Document:

VCAMPUS CORPORATION

Exhibit 10.65

 

VCAMPUS CORPORATION

SECURITIES PURCHASE

AGREEMENT

 

This Securities Purchase Agreement (the “Agreement”) is entered into as

of the       day of                  2002, by and among VCampus

Corporation, a Delaware corporation (the “Company”), and the purchasers listed

on Exhibit A hereto (the “Purchasers”).

 

WHEREAS,

the Company desires to enter into this Agreement with the Purchasers to sell

and issue preferred stock and warrants to the Purchasers; and

 

WHEREAS,

the Purchasers desire to enter into this Agreement to acquire preferred stock

and warrants of the Company on the terms and conditions set forth herein;

 

NOW,

THEREFORE, in consideration of the mutual promises,

representations, warranties, covenants and conditions set forth in this Agreement,

the parties to this Agreement mutually agree as follows:

 

1.             Authorization and Sale.

 

1.1          Authorization.

The Company has authorized the issuance and sale to the Purchasers of:

 

(a)                                                        Up

to            shares of its Series [F,

F-1 or F-2, as the case may be] Convertible Preferred Stock, $0.01 par value

per share (the “Series [F, F-1 or F-2] Preferred Stock”), having substantially

the rights, preferences, privileges and restrictions set forth in the

Certificate of Designations of Series [F, F-1 or F-2]  Convertible Preferred Stock in substantially the form attached

hereto as Exhibit B (the “Certificate of Designations”); and

 

(b)                                                       warrants

for the purchase of a number of shares of common stock equal to        % of the number of shares of common

stock initially issuable upon conversion of the Series [F, F-1 or F-2]  Preferred Stock purchased hereunder, in

substantially the form attached hereto as Exhibit C (the “Warrants”).

 

1.2          Sale.

Subject to the terms and conditions hereof, each Purchaser agrees to purchase

from the Company, and the Company agrees to sell and issue to such Purchaser,

the number of  shares of Series [F, F-1

or F-2]  Preferred Stock at $       per share (the “Shares”) and the number

of Warrants to purchase shares of common stock as set forth on Exhibit A

attached hereto.   Each share of Series

[F, F-1 or F-2]  Preferred Stock shall

initially be convertible into          

(     ) share(s) of common stock.

 

2.             Closings;

Delivery.

 

2.1          Closings.

The closing of the purchase and sale of the Shares and Warrants under this

Agreement shall take place at 2:00 p.m. (Eastern time) on May 9, 2002 at the

offices

 

 

of Wyrick Robbins Yates &

Ponton LLP, 4101 Lake Boone Trail, Suite 300, Raleigh, North Carolina, or at

such other time and place as the Company and the Purchasers may agree.  Additional Purchasers may enter into this

Agreement with the Company’s consent (up to a maximum of             Shares) at additional closings (each

closing hereunder, a “Closing”).

 

2.2          Delivery.

At each Closing, subject to the terms and conditions hereof, the Company will

deliver to the Purchasers certificates representing the Shares and the Warrants

to be purchased by the Purchasers from the Company at the Closing, dated the

date of the Closing, against payment of the purchase price therefor payable as

of the date of such Closing by [wire transfer or cancellation of debt, as the

case may be].

 

3.             Representations and Warranties

of the Company. The Company hereby represents and

warrants to each Purchaser as follows.

 

3.1          Organization and Standing.

The Company is a corporation duly organized, validly existing and in good

standing under the laws of the State of Delaware, and has all requisite

corporate power and authority to own and operate its properties and assets and

to carry on its business as now conducted and as currently proposed to be

conducted.  The Company is duly

qualified and authorized to do business, and is in good standing as a foreign

corporation, in Virginia and in each other jurisdiction where the nature of its

activities and of its properties makes such qualification necessary, except

where a failure to do so would not have a material adverse effect on the

Company.

 

3.2          Capitalization. The authorized and outstanding

capital of the Company, as of March 31, 2002, consisted of:  1,200,000 shares of Series D Convertible

Preferred Stock, $0.01 par value per share, 1,013,809 of which are issued and

outstanding; 1,000,000 shares of Series C Convertible Preferred Stock, $0.01

par value per share, 623,339 shares of which are issued and outstanding;

3,000,000 shares of Series E Convertible Preferred Stock, 552,530 of which are

issued and outstanding; 3,000,000 shares of Series F Convertible Preferred

Stock, 2,642,836 of which are issued and outstanding; 341,587 shares of undesignated

and unissued Preferred Stock, $0.01 par value per share; and 36,000,000 shares

of common stock, $0.01 par value per share, 14,699,554 of which were issued and

outstanding.  Prior to Closing the

Company will have filed the Certificate of Designations for the Series [F, F-1

or F-2] Preferred Stock in Delaware authorizing             shares of Series [F, F-1 or F-2] Preferred Stock, none

of which will be outstanding prior to Closing. 

The Company expects to issue            

shares of Series F Preferred Stock,                  shares of Series F-1 Preferred Stock and up to

approximately              shares of

Series F-2 Preferred Stock on or about the dated of the initial Closing of this

Agreement.

 

All of the

outstanding shares of common stock and preferred stock have been duly

authorized and validly issued, are fully paid and nonassessable and were issued

in compliance with all applicable federal and state securities laws.  The Company has duly and validly reserved

(i) the Shares for issuance as contemplated hereby, (ii) a sufficient

number of shares of common stock for issuance upon conversion of the Shares

(the “Conversion Shares”), subject to adjustment pursuant to the terms of the

Certificate of Designations, and (iii) a sufficient number of shares of common

stock for issuance upon exercise of the Warrants (the “Warrant Shares”).  Except for the conversion rights associated

with the Series C, D, E, F,  F-1 and F-2

Preferred

 

2

 

Stock and the rights created

under this Agreement and except as disclosed in the reports and documents filed

by the Company prior to the date of this Agreement under the Securities Act of

1933, as amended (the “Securities Act”), and the Securities Exchange Act of

1934, as amended (the “SEC Filings”), there are no outstanding rights of first

refusal, preemptive rights or other rights, options, warrants, conversion

rights or other agreements, either directly or indirectly, for the purchase or

acquisition from the Company of any shares of its capital stock.

 

3.3          Authorization.   All corporate action on the part of the Company and its directors

and stockholders necessary for the authorization, execution and delivery of

this Agreement, the performance of all the Company’s obligations hereunder and

thereunder, and the authorization, issuance, sale and delivery of the Shares,

Conversion Shares, the Warrants and the Warrant Shares (collectively, the

“Securities”) has been taken.  This

Agreement, when executed and delivered by the Company and the respective other

parties thereto, shall constitute a valid and legally binding obligation of the

Company enforceable in accordance with its terms, subject to laws of general

application relating to bankruptcy, insolvency and the relief of debtors, rules

and laws governing specific performance, injunctive relief and other equitable

remedies.

 

3.4          Validity of the Shares.   The Shares and Warrants, when issued pursuant

to the terms of this Agreement, and the Conversion Shares and Warrant Shares,

when issued pursuant to the terms of the Certificate of Designation and the

Warrants, will be validly issued, and fully paid and nonassessable and will be

free of any liens or encumbrances; provided, however, that such securities will

be subject to restrictions on transfer under state and/or federal securities

laws as set forth herein and subject to certain other restrictions, including

restrictions imposed pursuant to Nasdaq Marketplace Rules, as set forth in the

Certificate of Designations and the Warrants.

 

3.5          Compliance with Other Instruments.   The Company is not in violation of any

provisions of its Certificate of Incorporation or its Bylaws as amended, or of

any provisions of any material agreement or any judgment, decree or order by

which it is bound or any statute, rule or regulation applicable to the

Company.  Subject to the compliance with

such filings as may be required to be made with the SEC, the National

Association of Securities Dealers, Inc. (the “NASD”) and certain state

securities commissions, the execution, delivery and performance of this

agreement and the issuance and sale of the Shares and Warrants pursuant hereto

and, subject to Nasdaq shareholder approval rules, the issuance of the

Conversion Shares and the Warrant Shares pursuant to the Certificate of

Designations and the Warrants, respectively, will not result in any such

violation or be in conflict with or constitute a default under any such

provisions or result in the creation of any mortgage, pledge, lien, encumbrance

or charge upon any of the properties or assets of the Company.

 

3.6          Governmental Consents.   All consents, approvals, orders or

authorization of, or registrations, qualifications, designations, declarations

or filings with, any federal or state governmental authority on the part of the

Company required in connection with the valid execution and delivery of this

Agreement, the offer, sale or issuance of the Securities, or the consummation

of any other transaction contemplated hereby, have been obtained, except for

notices required to be filed with the SEC, the NASD and certain state

securities commissions thereafter, which notices will be filed on a timely

basis.

 

3

 

3.7          Accuracy of Reports.  The SEC Filings required to be

filed by the Company within the year prior to the date of this Agreement under

the Securities Exchange Act of 1934 have been duly filed, were in substantial

compliance with the requirements of their respective forms, were complete and

correct in all material respects as of the dates at which the information was

furnished, and contained (as of such dates) no untrue statement of a material

fact or omitted to state a material fact necessary in order to make the

statements made therein, in light of the circumstances under which they were

made, not misleading.

 

3.8          Disclosure.  No representation or warranty of the Company

contained in this Agreement contains any untrue statement of a material fact or

omits to state a material fact necessary in order to make the statements

contained herein or therein, in light of the circumstances under which they

were made, not misleading.

 

4.             Representations and Warranties

of the Purchasers. Each Purchaser hereby

represents and warrants to the Company as follows:

 

4.1          Power and Authority.

It has the requisite power and authority to enter into this Agreement, to

purchase the Securities and to carry out and perform its obligations under the

terms of this Agreement.

 

4.2          Due Execution.

This Agreement has been duly authorized, executed and delivered by it, and,

upon due execution and delivery by the Company, will be a valid and binding

agreement of it, subject to laws of general application relating to bankruptcy,

insolvency and the relief of debtors, rules and laws governing specific performance,

injunctive relief and other equitable remedies.

 

4.3          Investment

Representations.

 

(a)           Purchaser is a resident of the state

indicated on the signature page hereof, is legally competent to execute this

Agreement, and:

 

(i)                                     if

Purchaser is an individual, has his or her principal residence in such state

and is at least 21 years of age; or

 

(ii)                                  if

Purchaser is a corporation, partnership, trust or other form of business

organization, has its principal office in such state; or

 

(iii)                               if Purchaser is a corporation,

partnership, trust or other form of business organization, Purchaser has not

been organized for the specific purpose of acquiring the Securities.

 

(b)           The Purchaser has read this Agreement

carefully and, to the extent believed necessary, has discussed the

representations, warranties and agreements and the applicable limitations upon

the Purchaser’s resale of the Securities with counsel.

 

(c)           The Purchaser

understands that no federal or state agency has made any finding or

determination regarding the fairness of this offering, or any recommendation or

endorsement of this offering.

 

4

 

(d)           The Purchaser is an “accredited

investor” as defined in Rule 501 of Regulation D promulgated under the Act.

 

Entities that are accredited investors under Rule 501

include, among others, certain banks, savings and loan associations, registered

securities broker-dealers, insurance companies, registered investment companies

and trusts.  Individuals that are

accredited investors under Rule 501 include, among others, any natural person

whose individual net worth, or joint net worth with that person’s spouse,

exceeds $1 million; or who had income in excess of $200,000 in each of the two

most recent years or joint income with that person’s spouse in excess of

$300,000 in each of those years and who has a reasonable expectation of

reaching the same income level in the current year.

 

(e)           The Purchaser has had access to and

has read copies of the Company’s SEC Filings and has had an adequate

opportunity to ask questions of and receive answers from the Company regarding

these documents and to obtain such other information as the Purchaser desires

in order to evaluate an investment in the Securities.

 

(f)            The Purchaser is financially able to

bear the economic risk of this investment, including the ability to afford

holding the Securities for an indefinite period, or to afford a complete loss

of its investment.

 

(g)           The Purchaser is

purchasing the Securities for the Purchaser’s own account, with the intention

of holding the Securities for investment purposes and not for the purpose of

reselling or otherwise participating, directly or indirectly, in a distribution

of the Securities, and shall not make any sale, transfer or other disposition

of any portion of the Securities purchased hereby without registration under

the Act and any applicable securities act of any state or unless an exemption

from registration is available under such acts.

 

(h)             The

Purchaser understands that an investment in the Securities is a highly illiquid

investment, and that, the Purchaser will have to bear the economic risk of the

investment indefinitely (or at least until such shares may become registered as

provided under this Agreement) because the shares of common stock underlying

the Securities have not been registered under the Act and the Securities are

being issued pursuant to a private placement exemption under Regulation D, on

the grounds that no public offering is involved.  Therefore, the Securities and the shares of common stock issuable

in connection therewith cannot be offered, sold, transferred, pledged or

hypothecated to any person, unless either they are subsequently registered

under the Act and applicable state securities laws or an exemption from registration

is available and the Purchaser obtains a favorable opinion of the Company’s

counsel to that effect.

 

(i)  Prior to registration of the Shares by the

Company pursuant to the Registration Rights Agreement referenced in Section 5.6

hereof, the Purchaser understands that the provisions of Rule 144 promulgated

under the Act are not available for at least one (1) year to permit resale of

the Securities or the shares of common stock underlying the Securities, and

there can be no

 

5

 

assurance that the conditions

necessary to permit routine sales of such securities under Rule 144 will ever

be satisfied, and, if Rule 144 should become available, routine sales made in

reliance on its provisions could be made only in limited amounts and in

accordance with the terms and conditions of the Rule.  The Purchaser further understands that in connection with sales

for which Rule 144 is not available, compliance with some other registration

exemption will be required, which may not be available.

 

(j) 

The Purchaser understands and agrees that stop transfer instructions

will be given to the Company’s transfer agent or the officer in charge of its

stock records and noted on the appropriate records of the Company to the effect

that the Securities and the shares of common stock issuable upon exercise or

conversion thereof may not be transferred out of the Purchaser’s name unless

either such securities become registered under the Act or it is established to

the satisfaction of counsel for the Company that an exemption from the

registration provisions of the Act and applicable state securities laws is

available therefore.  The Purchaser

further agrees that there will be placed on the certificates for the Securities

and the underlying common stock, or any substitutions therefore, a legend

stating in substance as follows, that the Purchaser understands and agrees that

the Company may refuse to permit the transfer of the stock out of its name and

that the stock must be held indefinitely in the absence of compliance with the

terms of such legend.

 

THE SECURITIES REPRESENTED BY THIS

CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, OR ANY STATE SECURITIES ACT AND MAY NOT BE SOLD, TRANSFERRED OR

PLEDGED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE CORPORATION RECEIVES AN

OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE CORPORATION) REASONABLY

SATISFACTORY TO IT THAT SUCH TRANSFER MAY BE MADE IN COMPLIANCE WITH APPLICABLE

FEDERAL AND STATE SECURITIES LAWS AND REGULATIONS.

 

The Purchaser agrees to indemnify the Company, its directors, officers

and employees, and to hold them harmless from and against any and all

liability, damages, costs or expenses, including reasonable attorney fees, on

account of or arising out of (i) any inaccuracy in the Purchaser’s

representations and warranties hereinabove set forth; (ii) the disposition of

any Securities or common stock which it will receive, contrary to its foregoing

representations and warranties; and (iii) any action, suit or proceeding based

upon either the claim that the Purchaser’s representations or warranties were

inaccurate or misleading or otherwise cause for obtaining damages or redress

from the Company, its directors, officers or employees, or the disposition of

any portion of the Securities or common stock.

 

4.4          Government Consents.

No consent, approval or authorization of, or designation, declaration or filing

with, any state, federal or foreign governmental authority on the part of such

Purchaser because of any special characteristic of such Purchaser is required

in connection with the valid execution and delivery of this Agreement by such

Purchaser or the

 

6

 

consummation by such Purchaser

of the transactions contemplated hereby; provided, however, that such Purchaser

makes no representations as to compliance with applicable state securities

laws.

 

5.             Conditions to the Purchaser’s

Obligations at the Closing. The obligations of a

Purchaser to purchase the Securities at the Closing are subject to the

fulfillment on or before such Closing of each of the following conditions:

 

5.1          Representations and Warranties.

The representations and warranties of the Company contained in Section 3 shall

be true in all material respects on and as of the Closing with the same force

and effect as if they had been made at the Closing.

 

5.2          Performance.

The Company shall have performed and complied in all material respects with all

agreements and conditions contained in this Agreement required to be performed

or complied with by it on or before the Closing.

 

5.3          Qualifications.

All authorizations, approvals or permits, if any, of any governmental authority

or regulatory body of the United States or of any state that are required prior

to and in connection with the lawful issuance and sale of the Securities

pursuant to this Agreement shall have been duly obtained and shall be effective

on and as of the Closing.

 

5.4          Legal Investment.

At the time of the Closing, the purchase of the Securities by the Purchaser

hereunder shall be legally permitted by all laws and regulations to which it or

the Company is subject.

 

5.5          Proceedings and Documents.

All corporate and other proceedings in connection with the transactions

contemplated at the Closing hereby and all documents and instruments incident

to such transactions shall be reasonably satisfactory in substance and form to

the Purchaser, and the Purchaser shall have received all such counterpart

originals or certified or other copies of such documents as it may reasonably

request.

 

5.6          Registration Rights Agreement.  The Company shall have executed and

delivered a Registration Rights Agreement to the Purchaser, in substantially

the form attached hereto as Exhibit D, granting registration rights with

respect to the Conversion Shares and the Warrant Shares.

 

6.             Conditions to the Company’s

Obligations at the Closing. The obligations of the

Company to issue and sell Securities at the Closing are subject to the

fulfillment on or before the Closing of each of the following conditions:

 

6.1          Representations and Warranties.

The representa­tions and warranties of the Purchasers contained in Section 4

shall be true in all material respects on and as of the Closing with the same

force and effect as if they had been made at the Closing.

 

6.2          Performance.

The Purchasers shall have performed and complied in all material respects with

all agreements and conditions contained in this Agreement required to be

performed or complied with by them on or before the Closing.

 

7

 

6.3          Qualifications.

All authorizations, approvals or permits, if any, of any governmental authority

or regulatory body of the United States or of any state that are required prior

to and in connection with the lawful issuance and sale of the Securities

pursuant to this Agreement shall have been duly obtained and shall be effective

on and as of the Closing.

 

6.4          Legal Investment.

At the time of the Closing, the purchase of the Securities by the Purchasers

hereunder shall be legally permitted by all laws and regulations to which it or

the Company is subject.

 

7.             Miscellaneous.

 

7.1          Entire Agreement; Effectiveness.

This Agreement and the documents referred to herein constitute the entire

agreement among the parties, and no party shall be liable or bound to any other

party in any manner by any warranties, representations or covenants except as

specifically set forth herein or therein. 

The terms and conditions of this Agreement shall inure to the benefit of

and be binding upon the successors and assigns of the parties.  Nothing in this Agreement, express or

implied, is intended to confer upon any third party any rights, remedies,

obligations or liabilities under or by reason of this Agreement, except as expressly

provided in this Agreement.

 

7.2          Governing Law.

This Agreement shall be governed by and construed under the laws of the State

of Delaware as applied to agreements among Delaware residents, made and to be

performed entirely within the State of Delaware.

 

7.3          Counterparts; Facsimiles.  This Agreement may be executed in two or

more counterparts, each of which shall be deemed an original, but all of which

together shall constitute one and the same instrument.  Delivery by facsimile transmission of a signature

page hereto shall constitute execution hereof.

 

7.4          Headings.  The headings used in this Agreement are used

for convenience only and are not to be considered in construing or interpreting

this Agreement.

 

7.5          Notices.  Any notice required or permitted under this

Agreement shall be given in writing and shall be deemed effectively given upon

personal delivery or upon deposit with the United States Post Office, by

registered or certified mail, postage prepaid, or sent by confirmed telecopy,

addressed (a) if  the Company, at:

 

VCampus

Corporation

1850

Centennial Park Drive, Suite 200

Reston,

Virginia  20191

Attention:  Chief Financial Officer

 

With a copy

to:

Kevin A.

Prakke, Esq.

Wyrick Robbins

Yates & Ponton LLP

4101 Lake

Boone Trail, Suite 300

Raleigh, North

Carolina  27607-7506

 

8

 

or at such other address as the Company shall have furnished to a

Purchaser in writing, and (b) if to a Purchaser, at its address on the

books and records of the Company.

 

7.6          Attorneys’ Fees.  Should any litigation or arbi­tra­tion be

commenced between the parties hereto concerning this Agreement, the party

prevailing in such litigation or arbitration shall be entitled, in addition to

such other relief as may be granted, to a reasonable sum for attorneys’ fees

and costs in such litigation or arbitration, which fees and costs shall be

determined by the court or arbitrator, as the case may be.

 

7.7          Survival.  The representations, warranties, covenants

and agreements made herein shall survive any investiga­tion made by any

Purchaser and the Closing.  All

statements as to factual matters contained in any certificate or other

instrument delivered by or on behalf of the Company pursuant hereto or in

connection with the transactions contemplated hereby shall be deemed to be

representations and warranties made by the Company hereunder as of the date of

such certificate or instrument.

 

7.8          Severability.  In case any provision of this Agreement shall

be invalid, illegal or unenforceable, it shall to the extent practicable, be

modified so as to make it valid, legal and enforceable and to retain as nearly

as practicable the intent of the parties, and the validity, legality and

enforceability of the remaining provisions shall not in any way be affected or

impaired thereby.

 

7.9          Delays or Omissions.  No delay or omission to exercise any right,

power or remedy accruing to the Company or a Purchaser or any subsequent holder

of any Securities upon any breach, default or noncompliance of a Purchaser, any

subsequent holder of any Securities or the Company under this Agreement, the

Certificate of Designations or the Warrant shall impair any such right, power

or remedy, nor shall it be construed to be a waiver of any such breach, default

or noncompliance, or any acquiescence therein, or of any similar breach,

default or noncompliance thereafter occurring. 

It is further agreed that any waiver, permit, consent or approval of any

kind or character on the part of the Company or a Purchaser of any breach, default

or noncompliance under this Agreement, the Certificate of Designations or the

Warrant or any waiver on the Company’s or a Purchaser’s part 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 and that all remedies,

either under this Agreement, the Certificate of Designations or the Warrants,

by law, or otherwise afforded to the Company and the Purchasers, shall be

cumulative and not alternative.

 

7.10        Information Confidential.   Each Purchaser acknowledges that this

Agreement and all attachments hereto are confidential and for such Purchaser’s

use only, and it will refrain from using such information and any Company

confidential information obtained by it pursuant to this Agreement

(collectively, “Confidential Information”) or reproducing, disclosing or

disseminating Confidential Information to any other person (other than its

employees, affiliates, agents or partners having a need to know the contents of

such information and its attorneys), except in connection with the enforcement

of rights under this Agreement, unless the Company has made such information

available to the public generally or it is required by a governmental body to

disclose such information.

 

9

 

7.11        Amendments and Waivers.  Except as otherwise expressly provided

herein, any term of this Agreement may be amended and the observance of any

term of this Agreement may be waived (either generally or in a particular

instance, either retroactively or prospectively and either for a specified

period of time or indefinitely) with the written consent of the Company and the

Purchaser to be bound, or persons holding a majority of the Securities, on an

as-converted to or exercised for common stock basis.  Any amendment or waiver effected in accordance with this Section

shall be binding upon the Purchaser and each transferee of the Securities.

 

7.12        Expenses.  The Company and each Purchaser shall be

responsible for its own costs and expenses, including “due diligence”

investigation and attorneys’ fees and expenses, incurred in connection with the

preparation, execution and delivery of this Agreement and other related

documentation.

 

 

Next

Page is Signature Page.

 

10

 

IN

WITNESS WHEREOF, the parties have executed this

Securities Purchase Agreement as of the date first above written.

 

	

  COMPANY:

  	

  VCAMPUS CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Daniel J. Neal,

  
	

   

  	

  Chief Executive Officer

  

 

 

	

  PURCHASER:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
						

 

11

 

EXHIBIT A

 

SCHEDULE OF PURCHASERS

 

	

   

  	

  Purchasers

  	

   

  	

  Amount

  Invested

  	

   

  	

  Series [F,

  F-1

  or F-2]

  Shares

  	

   

  	

  Common

  Stock

  Initially

  Issuable

  Upon

  Conversion

  	

   

  	

  Warrants

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Totals:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

 

EXHIBIT B

 

SERIES [F, F-1 or F-2] CERTIFICATE OF

DESIGNATIONS

 

 

EXHIBIT C

 

FORM OF WARRANT

 

 

EXHIBIT D

 

REGISTRATION RIGHTS AGREEMENTLocal: Q:\DATA\WIP\_GECAC\AGRN256K.23A

Exhibit

10.66

 

REGISTRATION

RIGHTS AGREEMENT

 

Registration Rights Agreement, dated effective as

of                , 2002, by and between

VCampus Corporation, a Delaware corporation (the “Company”), and each of the

purchasers set forth on Schedule A attached hereto (each individually, a

“Purchaser” and collectively, the “Purchasers”).

 

W I T N E S S E T H

:

 

WHEREAS, Company and each Purchaser have entered into

one or more Securities Purchase Agreements, each dated as of the date hereof

(the “Purchase Agreements”), pursuant to which the Company has agreed to issue

and sell to the Purchasers, and the Purchasers have agreed to purchase from the

Company shares of Series [F, F-1 or F-2, as the case may be]  Preferred Stock of the Company, and, with

respect to certain of the Purchase Agreements, Warrants exercisable for common

stock of the Company (the “Warrants”); and

 

WHEREAS, in order to induce the Purchasers to enter

into the Purchase Agreements and to purchase the Series [F, F-1 or F-2]  Preferred Stock and/or Warrants, the Company

has agreed to provide registration rights with respect thereto;

 

NOW, THEREFORE, in consideration of the premises and

the covenants hereinafter contained, it is agreed as follows:

 

1.             Definitions.  Unless otherwise defined herein, terms used

herein shall have the meaning ascribed to them in the Purchase Agreements, and

the following shall have the following respective meanings (such meanings being

equally applicable to both the singular and plural form of the terms defined):

 

“Agreement” shall mean this Registration Rights

Agreement, including all amendments, modifications and supplements and any

exhibits or schedules to any of the foregoing, and shall refer to the Agreement

as the same may be in effect at the time such reference becomes operative.

 

“Warrant Shares” shall mean shares of common stock

issued upon exercise of the Warrants.

 

“Holder” shall mean (i) each Purchaser, and (ii)

any other Person holding Registrable Securities to whom the registration rights

conferred by this Agreement have been transferred in compliance with this

Agreement.

 

“Majority Holders” shall mean the Holders of a

majority of the Registrable Securities.

 

“NASD” shall mean the National Association of

Securities Dealers, Inc., or any successor corporation thereto.

 

“Piggy-back Registration” shall have the meaning

ascribed to it in Section 3.

 

 

“Registrable Securities” shall mean the shares of

common stock issuable pursuant to the Purchase Agreements, including the

Warrant Shares, and the shares of common stock issuable upon conversion of the

Series [F, F-1 or F-2]  Preferred Stock

and shares of common stock which the Purchasers hereafter obtains the right to

acquire pursuant to any dividend, distribution, stock split or similar

transaction or rights to the extent that all of the holders of the common stock

received shares of common stock; provided, however, that the aforementioned

shares shall only be treated as Registrable Securities if and for so long as

they have not been sold to or through a broker or underwriter in a public

distribution, or only until the date on which all of the Registrable Securities

can be disposed of in any three month period pursuant to Rule 144 (or any

similar or analogous rule under the Securities Act of 1933).

 

“Registration Statement” shall mean a registration

statement filed by the Company with the U.S. Securities and Exchange Commission

for a public offering and sale of securities of the Company (other than a

Registration Statement on Form S-4 or S-8 or any successor form for securities

to be offered in a transaction of the type referred to in Rule 145 under the

Securities Act or to employees of Company pursuant to any employee benefit

plan, respectively).

 

“Warrants” shall mean the warrants to purchase shares

of the Company’s common stock issued to the Purchasers on the date hereof.

 

2.             Mandatory

Registration.  The Company shall

file a Registration Statement covering the Registrable Securities on the same

Registration Statement covering resale of the securities issued by the Company

on December 28, 2001 and March 31, 2002 and shall thereafter use its best

efforts to effect the registration under the Securities Act of the Registrable

Securities for sale within 90 days after such filing, all to the extent

required to permit the disposition of the Registrable Securities so registered

for a period of up to one year.

 

3.             Piggy-back

Registration.  If the Company at any

time proposes to file a registration statement under the Securities Act on any

form (other than a Registration Statement on Form S-4 or S-8 or any successor

form for securities to be offered in a transaction of the type referred to in

Rule 145 under the Securities Act or to employees of Company pursuant to any

employee benefit plan, respectively) for the general registration of securities

(an “Piggy-back Registration Statement”), it will give written notice to all

Holders at least 15 days before the initial filing with the SEC of such

Piggy-back Registration Statement, which notice shall set forth the intended

method of disposition of the securities proposed to be registered by

Company.  The notice shall offer to

include in such filing the aggregate number of shares of Registrable Securities

as such Holders may request.

 

Each Holder desiring to have Registrable Securities

registered under this Section 3 shall advise Company in writing within 10

Business Days after the date of receipt of such offer from Company, setting

forth the amount of such Registrable Securities for which registration is

requested.  Company shall thereupon

include in such filing the number of shares of Registrable Securities for which

registration is so requested, subject to the next sentence, and shall use its

best efforts to effect registration under the Securities Act of such shares.  In connection with any registration subject

to this Section 3, which is to be effected in a firm commitment underwriting,

Company will not be required to include Registrable Securities in such

underwriting unless the Holder of such Registrable Securities accepts the terms

and conditions of the underwriting

 

2

 

agreement which is agreed upon between Company and the managing

underwriter selected by Company, so long as such underwriting agreement

conforms to industry standards and practices and the obligations and

liabilities imposed on the Holders under such agreement are customary for the

stockholders selling securities in an underwritten offering.  If the managing underwriter of a proposed

public offering shall advise Company in writing that, in its opinion, the

distribution of the Registrable Securities requested to be included in the

registration concurrently with the securities being registered by Company would

materially and adversely affect the distribution of such securities by Company,

then all selling security holders with piggy-back registration rights shall

reduce the amount of securities each intended to distribute through such

offering on a pro rata basis.  Except as

otherwise provided in Section 5, all expenses of such registration shall be

borne by Company. The Company shall have the right to terminate or withdraw any

Registration Statement initiated under this Section 3 prior to the

effectiveness of such Registration Statement whether or not the Holders have

elected to include Registrable Securities in such Registration Statement.

 

4.             Registration

Procedures. If the Company is required by the provisions of Section 2 or 3

to use its best efforts to effect the registration of any of its securities

under the Securities Act, Company will, as expeditiously as possible:

 

(a)           prepare

and file with the SEC a Registration Statement with respect to such securities

and use its best efforts to cause such Registration Statement to become and

remain effective for a period of time required for the disposition of such

securities by the holders thereof, but not to exceed one year (or, with respect

to any underwritten offering, such shorter period as the underwriters need to

complete the distribution of the registered offering or, with respect to a

shelf Registration Statement on a form under the Securities Act relating to the

offer and sale of Registrable Securities from time to time in accordance with

Rule 415, such longer period as may be required to dispose of the Registrable

Securities covered by such Registration Statement);

 

(b)           prepare

and file with the SEC such amendments and supplements to such Registration

Statement and the prospectus used in connection therewith as may be necessary

to keep such Registration Statement effective and to comply with the provisions

of the Securities Act with respect to the sale or other disposition of all

securities covered by such Registration Statement until the earlier of such

time as all of such securities have been disposed of in a public offering or

the expiration of one year;

 

(c)           furnish,

to such selling security holders such number of copies of a summary prospectus

or other prospectus, including a preliminary prospectus, in conformity with the

requirements of the Securities Act, and such other documents, as such selling

security holders may reasonably request;

 

(d)           use

its best efforts to register or qualify the securities covered by such

Registration Statement under such other securities or blue sky laws of such

jurisdictions within the United States and Puerto Rico as each holder of such

securities shall request (provided, however, that Company shall

not be obligated to qualify as a foreign corporation to do business under the

laws of any jurisdiction in which it is not then qualified or to file any

general consent to service or process), and do such other reasonable acts and

things as may be required of it to

 

3

 

enable such holder to consummate the disposition in such jurisdiction

of the securities covered by such Registration Statement;

 

(e)           enter

into customary agreements (including an underwriting agreement in customary

form) and take such other actions as are reasonably required in order to

expedite or facilitate the disposition of such Registrable Securities;

 

(f)            otherwise

use its best efforts to comply with all applicable rules and regulations of the

SEC, and make available to its security holders, as soon as reasonably

practicable, but not later than 18 months after the effective date of the

Registration Statement, an earnings statement covering the period of at least

12 months beginning with the first full month after the effective date of such

Registration Statement, which earnings statement shall satisfy the provisions

of Section 11(a) of the Securities Act;

 

(g)           give

written notice to Holders:

 

(i)                                     when

such Registration Statement or any amendment thereto has been filed with the

SEC and when such Registration Statement or any posteffecive amendment thereto

has become effective;

 

(ii)                                  of

any request by the SEC for amendments or supplements to such Registration

Statement or the prospectus included therein or for additional information;

 

(iii)                               of

the issuance by the SEC of any stop order suspending the effectiveness of such

Registration Statement or the initiation of any proceedings for that purpose;

 

(iv)                              of

the receipt by Company or its legal counsel of any notification with respect to

the suspension of the qualification of the common stock for sale in any

jurisdiction or the initiation or threatening of any proceeding for such

purpose; and

 

(v)                                 of

the happening of any event that requires Company to make changes in such

Registration Statement or the prospectus in order to make the statements

therein not misleading (which notice shall be accompanied by an instruction to

suspend the use of the prospectus until the requisite changes have been made);

 

(h)           use

its best efforts to prevent the issuance or obtain the withdrawal of any order

suspending the effectiveness of such Registration Statement at the earliest

possible time;

 

(i)            furnish

to each Holder, without charge, at least one copy of such Registration

Statement and any post-effective amendment thereto, including financial

statements and schedules, and, if the Holder so requests in writing, all

exhibits (including those, if any, incorporated by reference);

 

4

 

(j)            cooperate

with the Holders to facilitate the timely preparation and delivery of

certificates representing the Registrable Securities to be sold free of any

restrictive legends and in such denominations and registered in such names as

the Holders may request a reasonable period of time prior to sales of the

Registrable Securities; and

 

(k)           upon

the occurrence of any event contemplated by Section 4(g)(v) above, promptly

prepare a post-effective amendment to such Registration Statement or a

supplement to the related prospectus or file any other required document so

that, as thereafter delivered to Holders, the prospectus will not contain an

untrue statement of a material fact or omit to state any material fact

necessary to make the statements therein, in light of the circumstances under

which they were made, not misleading. 

If the Company notifies the Holders in accordance with Section 4(g)(v)

above to suspend the use of the prospectus until the requisite changes to the

prospectus have been made, then the Holders shall suspend use of such

prospectus, and the period of effectiveness of such Registration Statement

provided for above shall each be extended by the number of days from and

including the date of the giving of such notice to Holders shall have received

such amended or supplemented prospectus pursuant to this Section 4(k).

 

It shall be a condition precedent to the obligation of

Company to take any action pursuant to this Agreement in respect of the

securities which are to be registered at the request of any Holder that such

Holder shall furnish to Company such information regarding the securities held

by such Holder and the intended method of disposition thereof as Company shall

reasonably request and as shall be required in connection with the action taken

by Company.

 

5.             Expenses.  All expenses incurred in complying with this

Agreement, including, without limitation, all registration and filing fees

(including all expenses incident to filing with the NASD), printing expenses,

fees and disbursements of counsel for Company, expenses of any special audits

incident to or required by any such registration and expenses of complying with

the securities or blue sky laws of any jurisdiction pursuant to Section 4(d),

shall be paid by Company, except that:

 

(a)                                  all

such expenses in connection with any amendment or supplement to a Registration

Statement or prospectus required to be filed pursuant to Section 3 which is

filed more than one year after the effective date of such Registration

Statement because any Holder has not effected the disposition of the securities

requested to be registered shall be paid by such Holder; and

 

(b)                                 Company

shall not be liable for any fees, discounts or commissions to any underwriter

or any fees or disbursements of counsel for any underwriter in respect of the

securities sold by such Holder.

 

6.             Indemnification

and Contribution.

 

(a)                                  In

the event of any registration of any Registrable Securities under the

Securities Act pursuant to this Agreement, Company shall indemnify and hold

harmless the holder of such Registrable Securities, such holder’s directors and

officers, and each other person (including each underwriter) who participated

in the offering of such Registrable Securities and each other person, if any,

who controls such

 

5

 

holder or such participating person within the meaning

of the Securities Act, against any losses, claims, damages or liabilities,

joint or several, to which such holder or any such director or officer or

participating person or controlling person may become subject under the

Securities Act or any other statute or at common law, insofar as such losses,

claims, damages or liabilities (or actions in respect thereof) arise out of or

are based upon (i) any alleged untrue statement of any material fact

contained, on the effective date thereof, in any Registration Statement under

which such securities were registered under the Securities Act, any preliminary

prospectus or final prospectus contained therein, or any amendment or

supplement thereto, or (ii) any alleged omission to state therein a

material fact required to be stated therein or necessary to make the statements

therein not misleading, and shall reimburse such holder or such director,

officer or participating person or controlling person for any legal or any

other expenses reasonably incurred by such holder or such director, officer or

participating person or controlling person in connection with investigating or

defending any such loss, claim, damage, liability or action; provided, however,

that Company shall not be liable in any such case to the extent that any such

loss, claim, damage or liability arises out of or is based upon any actual or

alleged untrue statement or actual or alleged omission made in such

Registration Statement, preliminary prospectus, prospectus or amendment or

supplement in reliance upon and in conformity with written information

furnished to Company by such holder specifically for use therein or (in the

case of any underwritten offering) so furnished for such purposes by any

underwriter.  Such indemnity shall

remain in full force and effect regardless of any investigation made by or on

behalf of such holder or such director, officer or participating person or

controlling person, and shall survive the transfer of such securities by such

holder.

 

(b)                                 Each

Holder, by acceptance hereof, agrees to indemnify and hold harmless Company,

its directors and officers and each other person, if any, who controls Company

within the meaning of the Securities Act against any losses, claims, damages or

liabilities, joint or several, to which Company or any such director or officer

or any such person may become subject under the Securities Act or any other

statute or at common law, insofar as such losses, claims, damages or

liabilities (or actions in respect thereof) arise out of or are based upon

information in writing provided to Company by such Holder specifically for use

in the following documents and contained, on the effective date thereof, in any

Registration Statement under which securities were registered under the

Securities Act at the request of such holder, any preliminary prospectus or

final prospectus contained therein, or any amendment or supplement

thereto.  Notwithstanding the provisions

of this paragraph (b) or paragraph (c) below, no Holder shall be required to

indemnify any person pursuant to this Section 6 or to contribute pursuant to

paragraph (c) below in an amount in excess of the amount of the aggregate net

proceeds received by such Holder in connection with any such registration under

the Securities Act.

 

(c)                                  If

the indemnification provided for in this Section 6 from the indemnifying party

is unavailable to an indemnified party hereunder in respect of any losses,

claims,

 

6

 

damages, liabilities or expenses referred to therein,

then the indemnifying party, in lieu of indemnifying such indemnified party,

shall contribute to the amount paid or payable by such indemnified party as a

result of such losses, claims, damages, liabilities or expenses in such

proportion as is appropriate to reflect the relative fault of the indemnifying

party and indemnified parties in connection with the actions which resulted in

such losses, claims, damages, liabilities or expenses, as well as any other

relevant equitable considerations.  The

relative fault of such indemnifying party and indemnified parties shall be

determined by reference to, among other things, whether any action in question,

including any untrue or alleged untrue statement of a material fact or omission

or alleged omission to state a material fact, has been made by, or relates to

information supplied by, such indemnifying party or indemnified parties, and

the parties’ relative intent, knowledge, access to information and opportunity

to correct or prevent such action.  The

amount paid or payable by a party as a result of the losses, claims, damages,

liabilities and expenses referred to above shall be deemed to include any legal

or other fees or expenses reasonably incurred by such party in connection with

any investigation or proceeding.

 

The parties hereto agree that it would not be just and

equitable if contribution pursuant to this Section 6(c) were determined by pro

rata allocation or by any other method of allocation which does not take

account of the equitable considerations referred to in the immediately

preceding paragraph.  No Person guilty

of fraudulent misrepresentation (within the meaning of Section 11(f) of the

Securities Act) shall be entitled to contribution from any Person who was not

guilty of such fraudulent misrepresentation.

 

7.             Certain Limitations on Registration

Rights.  Notwithstanding the other

provisions of this Agreement:

 

(a)                                  Company

shall have the right to delay the filing or effectiveness of, or by written

notice require the Holders to cease sales of Registrable Securities pursuant

to, a Registration Statement required pursuant to this Agreement during one or

more periods aggregating not more than 60 days in any twelve-month period (such

period or periods, the “Suspension Period”) in the event that (i) Company

would, in accordance with the advice of its counsel, be required to disclose in

the prospectus information not otherwise then required by law to be publicly

disclosed, (ii) in the judgment of Company’s Board of Directors, there is a

reasonable likelihood that such disclosure, or any other action to be taken in

connection with the prospectus, would materially and adversely affect any

existing or prospective material business situation, transaction or negotiation

or otherwise materially and adversely affect Company, or (iii) the Registration

Statement can no longer be used under the Securities Act; provided that the

period of effectiveness of the Registration Statement shall be extended by the

length of any such Suspension Period;

 

(b)                                 If

Company suspends the Registration Statement or requires the Holders to cease

sales of the common stock pursuant to paragraph (a) above, Company shall, as

promptly as practicable following the termination of the circumstances which

 

7

 

entitled Company to do so, take such action as may be

necessary to reinstate the effectiveness of the Registration Statement and/or

give written notice to all Holders authorizing them to resume sales pursuant to

the Registration Statement.  If, as a result

thereof, the prospectus included in the Registration Statement has been amended

to comply with the requirements of the Securities Act, Company shall enclose

such revised prospectus with a notice to Holders given pursuant to this

paragraph (b), and the Shareholders shall make no offers or sales of shares

pursuant to such Registration Statement other than by means of such revised

prospectus.

 

8.             Restrictions on Sale After Public Offering.  Except for transfers made in transactions

exempt from the registration requirements under the Securities Act, Company and

each Holder hereby agree not to offer, sell, contract to sell or otherwise

dispose of any of their Registrable Securities within 120 days after the date

of any final prospectus relating to the public offering of common stock, if

underwritten, whether by Company or by any Holders, except pursuant to such

prospectus or with the written consent of the managing underwriter or

underwriters for such offering.

 

9.             Miscellaneous.

 

(a)                                  Amendments

and Waivers.  Except as otherwise

provided herein, the provisions of this Agreement may not be amended, modified

or supplemented, and waivers or consents to departure from the provisions

hereof may not be given without the written consent of the Majority Holders and

the Company.

 

(b)                                 Notice

Generally.  Any notice, demand,

request, consent, approval, declaration, delivery or other communication

hereunder to be made pursuant to the provisions of this Agreement shall be

sufficiently given or made if in writing and either delivered in person with

receipt acknowledged or sent by registered or certified mail, return receipt

requested, postage prepaid, or by telecopy and confirmed by telecopy

answerback, addressed as follows:

 

(i)                                     If

to any Holder, at its last known address appearing on the books of Company

maintained for such purpose.

 

(ii)                                  If

to Company, at

 

VCampus Corporation

Suite 200

1850 Centennial Park Drive

Reston, VA 20191

Attention: 

Chief Financial Officer

Telecopy Number:  (703) 654-7311

 

with a copy to

 

Wyrick

Robbins Yates & Ponton LLP

Suite

300

 

8

 

4101

Lake Boone Trail

Raleigh,

NC  27607

Attn:  Kevin A. Prakke

 

or at such other address as may be substituted by notice given as

herein provided.  The giving of any

notice required hereunder may be waived in writing by the party entitled to

receive such notice.  Every notice,

demand, request, consent, approval, declaration, delivery or other

communication hereunder shall be deemed to have been duly given or served on

the date on which personally delivered, with receipt acknowledged, telecopied

and confirmed by telecopy answerback or three Business Days after the same

shall have been deposited in the United States mail.

 

(c)           Successors

and Assigns.  This Agreement shall

inure to the benefit of and be binding upon the successors and assigns of each

of the parties hereto including any person to whom Registrable Securities are

transferred.

 

(d)           Headings.  The headings in this Agreement are for

convenience of reference only and shall not limit or otherwise affect the meaning

hereof.

 

(e)           Governing Law; Jurisdiction.  This Agreement shall be governed by,

construed and enforced in accordance with the laws of the State of Delaware

without giving effect to the conflict of laws provisions thereof.

 

(f)            Severability.  Wherever possible, each provision of this

Agreement shall be interpreted in such manner as to be effective and valid

under applicable law, but if any provision of this Agreement shall be

prohibited by or invalid under applicable law, such provision shall be ineffective

to the extent of such prohibition or invalidity, without invalidating the

remainder of such provision or the remaining provisions of this Agreement.

 

(g)           Entire Agreement.  This Agreement, together with the Purchase

Agreement, the Series [F, F-1 or F-2] 

Certificate of Designations and Warrants, represents the complete

agreement and understanding of the parties hereto in respect of the subject

matter contained herein and therein. 

This Agreement supersedes all prior agreements and understandings between

the parties with respect to the subject matter hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

9

 

IN WITNESS WHEREOF, the parties hereto have executed

this Registration Rights Agreement as of the date first above written.

 

	

  COMPANY:

  	

  VCAMPUS

  CORPORATION

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:  Daniel J. Neal

  
	

   

  	

  Title:  Chief Executive Officer

  

 

	

  PURCHASERS:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
						

 

10

 

SCHEDULE A

Schedule of Purchasers

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]