contemplated thereby in a timely manner, and further agrees not to take any actions, or to permit, authorize or direct any of its affiliates to take any actions, that would have the effect of delaying, threatening the success of, or preventing in any way the transactions contemplated by each of the Agreements. 8.14. Public Statements or Releases. Neither the Company nor any Purchaser shall make any public announcement with respect to the existence or terms of this Agreement or the transactions provided for herein without the prior approval of the other parties, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, nothing in this Section 8.14 shall prevent any party from making any public announcement it considers necessary in order to satisfy its obligations under the law or the rules of any national securities exchange or Nasdaq; provided such party, to the extent practicable, provides the other parties with an opportunity to review and comment on any proposed public announcement before it is made. 8.15. Confidentiality. All material, non-public information disclosed by the Company to the Purchasers pursuant to this Agreement or otherwise shall be held strictly confidential and used by the Purchasers solely for evaluating purchases of Securities in this Offering, provided this obligation shall not apply to any information that is generally available to the public or becomes available to the public without any disclosure by the Purchasers or their agents or due to negligence or misconduct of the Purchasers or their agents or as to which disclosure is required pursuant to court order or subpoena. The provisions of this Section 8.15 shall not in any way amend or supercede the provisions of any other confidentiality, non-disclosure or similar agreement with the Company to which any Purchaser is bound. 8.16. Entire Agreement; Amendment. This Agreement, the Escrow Agreement, the Registration Rights Agreements, the Subscription Agreement and the other Agreements constitute the entire understanding and agreement between the Purchasers and the Company with regard to the subject matter. Except as expressly provided herein, this Agreement, any of the other Agreements or any term hereof may be amended, modified, waived or discharged only by a written instrument signed by the party waiving any term, condition, or right or remedy that benefits it hereunder. 8.17. Termination Upon Failure to Close the Acquisition. Except as otherwise set forth herein and other than the Company's obligations to cause the Escrow Agent to disburse the Escrow Funds to the Purchasers as set forth under Section 2.2 therein, in the event that the Company fails to close the Acquisition on or prior to the Expiration Date, then this Agreement shall automatically and immediately terminate and be of no further force or effect. [The remainder of this page has been intentionally left blank.] 21 EX-3 5 w1175102b.txt FORM OF CONVERTIBLE PROMISSORY NOTE EXHIBIT 3 --------- THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES, OR "BLUE SKY," LAWS OF ANY STATE OR OTHER DOMESTIC OR FOREIGN JURISDICTION. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO A REGISTRATION STATEMENT IN EFFECT UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR A WRITTEN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE FOR SUCH TRANSACTIONS UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS." FORM OF CONVERTIBLE NOTE $4,891,001.00 March 5, 2003 FOR VALUE RECEIVED, Indus International, Inc., a Delaware corporation (the "Company"), hereby promises to pay to the order of Warburg, Pincus Investors, L.P. (the "Holder") at the address of the Holder indicated on the signature page(s) hereto, or at such other place as the Holder may designate in writing to the undersigned, in lawful money of the United States of America, and in immediately available funds, the principal amount of Four Million Eight Hundred Ninety-One Thousand, One Dollars ($4,891,001.00) (the "Principal Amount"), together with interest on the principal balance hereof as hereinafter set forth. This Note is one of the "Notes" issued pursuant to the Purchase Agreement, dated as of the date hereof (as amended, modified or supplemented, the "Purchase Agreement"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed thereto in the Purchase Agreement. 1. Payment Terms. Until paid in full, interest on the principal balance of this Convertible Note (this "Note") from time to time outstanding shall accrue from the date hereof at a rate per annum of eight percent (8.0%). Interest shall be payable quarterly in arrears on each three month anniversary of the date hereof, beginning three months from the date hereof. Interest shall be computed on the basis of a three hundred and sixty-five day year and shall be paid for the actual number of days on which principal is outstanding. In any event, the entire outstanding principal balance of this Note, together with any accrued interest and other charges as may be due hereunder, shall be paid on December 5, 2003 (the "Maturity Date"). In no event shall the amount of interest due or payable under this Note exceed the maximum rate of interest allowed by applicable law and, in the event any such payment is inadvertently paid by the undersigned or inadvertently received by the Holder, then such excess sum shall be credited as a payment of principal, unless the undersigned shall notify the Holder in writing that the undersigned elects to have such excess sum returned to it forthwith. It is the express intent of the parties hereto that the undersigned not pay and the Holder not receive, directly or indirectly, in any manner whatsoever, interest in excess of that which may be lawfully paid by the undersigned under the applicable law. 2. Solicitation of Stockholder Approval; Conversion. The Company will use its commercially reasonable efforts to file as promptly as practicable, but in no event later than thirty (30) days from the date hereof, a Proxy Statement with the Securities and Exchange Commission to solicit the 1 approval of the Company's stockholders (the "Stockholder Approval") to the issuance of the shares of the Company's common stock, which are issuable upon conversion of this Note (the "Conversion Shares"). Upon receipt of the Stockholder Approval (such date, the "Conversion Date"), this Note will automatically and immediately convert into whole Conversion Shares at a price equal to $1.50 per share, subject to adjustment pursuant to Section 6 hereof (as it may be so adjusted, the "Conversion Price"). Any and all accrued interest on the Note will also be paid to the Holder in whole Conversion Shares. The amount of accrued interest to be paid in Conversion Shares will be based upon the Principal Amount of this Note. At the Conversion Date, or as promptly as practicable thereafter, the Company shall issue and deliver to the Holder (or such other person as directed by the Holder) a certificate or certificates for the full number of shares of Conversion Shares to which the Holder is entitled. The Company will not issue any fractional interests in Conversion Shares, and the Company will pay to the Holder is cash the amount of the unconverted principal balance of this Note that would otherwise be converted into such fractional interests. Such conversion shall be deemed to have been made immediately prior to the close of business on the Conversion Date, and the person or persons entitled to receive Conversion Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Conversion Shares as of such date. At the Conversion Date, this Note shall evidence the Holder's right to receive the Conversion Shares to which the Holder is entitled. 3. Prepayment. This Note shall not be subject to prepayment unless the Stockholder Approval is not obtained by the Company by the Expiration Date, whereafter the outstanding principal balance of this Note, and accrued interest thereon, may be prepaid in whole or in part at any time without premium or penalty and without the prepayment of unearned interest. 4. Costs; Waivers. The Company agrees to pay all costs (including reasonable attorney's fees, expenses and disbursements) of Holder in connection with the collection and/or enforcement of this Note. The Company hereby forever waives demand, presentment for payment, protest, notice of protest, notice of dishonor of this Note and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note. No delay or omission on the part of Holder in exercising any rights hereunder shall operate as a waiver of such rights or any other rights of Holder, nor shall any delay, omission or waiver on one occasion be deemed a bar to or waiver of the same or any other right on future occasions. 5. Change of Control. If at any time after the date of issuance of this Note and prior to the Maturity Date, the Company shall undergo a Change of Control (as defined below), then the holder hereof shall have the option to accelerate the Maturity Date to the date of the consummation of such Change of Control and demand payment of all outstanding principal and unpaid accrued interest on this Note in full in lawful money of the United States of America payable at the principal office of the Company, or at such other place as the holder hereof may from time to time designate in writing to the Company. A "Change of Control" shall be deemed to have occurred at the time that the holders, as of the date hereof, of the Company's outstanding capital stock, assuming for purposes hereof that all of the Shares are issued and outstanding as of such date, no longer retain stock or other equity interests representing a majority of the voting power of the Company. 6. Event of Default. The Company agrees that: (i) upon the failure to pay when due the principal balance and accrued interest hereunder; (ii) if the Company (1) commences any voluntary proceeding under any provision of Title 11 of the United States Code, as now or hereafter amended, or commences any other proceeding, under any law, now or hereafter in force, relating to bankruptcy, insolvency, reorganization, liquidation, or otherwise to the relief of debtors or the readjustment of indebtedness, (2) makes any assignment for the benefit of creditors or a composition or similar 2 arrangement with such creditors, or (3) appoints a receiver, trustee or similar judicial officer or agent to take charge of or liquidate any of its property or assets; (iii) upon the commencement against the Company of any involuntary proceeding of the kind described in paragraph (ii); or (iv) upon the acceleration of any other indebtedness of the Company for borrowed money in excess of $250,000 (any of (i) through (iv), an "Event of Default"), all unpaid principal and accrued interest under this Note shall become immediately due and payable without presentment, demand, protest or notice of any kind. Upon the occurrence and continuance of an Event of Default, the Holder shall have all the rights and remedies under the Uniform Commercial Code of the State of Delaware. 7. Adjustments. (a) Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the Common Stock or subdivides the Common Stock in a transaction that increases the amount of Common Stock into which this Note may be converted, or if the Company combines the Common Stock in a transaction that decreases the amount of Common Stock into which this Note may be converted, then upon any subsequent conversion of this Note, for each share acquired, Holder shall receive the total number and kind of securities to which the Holder would have been entitled had the Holder owned the Common Stock on the record date for the dividend, subdivision or combination. If the outstanding Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of Common Stock, the Conversion Price shall be proportionately increased. If the outstanding Common Stock are divided into a greater number of Common Stock, the Conversion Price shall be proportionately decreased. (b) Reclassification, Exchange or Substitution. In case of any reclassification or change of securities of the class issuable upon conversion of this Note (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision, combination or stock dividend referred to above), or, subject to Section 5 hereof, in case of any merger of the Company with or into another entity (other than a merger with another entity in which the Company is the acquiring and the surviving entity and which does not result in any reclassification or change of outstanding securities issuable upon conversion of this Note), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing entity, as the case may be, shall duly execute and deliver to the Holder a new Note, so that the Holder shall have the right to receive upon conversion of this Note, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change or merger by a the Holder of the number of Common Stock that would otherwise have been deliverable upon the conversion of this Note if such Note had been converted in full immediately prior to such event. (c) No Adjustment for Exercise of Certain Options, Warrants, Etc. The provisions of this Section 7 shall not apply to any Common Stock issued or issuable: (i) to any person pursuant to any stock option, stock purchase or similar plan or arrangement for the benefit of employees, consultants, suppliers, vendors or directors of the Company or its subsidiaries (provided, that such issuances shall not exceed 5% of the Company's outstanding equity, and, to the extent that such issuances do exceed 5% of the Company's outstanding equity, the adjustment provisions of this Section 7 shall apply only to those issuances in excess thereof), or (ii) pursuant to options, warrants and conversion rights in existence on the date of issuance hereof. (d) Adjustment is Cumulative. The provisions of this Section 7 shall similarly apply to successive stock dividends, stock splits or combinations, reclassifications, exchanges, substitutions or other events. 8. Governing Law. This Note shall have the effect of an instrument executed under seal and shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict or choice of law principles thereof. 3 9. Binding Effect. This Agreement shall be binding upon and enforceable by, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns. 10. No Recourse Against Others. No director, officer, employee, consultant, advisor or stockholder of the Company or any affiliate of the Company, as such, shall have any liability for any obligations, including, without limitation, indebtedness, of the Company under this Note or for any claim based on, in respect of, or by reason of, such obligations or their creation. Holder by accepting this Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of this Note. 11. Amendment. None of the terms or provisions of this Note may be excluded, modified, or amended except by a written instrument duly executed by the holder and the Company expressly referring to this Note and setting forth the provision so excluded, modified or amended. 12. Prohibition on Transfer. This Note or any portion thereof may not be sold, mortgaged, pledged, hypothecated, assigned or otherwise transferred without the prior express written consent of the Company, not to be unreasonably withheld, other than to Affiliates of the Holder. 13. Pari Passu Indebtedness. The Holder acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Notes issued pursuant to the Purchase Agreement or pursuant to the terms of such Notes. THE COMPANY: INDUS INTERNATIONAL, INC., By: ------------------------------ Name: Title: 4 EX-4 6 w1175102c.txt FORM OF REGISTRATION RIGHTS AGREEMENT EXHIBIT 4 --------- FORM OF REGISTRATION RIGHTS AGREEMENT FOR SHARES THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of February 12, 2003 by and among Indus International, Inc., a Delaware corporation (the "Company"), and those persons (the "Purchasers") identified on, and a party to, an executed copy of the Subscription Agreement to which this Agreement is an Exhibit (the "Subscription Agreement"). This Agreement is made pursuant to the Subscription Agreement and the Purchase Agreement that is included as Exhibit A to the Subscription Agreement (the "Purchase Agreement"), by and between the Company and the Purchasers, pursuant to which the Company is issuing and selling up to 6,871,480 shares of its common stock, $0.001 par value per share (the "Common Stock" or the "Shares") and up to $20,000,000 in aggregate principal amount of its 8% convertible notes due 2003 (the "Convertible Notes" or the "Notes") to the Purchasers. The Shares and Notes are being offered and sold to the Purchasers without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, and the provisions of Rule 506 of Regulation D, promulgated under the Securities Act. In order to induce the Purchasers to enter into the Purchase Agreement, the Company has agreed to provide to the Purchasers (and their direct and indirect permitted transferees, if any) the registration rights set forth in this Agreement with respect to the resale of the Shares, as well as the registration rights set forth in the Registration Rights Agreement for Conversion Shares (as defined in the Purchase Agreement), included as Exhibit C to the Subscription Agreement, with respect to the resale of the shares of Common Stock to which the Notes may convert upon the requisite Company stockholder approval (the "Conversion Shares"). The execution and delivery of this Agreement is a condition to the Closing under the Purchase Agreement. Capitalized terms used but not defined herein shall have the meaning provided in the Purchase Agreement. In consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows: SECTION 1 Registration Rights 1.1. Filing of Form S-3 Resale Registration Statement. As soon as practical and, within thirty (30) days after the Closing under the Purchase Agreement, the Company shall file with the Securities and Exchange Commission (the "SEC" or the "Commission") a registration statement on Form S-3 pursuant to Rule 415 under the Securities Act, or, in the event that Form S-3 is unavailable to the Company, a registration statement on such other SEC Form that is available to the Company (together with any exhibits, amendments or supplements thereto, and any documents incorporated by reference therein, the "Registration Statement"), with respect to the resale of the Shares, and any securities of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares. The securities described in the preceding sentence are collectively referred to herein as the "Registrable Securities"; provided, that the term "Registrable Securities" shall not include securities transferred to a person other than a permitted transferee. 1.2. Effectiveness of Registration Statement. The Company shall, subject to Section 6 hereof, use its commercially reasonable efforts to cause the Registration Statement to become effective as soon as practicable and within 90 days after the filing thereof, and shall use its commercially reasonable efforts to keep the Registration Statement continuously effective from the date such Registration Statement 1 becomes effective until the earlier of (i) the date on which all Registrable Securities have been resold under such Registration Statement, and (ii) the date on which all Registrable Securities may be resold without restriction or limitation (the "Effectiveness Period"). 1.3 Demand Registration and "Piggy-Back" Registration Rights. Should the Registration Statement not be declared effective within the period provided under Section 1.2 of this Agreement, or should its effectiveness lapse at any point during the Effectiveness Period, if holders of the Registrable Securities, or their permitted transferees, as appropriate (collectively, the "Holders") holding more than 30% of the Shares not then resold so call and demand, the Company shall, at its own expense, use its commercially reasonable efforts to cause the Registration Statement, or a substitute or replacement registration statement on Form S-3 or Form S-1 or a successor form, to become effective. Such demand registration rights may be exercised by the Holders up to three times. In addition, the Holders shall have, at the Company's expense, "piggy-back" registration rights if the Registration Statement is not declared effective within the period provided under Section 1.2 of this Agreement, or should its effectiveness lapse at any point during the Effectiveness Period. Therefore, if the Company at any time determines to register any of its securities, for its own account or the account of any of its stockholders, other than a registration relating solely to employee benefit plans, a registration related to the offering of debt securities of the Company, or a registration statement on any form (other than Form S-1, S-2 or S-3, or their successor forms) that does not include substantially the same information as would be required in the Registration Statement covering the Registrable Securities, the Company will: (a) give to each Holder notice thereof as soon as practicable prior to the filing of such registration statement; and (b) include in such registration statement all the Registered Securities specified in written requests, made within five business (5) days after receipt of notice from the Company, by any Holder, subject to the other limitations and exceptions set forth herein with respect to the Registration Statement. 1.4. Supplements; Amendments. Subject to Section 6 hereof, the Company shall supplement or amend the Registration Statement, (i) as required by Form S-3, including, without limitation, the instructions applicable to Form S-3, or by the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and regulations promulgated under the Securities Act or the Exchange Act, respectively, and (ii) to include in the Registration Statement any additional securities that become Registrable Securities by operation of the definition thereof. The Company shall furnish to the Holders of the Registrable Securities to which the Registration Statement relates copies of any such supplement or amendment sufficiently in advance (but in no event less than five (5) business days in advance) of its use and/or filing with the Commission to allow the Holders a meaningful opportunity to comment thereon with respect to the information contained therein regarding the Holders and any plan for resale of the Registrable Securities. The Holders agree that they will within five (5) business days prior to the filing of the Registration Statement supply information regarding themselves and their plan of resale to the Company and hereby waive any notice of the initial filing of the Registration Statement, and that such Holders and their successors and assigns will promptly notify the Company of any changes in such information. 2 SECTION 2 Expenses The Company shall pay all expenses, fees and costs incurred in connection with the preparation, filing, distribution and effectiveness of the Registration Statement and any supplements or amendments thereto, whether or not the Registration Statement becomes effective, and whether all, none or some of the Registrable Securities are sold pursuant to the Registration Statement, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, fees and state securities, or "blue sky," fees and expenses and reasonable fees and expenses of one counsel for all the Holders, not to exceed $25,000, and the expense of any special audits incident to or required by, or in connection with the filing and effectiveness of the Registration Statement (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company). The Holders shall, severally and not jointly, pay all underwriting fees and discounts, selling commissions, brokerage fees and stock transfer taxes applicable to the Registrable Securities sold by such Holder and the fees and expenses of their counsel in excess of $25,000, if any. SECTION 3 Registration Procedures 3.1. Registration. The Company will advise the Holders as to the status of the preparation, filing and effectiveness of the Registration Statement and, at the Company's expense, will do the following: (a) make available to each Holder upon their request a copy of the Registration Statement (including all exhibits thereto) and any prospectus forming a part thereof and any amendments and supplements thereto (including all documents incorporated or deemed incorporated by reference therein prior to the effectiveness of the Registration Statement and including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, which documents, other than documents incorporated or deemed incorporated by reference, will be subject to the review of the information contained therein regarding the Holders and any plan for resale of the Registrable Securities by the Holders and any such underwriter for a period of at least five (5) business days from the Holder's receipt of such documents, and the Company shall not file the Registration Statement or such prospectus or any amendment or supplement to the Registration Statement or prospectus if any Holder shall reasonably object within five (5) business day period after the receipt thereof unless the Company shall have been advised by its counsel that the Registration Statement or such prospectus or amendment or supplement thereto is required under the Securities Act or the rules or regulations adopted thereunder in connection with the distribution of Registrable Securities by the Holders or the Company. A Holder shall be deemed to have reasonably objected to such filing only if the Registration Statement, amendment, prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission with respect to such Holder or its plan of resale; (b) make available to each Holder upon their request one conformed copy of the Registration Statement and of each amendment and supplement thereto (in each case including all exhibits) and such number of copies of the prospectus forming a part of the Registration Statement (including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, including, without limitation, documents incorporated or deemed to be 3 incorporated by reference prior to the effectiveness of such Registration Statement, as each of the Holders or any such underwriter, from time to time may reasonably request; (c) to the extent practicable, promptly upon the filing of any document that is to be incorporated by reference into the Registration Statement or prospectus forming a part thereof subsequent to the effectiveness thereof, and in any event no later than five (5) business days after such document is filed with the Commission, make available copies of such document to the Holders upon their request, and make representatives of the Company available for discussion of such document and other customary due diligence matters; and provide promptly to the Holders upon request any document filed by the Company with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act; (d) make available at reasonable times for inspection by the Holders, and any attorney, accountant, financial adviser or other representative (collectively, "Representatives") retained by the Holders, subject to the recipient's prior written agreement to keep such information confidential and not use or disclose it, all financial and other records, pertinent corporate documents and properties of the Company and cause the officers, directors and employees of the Company to supply all information reasonably requested by the Holders or their respective Representatives in connection with the preparation, filing and effectiveness of the Registration Statement; (e) use its commercially reasonable efforts (i) to register or qualify all Registrable Securities covered by the Registration Statement under state securities, or "blue sky," laws of such States of the United States of America where required and where an exemption is not available and as the Holders of Registrable Securities covered by the Registration Statement shall reasonably request, (ii) to keep such registration or qualification in effect for so long as the Registration Statement is required to be effective hereunder, and (iii) to take any other action which may be reasonably necessary or advisable to enable the Holders to consummate the disposition of the securities to be sold by the Holders in such jurisdictions, consistent with the plan of distribution described in the prospectus included in the Registration Statement, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where it is not so qualified, or to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder; (f) use its commercially reasonable efforts to cause all Registrable Securities covered by the Registration Statement to be registered or qualified with or approved by all other applicable Governmental Authorities as may be necessary, in the opinion of counsel to the Company and counsel to the Holders of Registrable Securities, to enable the Holders thereof the consummate the disposition of such Registrable Securities; (g) subject to Section 6 hereof, promptly notify each Holder of Registrable Securities covered by the Registration Statement (i) upon discovery that, or upon the occurrence of any event as a result of which, the prospectus forming a part of the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of proceedings for that purpose, (iii) of any request by the Commission for (A) amendments to the Registration 4 Statement or any document incorporated or deemed to be incorporated by reference in the Registration Statement, or (B) supplements to the prospectus forming a part of the Registration Statement, or (C) additional information, or (iv) of the receipt by the Company of any notification with respect to the suspension of the registration, qualification or exemption from registration or qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, and at the request of any such Holder promptly prepare and file an amendment to the Registration Statement or a supplement to the prospectus as the Company may deem necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and make available to each Holder upon their request a reasonable number of copies of such supplement to, or amendment of, such registration statement and prospectus, and, in the event of a stop order, use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any the Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction; (h) if reasonably requested by any Holder or if required by law or SEC or other applicable rule or regulation, promptly incorporate in the Registration Statement such appropriate information as the Holder may reasonably request to have included therein by filing a Form 8-K, or filing a supplement to the prospectus, to reflect any change in the information regarding the Holder, and make all required filings with the Commission in respect of any offer or sale of Registrable Securities or any amendment or supplement to the Registration Statement or related prospectus; (i) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more than 18 months, beginning with the first full calendar month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; and (j) use its commercially reasonable efforts to cause all Registrable Securities included in the Registration Statement to be listed on Nasdaq and each securities exchange on which securities of the same class are then listed, or, if not then listed on any securities exchange or Nasdaq, to be eligible for trading in any over-the-counter market or trading system in which securities of the same class are then traded. 3.2. Underwriting. If Holders of at least 50% of the Registrable Securities ("Initiating Holders") intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so notify the Company. The Holders whose shares are to be included in such registration and the Company shall (together with all other stockholders proposing to distribute their securities through such underwriting) enter into underwriting and related agreements in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Initiating Holders and reasonably acceptable to the Company. In any case, such representative shall be a nationally recognized underwriter in good standing. Such underwriting agreement will contain such representations and warranties by the Company and such other terms and provisions as are customary for underwriting agreements with respect to secondary distributions, including, without limitation, indemnities and contribution, the provision of opinions of counsel and accountants' letters and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of the Holders. The Company shall cooperate fully 5 with the Holders and the underwriters in connection with any underwritten offering. Notwithstanding any other provision of this Section 3.2, if the representative of the underwriters advises the Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the securities of the Company held by other stockholders shall be excluded from such registration to the extent so required by such limitation. If, after the exclusion of such shares, still further reductions are required, the number of shares included in the registration by each Holder shall be reduced on a pro rata basis (based on the number of shares held by such Holder), by such minimum number of shares as is necessary to comply with such request; provided, that there shall be no reduction in the number of shares included in the registration by any Holders until all shares of other stockholders have been excluded from such registration. No Registrable Securities or any other securities excluded from the underwriting by reason of the underwriter's marketing limitation shall be included in such registration. If any other stockholder who has requested inclusion in such registration as provided above disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the underwriter and the Initiating Holders. The securities so withdrawn shall also be withdrawn from registration. If the underwriter has not limited the number of Registrable Securities or other securities to be underwritten, the Company and officers and directors of the Company may include its or their securities for its or their own account in such registration, or for the account of others, if the representative so agrees and if the number of Registrable Securities and other securities which would otherwise have been included in such registration and underwriting will not thereby be limited. SECTION 4 Indemnification 4.1. Indemnification by the Company. The Company will indemnify: (a) each of the Holders, as applicable, (b) each of the Holder's officers, directors, members and partners, and (c) each individual, partnership, joint stock company, corporation, trust, unincorporated organization, government agency or political subdivision (each of the foregoing, a "Person") controlling each of the Holders within the meaning of SEC Rule 405 under the Securities Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, with respect to the Registration Statement, against all expenses, claims, losses, damages and liabilities (or actions, investigations or proceedings in respect thereof) (collectively, a "Claim") arising out of or based on any actual or alleged untrue statement of a material fact, or any omission of a material fact required to be stated therein or necessary in order to make the statements included therein not misleading, contained in the Registration Statement, any prospectus or other offering document (including any related registration statement, notification or the like) incident to the registration, qualification or compliance, or any violation by the Company of the Securities Act or the Exchange Act or any other laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each of the Holders, each of its officers, directors, members and partners, and each Person controlling each of the Holders, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such Claim; provided, however, that the Company will not be liable in any such case to the extent that any such Claim (i) arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by the Holders or their Representatives and stated to be specifically for use therein, or (ii) is finally judicially determined to have resulted primarily from the 6 gross negligence or willful misconduct of any person or entity set forth in subsections (a) through (c) above. 4.2. Indemnification by the Holders. Each of the Holders will, if Registrable Securities held by it are included in the securities as to which such Registration Statement is being effected, severally and not jointly, indemnify the Company, each of its directors and officers, and each Person who "controls" the Company within the meaning of SEC Rule 405 under the Securities Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, and each other Holder, against all Claims arising out of or based on any actual or alleged untrue statement of a material fact, or any omission or a material fact required to be stated therein or necessary in order to make the statement included or incorporated therein not misleading, contained in the Registration Statement, prospectus, or other offering document made by or on behalf of such Holder, and will reimburse the Company and each other Holder, its respective directors, officers, partners, members or control Persons for any legal or any other expenses reasonably incurred in connection with investigating and defending any such Claim, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in the Registration Statement, prospectus, offering memorandum or other document in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder and stated to be specifically for use therein; provided, however, that the several obligations of each of the Holders hereunder shall be limited to an amount equal to the net proceeds received by such Holder from the sale of the Registrable Securities pursuant to the Registration Statement. 4.3. Procedures. Each party entitled to indemnification under this Agreement (each, an "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any Claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such Claim; provided that counsel for the Indemnifying Party, who shall conduct the defense of such Claim, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense (unless the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of one such counsel for all Indemnified Parties shall be at the expense of the Indemnifying Party), and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in the investigation or defense of any such Claim shall, except with the consent of each Indemnified Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement or compromise which does not include an unconditional release of the Indemnifying Party from all liability in respect to such Claim. Each Indemnified Party shall furnish such information regarding itself or the Claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the investigation and defense of such Claim. 4.4. Contribution. If the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Claim, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such Claim, as well as any other relevant equitable considerations; provided, however, that the Company will not be liable in any such case to the extent that any such Claim (i) arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by the Holders or their Representatives and stated to be specifically for use therein, or (ii) is finally judicially 7 determined to have resulted primarily from the gross negligence or willful misconduct of any person or entity set forth in Section 4.1(a) through 4.1(c) above. The relative fault of the Indemnifying Party and of the Indemnified Party 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 the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and provided that each Holder shall not be required to contribute, in the aggregate, more than the net proceeds received by such Holder from the sale of its Registrable Securities pursuant to the Registration Statement and further provided that the obligations of the Holders under this Section 4.4 shall be several and not joint. SECTION 5 Provision of Information by the Holders Each of the Holders whose Registrable Securities are included in the Registration Statement shall furnish to the Company such information regarding such Holder as the Company may reasonably request in writing and as shall be reasonably required or advisable in connection with any registration, qualification or compliance referred to in this Agreement, and shall promptly notify the Company if such information becomes incorrect or misleading, or requires amendment or updating. Each of the Holders, severally and not jointly, agrees that the plan of distribution included in any prospectus relating to the Registrable Securities shall be substantially as set forth on Schedule B-1 hereto and that such Holder will not resell any Registrable Securities pursuant to the Registration Statement in any manner other than as provided therein or herein. The other information regarding the Holders required for the initial filing of the Registration Statement has been provided by each Holder on the Subscription Agreement. Each Holder, severally and not jointly, represents, warrants and covenants to the Company that the information regarding such Holder that appears in the Subscription Agreement and/or Schedule B-2 is accurate and complete in all material respects consistent with Commission Regulation S-K, Items 507 and 508. The Purchaser will confirm promptly by delivery of a signed copy of Schedule B-2, the sale of any Shares pursuant to Rule 144 or the Registration Statement. SECTION 6 Holdback; Postponement Notwithstanding the other provisions of this Agreement, if (a) there is material non-public information regarding the Company which the Company's Board of Directors reasonably and in good faith determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (b) there is a extraordinary business opportunity (including but not limited to the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar extraordinary transaction not in the ordinary course of business) available to the Company which the Company's Board of Directors reasonably and in good faith determines not to be in the Company's best interest to disclose, then the Company may postpone or suspend filing or effectiveness of a registration statement for a period not to exceed 90 days, provided that the Company may not postpone or suspend filing or effectiveness of a registration statement for more than 180 days in the aggregate during any 365-day period and there shall be an aggregate of not more than two (2) suspensions during any 365-day period; provided, however that no postponement or suspension shall be permitted for consecutive 90 day periods arising out of the same set of facts, circumstances or transactions. 8 SECTION 7 Rule 144 Reporting, Etc. 7.1. SEC Reporting Compliance. (a) With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, through the second anniversary of this Agreement, the Company will: (i) make and keep "current public information" regarding the Company available, as defined in Commission Rule 144(c) under the Securities Act, and cooperate with the Holders and take such further reasonable action as the Holders may reasonable request in writing (including, without limitation, making such reasonable representations as the Holders may reasonably request); (ii) use its commercially reasonable efforts to file with the Commission in a timely manner all SEC Reports and other filings and documents required of the Company under the Securities Act and the Exchange Act; and (iii) so long as a Holder owns any Registrable Securities, furnish the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements under the Securities Act and the Exchange Act, including compliance with SEC Rule 144(c), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of, or reasonably obtainable by, the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration. Notwithstanding the foregoing, nothing in this Section 7.1(a) shall be deemed to require the Company to register any of its securities (other than the Common Stock) under any section of the Exchange Act. (b) The Company shall file the reports required to be filed by it under the Exchange Act and shall comply with all other requirements set forth in the instruction to Form S-3 in order to allow the Company to be eligible to file registration statements on Form S-3. SECTION 8 Miscellaneous 8.1. Assignment. The registration rights set forth herein may be assigned, in whole or in part, to any transferee of Registrable Securities permitted in accordance with the Purchase Agreement, which transferee, upon registration on the Company's or its transfer agent's books and records as a holder of record of Registrable Securities, shall be considered thereafter to be a Holder (provided that any transferee who is not an affiliate of a Purchaser shall be a Holder only with respect to such Registrable Securities so acquired and any stock of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such Registrable Securities) and shall be bound by all obligations and limitations of this Agreement and the Purchase Agreement. 9 8.2. Section Headings. The titles and headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. 8.3. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the conflict of law rules thereof to the extent that the application of the law of another jurisdiction would be required thereby. 8.4. Notices. (a) All communications under this Agreement shall be in writing and shall be delivered by facsimile, by hand, by reliable overnight delivery service such as UPS or FedEx or by registered or certified mail, postage prepaid: (i) if to the Company, to the address listed in the Purchase Agreement, or at such other address as it may have furnished in writing to the Purchasers; (ii) if to the Purchasers, at the addresses listed on Subscription Agreement, or at such other addresses as may have been furnished the Company in writing. (b) Any notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if sent by reliable overnight delivery service such as UPS or FedEx, on the first business day following the date of delivery to such service for overnight delivery, (iii) if delivered by facsimile, on the date of such facsimile, or (iv) if mailed by registered or certified mail, on the third business day after the date of such mailing. In the event that any notice is sent by facsimile transmission to the Company, such transmission shall be followed immediately by overnight delivery to the Company of such notice. 8.5. Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties. No other person is intended to or shall have any rights or remedies hereunder, whether as a third part beneficiary or otherwise. 8.6. Counterparts. Persons may become parties to this Agreement be entering into the Subscription Agreement, which may be executed in one or more identical counterparts, each of which shall be deemed an original and all of which shall be one and the same agreement. Any signature that is delivered by facsimile signature page shall be valid and binding, with the same force and effect as if an original, manually signed counterpart. 8.7. Remedies. Each Holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 8.8. Severability. In the event that any provision contained herein is unenforceable, the remaining provisions shall continue in full force and effect. 8.9. Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holders, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any provision hereof, 10 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. It is further agreed that any waiver, permit, consent or approval of any kind or character by a Holder of any breach or default under this Agreement, or any waiver by a Holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in the writing, and that all remedies, either under this Agreement, or by law or otherwise afforded to a Holder, shall be cumulative and not alternative. 8.10. Attorney's Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 8.11. Entire Agreement; Amendment. This Agreement, the Purchase Agreement, the Subscription Agreement and the other Agreements constitute the entire understanding and agreement of the parties with respect to the subject matter hereof and supersede all prior understandings, written or otherwise, among such parties. This Agreement may be amended only in a writing signed by the Company and the Holders of at least a majority of the then outstanding Registrable Securities. 8.12. Termination Upon Failure to Close the Acquisition. In the event that the Company fails to close the Acquisition on or prior to the Expiration Date, then this Agreement shall automatically and immediately terminate and be of no further force or effect. [The remainder of this page has been intentionally left blank.] 11 SCHEDULE B-1 ------------ Plan of Distribution The Selling Stockholders and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility (including, without limitation, the Nasdaq National Market and the over the counter market) on which the shares are traded or in private transactions, subject to applicable law. These sales may be public or private at prices prevailing in such market, fixed prices or prices negotiated at the time of sale. The shares may be sold by the Selling Stockholders directly to one or more purchasers, through agents designated from time to time or to or through broker-dealers designated from time to time. In the event the shares are publicly offered through broker-dealers or agents, the selling stockholders may enter into agreements with respect thereto. The Selling Stockholders may, subject to applicable law, also use any one or more of the following methods when selling shares: o ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; o block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; o purchases by a broker-dealer as principal and resale by the broker-dealer for its account; o an exchange distribution in accordance with the rules of the applicable exchange; o privately negotiated transactions; o short sales broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; o a combination of any such methods of sale; or o any other method permitted pursuant to applicable law. The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. The Selling Stockholder may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3), or other applicable provision of the Securities Act of 1933, amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The Selling Stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. The Selling Stockholders and the broker-dealers or agents that participate in the distribution of the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any discounts and any commissions received by such broker-dealers or agents and any profit on the sale of the shares purchased by them and any discounts or commissions might be deemed to be underwriting discounts or commissions under the Securities Act. Any such broker-dealers and agents may engage in transactions with, and perform services for, the Company. At the time a particular offer of shares is made by the selling stockholders, to the extent required, a prospectus will be distributed which will set forth the aggregate number of shares being offered, and the terms of the offering, including the public offering price thereof, the name or names of any broker-dealers or agents, any discounts, commissions and other items constituting compensation from, and the resulting net proceeds to, the Selling Stockholders. In order to comply with the securities laws of certain states, sales of shares offered hereby to the public in such states may be made only through broker-dealers who are registered or licensed in such states. Sales of shares offered hereby must also be made by the Selling Stockholders in compliance with other applicable state securities laws and regulations. The Company is required to pay all fees and expenses incident to the registration of the shares, including fees and expenses of one counsel for all Selling Stockholders in an amount not to exceed $25,000; provided, that the Selling Stockholders are required, severally and not jointly, to pay all underwriting fees and discounts, selling commissions, brokerage fees and stock transfer taxes applicable to shares sold by such Selling Stockholders hereby. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. SCHEDULE B-2 ------------ Purchaser's Certificate of Subsequent Sale(1) The undersigned, an officer of, or other person duly authorized by the Purchaser named below hereby certifies to the Company, as defined in the Registration Right Agreement, dated as of February 12, 2003 (the "Agreement") that he/she (said institution) is the Purchaser of the shares evidenced by the attached certificate, and as such, sold such shares on ___________________, 200__ in accordance with: (i) Registration Statement number ______________________________, in the manner indicated under "Plan of Distribution" in the current prospectus and has delivered a current prospectus, or (ii) Pursuant to the applicable requirements of Rule 144 of the Securities Act of 1933, as amended, in which case, a copy of Form 144 as filed with the Securities and Exchange Commission, together with the representation letter of the undersigned and the broker's representation letter are enclosed. Print or Type: Name of Purchaser (Individual or Institution): ____________________________ Name of Individual Representing Purchaser (if an Institution): ___________________________________ Title: ____________________________ Confirmed by the undersigned thereunto duly authorized: ___________________________________ Purchaser Name By: _______________________________ Name: Title: - ---------- (1) All capitalized terms used but not defined herein shall have the meanings provided in the Agreement. EX-5 7 w1175102d.txt FORM OF REGISTRATION RIGHTS AGREEMENT EXHIBIT 5 --------- FORM OF REGISTRATION RIGHTS AGREEMENT FOR CONVERSION SHARES THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of February 12, 2003 by and among Indus International, Inc., a Delaware corporation (the "Company"), and those persons (the "Purchasers") identified as Purchasers of Notes (as defined below) on, and a party to, an executed copy of the Subscription Agreement to which this Agreement is an Exhibit (the "Subscription Agreement"). This Agreement is made pursuant to the Subscription Agreement and the Purchase Agreement that is included as Exhibit A to the Subscription Agreement (the "Purchase Agreement"), by and between the Company and the Purchasers, pursuant to which the Company is issuing and selling up to 6,871,480 shares (the "Shares") of its common stock, $0.001 par value per share (the "Common Stock") and up to $20,000,000 in aggregate principal amount of its 8% convertible notes due 2003 (the "Convertible Notes" or the "Notes") to the Purchasers. The Shares and Notes are being offered and sold to the Purchasers without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, and the provisions of Rule 506 of Regulation D, promulgated under the Securities Act. As described in the Purchase Agreement and the Note, upon the Company's receipt of the requisite stockholder approval, the Notes will immediately automatically convert (the "Conversion") into shares (the "Conversion Shares") of Common Stock based on the Conversion Price (as defined in the Note). In order to induce the Purchasers to enter into the Purchase Agreement, the Company has agreed to provide to the Purchasers (and their direct and indirect permitted transferees, if any) the registration rights set forth in the Registration Rights Agreement for Shares (as defined in the Purchase Agreement), included as Exhibit B to the Subscription Agreement, with respect to the resale of the Shares, as well as the registration rights set forth in this Agreement with respect to the resale of the Conversion Shares, in the event of the Conversion. The execution and delivery of this Agreement is a condition to the Closing under the Purchase Agreement; provided, however, this Agreement shall only become effective upon the Conversion, if any. Capitalized terms used but not defined herein shall have the meaning provided in the Purchase Agreement. In consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows: SECTION 1 Registration Rights 1.1. Filing of Form S-3 Resale Registration Statement. As soon as practical and, within thirty (30) days after the Conversion, if any, the Company shall file with the Securities and Exchange Commission (the "SEC" or the "Commission") a registration statement on Form S-3 pursuant to Rule 415 under the Securities Act, or, in the event that Form S-3 is unavailable to the Company, a registration statement on such other SEC Form that is available to the Company (together with any exhibits, amendments or supplements thereto, and any documents incorporated by reference therein, the "Registration Statement"), with respect to the resale of the Conversion Shares, and any securities of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Conversion Shares. The securities described in the preceding sentence are collectively referred to herein as the "Registrable Securities"; provided, that the term "Registrable Securities" shall not include securities transferred to a person other than a permitted transferee. 1 1.2. Effectiveness of Registration Statement. The Company shall, subject to Section 6 hereof, use its commercially reasonable efforts to cause the Registration Statement to become effective as soon as practicable and within 90 days after the filing thereof, and shall use its commercially reasonable efforts to keep the Registration Statement continuously effective from the date such Registration Statement becomes effective until the earlier of (i) the date on which all Registrable Securities have been resold under such Registration Statement, and (ii) the date on which all Registrable Securities may be resold without restriction or limitation (the "Effectiveness Period"). 1.3 Demand Registration and "Piggy-Back" Registration Rights. Should the Registration Statement not be declared effective within the period provided under Section 1.2 of this Agreement, or should its effectiveness lapse at any point during the Effectiveness Period, if holders of the Registrable Securities, or their permitted transferees, as appropriate (collectively, the "Holders") holding more than 30% of the Conversion Shares not then resold so call and demand, the Company shall, at its own expense, use its commercially reasonable efforts to cause the Registration Statement, or a substitute or replacement registration statement on Form S-3 or Form S-1 or a successor form, to become effective. Such demand registration rights may be exercised by the Holders up to three times. In addition, the Holders shall have, at the Company's expense, "piggy-back" registration rights if the Registration Statement is not declared effective within the period provided under Section 1.2 of this Agreement, or should its effectiveness lapse at any point during the Effectiveness Period. Therefore, if the Company at any time determines to register any of its securities, for its own account or the account of any of its stockholders, other than a registration relating solely to employee benefit plans, a registration related to the offering of debt securities of the Company, or a registration statement on any form (other than Form S-1, S-2 or S-3, or their successor forms) that does not include substantially the same information as would be required in the Registration Statement covering the Registrable Securities, the Company will: (a) give to each Holder notice thereof as soon as practicable prior to the filing of such registration statement; and (b) include in such registration statement all the Registered Securities specified in written requests, made within five business (5) days after receipt of notice from the Company, by any Holder, subject to the other limitations and exceptions set forth herein with respect to the Registration Statement. 1.4. Supplements; Amendments. Subject to Section 6 hereof, the Company shall supplement or amend the Registration Statement, (i) as required by Form S-3, including, without limitation, the instructions applicable to Form S-3, or by the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and regulations promulgated under the Securities Act or the Exchange Act, respectively, and (ii) to include in the Registration Statement any additional securities that become Registrable Securities by operation of the definition thereof. The Company shall furnish to the Holders of the Registrable Securities to which the Registration Statement relates copies of any such supplement or amendment sufficiently in advance (but in no event less than five (5) business days in advance) of its use and/or filing with the Commission to allow the Holders a meaningful opportunity to comment thereon with respect to the information contained therein regarding the Holders and any plan for resale of the Registrable Securities. The Holders agree that they will within five (5) business days prior to the filing of the Registration Statement supply information regarding themselves and their plan of resale to the Company and hereby waive any notice of the initial filing of the Registration Statement, and that such Holders and their successors and assigns will promptly notify the Company of any changes in such information. 2 SECTION 2 Expenses The Company shall pay all expenses, fees and costs incurred in connection with the preparation, filing, distribution and effectiveness of the Registration Statement and any supplements or amendments thereto, whether or not the Registration Statement becomes effective, and whether all, none or some of the Registrable Securities are sold pursuant to the Registration Statement, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, fees and state securities, or "blue sky," fees and expenses and reasonable fees and expenses of one counsel for all the Holders, not to exceed $25,000, and the expense of any special audits incident to or required by, or in connection with the filing and effectiveness of the Registration Statement (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company). The Holders shall, severally and not jointly, pay all underwriting fees and discounts, selling commissions, brokerage fees and stock transfer taxes applicable to the Registrable Securities sold by such Holder and the fees and expenses of their counsel in excess of $25,000, if any. SECTION 3 Registration Procedures 3.1. Registration. The Company will advise the Holders as to the status of the preparation, filing and effectiveness of the Registration Statement and, at the Company's expense, will do the following: (a) make available to each Holder upon their request a copy of the Registration Statement (including all exhibits thereto) and any prospectus forming a part thereof and any amendments and supplements thereto (including all documents incorporated or deemed incorporated by reference therein prior to the effectiveness of the Registration Statement and including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, which documents, other than documents incorporated or deemed incorporated by reference, will be subject to the review of the information contained therein regarding the Holders and any plan for resale of the Registrable Securities by the Holders and any such underwriter for a period of at least five (5) business days from the Holder's receipt of such documents, and the Company shall not file the Registration Statement or such prospectus or any amendment or supplement to the Registration Statement or prospectus if any Holder shall reasonably object within five (5) business day period after the receipt thereof unless the Company shall have been advised by its counsel that the Registration Statement or such prospectus or amendment or supplement thereto is required under the Securities Act or the rules or regulations adopted thereunder in connection with the distribution of Registrable Securities by the Holders or the Company. A Holder shall be deemed to have reasonably objected to such filing only if the Registration Statement, amendment, prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission with respect to such Holder or its plan of resale; (b) make available to each Holder upon their request one conformed copy of the Registration Statement and of each amendment and supplement thereto (in each case including all exhibits) and such number of copies of the prospectus forming a part of the Registration Statement (including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such 3 other documents, including, without limitation, documents incorporated or deemed to be incorporated by reference prior to the effectiveness of such Registration Statement, as each of the Holders or any such underwriter, from time to time may reasonably request; (c) to the extent practicable, promptly upon the filing of any document that is to be incorporated by reference into the Registration Statement or prospectus forming a part thereof subsequent to the effectiveness thereof, and in any event no later than five (5) business days after such document is filed with the Commission, make available copies of such document to the Holders upon their request, and make representatives of the Company available for discussion of such document and other customary due diligence matters; and provide promptly to the Holders upon request any document filed by the Company with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act; (d) make available at reasonable times for inspection by the Holders, and any attorney, accountant, financial adviser or other representative (collectively, "Representatives") retained by the Holders, subject to the recipient's prior written agreement to keep such information confidential and not use or disclose it, all financial and other records, pertinent corporate documents and properties of the Company and cause the officers, directors and employees of the Company to supply all information reasonably requested by the Holders or their respective Representatives in connection with the preparation, filing and effectiveness of the Registration Statement; (e) use its commercially reasonable efforts (i) to register or qualify all Registrable Securities covered by the Registration Statement under state securities, or "blue sky," laws of such States of the United States of America where required and where an exemption is not available and as the Holders of Registrable Securities covered by the Registration Statement shall reasonably request, (ii) to keep such registration or qualification in effect for so long as the Registration Statement is required to be effective hereunder, and (iii) to take any other action which may be reasonably necessary or advisable to enable the Holders to consummate the disposition of the securities to be sold by the Holders in such jurisdictions, consistent with the plan of distribution described in the prospectus included in the Registration Statement, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where it is not so qualified, or to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder; (f) use its commercially reasonable efforts to cause all Registrable Securities covered by the Registration Statement to be registered or qualified with or approved by all other applicable Governmental Authorities as may be necessary, in the opinion of counsel to the Company and counsel to the Holders of Registrable Securities, to enable the Holders thereof the consummate the disposition of such Registrable Securities; (g) subject to Section 6 hereof, promptly notify each Holder of Registrable Securities covered by the Registration Statement (i) upon discovery that, or upon the occurrence of any event as a result of which, the prospectus forming a part of the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of proceedings 4 for that purpose, (iii) of any request by the Commission for (A) amendments to the Registration Statement or any document incorporated or deemed to be incorporated by reference in the Registration Statement, or (B) supplements to the prospectus forming a part of the Registration Statement, or (C) additional information, or (iv) of the receipt by the Company of any notification with respect to the suspension of the registration, qualification or exemption from registration or qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, and at the request of any such Holder promptly prepare and file an amendment to the Registration Statement or a supplement to the prospectus as the Company may deem necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and make available to each Holder upon their request a reasonable number of copies of such supplement to, or amendment of, such registration statement and prospectus, and, in the event of a stop order, use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any the Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction; (h) if reasonably requested by any Holder or if required by law or SEC or other applicable rule or regulation, promptly incorporate in the Registration Statement such appropriate information as the Holder may reasonably request to have included therein by filing a Form 8-K, or filing a supplement to the prospectus, to reflect any change in the information regarding the Holder, and make all required filings with the Commission in respect of any offer or sale of Registrable Securities or any amendment or supplement to the Registration Statement or related prospectus; (i) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more than 18 months, beginning with the first full calendar month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; and (j) use its commercially reasonable efforts to cause all Registrable Securities included in the Registration Statement to be listed on Nasdaq and each securities exchange on which securities of the same class are then listed, or, if not then listed on any securities exchange or Nasdaq, to be eligible for trading in any over-the-counter market or trading system in which securities of the same class are then traded. 3.2. Underwriting. If Holders of at least 50% of the Registrable Securities ("Initiating Holders") intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so notify the Company. The Holders whose shares are to be included in such registration and the Company shall (together with all other stockholders proposing to distribute their securities through such underwriting) enter into underwriting and related agreements in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Initiating Holders and reasonably acceptable to the Company. In any case, such representative shall be a nationally recognized underwriter in good standing. Such underwriting agreement will contain such representations and warranties by the Company and such other terms and provisions as are customary for underwriting agreements with respect to secondary distributions, including, without limitation, indemnities and contribution, the provision of opinions of counsel and accountants' letters and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such 5 underwriters shall also be made to and for the benefit of the Holders. The Company shall cooperate fully with the Holders and the underwriters in connection with any underwritten offering. Notwithstanding any other provision of this Section 3.2, if the representative of the underwriters advises the Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the securities of the Company held by other stockholders shall be excluded from such registration to the extent so required by such limitation. If, after the exclusion of such shares, still further reductions are required, the number of shares included in the registration by each Holder shall be reduced on a pro rata basis (based on the number of shares held by such Holder), by such minimum number of shares as is necessary to comply with such request; provided, that there shall be no reduction in the number of shares included in the registration by any Holders until all shares of other stockholders have been excluded from such registration. No Registrable Securities or any other securities excluded from the underwriting by reason of the underwriter's marketing limitation shall be included in such registration. If any other stockholder who has requested inclusion in such registration as provided above disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the underwriter and the Initiating Holders. The securities so withdrawn shall also be withdrawn from registration. If the underwriter has not limited the number of Registrable Securities or other securities to be underwritten, the Company and officers and directors of the Company may include its or their securities for its or their own account in such registration, or for the account of others, if the representative so agrees and if the number of Registrable Securities and other securities which would otherwise have been included in such registration and underwriting will not thereby be limited. SECTION 4 Indemnification 4.1. Indemnification by the Company. The Company will indemnify: (a) each of the Holders, as applicable, (b) each of the Holder's officers, directors, members and partners, and (c) each individual, partnership, joint stock company, corporation, trust, unincorporated organization, government agency or political subdivision (each of the foregoing, a "Person") controlling each of the Holders within the meaning of SEC Rule 405 under the Securities Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, with respect to the Registration Statement, against all expenses, claims, losses, damages and liabilities (or actions, investigations or proceedings in respect thereof) (collectively, a "Claim") arising out of or based on any actual or alleged untrue statement of a material fact, or any omission of a material fact required to be stated therein or necessary in order to make the statements included therein not misleading, contained in the Registration Statement, any prospectus or other offering document (including any related registration statement, notification or the like) incident to the registration, qualification or compliance, or any violation by the Company of the Securities Act or the Exchange Act or any other laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each of the Holders, each of its officers, directors, members and partners, and each Person controlling each of the Holders, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such Claim; provided, however, that the Company will not be liable in any such case to the extent that any such Claim (i) arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by the Holders or their Representatives and stated to be specifically for use therein, or (ii) is finally judicially determined to have resulted primarily from the 6 gross negligence or willful misconduct of any person or entity set forth in subsections (a) through (c) above. 4.2. Indemnification by the Holders. Each of the Holders will, if Registrable Securities held by it are included in the securities as to which such Registration Statement is being effected, severally and not jointly, indemnify the Company, each of its directors and officers, and each Person who "controls" the Company within the meaning of SEC Rule 405 under the Securities Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, and each other Holder, against all Claims arising out of or based on any actual or alleged untrue statement of a material fact, or any omission or a material fact required to be stated therein or necessary in order to make the statement included or incorporated therein not misleading, contained in the Registration Statement, prospectus, or other offering document made by or on behalf of such Holder, and will reimburse the Company and each other Holder, its respective directors, officers, partners, members or control Persons for any legal or any other expenses reasonably incurred in connection with investigating and defending any such Claim, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in the Registration Statement, prospectus, offering memorandum or other document in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder and stated to be specifically for use therein; provided, however, that the several obligations of each of the Holders hereunder shall be limited to an amount equal to the net proceeds received by such Holder from the sale of the Registrable Securities pursuant to the Registration Statement. 4.3. Procedures. Each party entitled to indemnification under this Agreement (each, an "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any Claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such Claim; provided that counsel for the Indemnifying Party, who shall conduct the defense of such Claim, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense (unless the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of one such counsel for all Indemnified Parties shall be at the expense of the Indemnifying Party), and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in the investigation or defense of any such Claim shall, except with the consent of each Indemnified Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement or compromise which does not include an unconditional release of the Indemnifying Party from all liability in respect to such Claim. Each Indemnified Party shall furnish such information regarding itself or the Claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the investigation and defense of such Claim. 4.4. Contribution. If the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Claim, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such Claim, as well as any other relevant equitable considerations; provided, however, that the Company will not be liable in any such case to the extent that any such Claim (i) arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by the Holders or their Representatives and stated to be specifically for use therein, or (ii) is finally judicially 7 determined to have resulted primarily from the gross negligence or willful misconduct of any person or entity set forth in Section 4.1(a) through 4.1(c) above. The relative fault of the Indemnifying Party and of the Indemnified Party 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 the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and provided that each Holder shall not be required to contribute, in the aggregate, more than the net proceeds received by such Holder from the sale of its Registrable Securities pursuant to the Registration Statement and further provided that the obligations of the Holders under this Section 4.4 shall be several and not joint. SECTION 5 Provision of Information by the Holders Each of the Holders whose Registrable Securities are included in the Registration Statement shall furnish to the Company such information regarding such Holder as the Company may reasonably request in writing and as shall be reasonably required or advisable in connection with any registration, qualification or compliance referred to in this Agreement, and shall promptly notify the Company if such information becomes incorrect or misleading, or requires amendment or updating. Each of the Holders, severally and not jointly, agrees that the plan of distribution included in any prospectus relating to the Registrable Securities shall be substantially as set forth on Schedule C-1 hereto and that such Holder will not resell any Registrable Securities pursuant to the Registration Statement in any manner other than as provided therein or herein. The other information regarding the Holders required for the initial filing of the Registration Statement has been provided by each Holder on the Subscription Agreement. Each Holder, severally and not jointly, represents, warrants and covenants to the Company that the information regarding such Holder that appears in the Subscription Agreement and/or Schedule C-2 is accurate and complete in all material respects consistent with Commission Regulation S-K, Items 507 and 508. The Purchaser will confirm promptly by delivery of a signed copy of Schedule C-2, the sale of any Conversion Shares pursuant to Rule 144 or the Registration Statement. SECTION 6 Holdback; Postponement Notwithstanding the other provisions of this Agreement, if (a) there is material non-public information regarding the Company which the Company's Board of Directors reasonably and in good faith determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (b) there is a extraordinary business opportunity (including but not limited to the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar extraordinary transaction not in the ordinary course of business) available to the Company which the Company's Board of Directors reasonably and in good faith determines not to be in the Company's best interest to disclose, then the Company may postpone or suspend filing or effectiveness of a registration statement for a period not to exceed 90 days, provided that the Company may not postpone or suspend filing or effectiveness of a registration statement for more than 180 days in the aggregate during any 365-day period and there shall be an aggregate of not more than two (2) suspensions during any 365-day period; provided, however that no postponement or suspension shall be permitted for consecutive 90 day periods arising out of the same set of facts, circumstances or transactions. 8 SECTION 7 Rule 144 Reporting, Etc. 7.1. SEC Reporting Compliance. (a) With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, through the second anniversary of this Agreement, the Company will: (i) make and keep "current public information" regarding the Company available, as defined in Commission Rule 144(c) under the Securities Act, and cooperate with the Holders and take such further reasonable action as the Holders may reasonable request in writing (including, without limitation, making such reasonable representations as the Holders may reasonably request); (ii) use its commercially reasonable efforts to file with the Commission in a timely manner all SEC Reports and other filings and documents required of the Company under the Securities Act and the Exchange Act; and (iii) so long as a Holder owns any Registrable Securities, furnish the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements under the Securities Act and the Exchange Act, including compliance with SEC Rule 144(c), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of, or reasonably obtainable by, the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration. Notwithstanding the foregoing, nothing in this Section 7.1(a) shall be deemed to require the Company to register any of its securities (other than the Common Stock) under any section of the Exchange Act. (b) The Company shall file the reports required to be filed by it under the Exchange Act and shall comply with all other requirements set forth in the instruction to Form S-3 in order to allow the Company to be eligible to file registration statements on Form S-3. SECTION 8 Miscellaneous 8.1. Assignment. The registration rights set forth herein may be assigned, in whole or in part, to any transferee of Registrable Securities permitted in accordance with the Purchase Agreement, which transferee, upon registration on the Company's or its transfer agent's books and records as a holder of record of Registrable Securities, shall be considered thereafter to be a Holder (provided that any transferee who is not an affiliate of a Purchaser shall be a Holder only with respect to such Registrable Securities so acquired and any stock of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such Registrable Securities) and shall be bound by all obligations and limitations of this Agreement and the Purchase Agreement. 9 8.2. Section Headings. The titles and headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. 8.3. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the conflict of law rules thereof to the extent that the application of the law of another jurisdiction would be required thereby. 8.4. Notices. (a) All communications under this Agreement shall be in writing and shall be delivered by facsimile, by hand, by reliable overnight delivery service such as UPS or FedEx or by registered or certified mail, postage prepaid: (i) if to the Company, to the address listed in the Purchase Agreement, or at such other address as it may have furnished in writing to the Purchasers; (ii) if to the Purchasers, at the addresses listed on Subscription Agreement, or at such other addresses as may have been furnished the Company in writing. (b) Any notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if sent by reliable overnight delivery service such as UPS or FedEx, on the first business day following the date of delivery to such service for overnight delivery, (iii) if delivered by facsimile, on the date of such facsimile, or (iv) if mailed by registered or certified mail, on the third business day after the date of such mailing. In the event that any notice is sent by facsimile transmission to the Company, such transmission shall be followed immediately by overnight delivery to the Company of such notice. 8.5. Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties. No other person is intended to or shall have any rights or remedies hereunder, whether as a third part beneficiary or otherwise. 8.6. Counterparts. Persons may become parties to this Agreement be entering into the Subscription Agreement, which may be executed in one or more identical counterparts, each of which shall be deemed an original and all of which shall be one and the same agreement. Any signature that is delivered by facsimile signature page shall be valid and binding, with the same force and effect as if an original, manually signed counterpart. 8.7. Remedies. Each Holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 8.8. Severability. In the event that any provision contained herein is unenforceable, the remaining provisions shall continue in full force and effect. 8.9. Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holders, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any provision hereof, 10 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. It is further agreed that any waiver, permit, consent or approval of any kind or character by a Holder of any breach or default under this Agreement, or any waiver by a Holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in the writing, and that all remedies, either under this Agreement, or by law or otherwise afforded to a Holder, shall be cumulative and not alternative. 8.10. Attorney's Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 8.11. Entire Agreement; Amendment. This Agreement, the Purchase Agreement, the Subscription Agreement and the other Agreements constitute the entire understanding and agreement of the parties with respect to the subject matter hereof and supersede all prior understandings, written or otherwise, among such parties. This Agreement may be amended only in a writing signed by the Company and the Holders of at least a majority of the then outstanding Registrable Securities. 8.12. Effectiveness. This Agreement shall not become effective unless and until the Notes are converted into Conversion Shares. [The remainder of this page has been intentionally left blank.] 11 SCHEDULE C-1 ------------ Plan of Distribution The Selling Stockholders and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility (including, without limitation, the Nasdaq National Market and the over the counter market) on which the shares are traded or in private transactions, subject to applicable law. These sales may be public or private at prices prevailing in such market, fixed prices or prices negotiated at the time of sale. The shares may be sold by the Selling Stockholders directly to one or more purchasers, through agents designated from time to time or to or through broker-dealers designated from time to time. In the event the shares are publicly offered through broker-dealers or agents, the selling stockholders may enter into agreements with respect thereto. The Selling Stockholders may, subject to applicable law, also use any one or more of the following methods when selling shares: o ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; o block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; o purchases by a broker-dealer as principal and resale by the broker-dealer for its account; o an exchange distribution in accordance with the rules of the applicable exchange; o privately negotiated transactions; o short sales broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; o a combination of any such methods of sale; or o any other method permitted pursuant to applicable law. The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. The Selling Stockholder may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3), or other applicable provision of the Securities Act of 1933, amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The Selling Stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. The Selling Stockholders and the broker-dealers or agents that participate in the distribution of the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any discounts and any commissions received by such broker-dealers or agents and any profit on the sale of the shares purchased by them and any discounts or commissions might be deemed to be underwriting discounts or commissions under the Securities Act. Any such broker-dealers and agents may engage in transactions with, and perform services for, the Company. At the time a particular offer of shares is made by the selling stockholders, to the extent required, a prospectus will be distributed which will set forth the aggregate number of shares being offered, and the terms of the offering, including the public offering price thereof, the name or names of any broker-dealers or agents, any discounts, commissions and other items constituting compensation from, and the resulting net proceeds to, the Selling Stockholders. In order to comply with the securities laws of certain states, sales of shares offered hereby to the public in such states may be made only through broker-dealers who are registered or licensed in such states. Sales of shares offered hereby must also be made by the Selling Stockholders in compliance with other applicable state securities laws and regulations. The Company is required to pay all fees and expenses incident to the registration of the shares, including fees and expenses of one counsel for all Selling Stockholders in an amount not to exceed $25,000; provided, that the Selling Stockholders are required, severally and not jointly, to pay all underwriting fees and discounts, selling commissions, brokerage fees and stock transfer taxes applicable to shares sold by such Selling Stockholders hereby. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. SCHEDULE C-2 ------------ Purchaser's Certificate of Subsequent Sale(2) The undersigned, an officer of, or other person duly authorized by the Purchaser named below hereby certifies to the Company, as defined in the Registration Right Agreement for Conversion Shares, dated as of February 12, 2003 (the "Agreement") that he/she (said institution) is the Purchaser of the Conversion Shares evidenced by the attached certificate, and as such, sold such Conversion Shares on ___________________, 200__ in accordance with: (i) Registration Statement number ______________________________, in the manner indicated under "Plan of Distribution" in the current prospectus and has delivered a current prospectus, or (ii) Pursuant to the applicable requirements of Rule 144 of the Securities Act of 1933, as amended, in which case, a copy of Form 144 as filed with the Securities and Exchange Commission, together with the representation letter of the undersigned and the broker's representation letter are enclosed. Print or Type: Name of Purchaser (Individual or Institution): ____________________________ Name of Individual Representing Purchaser (if an Institution): ___________________________________ Title: ____________________________ Confirmed by the undersigned thereunto duly authorized: ___________________________________ Purchaser Name By: _______________________________ Name: Title: - ---------- (2) All capitalized terms used but not defined herein shall have the meanings provided in the Agreement. -----END PRIVACY-ENHANCED MESSAGE-----