Document:

Exhibit 10.104

 

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.

 

 

No. W-

Issuance Date: December 8, 2005

 

VCAMPUS CORPORATION

 

PURCHASE WARRANT

 

WARRANT TO PURCHASE SHARES OF COMMON STOCK

 

This is to certify that, FOR
VALUE RECEIVED, [Name of Purchaser] (“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 (“Exercise Date”),
but not later than 5:00 P.M., Eastern time, on the fifth (5th)
anniversary of the Issuance Date (the “Expiration Date”), a total of [75% of the number of shares of Common Stock issuable
upon conversion, at closing, of the Company’s Series A-1 Preferred Stock
purchased by the Warrantholder] shares (“Warrant Shares”) of Common
Stock, $0.01 par value per share (“Common Stock”), of the Company, at an
exercise price per share equal to the then applicable conversion price of the
Company’s Series A-1 Preferred Stock; provided, however, that if the
conversion price of the Company’s Series A-1 Preferred Stock resets on March 31,
2006, then the number of Warrant Shares thereafter issuable to Warrantholder
hereunder shall be increased to equal 75% of the number of shares of Common
Stock issuable upon conversion of the Warrantholder’s Series A-1 Preferred
Stock at the reset conversion price. The exercise price in effect from time to
time is hereafter called the “Warrant Price”. 
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 Subscription 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.  Exercise of
Warrant.

 

(a)                                  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 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)                                 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

 

2

 

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
average of the Closing Sale Price of the Common Stock over the five Trading
Days immediately preceding the date of the Exercise Notice.

 

C= the
Warrant 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.

 

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.

 

3

 

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. 
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.

 

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)                                  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.

 

(b)                                 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
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,

 

4

 

as nearly
equivalent as may be practicable in relation to any shares of stock, securities
or properties thereafter deliverable upon the exercise hereof.

 

(c)                                  In
the event that, as a result of an adjustment made pursuant to Section 9,
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.

 

(d)                                 In
the event of any adjustment pursuant to this Section 9 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 pursuant
to this Section 9 (but not for any other reason), 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.

 

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.  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:

 

5

 

VCampus Corporation

1850 Centennial Park Drive

Suite 200

Reston, VA 
20191

Attention:  CFO

 

With a copy to:

 

Maupin Taylor, P.A.

3200 Beechleaf Court, Suite 500

Raleigh, North Carolina 27604

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 13.

 

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 13.

 

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 14.  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 15.  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 16.  Governing Law.  This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware, 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 17.  Assignment,
etc.  The Warrantholder may assign or
transfer this Warrant to any transferee only with the prior written consent of
the Company. This Warrant shall be binding upon the Company and its successors
and shall inure to the benefit of the Warrantholder and its successors and
permitted assigns.

 

6

 

Section 18.  Definitions.  The following words and terms as used in this
Warrant shall have the following meanings:

 

(i)  “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.

 

(ii)  “Closing Sale Price” means, for any
security as of any date, the last closing sale price for such security on the
Principal Market as reported by Nasdaq, 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 Nasdaq, 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 Nasdaq (or by Bloomberg if
Nasdaq does not report such prices), or, if no last closing trade price is
reported for such security by Nasdaq, the last closing ask price of such
security as reported by Nasdaq, or, if no last closing ask price is reported
for such security by Nasdaq, 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 determined in good faith by the Company’s
Board of Directors.

 

(iii)  “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.

 

(iv)  “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.

 

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

 

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

 

Section 19.  4.99% Limitation.  Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the holder 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
Conversion Stock 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 4.99% 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,

 

7

 

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 upon 75 days’ 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 Liquidation Event (as defined in the
Certificate of Incorporation, as amended).

 

[signature page follows]

 

8

 

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

 

 

	
   

  	
  VCAMPUS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Narasimhan P.
  Kannan

  
	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sign:

  	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name: Christopher L. Nelson

  	
   

  	
   

  
							

 

9

 

VCAMPUS CORPORATION

WARRANT EXERCISE FORM

 

VCampus Corporation

1850
Centennial Park Drive

Suite 200

Reston, VA 
20191

Fax:  (703) 654-7319

Attention:  CFO

 

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 be issued
under the same instructions.

 

o 
(Check box, if applicable)  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 10.105

 

REGISTRATION
RIGHTS AGREEMENT

 

Registration Rights Agreement, dated effective as of December 8,
2005, 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
a Subscription  Agreement dated on or
about the date hereof (the “Purchase Agreement”), 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 A-1 Preferred Stock of the
Company (the “Shares”) and Warrants exercisable for common stock of the Company
(the “Warrants”); and

 

WHEREAS, in order to induce the Purchasers to enter
into the Purchase Agreement and to purchase the Shares and 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
Agreement, 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 Agreement, including the Warrant
Shares, the shares of common stock issuable upon conversion of the Series A-1
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 / Penalties for Delayed
Effectiveness.  Within 90 days from the date hereof, the
Company shall file a Registration Statement covering the resale of the
Registrable Securities (such number of Registrable Securities to be based on
the Conversion price after giving effect to the Price Reset) 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 two years.  In addition, if the number of Registrable
Securities increases as a result of an adjustment to the Conversion Price, then
the Company shall be required to file an additional Registration Statement
covering such additional shares (the “Additional Registrable Securities”)
within 15 days of such increase and shall thereafter use its best efforts to
effect the registration within 90 days after such filing.  If (A) the Registration Statement
covering Registrable Securities is not filed within 90 days following the
Closing Date (the “Filing Date”) or is not declared effective by the SEC within
180 days following the Closing Date, or within 90 days of filing in the case of
Additional Registrable Securities (the “Registration Date”), or (B) except
as may be provided in Section 7(a) below for an allowed Suspension
Period, 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 7(a) below,
then the Company will pay to the Purchaser, as liquidated damages and not as a
penalty, cash in the amount of one percent (1%) of the purchase price paid by
the Purchaser for the Shares 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.

 

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 (a “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 5
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 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 two years (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 two years;

 

(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 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 post-effective 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);

 

(j)                                     subject
to continued effectiveness of the Registration Statement or availability of an
exemption from registration, to 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 reasonably request; 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 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, 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 30 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
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.                                       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

 

Maupin Taylor, P.A

3200 Beechleaf Court

Suite 500

Raleigh, NC 
27604

Attn:  Kevin A.
Prakke, Esq.

 

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 A-1 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.

 

 

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

 

	
  COMPANY:

  	
   

  	
  VCAMPUS
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Christopher Nelson

  
	
   

  	
   

  	
  Title: Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
  PURCHASERS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

 

SCHEDULE A

 

Schedule of
Purchasers

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