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EXHIBIT 10.59
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is dated effective as of May 29, 2001,
by and between VCampus Corporation, a Delaware corporation ("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 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.
"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 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 shares of Common Stock or Warrant Shares
shall only be treated as Registrable Securities until the earlier of such time
as (i) all of such shares may be sold under Rule 144 within a ninety (90) day
period, or (ii) such earlier time as all of such shares have been sold pursuant
a Registration Statement.
"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).
"Securities Act" shall mean the Securities Act of 1933.
"Warrant" shall mean the warrant to purchase shares of the Company's Common
Stock issued to the Purchasers on the date hereof.
2. Mandatory Registration. Subject to the terms of this Section 2 and
Section 4, the Company shall, as expeditiously as practicable, use its best
efforts to effect the registration under the Securities Act of all the
Registrable Securities for sale, all to the extent required to permit the
disposition of the Registrable Securities so registered for a period of up to
one year from the date hereof. In satisfaction of this mandatory registration
obligation, the Company agrees to include the Registrable Securities in the
current registration currently in process for certain other holders of the
Company's securities.
3. Registration Procedures. The Company agrees to:
(a) prepare and file with the SEC a Registration Statement with respect to
the Registrable 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 more than one
year from the date hereof (the "Registration Period");
(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 for the Registration
Period;
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(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 of 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 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
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(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 3(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 3(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 3(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.
4. 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, if required), 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 3(d),
shall be paid by Company, except that:
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(a) all such expenses in connection with any amendment or supplement
to a Registration Statement or prospectus required to be filed pursuant to
Section 2 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 or disbursements of
counsel for any Holder.
5. 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 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. 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
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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 5 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 5 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 5(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.
6. 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 75 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
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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;
(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 Holders shall make no
offers or sales of shares pursuant to such Registration Statement other than by
means of such revised prospectus.
7. 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.
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.
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(ii) If to Company, at
VCampus Corporation
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Suite 300
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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
and Warrant, represents the complete agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein. This
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Agreement supersedes all prior agreements and understandings between the parties
with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement as of the date first above written.
VCAMPUS CORPORATION
By:
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Name:
Title:
PURCHASERS:
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(Signature)
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(Print Name)
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