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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;
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(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
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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
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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
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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.
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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.
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(ii) If to Company, at
VCampus Corporation
Xxxxx 000
0000 Xxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx, CEO
Telecopy Number: (000) 000-0000
with a copy to
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
Suite 300
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
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.
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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:
US WEST Internet Ventures, Inc.
By:
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Name:
Title:
