Document:

Exhibit
10.94

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS, IN
RELIANCE UPON EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS.  THIS SECURITY MAY NOT BE SOLD OR TRANSFERRED
UNLESS IT IS REGISTERED UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

 

Issuance Date: March 23, 2004

 

VCAMPUS
CORPORATION

 

PURCHASE
WARRANT

 

WARRANT
(“WARRANT”) TO PURCHASE SHARES OF

COMMON STOCK, $0.01 PAR VALUE PER SHARE

 

This is to certify that, FOR VALUE RECEIVED,
                                       (“Warrantholder”),
is entitled to purchase, subject to the provisions of this Warrant, from
VCampus Corporation, a corporation organized under the laws of Delaware
(“Company”), at any time and from time to time commencing six months from the
Issuance Date, or on the date of Shareholder Approval, whichever shall first
occur (“Exercise Date”), but not later than 5:00 P.M., Eastern time, on
the fifth (5th) anniversary of the Issuance Date (“Expiration
Date”), a total of
[                ]shares
(“Warrant Shares”) of Common Stock, $0.01 par value (“Common Stock”) of the
Company, at an initial exercise price per share equal to the Market Price as of
the Issuance Date.  The exercise price
in effect from time to time is hereafter called the “Warrant Price”.  Immediately following the date of
Shareholder Approval, the Warrant Price shall thereafter be $1.63 (subject to
adjustment as provided herein as if the Warrant Price had been $1.63 on the
Issuance Date).  The number of Warrant
Shares purchasable upon exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time as described herein.

 

This Warrant has been issued pursuant to the terms of the Purchase
Agreement (“Purchase Agreement”) dated on or about the date hereof between the
Company and the Warrantholder. 
Capitalized terms used herein and not defined shall have the meaning
specified in the Purchase Agreement.

 

Section 1.       Registration.  The Company shall maintain books for the
transfer and registration of the Warrant. 
Upon the initial issuance of the Warrant, the Company shall issue and
register the Warrant in the name of the Warrantholder.

 

Section 2.       Transfers.  As provided herein, this Warrant may be
transferred only pursuant to a registration statement filed under the
Securities Act of 1933, as amended

 

 

(“Securities Act”) or an exemption from registration
thereunder.  Subject to such
restrictions, the Company shall transfer this Warrant from time to time, upon
the books to be maintained by the Company for that purpose, upon surrender hereof
for transfer properly endorsed or accompanied by appropriate instructions for
transfer upon any such transfer, and a new Warrant shall be issued to the
transferee and the surrendered Warrant shall be canceled by the Company.

 

Section 3.       (a)
Exercise of Warrant.  Subject to
the provisions hereof, the Warrantholder may exercise this Warrant in whole or
in part at any time and from time to time on and after the Exercise Date and
ending on the Expiration Date, upon surrender of the original of this Warrant,
together with delivery of the duly executed Warrant exercise form attached
hereto (the “Exercise Agreement”) (which may be by fax), to the Company during
normal business hours on any business day at the Company’s principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), and upon payment to the Company in cash, by
certified or official bank check or by wire transfer for the account of the
Company of the Warrant Price for the Warrant Shares specified in the Exercise
Agreement.  The Warrant Shares so
purchased shall be deemed to be issued to the holder hereof or such holder’s
designee, as the record owner of such shares, as of the close of business on
the date on which the completed Exercise Agreement and original of this Warrant
shall have been delivered to the Company (or such later date as may be
specified in the Exercise Agreement). 
Certificates for the Warrant Shares so purchased, representing the
aggregate number of shares specified in the Exercise Agreement, shall be delivered
to the holder hereof within a reasonable time, not exceeding five (5) Trading
Days (as defined in the Notes) , after this Warrant shall have been so
exercised.  The certificates so
delivered shall be in such denominations as may be requested by the holder
hereof and shall be registered in the name of such holder or such other name as
shall be designated by such holder.  If
this Warrant shall have been exercised only in part, then, unless this Warrant
has expired, the Company shall (subject to Section 3(b) below), at its expense,
at the time of delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.  In
lieu of delivering physical certificates representing the shares of Common
Stock issuable upon exercise of this Warrant, provided the Company’s transfer
agent is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program and such certificates can be
issued without restrictive legends in accordance with applicable securities
laws, upon request of the Warrantholder, the Company shall use commercially
reasonable efforts to cause its transfer agent to electronically transmit such
shares issuable upon exercise to the Warrantholder (or its designee), by
crediting the account of the Warrantholder’s (or such designee’s) prime broker
with DTC through its Deposit Withdrawal Agent Commission system (provided that
the same time periods herein as for stock certificates shall apply).

 

(b) If the Company shall fail for any reason or for no reason
(other than by reason of a failure, breach or omission on the part of the
Holder) to issue to the Holder within five (5) Trading Days after the warrant
has been exercised, a certificate for the number of shares of Common Stock to
which the Holder is entitled or to credit the Holder’s designee’s balance
account with DTC, in accordance with Section 3(a) hereof, for such number of
shares of Common Stock to which the holder is entitled upon the Holder’s
exercise of this Warrant, the Company shall, in addition to any other remedies
under this Warrant or otherwise available to such holder, pay as additional
damages in cash to such Holder on each day such exercise is not

 

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timely effected an amount
equal to 2.5% multiplied by the product of (I) the sum of the number of shares
of Common Stock not issued to the holder and to which such holder is entitled
and (II) the excess of the Closing Sale Price of the Common Stock as of the
Trading Day preceding exercise over the Warrant Exercise Price then in effect.

 

(c) the holder of
this Warrant may, at its election exercised in its sole discretion, exercise
this Warrant and, in lieu of making the cash payment otherwise contemplated to
be made to the Company upon such exercise in payment of the Warrant Price for
the Warrant Shares specified in the Exercise Agreement, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a “Cashless Exercise”):

 

	
  Net Number = (A x B) - (A x C)

  	
   

  
	
   

  	
  ---------------------

  	
   

  
	
   

  	
  B

  	
   

  

 

For purposes of the foregoing formula:

 

A= the total number of shares with respect to which
this Warrant is then being exercised.

 

B= the Closing Sale Price of the Common Stock on the
Trading Day immediately preceding the date of the Exercise Notice.

 

C= the Warrant Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.

 

Section 4.       Compliance
with the Securities Act of 1933. 
Neither this Warrant nor the Common Stock issued upon exercise hereof
nor any other security issued or issuable upon exercise of this Warrant may be
offered or sold except as provided in this Warrant and in conformity with the
Securities Act of 1933, as amended, and then only against receipt of an
agreement of such person to whom such offer of sale is made to comply with the
provisions of this Section 4 with respect to any resale or other disposition of
such security.  The Company may cause
the legend set forth on the first page of this Warrant to be set forth on each
Warrant or similar legend on any security issued or issuable upon exercise of
this Warrant until the Warrant Shares have been registered for resale under the
Registration Rights Agreement or until Rule 144 is available, unless counsel
for the Company is of the opinion as to any such security that such legend is
unnecessary.

 

Section 5.       Payment
of Taxes.  The Company will pay any
documentary stamp taxes attributable to the initial issuance of Warrant Shares
issuable upon the exercise of the Warrant; provided, however, that the Company
shall not be required to pay any tax or taxes which may be payable in respect
of any transfer involved in the issuance or delivery of any certificates for
Warrant Shares in a name other than that of the registered holder of this
Warrant in respect of which such shares are issued.  The holder shall be responsible for income taxes due under
federal or state law, if any such tax is due.

 

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Section 6.       Mutilated
or Missing Warrants.  In case this
Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue
in exchange and substitution of and upon cancellation of the mutilated Warrant,
or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and for the purchase of a like number of Warrant Shares,
but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction of the Warrant, and with respect to a lost,
stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto,
if reasonably requested by the Company.

 

Section 7.       Reservation
of Common Stock.  The Company hereby
represents and warrants that there have been reserved, and the Company shall at
all applicable times keep reserved, out of the authorized and unissued Common
Stock, a number of shares sufficient to provide for the exercise of the rights
of purchase represented by the Warrant in full (without regard to any
restrictions on beneficial ownership contained herein), and the transfer agent
for the Common Stock, including every subsequent transfer agent for the Common
Stock or other shares of the Company’s capital stock issuable upon the exercise
of any of the right of purchase aforesaid (“Transfer Agent”), shall be
irrevocably authorized and directed at all times to reserve such number of
authorized and unissued shares of Common Stock as shall be requisite for such
purpose.  The Company agrees that all
Warrant Shares issued upon exercise of the Warrant in accordance with its terms
shall be, at the time of delivery of the certificates for such Warrant Shares,
duly authorized, validly issued, fully paid and non-assessable shares of Common
Stock of the Company.  The Company will
keep a conformed copy of this Warrant on file with its Transfer Agent.  The Company will supply from time to time
the Transfer Agent with duly executed stock certificates required to honor the
outstanding Warrant.

 

Section 8.       Warrant
Price.  The Warrant Price, subject
to adjustment as provided in Section 9, shall, if payment is made in cash or by
certified check, be payable in lawful money of the United States of America.

 

Section 9.       Adjustment
of Warrant Exercise Price and Number Of Shares.  The Warrant Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be adjusted from time to time as
follows:

 

a.             ADJUSTMENT
OF WARRANT PRICE.  If and whenever on or
after the Issuance Date and ending 24 months thereafter, the Company issues or
sells, or is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company, but with the exception of Excluded Issuances)
for a consideration per share (the “New Issuance Price”) less than the
Warrant Price in effect immediately prior to such issuance or sale (each such
sale or issuance, a “Dilutive Issuance”, then concurrent with such issue
or sale, the Warrant Price then in effect shall be reduced to a price (subject
to Section 9(b)) equal to the New Issuance Price.   This Section 9(a) and Section 9(b) below shall have no force or
effect until the date of Shareholder Approval, as of which date the Warrant
Price shall be adjusted as if this Section 9(a) and Section  9(b) below had been effective as of the
Issuance Date.

 

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b.             EFFECT
ON WARRANT EXERCISE PRICE OF CERTAIN EVENTS. 
For purposes of determining the adjusted Warrant Price under Section
9(a) above, the following shall be applicable:

 

(i)            ISSUANCE OF OPTIONS.  If the Company in any manner grants any
Options (other than Excluded Issuances) and the lowest price per share for
which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exchange or exercise of any Convertible Securities
issuable upon exercise of any such Option is less than the Warrant Price in
effect immediately prior to such Dilutive Issuance, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per
share.  For purposes of this Section 9(b)(i),
the “lowest price per share for which one share of Common Stock is issuable
upon exercise of any such Option or upon conversion, exchange or exercise of
any Convertible Securities issuable upon exercise of any such Option” shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock upon
the granting or sale of the Option, upon exercise of the Option and upon
conversion, exchange or exercise of any Convertible Security issuable upon
exercise of such Option.  No further
adjustment of the Warrant Price shall be made upon the actual issuance of such
Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such Common Stock upon conversion,
exchange or exercise of such Convertible Securities.

 

(ii)           ISSUANCE OF CONVERTIBLE
SECURITIES.  If the Company in any
manner issues or sells any Convertible Securities (other than Excluded
Issuances) and the lowest price per share for which one share of Common Stock
is issuable upon such conversion, exchange or exercise thereof is less than the
Warrant Price in effect immediately prior to such Dilutive Issuance, then such
share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the issuance or sale of such Convertible
Securities for such price per share. 
For the purposes of this Section 9(b)(ii), the “lowest price per share
for which one share of Common Stock is issuable upon such conversion, exchange
or exercise” shall be equal to the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to one share of
Common Stock upon the issuance or sale of the Convertible Security and upon
conversion, exchange or exercise of such Convertible Security.  No further adjustment of the Warrant Price
shall be made upon the actual issuance of such Common Stock upon conversion,
exchange or exercise of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of the Warrant Price had been or are to be made pursuant to
other provisions of this Section 9(b), no further adjustment of the Warrant Price
shall be made by reason of such issue or sale. 
Notwithstanding anything to the contrary herein, in no event shall an
adjustment to the Warrant Price be made retroactively with respect to any
portion of the Warrant exercised for Common Stock or otherwise terminated prior
to the actual date of the dilutive issuance or change.  In addition, to clarify for purposes of this
Section 9, if an Option or Convertible Security has a price reset or similar
provision that would cause the price to adjust based on a future event or
contingency, then the “lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon conversion,
exchange or exercise of any

 

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Convertible Securities issuable upon exercise of such
Option” shall not be such reset price unless and until the happening of such
event or contingency that actually gives effect to the reset.

 

(iii)          CHANGE IN OPTION PRICE OR RATE OF
CONVERSION.  If the purchase or exercise
price provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion, exchange or exercise of any Convertible
Securities, or the rate at which any Convertible Securities are convertible
into or exchangeable or exercisable for Common Stock changes at any time (other
than Excluded Issuances, in each case), the Warrant Price in effect at the time
of such change shall be adjusted to the Warrant Price which would have been in
effect at such time had such Options or Convertible Securities provided for
such changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold and the
number of shares of Common Stock acquirable hereunder shall be correspondingly
readjusted.  For purposes of this
Section 9(b)(iii), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Warrant are changed in the
manner described in the immediately preceding sentence, then such Option or
Convertible Security and the Common Stock deemed issuable upon conversion,
exchange or exercise thereof shall be deemed to have been issued as of the date
of such change.  On the expiration of
any Option or Convertible Security not exercised, the applicable Warrant Price
then in effect shall forthwith be increased to the Warrant Price that would
have been in effect at the time of such expiration had such Stock Purchase
Rights or Convertible Securities never been issued.  No adjustment shall be made if such adjustment would increase the
applicable Warrant Price by an amount in excess of the adjustment originally
made to the Warrant Price in respect of the issue, sale or grant of the
applicable Option or Convertible Security.

 

c.             CERTAIN
EVENTS.

 

(i)            If the Company or
any of its subsidiaries shall at any time or from time to time while the
Warrant is outstanding, pay a dividend or make a distribution on its capital
stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares into a
smaller number of shares or issue by reclassification of its outstanding shares
of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter
exercising the Warrant shall be entitled to receive the number of shares of
Common Stock or other capital stock which the Warrantholder would have received
if the Warrant had been exercised immediately prior to such event.  Such adjustment shall be made successively
whenever any event listed above shall occur.

 

(ii)           If any capital reorganization,
reclassification of the capital stock of the Company, consolidation or merger
of the Company with another corporation, or sale, transfer or other disposition
of all or substantially all of the Company’s assets to another corporation
shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each

 

6

 

Warrantholder shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions herein
specified and in lieu of the Warrant Shares immediately theretofore issuable
upon exercise of the Warrant, such shares of stock, securities or assets as
would have been issuable or payable with respect to or in exchange for a number
of Warrant Shares equal to the number of Warrant Shares immediately theretofore
issuable upon exercise of the Warrant, had such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition
not taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of each Warrantholder to the end that the
provisions hereof (including, without limitations, provision for adjustment of
the Warrant Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or properties
thereafter deliverable upon the exercise hereof.  The Company shall not effect any such consolidation, merger, sale,
transfer or other disposition unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing or
otherwise acquiring such assets or other appropriate corporation or entity
shall assume, by written instrument executed and delivered to the Company, the
obligation to deliver to the holder of the Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase and the other obligations under this
Warrant.  The provisions of this
paragraph (ii) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.

 

(iii)          In case the Company shall fix a record
date for the making of a distribution to all holders of Common Stock (including
any such distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of indebtedness
or assets or subscription rights or warrants, the Warrant Price to be in effect
after such record date shall be determined by multiplying the Warrant Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
multiplied by the Closing Price per share of Common Stock (as defined below),
less the fair market value (on a per share basis) (as determined by the
Company’s Board of Directors in good faith) of said assets or evidences of
indebtedness so distributed, or of such subscription rights or warrants, and
the denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such Closing Price per share of Common Stock.  Such adjustment shall be made successively
whenever such a record date is fixed. 
“Closing Price” of the Common Stock shall be the closing sale price per
share of the Common Stock as reported by the Principal Market on the Trading
Day immediately preceding the date on which such value is being
determined.  An adjustment shall become
effective immediately after the record date in the case of each dividend or
distribution and immediately after the effective date of each other event which
requires an adjustment.

 

(iv)          In the event that, as a result of an
adjustment made pursuant to Section 9(c), the holder of this Warrant shall
become entitled to receive any shares of capital stock of the Company other
than shares of Common Stock, the number of such other shares so receivable upon
exercise of this Warrant shall be subject thereafter to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in this Warrant.

 

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(v)           In the event of any adjustment
pursuant to this Section 9(c) in the number of Warrant Shares issuable
hereunder upon exercise, the Warrant Price shall be inversely proportionately
increased or decreased, as the case may be, such that the aggregate purchase
price for Warrant Shares upon full exercise of this Warrant shall remain the
same.  Similarly, in the event of any
adjustment in the Warrant Price, the number of Warrant Shares issuable
hereunder upon exercise shall be inversely proportionately increased or
decreased, as the case may be, such that the aggregate purchase price for
Warrant Shares upon full exercise of this Warrant shall remain the same.

 

d.               FAILURE TO ACHIEVE MILESTONE.  In the event that following Shareholder
Approval, the Milestone (as defined herein) is not achieved, the number of
Warrant Shares shall be increased from
[               ]
to [a number of shares equal to 50% of the original principal amount of
Holder’s Series A Note or Series B Note, as applicable, divided by $1.38
(rounding down to the nearest whole share)] and the Warrant Price shall be
reduced from $1.63 to $1.38 subject to adjustment as provided in this Section
9, as if such increase in the number of Warrant Shares and decrease in Warrant
Price had taken effect on the Issuance Date.

 

Section 10.             Fractional Interest. The
Company shall not be required to issue fractions of Warrant Shares upon the
exercise of the Warrant.   If any
fraction of a Warrant Share would, except for the provisions of this Section,
be issuable upon the exercise of the Warrant (or specified portions thereof),
the Company shall round such calculation to the nearest whole number and
disregard the fraction.

 

Section 11.             Benefits.  Nothing in this Warrant shall be construed
to give any person, firm or corporation (other than the Company and the
Warrantholder) any legal or equitable right, remedy or claim, it being agreed
that this Warrant shall be for the sole and exclusive benefit of the Company
and the Warrantholder.

 

Section 12.             Notices to Warrantholder.  Upon the happening of any event requiring an
adjustment of the Warrant Price, the Company shall forthwith give written
notice thereof to the Warrantholder at the address appearing in the records of
the Company, stating the adjusted Warrant Price and the adjusted number of
Warrant Shares resulting from such event and setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is
based.  In the event of a dispute with
respect to any such calculation, the certificate of the Company’s independent
certified public accountants shall be conclusive evidence of the correctness of
any computation made, absent manifest error. 
Failure to give such notice to the Warrantholder or any defect therein
shall not affect the legality or validity of the subject adjustment.  At the Warrantholder’s request, the Company
shall deliver to the Warrantholder as of a requested date a notice specifying
the Warrant Price and the number of Warrant Shares into which this Warrant is
exercisable as of such date.

 

Section 13.             Identity of Transfer Agent.  The Transfer Agent for the Common Stock is
Wachovia Bank.  Forthwith upon the
appointment of any subsequent transfer agent for the Common Stock or other
shares of the Company’s capital stock issuable upon the exercise of the rights
of purchase represented by the Warrant, the Company will fax to the
Warrantholder a statement setting forth the name and address of such transfer
agent.

 

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Section 14.             Notices.  Any notice pursuant hereto to be given or
made by the Warrantholder to or on the Company shall be sufficiently given or
made if delivered personally or by facsimile or if sent by an internationally
recognized courier, addressed as follows:

 

VCampus Corporation

1850 Centennial Park Drive

Suite 200

Reston, VA 
20191

Attention:  CEO

 

With a copy to:

 

Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail, Suite 300

Raleigh, North Carolina 27607

Attn:  Kevin A.
Prakke, Esq.

 

or such other
address as the Company may specify in writing by notice to the Warrantholder
complying as to delivery with the terms of this Section 14.

 

Any notice pursuant hereto to be given or made by the Company to or on
the Warrantholder shall be sufficiently given or made if personally delivered
or if sent by an internationally recognized courier service by overnight or
two-day service, to the address set forth on the books of the Company or, as to
each of the Company and the Warrantholder, at such other address as shall be
designated by such party by written notice to the other party complying as to
delivery with the terms of this Section 14.

 

All such notices, requests, demands, directions and other
communications shall, when sent by courier, be effective two (2) days after
delivery to such courier as provided and addressed as aforesaid.  All faxes shall be effective upon receipt.

 

Section 15.             Registration Rights.  The initial holder of this Warrant is
entitled to the benefit of certain registration rights in respect of the
Warrant Shares as provided in the Registration Rights Agreement.

 

Section 16.             Successors.  All the covenants and provisions hereof by
or for the benefit of the Warrantholder shall bind and inure to the benefit of
its respective successors and assigns hereunder.

 

Section 17.             Governing Law.  This Warrant shall be deemed to be a
contract made under the laws of the State of New York, without giving effect to
its conflict of law principles, and for all purposes shall be construed in
accordance with the laws of said State.

 

Section 18.             9.9% Limitations.
Notwithstanding anything to the contrary contained herein, the number of shares
of Common Stock that may be acquired by the holder

 

9

 

upon exercise pursuant to
the terms hereof shall not exceed a number that, when added to the total number
of shares of Common Stock deemed beneficially owned by such holder at such time
(other than by virtue of the ownership of securities or rights to acquire
securities (including the Notes and Warrant Shares) that have limitations on
the holder’s right to convert, exercise or purchase similar to the limitation
set forth herein), together with all shares of Common Stock deemed beneficially
owned (other than by virtue of the ownership of securities or rights to acquire
securities that have limitations on the right to convert, exercise or purchase
similar to the limitation set forth herein) by the Warrantholder’s “affiliates”
at such time (as defined in Rule 144 of the Act) (“Aggregation Parties”) that
would be aggregated for purposes of determining whether a group under Section
13(d) of the Securities Exchange Act of 1934, as amended, exists, would exceed
9.9% of the total issued and outstanding shares of the Common Stock (the
“Restricted Ownership Percentage”), unless, at the time such additional shares
of Common Stock may be acquired by the Holder upon any exercise pursuant to the
terms hereof, Holder has already exceeded the Restricted Ownership Percentage.  Each holder shall have the right (x) at
any time and from time to time to reduce its Restricted Ownership Percentage
immediately upon notice to the Company and (y) (subject to waiver) at any
time and from time to time, to increase its Restricted Ownership Percentage
immediately in the event of the announcement as pending or planned, of a Change
in Control Transaction (as defined in the Notes).

 

Section 19.             Replacement Warrants.  The Company agrees that within ten (10)
Trading Days after any request from time to time of the Warrantholder, it shall
deliver to such holder a new Warrant in substitution of this Warrant which is
identical in all respects except that the then Warrant Price shall be
appropriately specified in the Warrant, and the Warrant shall specify the fixed
number of Warrant Shares into which this Warrant is then exercisable.  Such changes are intended not as amendments
to the Warrant but only as clarification of the foregoing numbers for
convenience purposes, and such changes shall not affect any provisions
concerning adjustments to the Warrant Price or number of Warrant Shares
contained herein.

 

Section 20.             Absolute Obligation to Issue
Warrant Shares.  The Company’s
obligations to issue and deliver Warrant Shares in accordance with the terms hereof
are absolute and unconditional, irrespective of any action or inaction by the
holder hereof to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person or any action
to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the holder hereof or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
holder hereof in connection with the issuance of Warrant Shares.  The Company will at no time close its
shareholder books or records in any manner which interferes with the timely
exercise of this Warrant.

 

Section 21.             Assignment, etc.  The Warrantholder may assign or transfer
this Warrant to any transferee only with the prior written consent of the
Company, which may not be unreasonably withheld or delayed, provided that the
Warrantholder may assign or transfer this Warrant in whole to any of such
Warrantholder’s affiliates that is not a competitor or vendor of the Company
without the consent of the Company.  The
Warrantholder shall notify the Company of any such assignment or transfer
promptly.  This Warrant shall be binding
upon the Company

 

10

 

and its successors and
shall inure to the benefit of the Warrantholder and its successors and
permitted assigns.

 

Section 22.   Judicial Proceedings.  Any legal action, suit or proceeding brought
against the Company with respect to this Warrant may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and by execution and delivery of this Warrant,
the Company hereby irrevocably and unconditionally waives any claim (by way of
motion, as a defense or otherwise) of improper venue, that it is not subject
personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Warrant or the subject matter may not be
enforced in or by such court.  The
Company hereby irrevocably and unconditionally consents to the service of
process of any of the aforementioned courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, at its address set forth or provided for in Section 14,
such service to become effective 10 days after such mailing.  Nothing herein contained shall be deemed to
affect the right of any party to serve process in any manner permitted by law
or commence legal proceedings or otherwise proceed against any other party in
any other jurisdiction to enforce judgments obtained in any action, suit or
proceeding brought pursuant to this Section. 
The Company irrevocably submits to the exclusive jurisdiction of the
aforementioned courts in such action, suit or proceeding.

 

Section 23.  DEFINITIONS:  The following words and terms as used in
this Warrant shall have the following meanings:

 

(i)            “Approved Stock Plan” means
any employee benefit plan, stock incentive plan or other similar plan or
arrangement which has been approved by the Board of Directors of the Company or
a duly authorized committee thereof, pursuant to which the Company’s securities
may be issued to any employee, consultant, officer or director for services
provided to the Company.

 

(ii)           “Bloomberg”
means Bloomberg Financial Markets or any other similar financial reporting service
as may be selected from time to time by the Company and the holders of the
Warrants representing not less than 50% of the shares of Common Stock issuable
upon exercise of all Warrants issued on the Original Issuance Date then
outstanding.

 

(iii)          “Business
Day” means any day other than Saturday, Sunday or other day on which
commercial banks in the City of New York are authorized or required by law to
remain closed.

 

(iv)          “Closing
Sale Price” means, for any security as of any date, the last closing trade
price for such security on the Principal Market as reported by Bloomberg, or if
the Principal Market begins to operate on an extended hours basis, and does not
designate the closing trade price, then the last trade price at 4:00 p.m., New
York City Time, as reported by Bloomberg, or if the foregoing do not apply, the
last closing trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
last closing trade price is reported for such security by Bloomberg, the last
closing ask price of such security as reported by Bloomberg, or, if no last
closing ask price is

 

11

 

reported for such security by Bloomberg, the average of the highest bid
price and the lowest ask price of any market makers for such security as
reported in the “pink sheets” by the Pink Sheets LLC.  If the Closing Sale Price cannot be calculated for such security
on such date on any of the foregoing bases, the Closing Sale Price of such
security on such date shall be the fair market value as mutually determined by
the Company and the holders of the Warrants representing at least 60% of the
shares of Common Stock obtainable upon exercise of all Warrants issued on the
Original Issuance Date then outstanding. 
If the Company and the holders of the Warrants are unable to agree upon
the fair market value of the Common Stock, then such dispute shall be resolved
by good faith efforts of the parties followed by binding third party valuation
paid for equally by the parties.  All
such determinations shall be appropriately adjusted for any stock dividend,
stock split or other similar transaction during such period.  All fees and expenses of such determinations
shall be borne solely by the Company.

 

(v)           “Convertible Securities” means
any stock or securities (other than Options) directly or indirectly convertible
into or exchangeable or exercisable for Common Stock.

 

(vi)          “Excluded Issuances” means
shares of Common Stock (i) issued or deemed to have been issued by the Company
in connection with an Approved Stock Plan (regardless of the applicable
exercise or conversion price), (ii) issued or deemed to have been issued upon
exercise of the Warrants, issued upon the issuance or conversion of the Notes
or otherwise issued in connection with the transactions contemplated in the
Purchase Agreement (including any securities issued or issuable to the
Collateral Agent or any of its affiliates in connection with consulting
services to be provided to the Company); (iii) issued upon exercise of Options
or Convertible Securities which are outstanding on the date immediately
preceding the Warrant Date, provided that such issuance of shares of Common
Stock upon exercise of such Options or Convertible Securities is made pursuant
to the terms of such Options or Convertible Securities in effect on the date
immediately preceding the Warrant Date and such Options or Convertible
Securities are not amended after the date immediately preceding the Warrant
Date other than with respect to Options originally issued pursuant to an
Approved Stock Plan, (iv) issued pursuant to a Strategic Financing; (v) issued
to the public pursuant to an underwritten offering registered pursuant to the
Securities Act (but in all events excluding offerings pursuant to “equity
lines” or similar products) or (vi) issued or deemed to be issued by the
Company with the prior approval of the Required Holders.

 

(vii)         “Issuance Date” means the date
on which this Warrant is issued to the Warrantholder as is set forth on the
first page of the Warrant.

 

(viii)        “Market Price” shall equal the
average closing price of the Common Stock as reported on a Principal Market for
the five (5) Trading Days immediately preceding the date of determination of
such Market Price or if not reported on any Principal Market, the Market Price
shall equal the Conversion Price.

 

(ix)           “Milestone”
means the execution on or before September 30, 2004, of definitive agreements
between the Company and at least six new “Premier Partners” for the
co-publishing of content which will be hosted by the Company, each of which
agreements is

 

12

 

expected, based upon the good faith projections of the Company and the
Premier Partner, to ramp up to an annual rate of $500,000 of revenue for the
Company by September 1, 2005.  A Premier
Partner shall mean a company that provides a credential or test, which can be
ported on line, to a membership or number of corporate enterprise employees,
greater than 5,000 in a growing global market.

 

(x)            “Option” means any rights,
warrants or options to subscribe for or purchase or otherwise acquire Common
Stock or Convertible Securities.

 

(xi)           “Person” means an individual,
a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

 

(xii)          “Principal Market” means the
principal securities exchange or trading market on which the Common Stock is traded.

 

(xiii)         “Securities Act” means the
Securities Act of 1933, as amended.

 

(iv)          “Shareholder
Approval” means the approval of the stockholders of the Company at a duly
convened meeting of stockholders of the Company, for the issuance of all
Securities as defined in the Purchase Agreement, including the issuance of the
Warrants.

 

(xv)         “Strategic
Financing” shall mean the issuance of Common Stock or Options or
Convertible Securities of the Company in connection with any acquisition by the
Company, by whatever means, of any business, assets or technologies, or to any
strategic investor, vendor, customer, lease or similar arrangement, the primary
purpose of which is not to raise equity capital.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first written above.

 

	
   

  	
  VCAMPUS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Attest:

 

	
  Sign:

  	
   

  	
   

  
	
  Print Name:

  

 

13

 

 

VCAMPUS
CORPORATION

WARRANT EXERCISE FORM

 

VCampus Corporation

1850 Centennial Park Drive

Suite 200

Reston, VA  20191

Fax: 
(703) 654-7319

Attention: 
CEO

 

This undersigned hereby irrevocably elects to
exercise the right of purchase represented by the within Warrant (“Warrant”)
for, and to purchase thereunder                                
shares of Common Stock (“Warrant Shares”) provided for therein, and requests
that certificates for the Warrant Shares be issued as follows:

 

	
   

  	
   

  
	
  Name

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

and, if the number of Warrant Shares shall not be all the Warrant
Shares purchasable upon exercise of the Warrant, that a new Warrant for the
balance of the Warrant Shares.

 

In lieu of delivering physical certificates
representing the Warrant Shares purchasable upon exercise of this Warrant,
provided the Company’s transfer agent is participating in the Depository Trust
Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program and a
registration statement covering the resale of the Warrant Shares is then
effective or an exemption from registration is available in the opinion of
Company counsel, upon request of the Holder, the Company shall use its best
efforts to cause its transfer agent to electronically transmit the Warrant
Shares issuable upon conversion or exercise to the undersigned, by crediting
the account of the undersigned’s prime broker with DTC through its Deposit
Withdrawal Agent Commission (“DWAC”) system.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name (please print)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AddressExhibit
10.95

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and
entered into as of this 23rd day of March 2004 by and among VCampus
Corporation, a corporation organized under the laws of Delaware (the “Company”),
and the persons identified as Purchasers pursuant to that certain Purchase
Agreement of even date herewith by and among the Company and such Purchasers
(the “Purchase Agreement”).

 

The parties hereby agree as follows:

 

1.     Definitions.

 

Capitalized terms used herein but not otherwise defined shall have the
meaning ascribed thereto in the Purchase Agreement and/or the Warrants or Notes
issued pursuant to the Purchase Agreement. 
As used in this Agreement, the following terms shall have the following
meanings:

 

“Additional Registrable Securities” shall mean any shares of
Common Stock which are included within the definition of Registrable Securities
but not included in any Registration Statement filed pursuant to Section
2(a)(i) below.

 

“Common Stock” shall mean the Company’s Common Stock $0.01 per
share.

 

“Conversion Price” shall have the meaning set forth in the
Notes.

 

“Filing Date” shall mean the date which is forty five (45) days
following the Closing Date.

 

“Prospectus” shall mean the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities or Additional Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by reference in such prospectus.

 

“Purchasers” shall mean the purchasers identified in the
Purchase Agreement and any subsequent holder of any Notes, Warrants,
Registrable Securities or Additional Registrable Securities as a result of a
transfer of such securities.

 

“Register,” “registered” and “registration” refer
to a registration made by preparing and filing a registration statement or
similar document in compliance with the 1933 Act (as defined below), and the
declaration or ordering of effectiveness of such registration statement or
document.

 

 

“Registrable Securities” shall mean (i) the Unit Shares,
Underlying Shares, the Warrant Shares and any other shares of Common Stock
issued or issuable (a) upon conversion of, or payment of interest or repayment
of principal under, the Notes, and upon the exercise of the Warrants, or (b)
upon any distribution with respect to, any exchange for or any replacement of
such Notes or Warrants, or (c) upon any conversion, exercise or exchange of any
securities issued in connection with any such distribution, exchange or
replacement; (ii) securities issued or issuable upon any stock split, stock
dividend, recapitalization or similar event with respect to such shares of
Common Stock; and (iii) any other security issued as a dividend or other
distribution with respect to, in exchange for, or in replacement of, the
securities referred to in the preceding clauses.

 

“Registration Statement” shall mean any registration statement
of the Company filed under the 1933 Act that covers the resale of any of the
Registrable Securities or Additional Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“1933 Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

“1934 Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

 

2.     Registration.

 

(a)           Registration
Statements.

 

(i)            Registrable
Securities.  On or prior to the
Filing Date, the Company shall prepare and file with the SEC one Registration
Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on
such form of registration statement as is then available to effect a
registration for resale of the Registrable Securities), covering the resale of
the Registrable Securities in an amount equal to (i) 100% of the Unit Shares;
(ii) 100% of the number of Underlying Shares issuable upon full conversion of
the Notes at the applicable Conversion Price; and (iii) 100% of the number of
shares of Common Stock necessary to permit the exercise in full of the Warrants
(in each case without regard to any restrictions on beneficial ownership).  Such Registration Statement also shall
cover, to the extent allowable under the 1933 Act and the rules promulgated
thereunder (including Rule 416), such indeterminate number of additional shares
of Common Stock resulting from stock splits, stock dividends, Dilutive
Issuance, or similar transactions with respect to the Registrable
Securities.  No securities shall be
included in the Registration Statement without the consent of the Purchasers
other than the Registrable Securities. 
The Registration Statement (and each amendment or supplement thereto)
shall be provided in accordance with Section 3(c) to the Purchasers and their
counsel prior to its filing or other submission.

 

(ii)           Additional
Registrable Securities.  At any time
and from time to time upon the written demand of the Required Holders following
the existence of any Additional

 

2

 

Registerable Securities, and in any event within thirty (30) days
following such demand, the Company shall prepare and file with the SEC one
Registration Statement on Form S-3 (or, if Form S-3 is not then available to
the Company, on such form of registration statement as is then available to
effect a registration for resale of the Additional Registrable Securities)
covering the resale of the Additional Registrable Securities in an amount equal
to the number of Additional Registrable Securities.  Such Registration Statement also shall cover, to the extent
allowable under the 1933 Act and the rules promulgated thereunder (including
Rule 416), such indeterminate number of additional shares of Common Stock
resulting from stock splits, stock dividends, Dilutive Issuance, or similar
transactions with respect to the Additional Registrable Securities.  The Registration Statement (and each
amendment or supplement thereto) shall be provided in accordance with Section
3(c) to the Purchaser and its counsel prior to its filing or other submission.

 

(b)           Expenses.  The Company will pay all expenses associated
with each registration, including the Purchasers’ reasonable, documented
expenses (including reasonable attorneys fees for one law firm up to an
aggregate of $5,000), in connection with the registration but excluding
discounts, commissions, fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals.

 

(c)           Effectiveness.

 

(i)            The
Company shall use its best efforts to have each Registration Statement declared
effective as soon as possible after filing. 
If (A) the Registration Statement covering Registrable Securities is not
declared effective by the SEC within 
120 days following the Closing Date, or the Registration Statement
covering Additional Registrable Securities is not declared effective by the SEC
within four (4) months following demand of the Required Holders relating to the
Additional Registrable Securities to be covered thereby (each of the foregoing
deadlines, a “Registration Date”), or (B) except as may be provided in
subparagraph (c)(iii) below for an Allowed Delay, after a Registration Statement
has been declared effective by the SEC, sales cannot be made pursuant to such
Registration Statement for any reason (including without limitation by reason
of a stop order, or the Company’s failure to update the Registration Statement)
but except as excused pursuant to subparagraph (iii) below, then the Company
will issue to the Purchaser, as liquidated damages and not as a penalty, 1,333
shares of Common Stock per Unit purchased by the Purchaser for each 30 day
calendar period during which any of the events described in (A) or (B) above
occurs and is continuing (the “Blackout Period”).  Each such issuance shall be made within five (5) days of the end
of each month of the Blackout Period until the termination of the Blackout
Period.  The Blackout Period shall
terminate upon the effectiveness of the applicable Registration Statement in
the case of (A) and (B) above.

 

(ii)           In
the event that the Registrable Securities (or Additional Registrable Securities
after issuance and registration) specifically are not listed or included for
quotation on the Nasdaq National Market System, the Nasdaq Small-Cap Market,
the Nasdaq OTC Bulletin Board, the New York Stock Exchange, the American Stock
Exchange or otherwise publicly traded 
or trading of the Common Stock is suspended or halted thereon, within
twenty (20) days following the Purchaser’s written demand for issuance of such
Underlying Shares or Warrant Shares or certificates, then the Company will make
pro-rata payments to the Purchaser  as
liquidated damages and not as a penalty, in an amount equal to 2% of the sum of
the aggregate

 

3

 

principal amount then outstanding under the Notes for each month (or
portion thereof) following the Registration Date during which any of the events
described above occurs and is continuing (the “Noncompliance Period”).  Each such payment shall be due and payable
within five (5) days of the end of each month (or ending portion thereof) of
the Blackout Period until the termination of the Noncompliance Period.  The Noncompliance Period shall terminate
upon (1) listing or inclusion and/or trading of the Registrable Securities on a
public market or exchange in the case of (A) above; and (2) delivery of such
shares in the case of (B) above.

 

(iii)          For
not more than twenty (20) consecutive trading days or for a total of not more
than forty-five (45) trading days in any consecutive twelve (12) month period,
the Company may delay the disclosure of material non-public information
concerning the Company, by terminating or suspending effectiveness of any
registration contemplated by this Section, the disclosure of which at the time
is not, in the good faith opinion of the Company, in the best interests of the
Company (an “Allowed Delay”); provided, that the Company shall promptly (a)
notify the Purchasers in writing of the existence of (but in no event, without
the prior written consent of a Purchaser, shall the Company disclose to such
Purchaser any of the facts or circumstances regarding) material non-public
information giving rise to an Allowed Delay, and (b) advise the Purchasers in
writing to cease all sales under the Registration Statement until the end of
the Allowed Delay.  No payments under
subparagraph (c)(i)  shall be required
in the event and for the duration of an Allowed Delay.

 

(d)           Underwritten
Offering.  If any offering pursuant
to a Registration Statement pursuant to Section 2(a) hereof involves an
underwritten offering, the Company shall have the right to select an investment
banker and manager to administer the offering, which investment banker or
manager shall be reasonably satisfactory to the Purchasers.

 

3.     Company
Obligations.  The Company will use
its best efforts to effect the registration of the Registrable Securities and
Additional Registrable Securities in accordance with the terms hereof, and
pursuant thereto the Company will, as expeditiously as possible:

 

(a)           use its best efforts
to cause such Registration Statement to become effective and to remain
continuously effective for a period (the “Registration Period”) that will
terminate upon the earlier of (i) the date on which all Registrable Securities
or Additional Registrable Securities have been sold (and no Notes or Warrants
remain outstanding), and (ii) the date on which all Registrable Securities or
Additional Registrable Securities, as the case may be, may be sold pursuant to
Rule 144(k).

 

(b)           prepare and file
with the SEC such amendments and post-effective amendments to the Registration
Statement and the Prospectus as may be necessary to keep the Registration
Statement effective for the period specified in Section 3(a) and to comply with
the provisions of the 1933 Act and the 1934 Act with respect to the
distribution of all Registrable Securities and Additional Registrable Securities;
provided that, at a time reasonably prior to the filing of a Registration
Statement or Prospectus, or any amendments or supplements thereto, the Company
will furnish to the Purchasers copies of all documents proposed to be filed,
which documents will be subject to the comments of the Purchasers;

 

4

 

(c)           permit one counsel
designated by the Purchasers to review each Registration Statement and all
amendments and supplements thereto no fewer than five (5) business days prior
to their filing with the SEC and not file any document to which such counsel
reasonably objects;

 

(d)           furnish to the
Purchasers and their one legal counsel (i) promptly after the same is prepared
and publicly distributed, filed with the SEC, or received by the Company, one
copy of any Registration Statement and any amendment thereto, each preliminary
prospectus and Prospectus and each amendment or supplement thereto, and each
letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of
any thereof which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Purchaser may reasonably request in order to facilitate
the disposition of the Registrable Securities and Additional Registrable
Securities owned by such Purchaser;

 

(e)           in the event the
Company selects an underwriter for the offering, the Company shall enter into
and perform its reasonable obligations under an underwriting agreement, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the underwriter of such
offering;

 

(f)            if required by the
underwriter, or if any Purchaser is described in the Registration Statement as
an underwriter, the Company shall furnish, on the effective date of the
Registration Statement, on the date that Registrable Securities or Additional
Registrable Securities, as applicable, are delivered to an underwriter, if any,
for sale in connection with the Registration Statement and at periodic
intervals thereafter from time to time on request, (i) an opinion, dated as of
such date, from legal counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the underwriter and any such
Purchaser and (ii) a letter, dated such date, from the Company’s independent
certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriter and any such Purchaser;

 

(g)           make effort to
prevent the issuance of any stop order or other suspension of effectiveness
and, if such order is issued, obtain the withdrawal of any such order at the
earliest possible moment;

 

(h)           furnish to each
Purchaser at least five copies of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
by air mail or reputable courier within three (3) business days of the
effective date thereof;

 

(i)            prior to any public
offering of Registrable Securities or Additional Registrable Securities, use
its best efforts to register or qualify or cooperate with the Purchasers and
their counsel in connection with the registration or qualification of such
Registrable Securities or Additional Registrable Securities, as applicable, for
offer and sale under the

 

5

 

securities or blue
sky laws of such jurisdictions requested by the Purchaser (provided, however,
the 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 of process) and do any and all other
reasonable acts or things necessary or advisable to enable the distribution in
such jurisdictions of the Registrable Securities or Additional Registrable
Securities covered by the Registration Statement;

 

(j)            cause all
Registrable Securities or Additional Registrable Securities covered by a
Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;

 

(k)           immediately notify
the Purchasers, at any time when a Prospectus relating to the Registrable
Securities or Additional Registrable Securities is required to be delivered
under the 1933 Act, upon discovery that, or upon the happening of any event as
a result of which, the Prospectus included in such 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 not misleading in the light of the circumstances then
existing, and at the request of any such holder, promptly prepare and furnish
to such holder a reasonable number of copies of a supplement to or an amendment
of such Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities or Additional Registrable Securities,
as applicable, 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 not misleading in the light of the
circumstances then existing; and

 

(l)            otherwise use its
best efforts to comply with all applicable rules and regulations of the SEC
under the 1933 Act and the 1934 Act and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities and Additional Registrable Securities, if applicable, hereunder.

 

4.     Due
Diligence Review; Information.   The
Company shall make available, during normal business hours, for inspection and
review by the Purchasers who may be deemed an underwriter, advisors to and
representatives of such Purchasers (who may or may not be affiliated with the
Purchasers and who are reasonably acceptable to the Company), and any
underwriter participating in any disposition of Common Stock on behalf of the
Purchasers pursuant to the Registration Statement or amendments or supplements
thereto or any blue sky, NASD or other filing, all financial and other records,
all SEC Documents and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for the
purpose of establishing a due diligence defense under applicable securities laws
and such other reasonable purposes, and cause the Company’s officers, directors
and employees, within a reasonable time period, to supply all such information
reasonably requested by such Purchasers or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling
such Purchasers and such representatives, advisors and underwriters and their
respective accountants

 

6

 

and attorneys to conduct initial and ongoing due diligence with respect
to the Company and the accuracy of the Registration Statement.

 

The Company shall not disclose material nonpublic information to the
Purchasers, or to advisors to or representatives of the Purchasers, unless
prior to disclosure of such information the Company identifies such information
as being material nonpublic information and provides the Purchasers, such
advisors and representatives with the opportunity to accept or refuse to accept
such material nonpublic information for review.  The Company may, as a condition to disclosing any material
nonpublic information hereunder, require the Purchasers’ advisors and
representatives to enter into a confidentiality agreement (including an
agreement with such advisors and representatives prohibiting them from trading
in Common Stock during such period of time as they are in possession of
material nonpublic information) in form reasonably satisfactory to the Company
and the Purchasers.  Nothing herein
shall require the Company to disclose material nonpublic information to the
Purchasers or their advisors or representatives.

 

5.     Obligations
of the Purchasers.

 

(a)           Each Purchaser shall
furnish in writing to the Company such information regarding itself, the
Registrable Securities or Additional Registrable Securities, as applicable,
held by it and the intended method of disposition of the Registrable Securities
or Additional Registrable Securities, as applicable, held by it, as shall be
reasonably required to effect the registration of such Registrable Securities
or Additional Registrable Securities, as applicable, and shall execute such
documents in connection with such registration as the Company may reasonably
request.  At least ten (10) days prior
to the first anticipated filing date of any Registration Statement, the Company
shall notify each Purchaser of the information the Company requires from such
Purchaser if such Purchaser elects to have any of the Registrable Securities or
Additional Registrable Securities included in the Registration Statement.

 

(b)           Each Purchaser, by
its acceptance of the Registrable Securities and Additional Registrable
Securities, if any, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless such Purchaser has notified the
Company in writing of its election to exclude all of its Registrable Securities
or Additional Registrable Securities, as applicable, from the Registration
Statement.  Each Purchaser agrees to
comply with the applicable prospectus delivery requirements under the 1933 Act
in connection with any resales of Registrable Securities pursuant to the
Registration Statement.

 

(c)           In the event the
Company determines to engage the services of an underwriter which engagement is
reasonably acceptable to the Purchasers, each Purchaser agrees to enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the dispositions of the Registrable Securities or Additional
Registrable Securities, as applicable.

 

7

 

(d)           Each Purchaser
agrees that, upon receipt of any notice from the Company of the happening of
any event rendering a Registration Statement no longer effective, such
Purchaser will immediately discontinue disposition of Registrable Securities or
Additional Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities or Additional Registrable Securities,
until the Purchaser’s receipt of the copies of the supplemented or amended
prospectus filed with the SEC and declared effective and, if so directed by the
Company, the Purchaser shall deliver to the Company (at the expense of the
Company) or destroy all copies in the Purchaser’s possession of the prospectus
covering the Registrable Securities or Additional Registrable Securities, as
applicable, current at the time of receipt of such notice.

 

(e)           No Purchaser may
participate in any third party underwritten registration hereunder unless it
(i) agrees to sell the Registrable Securities or Additional Registrable
Securities, as applicable, on the basis provided in any underwriting
arrangements in usual and customary form entered into by the Company, (ii)
completes and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions and any expenses in excess of those
payable by the Company pursuant to the terms of this Agreement.

 

6.     Indemnification.

 

(a)           Indemnification
by Company.  The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, the
Purchasers, each of their officers, directors, partners and employees and each
person who controls the Purchasers (within the meaning of the 1933 Act) against
all losses, claims, damages, liabilities, costs (including, without limitation,
reasonable attorney’s fees) and expenses imposed on such person caused by (i)
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or any preliminary prospectus or any
amendment or supplement thereto or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are based upon
any information furnished in writing to the Company by such Purchasers,
expressly for use therein, or (ii) any violation by the Company of any federal,
state or common law, rule or regulation applicable to the Company in connection
with any Registration Statement, Prospectus or any preliminary prospectus, or
any amendment or supplement thereto, and shall reimburse in accordance with
subparagraph (c) below, each of the foregoing persons for any legal and any
other expenses reasonably incurred in connection with investigating or
defending any such claims.  The
foregoing is subject to the condition that, insofar as the foregoing indemnities
relate to any untrue statement, alleged untrue statement, omission or alleged
omission made in any preliminary prospectus or Prospectus that is eliminated or
remedied in any Prospectus or amendment or supplement thereto, the above
indemnity obligations of the Company shall not inure to the benefit of any
indemnified party if a copy of such corrected Prospectus or amendment or
supplement thereto had been provided to such indemnified party and was not sent
or given by such indemnified party at or prior to the time such action was
required of such indemnified party by the 1933 Act and if delivery of such
Prospectus or amendment or supplement thereto would have eliminated (or been a
sufficient defense to) any liability of such indemnified party with respect to
such statement or omission.  Indemnity
under this Section 5(a)

 

8

 

shall remain in
full force and effect regardless of any investigation made by or on behalf of
any indemnified party and shall survive the permitted transfer of the
Registrable Securities and Additional Registrable Securities.

 

(b)           Indemnification
by Holder.  In connection with any
registration pursuant to the terms of this Agreement, each Purchaser will
furnish to the Company in writing such information as the Company reasonably
requests concerning the holders of Registrable Securities and Additional
Registrable Securities or the proposed manner of distribution for use in
connection with any Registration Statement or Prospectus and agrees, severally
but not jointly, to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees, stockholders
and each person who controls the Company (within the meaning of the 1933 Act)
against any losses, claims, damages, liabilities, costs and expenses
(including, without limitation, reasonable attorney’s fees) resulting from any
untrue statement of a material fact or any omission of a material fact required
to be stated in the Registration Statement or Prospectus or preliminary
prospectus or amendment or supplement thereto or necessary to make the
statements therein not misleading, to the extent, but only to the extent that
such untrue statement or omission is contained in any information furnished in
writing by such Purchaser to the Company specifically for inclusion in such
Registration Statement or Prospectus or amendment or supplement thereto and
that such information was relied upon by the Company in preparation of the
Registration Statement or Prospectus or any amendment or supplement thereto.

 

(c)           Conduct of
Indemnification Proceedings.  Any
person entitled to indemnification hereunder shall (i) give prompt notice to
the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party;
provided that any person entitled to indemnification hereunder shall have the
right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of
such person unless (a) the indemnifying party has agreed to pay such fees or
expenses, or (b) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to such person or (c)
in the reasonable judgment of any such person, based upon written advice of its
counsel, a conflict of interest exists between such person and the indemnifying
party with respect to such claims (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such claim on behalf of such
person); 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 hereunder, except to the extent that such failure to give notice
shall materially adversely affect the indemnifying party in the defense of any
such claim or litigation.  It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more
than one separate firm of attorneys at any time for all such indemnified
parties.  No indemnifying party will,
except with the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation.

 

9

 

(d)           Contribution.
 If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnified party and the indemnifying party, as well as
any other relevant equitable considerations. 
No person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the 1933 Act shall be entitled to contribution from any person
not guilty of such fraudulent misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable Securities or Additional Registrable Securities be greater in
amount than the dollar amount of the proceeds (net of all expenses paid by such
holder and the amount of any damages such holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities or
Additional Registrable Securities giving rise to such contribution obligation.

 

7.     Miscellaneous.

 

(a)           Amendments and
Waivers.  This Agreement may be
amended only by a writing signed by the parties hereto.  The Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company shall have obtained the written consent to such amendment,
action or omission to act, of the Purchasers affected by such amendment, action
or omission to act.

 

(b)           Notices.  All notices and other communications
provided for or permitted hereunder shall be made as set forth in Section 10.4
of the Purchase Agreement.

 

(c)           Assignments and
Transfers by Purchasers.  This
Agreement and all the rights and obligations of any Purchaser hereunder may be
assigned or transferred to any transferee or assignee of the Notes, Warrants or
Registrable Securities as may be permitted under the Purchase Agreement.  A Purchaser may make such assignment or
transfer to any transferee or assignee of any Note, Warrant, Registrable
Securities or Additional Registrable Securities, provided that (i) such
transfer is made expressly subject to this Agreement and the transferee agrees
in writing to be bound by the terms and conditions hereof, and (ii) the Company
is provided with written notice of such assignment.

 

(d)           Assignments and
Transfers by the Company.  This
Agreement may not be assigned by the Company without the prior written consent
of the Purchasers, but after notice duly given, the Company shall assign its
rights and delegate its duties hereunder to any successor-in-interest corporation,
and such successor-in-interest shall assume such rights and duties, in the
event of a merger or consolidation of the Company with or into another
corporation or the sale of all or substantially all of the Company’s assets
(and it shall be a condition to any such merger, consolidation or sale that
such successor-in-interest assume in writing all obligations hereunder).

 

(e)           Benefits of the
Agreement.  The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to
confer

 

10

 

upon any party
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

 

(f)            Counterparts.  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.  This Agreement may be executed by facsimile.

 

(g)           Titles and
Subtitles.  The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

 

(h)           Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms to the fullest extent permitted by law.

 

(i)            Further
Assurances.  The parties shall
execute and deliver all such further instruments and documents and take all
such other actions as may reasonably be required to carry out the transactions
contemplated hereby and to evidence the fulfillment of the agreements herein
contained.

 

(j)            Entire Agreement.  This Agreement, together with the Purchase Agreement,
Notes and Warrants and documents contemplated thereby, is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein.  This Agreement, together with the Purchase
Agreement, Notes and Warrants and documents contemplated thereby, supersedes
all prior agreements and understandings between the parties with respect to
such subject matter.

 

(k)           Applicable Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of law.

 

[Signature
Pages Follow]

 

11

 

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

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  VCampus Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Nat
  Kannan

  	
   

  
	
   

  	
  Name:  Nat Kannan

  
	
   

  	
  Title: CEO

  

 

12

 

	
   

  	
  THE PURCHASERS:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [executed by each of
  the 15 purchasers]

  
					

 

13

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