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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 20, 2000
VCampus Corporation
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
000-21421 54-1290319
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(Commission file Number) (IRS Employer ID Number)
1850 Centennial Park Drive, Suite 200, Reston, VA 20191
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 893-7800
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8251 Greensboro Drive, Suite 500, McLean, VA 22101
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On April 26, 2000, the Registrant issued a press release stating as follows:
U S WEST(R) SELECTS POWERFUL, COMPLETE DISTANCE LEARNING SOLUTIONS FROM
VCAMPUS TO PROVIDE CUSTOMERS INNOVATIVE, ADVANCED ONLINE EDUCATION OPTIONS
--U S WEST Business, Government and Academic Customers Can Now Have Access
To Unique Online Learning Management and Courseware Creation Tools, and
an Extensive Course Library--
DENVER-- Businesses, government organizations, schools and universities
that are increasingly turning to distance learning for staff and student
training can now access powerful and versatile online and custom course
creation services, and an extensive library of courses, as a result of a
new strategic relationship between U S WEST (NYSE: USW) and VCampus
(NASDAQ: VCMP). U S WEST will simultaneously take a minority equity stake
in VCampus.
Together, U S WEST Hosting Solutions and VCampus, a leading application
service provider of remotely hosted, web-based education and training
delivery solutions, will offer a diverse collection of courses tailored for
distance learning as well as end-to-end courseware design and integration
tools that can enable businesses and organizations to create and conduct
their own customized online courses.
VCampus' complete distance learning solution includes a student management
system, course delivery engine, more than 300 off-the-shelf courses and
courseware construction services. The well-rounded library of off-the-shelf
courses is designed to meet the educational needs of businesses in areas
such as IT, management, telecommunications, office skills and compliance.
The company can help business customers to easily manage the enrollment,
registration, tracking, testing, grading, administration and certification
of distance learners.
"Web-hosted online learning is no longer a `future thought,'" said Janice
Aune, president, U S WEST !NTERPRISE Networking. "It's here today and it is
one of the most powerful and effective way to equip employees with the
knowledge they need to stay proficient. By teaming with VCampus, we're able
to provide our customers with an unparalleled distance learning solution."
Web-based education is fast becoming the preferred learning environment.
According to International Data Corporation, the percentage of tech-based
training is projected to triple over the next three years. The global
training market is estimated to be approximately $60 billion in size.
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"VCampus brings a proven, turn-key e-Learning solution to U S WEST's
customers, allowing them, in turn, to provide e-Learning to their
employees, students and channel partners," said Nat Kannan, CEO and
President of VCampus. "e-Learning can save U S WEST customers over
traditional classroom instruction by helping to reduce or eliminate travel,
facilities, instructor and materials costs."
U S WEST Hosting Solutions will host the courseware at the U S WEST Network
Operations Center in Minneapolis. U S WEST Hosting Solutions is an
Application Service Provider (ASP) that delivers platform, Web, and
application-hosting solutions to businesses of all sizes, and combines the
networking expertise of U S WEST with industry-leading application
providers and integrators to offer end-to-end solutions for businesses,
regardless of the level of outsourcing they require. It gives businesses a
single source for multiple IT functions such as platform hosting and web
hosting, as well as network-based access to business applications and the
resources needed to support them.
ABOUT U S WEST
U S WEST (NYSE: USW) is a leading broadband and communications service
provider, with more than $13 billion in annual revenues. U S WEST leads the
industry in deploying next-generation broadband ADSL and VDSL Internet
access and data/video services; offers the nation's first and only
`one-number' advanced wireless service that integrates customers' home or
business phones with their wireless PCS; and provides multimedia
advertising services, including Internet & print directories. The company
has nearly 2 million miles of deployed fiber in the U.S., provides local
exchange services to more than 25 million customers in 14 states, and
provides wireless services to more than 500,000 customers and data services
to more than 800,000 customers nationally.
U S WEST is merging with Qwest Communications International Inc. The
combination, to be named Qwest Communications International Inc., will
create a communications powerhouse with a market capitalization of more
than $70 billion, headquartered in Denver and employing about 64,000 people
worldwide. U S WEST and Qwest will unite the nation's most innovative
local, wireless and broadband communications firm with one of the world's
most advanced fiber-optic networks and broadband Internet providers.
Together, the two firms will have more than 3 million miles of deployed
fiber in the U.S. and worldwide, 29 million customers and a local network
that is 99.2 percent digitally switched. For more information about U S
WEST, go to http://www.uswest.com.
With the exception of the historical information contained in the release,
the matters described herein contain forward-looking statements that are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve a number
of risks and uncertainties including but not limited to difficulties in
managing rapid growth (including future capital needs), development of its
target market, risks associated with acquisitions, and economic,
competitive, governmental and technological factors outside the control of
the Company. For more information regarding these risks and uncertainties
see the Company's Registration Statement on Form S-1 and other SEC filings,
copies of which are available upon request from the Company.
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As part of the Company's strategic relationship with US West, US West
invested $2.5 million for the purchase of 357,143 shares of VCampus common stock
at $7.00 per share and received five-year warrants to purchase up to $5 million
of additional shares of common stock at that price. One-half of these warrant
shares are immediately exercisable and the remaining shares become exercisable
after one year. US West was also granted the right to designate one of its
representatives for election to the VCampus Board.
Item 7. Exhibits
(c) Exhibits.
10.50 Subscription Agreement dated as of April 20, 2000,
by and between the Registrant and US West Internet
Ventures, Inc.
10.51 Registration Rights Agreement dated as of April 20,
2000 by and between the Registrant US West Internet
Ventures, Inc.
10.52 Warrant issued to US West Internet Ventures, Inc.,
dated as of April 20, 2000.
10.53 Board Nomination and Observer Rights Agreement dated
April 20, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VCAMPUS CORPORATION
/s/ NARASIMHAN P. KANNAN
Date: April 26, 2000 ---------------------------------------
Narasimhan P. Kannan
Chief Executive Officer
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EXHIBIT 10.50
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR BY THE SECURITIES REGULATORY
AUTHORITY OF ANY OTHER JURISDICTION, NOR HAS ANY COMMISSION OR AUTHORITY PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION CONTRARY TO THE
FOREGOING IS UNLAWFUL. THE SHARES MAY NOT BE TRANSFERRED OR RESOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
SUBSCRIPTION AGREEMENT
COMMON STOCK
VCAMPUS CORPORATION
1. Subscription. The undersigned (hereinafter referred to as
"Subscriber") hereby subscribes for and agrees to purchase the number of shares
of Common Stock of VCampus Corporation (the "Company"), par value $0.01 per
share, set forth on the signature page hereto (the "Shares") in consideration
for payment by the Subscriber of $7.00 per Share pursuant to this Subscription
Agreement (the "Agreement"). The Subscriber herewith tenders the entire amount
of such purchase price by check or wire transfer payable to the Company.
The Subscriber acknowledges that at the time of issuance the Common
Stock will not be registered under the Securities Act of 1933 (the "Act"), in
reliance upon an exemption from registration contained in the Act, and that the
Company's reliance upon such exemption is based, at least partially, on the
Subscriber's representations and warranties contained in this Subscription
Agreement.
2. Acceptance or Rejection of Subscription. Subscriber acknowledges and
agrees that this subscription shall not be effective until accepted in writing
by the Company, and that the Company reserves the right to reject this
subscription in whole or in part. Subscriptions may be rejected for insufficient
documentation or for such other reason as the Company may determine, in its sole
discretion, to be in the best interests of the Company.
3. Subscriber's Representations and Warranties. Subscriber represents,
warrants, acknowledges and agrees to the following.
a. Subscriber is a resident of the state indicated on the signature
page hereof, has its principal office in such state and has not been
organized for the specific purpose of acquiring the Shares.
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b. This Agreement is and shall be irrevocable, except that the
Subscriber shall have no obligations hereunder in the event that the
subscription is not accepted by the Company in whole or in part.
c. The Subscriber has read this Agreement carefully and, to the extent
believed necessary, has discussed the representations, warranties and
agreements and the applicable limitations upon the Subscriber's resale of
the Common Stock with counsel.
d. The Subscriber understands that no federal or state agency has made
any finding or determination regarding the fairness of this offering, or
any recommendation or endorsement of this offering.
e. The Subscriber is an "accredited investor" as defined in Rule 501
of Regulation D promulgated under the Act.
f. The Subscriber has received from the Company or others and has read
copies of the Company's filings with the U.S. Securities and Exchange
Commission (the "SEC"), and has had an adequate opportunity to ask
questions of and receive answers from the Company regarding these documents
(the "SEC Filings").
g. The Subscriber is purchasing the Common Stock for the Subscriber's
own account, with the intention of holding the Common Stock for investment
purposes and not for the purpose of reselling or otherwise participating,
directly or indirectly, in a distribution of the Common Stock, and shall
not make any sale, transfer or other disposition of any portion of the
Common Stock purchased hereby without registration under the Act and any
applicable securities act of any state or unless an exemption from
registration is available under such acts.
h. The Subscriber understands that an investment in the Common Stock
is a highly illiquid investment, and that, the Subscriber will have to bear
the economic risk of the investment indefinitely (or at least until such
shares may become registered as provided under this Agreement) because the
Common Stock has not been registered under the Act and is being issued
pursuant to a private placement exemption under Regulation D, on the
grounds that no public offering is involved. Therefore, the Common Stock
cannot be offered, sold, transferred, pledged or hypothecated to any
person, unless either it is subsequently registered under the Act and
applicable state securities laws or an exemption from registration is
available and the Subscriber obtains a favorable opinion of the Company's
counsel to that effect.
i. The Subscriber understands that the provisions of Rule 144
promulgated under the Act are not available for at least one (1) year, to
permit resale of the Common Stock, and there can be no assurance that the
conditions necessary to permit routine sales of the Common Stock under Rule
144 will ever be satisfied, and, if Rule 144 should become available,
routine sales made in reliance on its provisions could be made only in
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limited amounts and in accordance with the terms and conditions of the
Rule. The Subscriber further understands that in connection with sales for
which Rule 144 is not available, compliance with some other registration
exemption will be required, which may not be available.
j. The Subscriber understands and agrees that stop transfer
instructions will be given to the Company's transfer agent or the officer
in charge of its stock records and noted on the appropriate records of the
Company to the effect that the Common Stock may not be transferred out of
the Subscriber's name unless either the Shares become registered under the
Act or it is established to the satisfaction of counsel for the Company
that an exemption from the registration provisions of the Act and
applicable state securities laws is available therefore. The Subscriber
further agrees that there will be placed on the certificates for the Common
Stock, or any substitutions therefore, a legend stating in substance as
follows, that the Subscriber understands and agrees that the Company may
refuse to permit the transfer of the stock out of its name and that the
stock must be held indefinitely in the absence of compliance with the terms
of such legend.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
ACT AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH
REGISTRATION UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE CORPORATION) REASONABLY SATISFACTORY TO
IT THAT SUCH TRANSFER MAY BE MADE IN COMPLIANCE WITH APPLICABLE
FEDERAL AND STATE SECURITIES LAWS AND REGULATIONS.
k. The Subscriber agrees to indemnify the Company, its directors,
officers and employees, and to hold them harmless from and against any and
all liability, damages, costs or expenses, including reasonable attorney
fees, on account of or arising out of (i) any inaccuracy in the
Subscriber's representations and warranties hereinabove set forth; (ii) the
disposition of any of the Common Stock which it will receive, contrary to
its foregoing representations and warranties; and (iii) any action, suit or
proceeding based upon either the claim that the Subscriber's
representations or warranties were inaccurate or misleading or otherwise
cause for obtaining damages or redress from the Company, its directors,
officers or employees, or the disposition of any portion of the Common
Stock.
4. Company Representations and Warranties. The Company represents,
warrants, acknowledges and agrees to the following.
a. Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to
own and operate its properties and assets and to carry on its business as
now conducted and as currently proposed to be conducted. The Company is
duly qualified and authorized to do business, and is in good
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standing as a foreign corporation, in Virginia and in each other
jurisdiction where the nature of its activities and of its properties (both
owned and leased) makes such qualification necessary, except where a
failure to do so would not have a material adverse effect on the Company.
b. Capitalization. The authorized capital of the Company, immediately
prior to the Closing, will consist of: 1,200,000 shares of Series D
Convertible Preferred Stock, $0.01 par value per share, 1,073,370 of which
are issued and outstanding; 1,000,000 shares of Series C Convertible
Preferred Stock, $0.01 par value per share, 623,339 shares of which are
issued and outstanding; 3,000,000 shares of Series E Convertible Preferred
stock, 147,101 of which are issued and outstanding; 4,800,000 shares of
undesignated and unissued Preferred Stock, $0.01 par value per share; and
36,000,000 shares of Common Stock, $0.01 par value per share, 7,596,664 of
which were issued and outstanding as of March 16, 2000.
All of the outstanding shares of Common Stock and Preferred Stock that
have been duly authorized and validly issued, are fully paid and
nonassessable and were issued in compliance with all applicable federal and
state securities laws. The Company has duly and validly reserved the Shares
for issuance as contemplated hereby. Except as disclosed in the SEC
Filings, there are no outstanding rights of first refusal, preemptive
rights or other rights, options, warrants, conversion rights or other
agreements, either directly or indirectly, for the purchase or acquisition
from the Company of any shares of its capital stock.
c. Authorization. All corporate action on the part of the Company and
its directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all the Company's
obligations hereunder and thereunder, and the authorization, issuance, sale
and delivery of the Shares has been taken. This Agreement, when executed
and delivered by the Company and the respective other parties thereto,
shall constitute a valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors,
rules and laws governing specific performance, injunctive relief and other
equitable remedies.
d. Validity of the Shares. The Shares, when issued pursuant to the
terms of this Agreement, will be validly issued, and fully paid and
nonassessable and will be free of any liens or encumbrances; provided,
however, that the Shares will be subject to restrictions on transfer under
state and/or federal securities laws as set forth herein.
e. Compliance with Other Instruments. The Company is not in violation
of any provisions of its Certificate of Incorporation or its Bylaws as
amended, or of any provisions of any material agreement or any judgment,
decree or order by which it is bound or any statute, rule or regulation
applicable to the Company. Subject to the compliance with such filings as
may be required to be made with the SEC, the National Association of
Securities Dealers, Inc. (the "NASD") and certain state securities
commissions, the execution, delivery and performance of this agreement and
the issuance
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and sale of the Shares pursuant hereto, will not result in any such
violation or be in conflict with or constitute a default under any such
provisions or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company.
f. Governmental Consents. All consents, approvals, orders or
authorization of, or registrations, qualifications, designations,
declarations or filings with, any federal or state governmental authority
on the part of the Company required in connection with the valid execution
and delivery of this agreement, the offer, sale or issuance of the Shares,
or the consummation of any other transaction contemplated hereby, have been
obtained.
g. Accuracy of Reports. The SEC Filings required to be filed by the
Company within the year prior to the date of this Agreement under the
Securities Exchange Act of 1934 have been duly filed, were in substantial
compliance with the requirements of their respective forms, were complete
and correct in all material respects as of the dates at which the
information was furnished, and contained (as of such dates) no untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
h. Disclosure. No representation or warranty of the Company contained
in this Agreement contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they
were made, not misleading.
5. Assignment. This Agreement is not transferable or assignable by the
Subscriber.
6. Expenses. The Company and the Subscriber shall bear their own
expenses with respect to this Agreement and the transactions contemplated
hereby.
7. Correct Information. All information which the Subscriber has
provided concerning the Subscriber or its financial position and the
Subscriber's knowledge of financial and business matters is correct and complete
as of the date hereof, and if there should be any material change in such
information prior to the Company's acceptance of the subscription, the
Subscriber will immediately provide the Company with such information.
8. Miscellaneous. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware. This Agreement constitutes
the entire agreement among the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all parties.
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SUBSCRIPTION AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the Subscriber has executed this Subscription
Agreement effective on this the 20th day of April 2000.
357,143 = Shares of Common Stock
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$ 2,500,000 = total payment by Subscriber
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Signature of Subscriber
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US West Internet Ventures, Inc. Address
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Printed or typed name of Subscriber (in
exactly the form in which securities are to
be registered)
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Printed or Typed Name and Title of person
signing
FOR COMPANY USE ONLY:
ACCEPTED EFFECTIVE ON THE 20TH DAY OF APRIL 2000 ON BEHALF OF VCAMPUS
CORPORATION FOR 357,143 SHARES OF COMMON STOCK.
BY:
---------------------------------
NAME:
-------------------------------
TITLE:
------------------------------
6
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EXHIBIT 10.51
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated effective as of April 20, 2000, by
and between VCampus Corporation, a Delaware corporation ("Company"), and US WEST
Internet Ventures, Inc., a Colorado corporation ("Purchaser").
WITNESSETH:
WHEREAS, Company and Purchaser have entered into that certain
Subscription Agreement, dated as of the date hereof (the "Purchase Agreement"),
pursuant to which Company has agreed to issue and sell to Purchaser, and
Purchaser has agreed to purchase from Company shares of Common Stock of the
Company and a Warrant exercisable for Common Stock of the Company; and
WHEREAS, in order to induce Purchaser to enter into the Purchase
Agreement and to purchase the shares of Common Stock of the Company and the
Warrant exercisable for Common Stock of the Company, 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 Warrant.
"Holder" shall mean (i) the 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.
"Incidental Registration" shall have the meaning ascribed to it in
Section 3.
"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.
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"Registrable Securities" shall mean the shares of Common Stock issued
pursuant to the Purchase Agreement, the Warrant Shares, and shares of Common
Stock which Purchaser 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 shares of Common Stock or Warrant 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).
"Warrant" shall mean the warrant to purchase shares of the Company's
Common Stock issued to the Purchaser on the date hereof.
2. Demand Registration. Subject to the terms of this Section 2 and
Section 5, at any time after one (1) year from the date hereof, after receipt of
a written request from the holders of Registrable Securities requesting that
Company effect a registration under the Securities Act covering at least 50% of
the Registrable Securities then outstanding, and specifying the intended method
of disposition thereof, Company shall promptly notify all Holders in writing of
the receipt of such request and each such Holder, in lieu of exercising its
rights under Section 3 may elect (by written notice sent to Company within ten
(10) Business Days from the date of such Holder's receipt of the aforementioned
Company's notice) to have Registrable Securities included in such registration
thereof pursuant this Section 2. Thereupon the Company shall, as expeditiously
as possible, use its best efforts to effect the registration under the
Securities Act of all shares of Registrable Securities which Company has been so
requested to register by such Holders for sale, all to the extent required to
permit the disposition of the Registrable Securities so registered for a period
of up to 120 days; provided, however, that Company shall not be required to
effect more than one (1) registration of Registrable Securities pursuant to this
Section 2. The Company shall not be required to file a Registration Statement at
a time when a resale Form S-3 Registration Statement covering Registrable
Securities is then in effect.
3. Incidental Registration. If Company at any time proposes to file a
registration statement under the Securities Act on any form (other than a
Registration Statement on Form S-4 or S-8 or any successor form for securities
to be offered in a transaction of the type referred to in Rule 145 under the
Securities Act or to employees of Company pursuant to any employee benefit plan,
respectively) for the general registration of securities (an "Incidental
Registration Statement"), it will give written notice to all
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Holders at least 15 days before the initial filing with the SEC of such
Incidental Registration Statement, which notice shall set forth the intended
method of disposition of the securities proposed to be registered by Company.
The notice shall offer to include in such filing the aggregate number of shares
of Registrable Securities as such Holders may request.
Each Holder desiring to have Registrable Securities registered under
this Section 3 shall advise Company in writing within 10 Business Days after the
date of receipt of such offer from Company, setting forth the amount of such
Registrable Securities for which registration is requested. Company shall
thereupon include in such filing the number of shares of Registrable Securities
for which registration is so requested, subject to the next sentence, and shall
use its best efforts to effect registration under the Securities Act of such
shares. In connection with any registration subject to this Section 3, which is
to be effected in a firm commitment underwriting, Company will not be required
to include Registrable Securities in such underwriting unless the Holder of such
Registrable Securities accepts the terms and conditions of the underwriting
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 incidental 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 120
days (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);
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(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, in
the case of an Incidental Registration Statement file pursuant to Section 3, the
earlier of such time as all of such securities have been disposed of in a public
offering or the expiration of 120 days, or in the case of a Registration
Statement filed pursuant to Section 2, such time as is set forth in Section
4(a);
(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
posteffective 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;
<PAGE> 5
(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) cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing the Registrable Securities to be sold
free of any restrictive legends and in such denominations and registered in such
names as the Holders may request a reasonable period of time prior to sales of
the Registrable Securities; and
(k) upon the occurrence of any event contemplated by Section 4(g)(v)
above, promptly prepare a post-effective amendment to such Registration
Statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to Holders, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company notifies the Holders
in accordance with Section 4(g)(v) above to suspend the use of the prospectus
until the requisite changes to the prospectus have been made, then the Holders
shall suspend use of such prospectus, and the period of effectiveness of such
Registration Statement provided for above shall each be extended by the number
of days from and including the date of the giving of such notice to Holders
shall have received such amended or supplemented prospectus pursuant to this
Section 4(k).
It shall be a condition precedent to the obligation of Company to take
any action pursuant to this Agreement in respect of the securities which are to
be registered at the request of any Holder that such Holder shall furnish to
Company such information
<PAGE> 6
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 180 days 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
<PAGE> 7
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
<PAGE> 8
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 Section 2 hereof during one or more periods aggregating not more than 60 days
in any twelve-month period (such period or periods, the "Suspension Period") in
the event that (i) Company would, in accordance with the advice of its counsel,
be required to disclose in the prospectus information not otherwise then
required by law to be publicly disclosed, (ii) in the judgment of Company's
Board of Directors, there is a reasonable likelihood that such disclosure, or
any other action to be taken in connection with the prospectus, would materially
and adversely affect any existing or prospective material business situation,
transaction or negotiation or otherwise materially and adversely affect Company,
or (iii) the Registration Statement can no longer be used under the Securities
Act; provided that the period of effectiveness of the Registration Statement
pursuant to Section 2 shall be extended by the length of any such Suspension
Period;
(b) Notwithstanding Section 7(b) hereof, Company agrees that it
shall not impose a Suspension Period during the 30-day period following the date
on which the Registration Statement is first declared effective by the SEC (the
"30-day Period") as a result of any activity initiated by Company, or in
response to any proposal, unless Company's Board of Directors determines in good
faith that it is required to impose a Suspension Period by law during such
30-day Period. To the extent Company imposes a Suspension Period during such
30-day Period as a result of such determination by Company's Board of Directors,
Company shall not, for such additional number of consecutive days following the
termination of such Suspension Period, impose an additional Suspension Period,
so as to provide the Holders with a total of 30 days without a Suspension
Period; and
(c) 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 (c), and the Shareholders shall make
no offers or sales of shares pursuant to such Registration Statement other than
by means of such revised prospectus.
<PAGE> 9
8. Selection of Managing Underwriters. The managing underwriter or
underwriters for any offering of Registrable Securities to be registered
pursuant to Section 2 in an underwritten public offering shall be of recognized
national standing selected by the holders of a majority of the shares being so
registered, and shall be reasonably acceptable to Company.
9. Restrictions on Sale After Public Offering. Except for transfers
made in transactions exempt from the registration requirements under the
Securities Act, Company and each Holder hereby agree not to offer, sell,
contract to sell or otherwise dispose of any of their Registrable Securities
within 120 days after the date of any final prospectus relating to the public
offering of Common Stock, if underwritten, whether by Company or by any Holders,
except pursuant to such prospectus or with the written consent of the managing
underwriter or underwriters for such offering.
10. Miscellaneous.
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate. In any action or proceeding brought to enforce any provision
of this Agreement or where any provision hereof is validly asserted as a
defense, the successful party shall be entitled to recover reasonable attorneys'
fees in addition to any other available remedy.
(b) 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.
(c) 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.
<PAGE> 10
(ii) If to Company, at
VCampus Corporation
Suite 500
8251 Greensboro Drive
McLean, Virginia 22102
Attention: Nat Kannan, CEO
Telecopy Number: (703) 893-1905
with a copy to
Wyrick Robbins Yates & Ponton LLP
Suite 300
4101 Lake Boone Trail
Raleigh, NC 27607
Attn: Kevin A. Prakke
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three Business Days after the same shall have been deposited in
the United States mail.
(d) 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.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) 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.
(g) 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.
(h) Entire Agreement. This Agreement, together with the Purchase
Agreement and Warrant, represents the complete agreement and understanding of
the parties hereto in respect of the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first above written.
VCAMPUS CORPORATION
By:
----------------------------------
Name:
Title:
US WEST Internet Ventures, Inc.
By:
----------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10.52
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
WARRANT TO PURCHASE COMMON STOCK
OF
VCAMPUS CORPORATION
VOID AFTER APRIL 20, 2005
This Warrant (the "Warrant") is issued to US WEST Internet Ventures,
Inc. or its registered assigns ("Holder") by VCampus Corporation, a Delaware
corporation (the "Company"), on April 20, 2000 (the "Warrant Issue Date") for
consideration of $1,000 in the aggregate, receipt of which is hereby
acknowledged.
1. Purchase Shares. Subject to the terms and conditions hereinafter set
forth, the Holder is entitled, upon surrender of this Warrant at the principal
office of the Company (or at such other place as the Company shall notify the
holder hereof in writing), to purchase from the Company up to 714,285 shares of
Common Stock of the Company (the "Warrant Shares") at the Exercise Price
(defined below), subject to adjustment as provided in Section 8 (and subject to
adjustment as provided in Section 5 in the event the Holder elects the "cashless
exercise" procedure in Section 5).
2. Exercise Price. The purchase price for the Shares shall be $7.00 per
Warrant Share, as adjusted from time to time pursuant to Section 8 hereof (the
"Exercise Price").
3. Exercise Period. This Warrant shall be exercisable with respect to
one-half (1/2) of the Warrant Shares commencing immediately upon issuance and
with respect to the remaining one-half (1/2) of the Warrant Shares commencing
one year from the date of issuance, and ending at 5:00 p.m. on April 20, 2005.
4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(a) the surrender of the Warrant, together with a duly executed
copy of the form of Notice of Exercise attached hereto, to the
Secretary of the Company at its principal offices; and
(b) the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Warrant Shares being
purchased.
<PAGE> 2
5. Net Exercise. In lieu of exercising this Warrant pursuant to Section
4, the Holder may elect to receive, without the payment by the Holder of any
additional consideration, Warrant Shares equal to the value of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the Notice of Exercise attached
hereto indicating such election, in which event the Company shall issue to the
holder hereof a number of Warrant Shares computed using the following formula:
Y (A - B)
---------
X = A
Where: X = The number of Warrant Shares to be issued to the Holder pursuant
to this net exercise;
Y = The number of Warrant Shares in respect of which the net issue
election is made;
A = The fair market value of one Warrant Share at the time the net
issue election is made;
B = The Exercise Price (as adjusted to the date of the net issuance).
For purposes of this Section 5, the fair market value of one Warrant Share as of
a particular date shall be determined as follows: (i) if traded on a securities
exchange or through the Nasdaq National Market or the Nasdaq SmallCap Market,
the value shall be deemed to be the average of the closing prices of the
securities on such exchange over the thirty (30) day period ending one day prior
to the net exercise election; (ii) if traded over-the-counter, the value shall
be deemed to be the average of the closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending one day prior to the net
exercise; and (iii) if there is no active public market, the value shall be the
fair market value thereof, as determined in good faith by the Board of Directors
of the Company; provided, however, the Holder covenants and agrees that at least
30 days prior to effecting a net exercise pursuant to this Section 5, it will
provide written notice of same to the Company and that it will make itself
reasonably available to review any proposals submitted by the Company during
such period in an effort to reach an agreement by which the Holder would effect
a cash exercise for the full number of Warrant Shares in lieu of effecting a net
exercise; provided further, however, that (i) any proposal may be rejected by
the Holder in its sole discretion and (ii) Holder shall not be required to give
such notice or review proposals if doing so would limit Holder's rights, in any
material respect, to resale the Warrant Shares under any available registration
statement or if Holder notifies the Company that reviewing proposals would be
unproductive because Holder has no funds available for such an investment.
6. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Warrant
Shares so purchased shall be issued as soon as practicable thereafter (with
appropriate restrictive legends, if applicable), and in any event within ten
(10) days of the delivery of the subscription notice.
<PAGE> 3
7. Issuance of Shares. The Company covenants that the Warrant Shares,
when issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
8. Adjustment of Exercise Price and Kind and Number of Shares. The
number and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the
Company shall at any time prior to the expiration of this Warrant (i)
subdivide its Common Stock, by split-up or otherwise, or combine its
Common Stock, (ii) issue additional shares of its Common Stock or
other equity securities as a dividend with respect to any shares of
its Common Stock, or (iii) declare a cash dividend with respect to any
shares of its Common Stock, the number of shares of Common Stock
issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock or
cash dividend, or proportionately decreased in the case of a
combination. Appropriate adjustments shall also be made to the
purchase price payable per share, but the aggregate purchase price
payable for the total number of Warrant Shares purchasable under this
Warrant (as adjusted) shall remain the same. Any adjustment under this
Section 8(a) shall become effective at the close of business on the
date the subdivision or combination becomes effective, or as of the
record date of such dividend, or in the event that no record date is
fixed, upon the making of such dividend.
(b) Reclassification, Reorganization and Consolidation. In case
of any reclassification, capital reorganization, or change in the
Common Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above),
then, as a condition of such reclassification, reorganization, or
change, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be
delivered to the Holder, so that the Holder shall have the right at
any time prior to the expiration of this Warrant to purchase, at a
total price equal to that payable upon the exercise of this Warrant
(subject to adjustment of the Exercise Price as provided in Section
8), the kind and amount of shares of stock and other securities and
property receivable in connection with such reclassification,
reorganization, or change by a holder of the same number of shares of
Common Stock as were purchasable by the Holder immediately prior to
such reclassification, reorganization, or change. In any such case
appropriate provisions shall be made with respect to the rights and
interest of the Holder so that the provisions hereof shall thereafter
be applicable with respect to any shares of stock or other securities
and property deliverable upon exercise hereof, and appropriate
adjustments shall be made to the purchase price per share payable
hereunder, provided the aggregate purchase price shall remain the
same.
(c) Notice of Adjustment. When any adjustment is required to be
made in the number or kind of shares purchasable upon exercise of the
Warrant, or in the Exercise Price, the Company shall promptly notify
the holder of such event and of the number of shares of Common Stock
or other securities or property thereafter purchasable upon exercise
of this Warrant.
<PAGE> 4
(d) Issuance of New Warrant. Upon the occurrence of any of the
events listed in this Section 8 that results in an adjustment of the
type, number or exercise price of the securities underlying this
Warrant, the Holder shall have the right to receive a new warrant
reflecting such adjustment upon the Holder tendering this Warrant in
exchange. The new warrant shall otherwise have terms identical to this
Warrant.
9. Covenants and Conditions.
(a) No Impairment. Pursuant to the terms and conditions of this
Warrant, Company shall: (i) reserve an appropriate number of shares of
Company's Common Stock to facilitate the issuance of shares to Holder
pursuant to this Warrant, (ii) not amend its articles or take any
other action that would materially impair Company's ability to comply
with the terms of the Warrant or otherwise unfairly impair the rights
of the Holder, and (iii) provide Holder with reasonable notice before
Company undertakes any significant corporate action that would have a
material impact upon Holder's rights under the Warrant or upon the
rights of the holders of Common Stock generally.
(b) Registration Rights. The Company and Holder shall enter into
a Registration Rights Agreement simultaneous with the execution of
this Warrant on terms mutually agreeable to both parties.
10. Representations and Warranties. Pursuant to the terms and
conditions of this Warrant, the Company represents and warrants that (i) the
Company is properly organized and structured pursuant to all applicable
corporate laws of the State of Delaware, (ii) the issuance of this Warrant has
been duly authorized by all necessary corporate action of the Company and does
not conflict with the terms any of the bylaws, articles of incorporation or
material agreements of the Company, (iii) the capitalization of the Company (on
a fully diluted basis) is as set forth on Exhibit A hereto and (iv) all reports
and other information filed with the United States Securities Exchange
Commission were, on the date they were filed, complete and accurate in all
material respects, and do not make any material misstatement or omit to state
any facts that are material to the operations, financial results or prospects of
the Company. In addition, the Company has disclosed to Holder all material
changes in the Company's operations, financial results or prospects since the
date of its most recent SEC filing.
11. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
12. No Stockholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
shares of Common Stock issuable on the exercise hereof, including (without
limitation) the right to vote such shares of Common Stock, receive dividends or
other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company. However,
nothing in this Section 12 shall limit the right of the Holder to be provided
the Notices required under this Warrant.
<PAGE> 5
13. Successors and Assigns. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and assigns.
14. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder. Any waiver or amendment effected
in accordance with this Section shall be binding upon each holder of any shares
of Common Stock purchased under this Warrant at the time outstanding (including
securities into which such shares have been converted), each future holder of
all such Shares, and the Company.
15. Notices. All notices required under this Warrant and shall be
deemed to have been given or made for all purposes (i) upon personal delivery,
(ii) upon confirmation receipt that the communication was successfully sent to
the applicable number if sent by facsimile; (iii) one day after being sent, when
sent by professional overnight courier service, or (iv) five days after posting
when sent by registered or certified mail. Notices to the Company shall be sent
to the principal office of the Company (or at such other place as the Company
shall notify the Holder hereof in writing). Notices to the Holder shall be sent
to the address of the Holder on the books of the Company (or at such other place
as the Holder shall notify the Company hereof in writing).
16. Attorneys' Fees. If any action of law or equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which it may be entitled.
17. Captions. The section and subsection headings of this Warrant are
inserted for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
18. Governing Law. This Warrant shall be governed by the laws of the
State of Virginia as applied to agreements among Virginia residents made and to
be performed entirely within the State of Virginia.
<PAGE> 6
IN WITNESS WHEREOF, VCampus Corporation caused this Warrant to be executed by an
officer thereunto duly authorized.
VCAMPUS CORPORATION
By:
-------------------------------
Name:
-------------------------------
Address: 1850 Centennial Park Drive, Suite 200
Reston, VA 20191
Fax Number: (703) 893-1905
Agreed and Accepted:
U S WEST INTERNET VENTURES, INC.
By:
-------------------------------
Name:
-------------------------------
<PAGE> 7
NOTICE OF EXERCISE
To:
The undersigned hereby elects to [check applicable subsection]:
________ (a) Purchase _________________ shares of Common Stock
of _____________, pursuant to the terms of the
attached Warrant and payment of the Exercise Price
per share required under such Warrant accompanies
this notice;
OR
________ (b) Exercise the attached Warrant for [all of the
shares] [________ of the shares] [cross out
inapplicable phrase] purchasable under the Warrant
pursuant to the net exercise provisions of Section 5
of such Warrant.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
-----------------------------------------
By:
[NAME]
Address:
Date:
Name in which shares should be registered:
<PAGE> 8
EXHIBIT A -- CAPITALIZATION OF VCAMPUS CORPORATION
As of April 20, 2000
<TABLE>
<CAPTION>
Instrument Shares
<S> <C>
Common Stock 7,675,001
Preferred Stock - Series C 623,339
Preferred Stock - Series D 1,073,370
Preferred Stock - Series E 141,913
Stock Warrants 2,441,532
Stock Options 1,601,359
Total: 13,556,514
</TABLE>
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EXHIBIT 10.53
VCAMPUS CORPORATION
BOARD NOMINATION AND OBSERVER RIGHTS
April 20, 2000
US WEST Internet Ventures, Inc.
Ladies and Gentlemen:
This letter is to confirm that for so long as US WEST Internet Ventures,
Inc. ("US West") or affiliated entities holds at least 200,000 shares of Common
Stock (as adjusted for stock splits, etc.) of VCampus Corporation (the
"Company"), a designee of US West, which designee shall be reasonably acceptable
to the Company, shall have the right to, at US West's option, either: (1) be
included as a management nominee for election to the Board of Directors of the
Company, or (2) attend, participate in, and receive all notices and materials
provided to the members of the Board of Directors of the Company and at all
meetings of the Board of Directors of the Company. With respect to the Board
observation rights only, in the event the Board of Directors determines in good
faith that the presence of such person would violate the Company's
attorney-client privilege, would compromise confidential information of the
Company or could cause competitive harm to the Company, such person shall be
excluded from such portion of the meeting as the Board of Directors shall
designate.
In addition, so long as US West has the right to a nominee or board
observer as set forth above, it shall be entitled to have reasonable access to
the Company's management, including at least the ability to ask questions of,
and receive answers from, senior management of the Company about its operations,
business strategy and financial results.
This letter agreement shall terminate and be of no further force or
effect upon the earliest of (a) the third anniversary of the date of this letter
agreement or (b) the closing of the sale, conveyance, or other disposition or
encumbrance all or substantially all of the Company's assets or business or the
merger into or consolidation with any other entity (other than a wholly-owned
subsidiary corporation) or any other transaction or series of related
transactions in which more than fifty percent (50%) of the voting power of the
Company is disposed of (other than a merger effected exclusively for the purpose
of changing the domicile of the Company).
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If the foregoing accurately sets forth our agreement with respect to
this matter, please execute below where indicated and return a copy to me.
Sincerely,
VCAMPUS CORPORATION
By:
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Name:
Title:
ACCEPTED AND AGREED:
US WEST Internet Ventures, Inc.
By:
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Name:
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Title:
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