1
WARRANT
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND THIS WARRANT AND
SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
THEREFOR OR AN APPLICABLE EXEMPTION FROM REGISTRATION THEREFROM
UNDER SAID ACT AND SUCH LAWS.
VCAMPUS CORPORATION
Warrant for the Purchase of Shares
of Common Stock
FOR VALUE RECEIVED and subject to the terms and conditions contained
herein, VCampus Corporation, a Delaware corporation (the "Company"), hereby
certifies that for value received Mastech Corporation, a Pennsylvania
corporation, through its business unit Mastech eVentures, or its permitted
assigns, is entitled to purchase from the Company at any time or from time to
time during the Exercise Period (as defined below) any or all of the Warrant
Shares (as defined below) for the Exercise Price (as defined below). The
Exercise Price shall not be subject to adjustment, except as set forth in
paragraph 3 hereof.
1. Definitions.
As used in this Warrant, the following terms have the respective
meanings set forth below:
"BUSINESS DAY" means any day that is not a Saturday, a Sunday
or a legal holiday in Pittsburgh, Pennsylvania.
"CAPITAL STOCK" means any and all shares, interests,
participations, or other equivalents (however designated) of capital stock, or
any and all equivalent ownership interests.
"COMMON STOCK" means the common stock of the Company, $.01 par
value per share, and any Capital Stock into which such common stock may be
changed on or after the Issue Date and any class or series of Capital Stock of
the Company (regardless of how denominated), that has the right (subject to any
prior rights of any other class or series of stock) to participate in any
distribution of the assets or earnings of the Company without effective or
practical limit as to per share amount and shall also include shares of common
stock of any successor or acquiring corporation referred to in paragraph 3 (c)
received by or distributed to the holders of such Capital Stock in the
circumstances contemplated by paragraph 3(c).
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"CURRENT MARKET PRICE," as of any date with respect to any security,
means the daily market price of such security for the previous Business Day. The
daily market price for each such Business Day shall be (i) the last sale price
on such day on the principal stock exchange or NASDAQ SmallCap Market System
("NASDAQ/SCS") on which such Common Stock is then listed or admitted to trading,
(ii) if no sale takes place on such day on any exchange or NASDAQ/SCS, the
average of the last reported closing bid and asked prices on such day as
officially quoted on any such exchange or NASDAQ/SCS, (iii) if the Common Stock
is not then listed or admitted to trading on any stock exchange or on the
NASDAQ-SCS, the average of the last reported closing bid and asked prices on
such day in the over-the-counter market, as furnished by the National
Association of Securities Dealers Automatic Quotation System or the National
Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged
in the business of reporting such prices, as furnished by any similar firm then
engaged in such business, or (v) if there is no such firm, as furnished by any
member of the National Association of Securities Dealers ("NASD") selected
mutually by the Purchaser and Company or, if they cannot agree upon such
selection, as selected by two such members of the NASD, one of which shall be
selected by the Purchaser and one of which shall be selected by the Company.
"EXERCISE DATE" means the date on which the Holder exercises this
Warrant, in whole or in part.
"EXERCISE PERIOD" means the period commencing on the Issue Date and
ending at 5:00 p.m., Eastern standard time, on the Termination Date.
"EXERCISE PRICE" means the Current Market Price for each Warrant
Share plus 20% of such Current Market Price; provided further, however, and
notwithstanding the foregoing: (i) the Exercise Price shall never exceed $6.125
per Warrant Share; and (ii) the Exercise Price shall never be less than $4.344
per Share ($4.344 determined based upon an approximately 44% premium to the
average closing price of the Common Stock for the 15 trading days ended January
3, 2000).
"HOLDER" means Mastech Corporation or any permitted transferee of
this Warrant.
"ISSUE DATE" means the date upon which this Warrant is originally
issued.
"MERGER TRIGGERING EVENT" has the meaning assigned to that term in
paragraph 3(c).
"PERSON" means any individual, sole proprietorship, partnership,
corporation, limited liability company, joint venture, trust, association,
institution, public benefit corporation, governmental agency or other entity and
the heirs, executors, administrators, legal representatives, successors and
assigns of such Person, as the context may require.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of January 11, 2000, between the Company and Mastech
Corporation
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"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and the regulations promulgated thereunder.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated
as of January 11, 2000, between the Company and Mastech Corporation.
"TERMINATION DATE" means the first anniversary of the Issue Date;
provided, however, that if, on such date, the Company is then required, pursuant
to an effective request therefor by the Holder, to effect, or is in the process
of effecting, a registration under the Securities Act for an underwritten public
offering in which Warrant Shares are, pursuant to the Registration Rights
Agreement, entitled to be included, or if the Company is in default of any
obligations created by this Warrant, the Stock Purchase Agreement or by the
Registration Rights Agreement, the Termination Date shall be deemed to be, and
the right to exercise this Warrant and purchase Warrant Shares shall expire at
5:00 p.m., Eastern standard time, on, the 30th day following the date on which
such registration shall have become effective (but in no event later than 180
days beyond the date this Warrant otherwise would have expired) or on the 30th
day following the date all of such defaults have been cured, as the case may be;
and provided, further, that if an approval or waiver is required to be obtained
from a governmental authority (or a filing with a governmental authority and/or
expiration of a period of time following such filing) in order for an exercise
of this Warrant, in whole or in part, or the issuance of any or all of the
Warrant Shares upon such exercise, to comply with applicable law (including,
without limitation, the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976,
as amended) and the Holder delivers to the Company on or prior to the last date
with respect to which this Warrant can be exercised with respect to such Warrant
Shares a written notification of the Holder's intent to exercise this Warrant
and evidence reasonably satisfactory to the Company that the Holder has made all
filings required to be made by the Holder to obtain such approval or waiver or
to satisfy any other filing requirements, and a request that the Company make
all filings required to be made by the Company to obtain such approval or waiver
or to satisfy any other filing requirements, and the Holder thereafter
diligently continues to attempt to obtain such approval or waiver and/or
expiration of waiting period, then the Termination Date shall be deemed to be,
and the last date on which this Warrant can be exercised with respect to such
Warrant Shares shall be extended through, the date five Business Days after the
date on which a final ruling is made with respect to the filing(s) requesting
such approval or waiver or the expiration of such waiting period, as the case
may be. The Company agrees to provide reasonable assistance to, and cooperate
with, the Holder in making such filings required to be made by the Holder, and
the Company shall make all filings required to be made by the Company, for
obtaining such approvals or waivers or to satisfy any other filing requirements,
as are necessary for the exercise of this Warrant by the Holder not to
constitute a violation of any other law or regulation.
"TRANSACTION CONSIDERATION" has the meaning assigned in paragraph
3(c).
"WARRANT CONSIDERATION AMOUNT" has the meaning specified in Section
2(b) hereof.
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"WARRANT SHARES" means any of the shares of Common Stock issuable
upon exercise of this Warrant. The number of Warrant Shares shall initially be
450,000 shares of Common Stock, subject to adjustment on or after the Issue Date
pursuant only to the provisions of paragraph 3 of this Warrant.
2. Exercise of Warrant.
(a) This Warrant may be exercised during the Exercise Period in
accordance with the vesting schedule set forth on Schedule A attached
hereto, by the Holder by the surrender of this Warrant (with the
subscription duly executed) at the address set forth in paragraph 11(a)
hereof, together with proper payment of the Exercise Price.
Notwithstanding the foregoing, this Warrant shall become fully vested and
immediately exercisable in the event of: (i) a Merger Triggering Event; or
(ii) upon the breach of any covenant or obligation in this Warrant, the
Stock Purchase Agreement or the Registration Rights Agreement if such
breach is not cured within 30 days of notice of such breach delivered to
the Company. Payment for the Warrant Shares to be purchased shall be made
by wire transfer or certified or official bank check payable to the order
of the Company. If this Warrant is exercised in part, this Warrant must be
exercised for a whole number of shares of Common Stock, and the Holder is
entitled to receive a new Warrant covering the number of Warrant Shares in
respect of which this Warrant has not been exercised. Upon such surrender
of this Warrant, the Company will issue a certificate or certificates in
the name of the Holder for the number of shares of Common Stock to which
the Holder shall be entitled. The Company shall not be required to issue a
fractional share of Common Stock upon any exercise of this Warrant, but
the Company shall pay an amount in cash equal to the Current Market Price
for one Warrant Share on the date the Warrant is exercised, multiplied by
the fraction of a Warrant Share that would be issuable on the exercise of
this Warrant.
(b) In the event any Holder elects upon exercise to surrender
this Warrant for payment of the applicable Exercise Price for the shares
being purchased, this Warrant shall be surrendered and canceled. To the
extent any Holder elects to pay all or part of the Exercise Price by
surrendering this Warrant to the Company, the number of purchasable shares
under this Warrant required to be surrendered as payment for the Exercise
Price (the "Warrant Consideration Amount") shall be equal to that number
obtained by dividing (i) that amount of the aggregate Exercise Price that
any Holder elects by written notice to the Company to pay by the
application of this Warrant (such notice setting forth, in addition, the
required reduction in the number of shares purchasable by this Warrant as
calculated and shown in sufficient detail in accordance with the
immediately succeeding clause), by (ii) the Exercise Price per share on
the date of exercise.
(c) In the event of any exercise of the rights represented by
this Warrant, (i) certificates for the shares of Warrant Shares so
purchased shall be dated the date of such exercise and delivered to the
Holder hereof within a reasonable time, not exceeding five Business Days
after such exercise, and the Holder hereof shall be deemed for all
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purposes to be the Holder of the shares of Warrant Shares so purchased as
of the date of such exercise, and (ii) unless this Warrant has expired, a
new Warrant representing the number of shares equal to (A) the number of
shares purchasable under this Warrant less (B) the sum of (1) the number
of shares of Warrant Shares purchased upon exercise and (2) the Warrant
Consideration Amount, if any, shall be issued to the Holder hereof within
such time.
3. Certain Adjustments. The Exercise Price and the kind and number of
shares of Common Stock issuable upon exercise of this Warrant shall be subject
to adjustment as set forth below in this paragraph 3. The Company shall give the
registered Holder notice of any event described below which requires an
adjustment pursuant to this paragraph 3 in accordance with the provisions of
paragraph 4.
(a) Stock Dividends, Subdivisions and Combinations. If at any
time the Company shall:
(i) fix a record date for the purpose of determining the
holders of its Common Stock entitled to receive a dividend payable
in, or other distribution of, additional shares of Common Stock;
(ii) subdivide its outstanding shares of Common Stock into
a larger number of shares of Common Stock;
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock; or
(iv) issue any shares of its capital stock or other
securities by reclassification of the Common Stock (other than
pursuant to paragraph 3(c) below); then the Exercise Price shall be
proportionately decreased in the case of such a dividend or
distribution of additional shares of Common Stock or such a
subdivision, or proportionately increased in the case of such a
combination, or the kind of capital stock or other securities of the
Company which may be purchased shall be adjusted in the case of such
a reclassification of the Common Stock, each on the record date for
such dividend or distribution or effective date of such subdivision,
combination or reclassification, as the case may be, such that the
Holder shall be entitled to receive, upon exercise of this Warrant,
the aggregate number and kind of shares of Common Stock which, if
this Warrant had been fully exercised immediately prior to such
date, it would have owned upon such exercise and been entitled to
receive by virtue of such dividend, distribution, subdivision,
combination or reclassification.
(b) Certain Other Dividends and Distributions. If at any time the
Company shall fix a record date for the purpose of determining the holders
of its Common Stock entitled to receive any dividend or other distribution
(including any such distribution made in connection with a consolidation
or merger, but excluding any distribution referred to in subparagraph (a)
above) of:
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(i) any evidences of indebtedness, any shares of its
capital stock (including Convertible Securities but excluding Common
Stock) or any other securities or property of any nature whatsoever
(including cash but excluding normal cash dividends or cash
distributions permitted under applicable law so long as in each case
such cash is payable solely out of earnings or earned surplus of the
Company); or
(ii) any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any shares of its
capital stock (including Convertible Securities) or any other of its
securities or its property of any nature whatsoever;
then the Exercise Price shall be adjusted to equal the Exercise
Price in effect prior to such distribution or dividend multiplied by
a fraction, (A) the numerator of which shall be (1) the Current
Market Price per share of the Common Stock on such record date minus
(2) the amount allocable to one share of Common Stock of the fair
value of any and all such evidences of indebtedness, shares of
stock, other securities or property or warrants or other
subscription or purchase rights so distributable (as determined in
good faith by the Board of Directors of the Company and, unless
waived by the Holder, supported by an opinion from an investment
banking firm of nationally recognized standing approved by the
Holder, which approval shall not be unreasonably withheld), and (B)
the denominator of which shall be such Current Market Price per
share of Common Stock on such record date. Such adjustments shall be
made whenever such a record date is fixed. A reclassification of the
Common Stock (other than a change in par value, or from par value to
no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed
a distribution by the Company to the holders of its Common Stock of
such shares of such other class of stock within the meaning of this
subparagraph (b) and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common
Stock as a part of such reclassification, such change shall be
deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of
subparagraph (a). The Company shall give to the Holder of this
Warrant not less than twenty (20) days' prior notice of any record
date referred to in this subparagraph (b) in accordance with the
provisions of paragraph 4.
(c) Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc.
(i) In case the Company after the date hereof (A) shall
consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation of such consolidation or merger,
or (B) shall permit any other Person to consolidate with or merge
into the Company and the Company shall be the continuing or
surviving Person but, in connection with such consolidation or
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merger, the Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other
property, or (C) shall transfer all or substantially all of its
properties or assets to any other Person or (D) shall effect a
capital reorganization or reclassification of the Common Stock
(other than a capital reorganization or reclassification for which
adjustment in the Exercise Price is provided in subparagraph 3(a) or
subparagraph 3(b)), then, and in the case of each such transaction,
proper provision shall be made so that, upon the basis and the terms
and in the manner provided in this Warrant, the Holder of this
Warrant shall be entitled (x) upon the exercise hereof at any time
after the consummation of such transaction, to the extent this
Warrant is not exercised prior to such transaction, or is redeemed
in connection with such transaction, to receive at the Exercise
Price in effect at the time immediately prior to the consummation of
such transaction in lieu of the Common Stock issuable upon such
exercise of this Warrant prior to such transaction the stock and
other securities, cash and property to which such Holder would have
been entitled upon the consummation of such transaction if such
Holder had exercised the rights represented by this Warrant
immediately prior thereto, subject to adjustments (subsequent to
such corporate action) as nearly equivalent as possible to the
adjustments provided for in this paragraph 3 or (y) to sell this
Warrant (or, at such Holder's election, a portion thereof) to the
Person continuing after or surviving such event specified in clauses
(A) through (D) above, or to the Company (if the Company is the
continuing or surviving Person) at a sales price equal to the amount
of cash, property and/or the number of shares of Common Stock or
other securities to which a holder of the number of shares of Common
Stock which would otherwise have been delivered upon the exercise of
this Warrant or the portion hereof redeemed would have been entitled
upon the effective date or closing of any such event specified in
clauses (A) through (D) above (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value
equal to the aggregate Exercise Price applicable to this Warrant or
the portion hereof so sold.
(ii) Notwithstanding anything contained in this Warrant to
the contrary, the Company will not effect any of the transactions
described in clauses (A) through (D) of the above subparagraph (i)
unless, prior to the consummation thereof, the surviving Person (if
other than the Company) in any merger or consolidation described in
such clauses, each Person which is to acquire the Company's assets
in any transaction described in clause (c) above, and each Person
(other than the Company) which may be required to deliver any stock,
securities, cash or property upon the exercise of this Warrant as
provided herein, shall assume, by written instrument delivered to,
and reasonably satisfactory to, the Holder of this Warrant, (A) the
obligations of the Company under this Warrant (and if the Company
shall survive the consummation of such transaction, such assumption
shall be in addition to, and, if requested by the Holder, shall not
release the Company from, any continuing obligations of the Company
under this Warrant) and (B) the obligation to deliver to such Holder
such shares of stock, securities, cash or, property as, in
accordance with the foregoing provisions of this paragraph (c), such
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Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such
Person, which counsel shall be reasonably satisfactory to such
Holder, stating that this Warrant shall thereafter continue in full
force and effect and the terms hereof (including, without
limitation, all of the provisions of this paragraph 3) shall be
applicable to the stock, securities, cash or property which such
Person may be required to deliver upon any exercise of this Warrant
or the exercise of any rights pursuant hereto.
(iii) In case any of the transactions described in clauses
(A) through (D) of subparagraph (i) shall be proposed to be effected
(any such transaction a "Merger Triggering Event"), the Holder of
this Warrant may, and the Company agrees that as a condition to the
consummation of any such Merger Triggering Event, the Company shall
secure the right of such Holder to, sell this Warrant (or, at such
Holder's election, a portion thereof) to the Person continuing after
or surviving such Merger Triggering Event, or the Company (if the
Company is the continuing or surviving Person), simultaneously with,
the effective date or closing of such Merger Triggering Event, at a
sale price equal to the amount of cash, property and/or the number
of shares of Common Stock or other securities to which a holder of
the number of shares of Common Stock which would otherwise have been
deliverable upon the exercise of this Warrant or the portion hereof
redeemed would have been entitled upon the effective date or closing
of such Merger Triggering Event (the "Transaction Consideration"),
less the amount or portion of such Transaction Consideration having
a fair value equal to the aggregate Exercise Price applicable to
this Warrant or the portion hereof so sold. In the event that the
Holder of this Warrant exercises its rights under this subparagraph
(iii) to sell this Warrant (or a portion thereof) simultaneously
with the effective date or closing of any such Merger Triggering
Event, the Company shall not effect any such Merger Triggering Event
unless upon or prior to the consummation thereof such amounts of
cash, property, Common Stock, or other securities are delivered to
the Holder of this Warrant. Not less than twenty (20) days' prior
notice of any Merger Triggering Event shall be given to the Holder
of this Warrant in accordance with paragraph 4.
(d) Adjustment of Number of Warrant Shares. Upon each adjustment
of the Exercise Price, as the case may be, pursuant to subparagraph (a) or
(b) of this paragraph 3, this Warrant shall be deemed to evidence the
right to purchase, at the adjusted Exercise Price, that number of shares
of Common Stock obtained by multiplying the number of shares of Common
Stock covered by this Warrant immediately prior to such adjustment by the
Exercise Price in effect prior to such adjustment and dividing the product
so obtained by the Exercise Price in effect after such adjustment. If the
Company shall be in default under any provision of this Warrant so that
shares issued at the Exercise Price adjusted in accordance with the terms
of this Warrant would not be validly issued, the adjustment of number of
shares provided for in the foregoing sentence shall nonetheless be made,
and the Holder of this Warrant shall be entitled to purchase such greater
number of shares at the lowest price at which such shares may then be
validly issued under
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applicable law. Such exercise shall not constitute a waiver of any claim
arising against the Company by reason of its default under this Warrant.
(e) When Adjustments to Be Made. No adjustment in the Exercise
Price shall be required by this paragraph 3 if such adjustment either by
itself or with other adjustments not previously made would require an
increase or decrease of less than 1% in such price. Any adjustment
representing a change of less than such minimum amount which is postponed
shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this paragraph 3 and not previously
made, would result in a minimum adjustment. Notwithstanding the foregoing,
any adjustment carried forward shall be made no later than ten Business
Days prior to the Termination Date. All calculations under this
subparagraph (e) shall be made to the nearest cent. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
(f) Fractional Interests. In computing adjustments under this
paragraph 3, fractional interests in Common Stock shall be taken into
account to the nearest whole share.
(g) When Adjustments Not Required. If the Company shall fix a
record date for the purpose of determining the holders of its Common Stock
entitled to receive a dividend or distribution and shall, thereafter and
before the distribution to stockholders thereof, legally abandon its plan
to pay or deliver such dividend or distribution, then thereafter no
adjustment shall be required by reason of the taking of such record and
any such adjustment previously made in respect thereof shall be rescinded
and annulled.
(h) Certain Limitations. Subject to the provisions of paragraph
6, there shall be no adjustment of the Exercise Price hereunder to the
extent that such adjustment would cause the Exercise Price to be less than
the par value per share of the Common Stock, which par value shall not at
any time while this Warrant is outstanding exceed $.01.
(i) Other Action Affecting Common Stock. In case after the date
hereof the Company shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subparagraphs (a) through
(h) of this paragraph 3, inclusive, and the failure to make any adjustment
would not fairly protect the purchase rights represented by this Warrant
in accordance with the essential intent and principle of this paragraph 3,
then the Exercise Price and/or the number of Warrant Shares shall be
adjusted in such manner and at such time as the Board of Directors of the
Company may in good faith determine to be equitable in the circumstances.
4. Notices.
(a) Notices of Adjustments. Whenever the Exercise Price or the
number of Warrant Shares shall be adjusted pursuant to paragraph 3, the
Company shall forthwith deliver to the Holder a certificate prepared by
the Company, setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was
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calculated (including a description of the basis on which the Board of
Directors of the Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants or
other subscription or purchase rights), specifying the number of Warrant
Shares then issuable hereunder, the Exercise Price after giving effect to
such adjustment and (to the extent applicable) describing the number and
kind of any other shares of stock for which the Warrant is exercisable. In
the event that the Holder shall disagree with any such adjustment or with
the terms of any new agreement to be entered into pursuant to paragraph
3(c), it shall notify the Company thereof and any disagreement shall be
resolved by an investment banking firm of nationally recognized standing
mutually agreeable to the Company and the Holder, or if the Company and
the Holder are unable to agree upon an investment banking firm, an
investment banking firm selected by an investment banking firm chosen by
the Company and an investment banking firm chosen by the Holder.
(b) Notices of Corporate Action. In the event of any of the
following:
(i) any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, which dividend,
distribution or other right affects the rights of the Holder, or
(ii) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger involving the Company and any
other party or any transfer of all or substantially all the assets
of the Company to any other party, or
(iii) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
The Company will mail to the Holder a notice specifying (A) the date or expected
date on which any such record is to be taken for the purpose of such dividend,
distribution or right and the amount and character of any such dividend,
distribution or right and (B) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or other securities) shall be entitled to exchange their shares of Common
Stock (or other securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-up. Such notice shall be
mailed at least twenty (20) days prior to the date herein specified, in the case
of any date referred to in the foregoing subdivision (A), and at least twenty
(20) days prior to the date therein specified, in the case of the date referred
to in the foregoing subdivision (B).
5. Reservation of Warrant Shares. The Company agrees that, upon
commencement of the Exercise Period and at all times prior to the Termination
Date, the Company will at all
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times have authorized and in reserve, and will keep available, solely for
issuance or delivery upon the exercise of this Warrant, the shares of the Common
Stock and other securities and properties as from time to time shall be
receivable upon the exercise of this Warrant, free and clear of all restrictions
on sale or transfer and free and clear of all preemptive rights. The Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holders hereof against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock, free and clear of any
liens, claims, encumbrances and restrictions (other than as provided herein)
upon the exercise of this Warrant, and (c) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.
6. Fully Paid Stock; Taxes. The shares of Common Stock represented by
each and every certificate for Warrant Shares delivered on the exercise of this
Warrant and the payment of the Exercise Price set forth herein shall, at the
time of such delivery, be validly issued and outstanding, fully paid and
nonassessable, and not subject to preemptive rights, and the Company will take
all such actions as may be necessary to assure that the par value or stated
value, if any, per share of the Common Stock is at all times equal to or less
than the then Exercise Price. If the Exercise Price is at any time less than the
par value of the Warrant Shares or if the Warrant at any time is exercisable by
its delivery alone and without payment of any additional consideration, the
Company also covenants and agrees to cause to be taken such action (whether by
decreasing the par value of the Warrant Shares, the conversion of the Warrant
Shares from par value to no par value, or otherwise) as will permit the exercise
of this Warrant without any additional payment by the Holder hereof (other than
payment of the Exercise Price, if any, and applicable transfer taxes, if any)
and the issuance of the Warrant Shares, which Warrant Shares, upon such
issuance, will be fully paid and non-assessable. The Company further covenants
and agrees that it will pay, when due and payable, any and all federal and state
stamp, original issue or similar taxes which may be payable in respect of the
issuance of any Warrant Shares or certificate therefor and that the Warrant
Shares will be otherwise free from all taxes, liens and charges with respect to
issuance.
7. Transferability. Upon execution and delivery of an assignment
instrument substantially in the form attached hereto, an assignee shall be a
party to this Agreement and shall have the rights and obligations of the Holder,
to the extent of such assignment, and the Holder shall be released from its
obligations hereunder to a corresponding extent. Upon the consummation of any
assignment permitted pursuant to this paragraph, the Holder and the Company
shall make appropriate arrangements, so that, if required, new Warrants shall be
issued
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12
to the Holder and the assignee. The Holder shall give the Company prior written
notice of the date that any such assignment shall become effective, which date
shall be no less than ten days after the date such notice is given.
8. Loss, etc., of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity or bond reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of the like
date, tenor and denomination.
9. Holder Not Shareholder. This Warrant does not confer upon the Holder
any right to vote or to consent to or receive notice as a shareholder of the
Company, as such, in respect of any matters whatsoever, or any other rights or
liabilities as a shareholder, prior to the exercise hereof.
10. Surrender. The Holder may at any time surrender all or a portion of
this Warrant for cancellation by transmitting same to the Company at its address
set forth herein accompanied by a written notice setting forth the Holder's
intention to surrender this Warrant (or such portion) for cancellation and upon
such transmittal by the Holder, this Warrant (or such portion) shall become null
and void and of no further force and effect.
11. Notices. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant 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, addressed as
follows:
(a) in the case of the Company, to:
VCampus Corporation
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
Suite 300
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
(b) in the case of the Holder, to:
Mastech Corporation
0000 XxXxx Xxxx
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13
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxxxxx Ingersoll Professional Corporation
One Oxford Centre
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq. and Xxxxx X.
Xxxxxx, Esq.
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, 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, or three Business Days after the same shall have been
deposited in the United States mail. Failure or delay in delivering copies of
any notice, demand, request, approval, declaration, delivery or other
communication to the person designated above to receive a copy shall in no way
adversely affect the effectiveness of such notice, demand, request, approval,
declaration, delivery or other communication.
12. Miscellaneous.
(a) Remedies. The 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 Warrant and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be
adequate. Accordingly, it is agreed that the Holder shall be entitled to
an injunction, restraining order or other equitable relief to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United
States or any state thereof. Such remedies shall be cumulative and
nonexclusive and shall be in addition to any other rights and remedies the
parties may have under this Agreement.
(b) No Inconsistent Agreements. The Company will not on or after
the date of this Warrant enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Holder in
this Warrant, otherwise conflicts with the provisions hereof or would be
violated by the performance of the Company's obligations hereunder. The
Company represents and warrants that, except as set forth on Schedule B,
the rights granted to the Holder hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of the
Company's securities under any such agreements.
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14
(c) Successors and Assigns. Subject to the provisions of
paragraph 7 hereof, this Warrant shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties.
(d) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
(e) Amendments and Waivers. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given without the consent of both the Company and the
Holder.
(f) Headings. The headings of this Warrant have been inserted as
a matter of convenience and shall not affect the construction hereof.
(g) Applicable Law. This Warrant shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
Each party hereto agrees to submit to the nonexclusive jurisdiction of the
courts in the City of Pittsburgh in the Commonwealth of Pennsylvania in
any action or proceeding arising out of or relating to this Agreement.
(h) Registration Provisions. Except as provided in the
Registration Rights Agreement, the Company is not required under the terms
hereof to register any securities issued pursuant hereto, and the
subsequent transfer of any shares issued pursuant hereto may require
registration under the Securities Act as well as under applicable state
laws. In the event the shares issued upon the exercise of this Warrant are
not registered, the Holder acknowledges that any stock certificate
evidencing shares acquired on exercise of this Warrant shall contain a
legend restricting transferability substantially as follows:
THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED AND/OR
QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE
SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION OR
QUALIFICATION IS APPLICABLE. THEREFORE, NO SALE OR TRANSFER OF THIS
SECURITY SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO
GIVE ANY EFFECT TO ANY SUCH TRANSACTION, UNLESS (A) SUCH TRANSACTION
SHALL HAVE BEEN REGISTERED UNDER THE ACT AND QUALIFIED OR APPROVED
UNDER APPROPRIATE STATE SECURITIES LAWS, OR (B) THE ISSUER SHALL
HAVE FIRST RECEIVED AN OPINION OF COUNSEL
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15
REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION, QUALIFICATION
OR APPROVAL IS NOT REQUIRED.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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16
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
in its name by its Chief Executive Officer thereunto duly authorized.
Dated: January , 2000
--
VCAMPUS CORPORATION
By:
--------------------------------------
Name: Xxxxxxxxxx X. Xxxxxx
Title: Chief Executive Officer
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17
SUBSCRIPTION
The undersigned, __________________, pursuant to the provisions of
the foregoing Warrant, hereby agrees to subscribe for and purchase _______
shares of the Common Stock of VCampus Corporation, covered by said Warrant, and
makes payment therefor in full at the price per share provided by said Warrant.
Dated:
---------------------------------------------
(Signature)
---------------------------------------------
(Address)
ASSIGNMENT
FOR VALUE RECEIVED, __________________, hereby sells, assigns and
transfers unto ____________________ the foregoing Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_______________________, attorney, to transfer said Warrant on the books of
VCampus Corporation.
Dated:
---------------------------------------------
(Signature)
---------------------------------------------
(Address)
18
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ____________________ hereby assigns and transfers
unto _______________________ the right to purchase [ ] shares of the Common
Stock of VCampus Corporation by the foregoing Warrant and the rights evidenced
thereby, and does irrevocably constitute and appoint _______________________,
attorney, to transfer said Warrant on the books of VCampus Corporation.
Dated:
----------------------
---------------------------------------------
(Signature)
---------------------------------------------
(Address)
19
SCHEDULE A
The Warrant shall vest in accordance with the following schedule:
(a) 150,000 shares of Common Stock shall vest upon the two (2)
month anniversary date of this Warrant;
(b) 150,000 shares of Common Stock shall vest upon the four (4)
month anniversary date of this Warrant;
(c) 150,000 shares of Common Stock shall vest upon the six (6)
month anniversary date of this Warrant.
