Exhibit 10.111


 


THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION OR BY THE SECURITIES REGULATORY
AUTHORITY OF ANY OTHER JURISDICTION, NOR HAS ANY COMMISSION OR AUTHORITY PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL. THE SHARES MAY NOT BE TRANSFERRED OR RESOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE. INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.


 


SUBSCRIPTION
AGREEMENT


Series
B-1 Preferred Stock


 


VCAMPUS
CORPORATION


 


1.             Subscription.
VCampus Corporation (the “Company”) is authorized to issue and sell up to 5,000
shares of its Series B-1 Convertible Preferred Stock (the “Series B-1 Preferred
Stock”), having substantially the rights, preferences, privileges and
restrictions set forth in the Certificate of Designations of the Series B-1
Preferred Stock in substantially the form attached hereto as Exhibit A.
The undersigned (hereinafter referred to as “Subscriber”) hereby subscribes for
and agrees to purchase the number of shares of Series B-1 Preferred Stock of
VCampus Corporation (the “Company”), par value $0.01 per share, set forth on
the signature page hereto (the “Shares”) in consideration for payment by the
Subscriber of a per Share purchase price of $1,000 (the “Purchase Price”) pursuant
to this Subscription Agreement (the “Agreement”). The Subscriber herewith
tenders the entire amount of such purchase price by check or wire transfer
payable to the order of the Company.


 


The Subscriber acknowledges that at the time of
issuance the Common Stock will not be registered under the Securities Act of
1933 (the “Act”), in reliance upon an exemption from registration contained in
the Act, and that the Company’s reliance upon such exemption is based, at least
partially, on the Subscriber’s representations and warranties contained in this
Subscription Agreement.


 


2.             Acceptance
or Rejection of Subscription. Subscriber acknowledges and agrees that this
subscription shall not be effective until accepted in writing by the Company,
and that the Company reserves the right to reject this subscription in whole or
in part. The Company is raising capital through the sale of up to approximately
5,000 Shares through one or more offerings, although it reserves the right to
sell any number of shares less than the 5,000 Shares authorized. Subscriptions
may be rejected for insufficient documentation or for such other


 

















 


reason as the Company may determine, in its sole discretion, to be in
the best interests of the Company. The Company, in its sole discretion, reserves
the right to close this offering at any time. In the event the Subscriber’s
subscription is accepted by the Company, (the “Closing”) Subscriber’s Shares
shall be issued as of the date specified by the Company at the time of
acceptance.


 


3.             Warrants.
Subscriber shall receive 10-year warrants, (the “Warrants”) in substantially
the form attached hereto as Exhibit B, to purchase a number of shares of
Common Stock equal to a pro rata portion of 1,000,000 shares (based on an
assumed total investment of $2,300,000 for the Series B-1 Preferred Stock). The
Warrants shall become exercisable beginning four years from the date of
issuance at an exercise price equal to the then applicable Conversion Price for
the Shares.


 


4.             Registration
Rights. The shares of common stock issuable upon conversion of the Shares
purchased hereunder (the “Conversion Shares”), together with the shares
issuable upon exercise of the Warrants (the “Warrant Shares”), shall have
registration rights pursuant to the Registration Rights Agreement attached
hereto as Exhibit C.


 


5.             Subscriber’s
Representations and Warranties. Subscriber represents, warrants,
acknowledges and agrees to the following.


 


a.             Subscriber is a resident of the
state indicated on the signature page hereof, is legally competent to execute
this Agreement, and:


 


(i)                                     if
Subscriber is an individual, has his or her principal residence in such state
and is at least 21 years of age; or


 


(ii)                                  if
Subscriber is a corporation, partnership, trust or other form of business
organization, has its principal office in such state; or


 


(iii)                               if Subscriber is a
corporation, partnership, trust or other form of business organization,
Subscriber has not been organized for the specific purpose of acquiring the
Shares.


 


b.             This Agreement is and shall be irrevocable, except that
the Subscriber shall have no obligations hereunder in the event that the
subscription is not accepted by the Company in whole or in part.


 


c.             The Subscriber has read this Agreement carefully and, to
the extent believed necessary, has discussed the representations, warranties
and agreements and the applicable limitations upon the Subscriber’s resale of
the Shares, the Conversion Shares and Warrant Shares with counsel.


 


d.             The Subscriber understands that no federal or state
agency has made any finding or determination regarding the fairness of this
offering, or any recommendation or endorsement of this offering.


 


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e.             The Subscriber is an “accredited investor” as defined in
Rule 501 of Regulation D promulgated under the Act. Entities that are
accredited investors under Rule 501 include, among others, certain banks,
savings and loan associations, registered securities broker-dealers, insurance
companies, registered investment companies and trusts. Individuals that are
accredited investors under Rule 501 include, among others, any natural person
whose individual net worth, or joint net worth with that person’s spouse,
exceeds $1 million; or who had income in excess of $200,000 in each of the two
most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and who has a reasonable expectation of
reaching the same income level in the current year.


 


f.              The Subscriber has received from the Company or others
and has read copies of the Company’s filings with the U.S. Securities and
Exchange Commission (the “SEC”), and has had an adequate opportunity to ask
questions of and receive answers from the Company regarding these documents
(the “SEC Filings”).


 


g.             The
Subscriber represents that the Subscriber, if an individual, has adequate means
of providing for his/her current needs and personal and family contingencies
and has no need for liquidity in his/her investment in this offering.


 


h.             The
Subscriber is financially able to bear the economic risk of this investment,
including the ability to afford holding the Shares, the Conversion Shares, the
Warrants and Warrant Shares (collectively, the “Securities”) for an indefinite
period, or to afford a complete loss of its investment.


 


i.              The Subscriber is purchasing the Securities for the
Subscriber’s own account, and not for the purpose of reselling or otherwise
participating, directly or indirectly, in a distribution of the Securities, and
shall not make any sale, transfer or other disposition of any portion of the
Securities purchased hereby without registration under the Act and any
applicable securities act of any state or unless an exemption from registration
is available under such acts.


 


j.              The Subscriber’s overall commitment to investments that
are not readily marketable is not disproportionate to the Subscriber’s net
worth, and the Subscriber’s investment in the Securities will not cause such
overall commitment to become excessive.


 


k.             The Subscriber understands that an investment in the
Securities is a highly illiquid investment, and that, the Subscriber will have
to bear the economic risk of the investment indefinitely (or at least until
such shares may become registered for resale as provided under this Agreement)
because the Securities have not been registered under the Act and are being
issued pursuant to a private placement exemption under Regulation D, on the
grounds that no public offering is involved. Therefore, the Securities cannot
be offered, sold, transferred, pledged or otherwise disposed of to any person,
unless either it is subsequently registered under the Act and applicable state
securities laws or an exemption from registration is available and the
Subscriber obtains a favorable opinion of the Company’s counsel to that effect.


 


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l.              Prior
to registration of the Shares by the Company pursuant to Section 4 hereof or
the availability of another exemption that might be available to the Subscriber,
the Subscriber understands that the provisions of Rule 144 promulgated under
the Act are not available for at least one (1) year to permit resale of the
Securities, and there can be no assurance that the conditions necessary to
permit routine sales of the Securities under Rule 144 will ever be satisfied,
and, if Rule 144 should become available, routine sales made in reliance on its
provisions could be made only in limited amounts and in accordance with the
terms and conditions of the Rule. The Subscriber further understands that in
connection with sales for which Rule 144 is not available, compliance with some
other registration exemption will be required, which may not be available.


 


m.            The Subscriber understands and agrees that stop transfer
instructions will be given to the Company’s transfer agent or the officer in
charge of its stock records and noted on the appropriate records of the Company
to the effect that the Securities may not be transferred out of the Subscriber’s
name unless either the Securities become registered for resale under the Act or
it is established to the satisfaction of counsel for the Company that an
exemption from the registration provisions of the Act and applicable state
securities laws is available therefor. The Subscriber further agrees that there
will be placed on the certificates for the Shares and Warrant Shares, or any
substitutions therefore, a legend stating in substance as follows, that the
Subscriber understands and agrees that the Company may refuse to permit the transfer
of the stock out of its name and that the stock must be held indefinitely in
the absence of compliance with the terms of such legend.


 


THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL (WHICH
MAY BE COUNSEL FOR THE CORPORATION) REASONABLY SATISFACTORY TO IT THAT SUCH
TRANSFER MAY BE MADE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES
LAWS AND REGULATIONS.


 


n.             The
Subscriber has been given the opportunity to review the Company’s SEC Filings,
and to ask questions of, and receive answers from, Company representatives concerning
the Company and the terms and conditions of the offering and to obtain such
other information as the Subscriber desires in order to evaluate an investment
in the Securities.


 


o.             The
Subscriber did not learn of the investment in the Securities as a result of any
public advertising or general solicitation.


 


6.             Company
Representations and Warranties. Except as disclosed in the Company’s SEC
Filings, the Company represents and warrants to the Subscriber as follows:


 


4

















 


a.             Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to own and
operate its properties and assets and to carry on its business as now conducted.
The Company is duly qualified and authorized to do business, and is in good
standing as a foreign corporation, in Virginia and in each other jurisdiction
where the nature of its activities and of its properties makes such
qualification necessary, except where a failure to do so would not have a
material adverse effect on the Company.


 


b.             Capitalization. The authorized and outstanding capital of
the Company, as of immediately prior to filing of the Certificate of
Designation of the Series B-1 Preferred Stock, consisted of:  167,586 shares of undesignated and unissued
Preferred Stock, $0.01 par value per share, 5,000 authorized shares of Series
A-1 Preferred Stock, of which 2,342 shares were issued and outstanding; and
36,000,000 shares of Common Stock, $0.01 par value per share, 9,613,512 of
which were issued and outstanding.


 


All of
the outstanding shares of Common Stock and Preferred Stock that have been duly
authorized and validly issued are fully paid and nonassessable and were issued
in compliance with all applicable federal and state securities laws. The
Company has duly and validly reserved the Conversion Shares, the Shares and
Warrant Shares for issuance as contemplated hereby. Except as disclosed in the
SEC Filings (including the right of first refusal in favor of the March 2004
investors that does not apply to this financing), there are no outstanding
rights of first refusal, preemptive rights or other rights, options, warrants,
conversion rights or other agreements, either directly or indirectly, for the
purchase or acquisition from the Company of any shares of its capital stock.


 


c.             Authorization. Except
to the extent as may be required under Nasdaq Marketplace Rules to permit
conversion in full of the Conversion Shares and Warrant Shares, all corporate
action on the part of the Company and its directors and stockholders necessary
for the authorization, execution and delivery of this Agreement, the
performance of all the Company’s obligations hereunder and thereunder, and the
authorization, issuance, sale and delivery of the Securities has been taken. This
Agreement, when executed and delivered by the Company and the respective other
parties thereto, shall constitute a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors, rules
and laws governing specific performance, injunctive relief and other equitable
remedies.


 


d.             Validity of the Shares. The
Shares, when issued pursuant to the terms of this Agreement (and the Conversion
Shares and Warrant Shares, when issued pursuant to the terms of the Certificate
of Designations of the Series B-1 Preferred Stock and pursuant to the Warrants,
respectively), will be validly issued, and fully paid and nonassessable and
will be free of any liens or encumbrances; provided, however, that the
Securities will be subject to restrictions on transfer under state and/or
federal securities laws as set forth herein.


 


e.             Compliance with Other
Instruments. The Company is not in violation of any provisions of
its Certificate of Incorporation or its Bylaws as amended, or, except as


 


5

















 


disclosed in the Company’s SEC Filings, of any provisions of any
material agreement or any judgment, decree or order by which it is bound or any
statute, rule or regulation applicable to the Company. Subject to the
compliance with such filings as may be required to be made with the SEC, the
National Association of Securities Dealers, Inc. (the “NASD”) and certain state
securities commissions and except with respect to shareholder approval that
might be deemed to be required under Nasdaq Marketplace Rules, the execution,
delivery and performance of this agreement and the issuance and sale of the
Shares pursuant hereto, will not result in any such violation or be in conflict
with or constitute a default under any such provisions or result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company.


 


f.              Governmental
Consents. All consents, approvals, orders or authorization of, or
registrations, qualifications, designations, declarations or filings with, any
federal or state governmental authority on the part of the Company required in
connection with the valid execution and delivery of this agreement, the offer,
sale or issuance of the Shares, or the consummation of any other transaction
contemplated hereby, have been obtained (other than post-sale filings pursuant
to applicable state and federal securities law).


 


g.             Accuracy of Reports. The
SEC Filings required to be filed by the Company within the year prior to the
date of this Agreement under the Securities Exchange Act of 1934 have been duly
filed, were in substantial compliance with the requirements of their respective
forms, were complete and correct in all material respects as of the dates at
which the information was furnished, and contained (as of such dates) no untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.


 


h.             Disclosure. No
representation or warranty of the Company contained in this Agreement contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.


 


i.              Financial
Statements and Commission Filings; Undisclosed Liabilities.


 


(1)           Included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2004 (the “2004 10-K”) are
true and complete copies of the audited consolidated balance sheets (the “Balance
Sheets”) of the Company as of December 31, 2003 and 2004, and the related
audited statements of income, changes in stockholders’ equity and cash flows
for the years ended December 31, 2002, 2003 and 2004 (the “Financial Statements”),
accompanied by the reports of the Company’s auditors. The Financial Statements
have been prepared in accordance with United States generally accepted
accounting principles (“GAAP”), applied consistently with the past practices of
the Company (except as may be indicated in the notes thereto), and as of their
respective dates, fairly present, in all material respects, the consolidated
financial position of the Company and the results of its operations as of the
time and for the periods indicated therein. The Company keeps proper accounting
records in which all material assets and liabilities and all material
transactions of the Company are recorded in conformity with GAAP.


 


6

















 


(2)           As of their respective filing dates,
the financial statements of the Company included in the SEC Filings required to
be filed by the Company within the year prior to the date of this Agreement
complied as to form in all material respects with then applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with GAAP, applied consistently
with the past practices of the Company, and as of their respective dates,
fairly presented in all material respects the financial position of the Company
and the results of its operations as of the time and for the periods indicated
therein (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q, and Regulations S-K and S-X of
the SEC).


 


(3)           Since December 31, 2004, neither the
Company nor any of the Company’s Subsidiaries has incurred any liabilities or
obligations of any nature, whether or not accrued, absolute, contingent or
otherwise, other than liabilities (i) disclosed in the SEC Filings filed prior
to the date of this Agreement, (ii) adequately provided for in the Balance
Sheets or disclosed in any related notes thereto, (iii) not required under GAAP
to be reflected in the Balance Sheets, or disclosed in any related notes
thereto, (iv) incurred in connection with this Agreement, or (v) incurred in
the ordinary course of business.


 


j.              Litigation. Except
as set forth in the Company’s SEC Filings, there are no claims, actions, suits,
investigations or proceedings pending or, to the Company’s knowledge,
threatened proceedings against the Company or its assets, at law or in equity,
by or before any governmental authority, or by or on behalf of any third party.


 


k.             Investment Company.
The Company is not, and following the Closing of the transactions contemplated
hereunder will not be, an “investment company” within the meaning of that term
under the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC.


 


l.              Listing and Maintenance
Requirements Compliance. Except as disclosed in the Company’s SEC
Filings, the Company has not received notice (written or oral) from any stock
exchange or market on which the Common Stock is listed to the effect that the
Company is not in compliance with the continuing listing or maintenance
requirements of the exchange or market.


 


m.            Compliance. The
Company is in compliance in all material respects with all applicable laws
(including the Sarbanes-Oxley At of 2002 and the rules promulgated thereunder)
and all orders of, and agreements with, any governmental authority applicable
to the Company or any of its assets. The Company has all permits, certificates,
licenses, approvals and other authorizations required under applicable laws or
necessary in connection with the conduct of its businesses, except where the
failure to have such permits, certificates, licenses, approvals and other
authorizations would not have a material adverse effect on the Company.


 


n.             No Integrated Offering.
The Company has not, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under


 


7

















 


circumstances that would require registration of any of the Securities
under the Securities Act of 1933; nor will the Company take any action or steps
that would require registration of the Securities under the Securities Act of
1933 or cause the offering of the Securities to be integrated with other
offerings in a manner that would require such registration.


 


o.             Material Non-Public
Information. Except as disclosed on Schedule 6.o attached hereto,
the Company has not disclosed to the Subscriber any material non-public
information that (i) if disclosed, would reasonably be expected to have a material
effect on the price of the Company’s common stock or (ii) according to
applicable law, rule or regulation, should have been disclosed publicly by the
Company prior to the date hereof, but which has not been so disclosed. The
Subscriber acknowledges and agrees that the Company’s disclosure to him of
material non-public information imposes certain restrictions on his trading in
Company securities.


 


p.             Valid Private Placement. Subject to the accuracy as to
factual matters of each Subscriber’s representations in Section 5 of each
Purchase Agreement, the Securities may be issued to the Subscribers pursuant to
the transaction documents without registration under the Securities Act of 1933
or the securities laws of any state.


 


7.             Assignment.
This Agreement is not transferable or assignable by the Subscriber.


 


8.             Expenses. The Company and the Subscriber shall
bear their own expenses with respect to this Agreement and the transactions
contemplated hereby.


 


9.             Correct
Information. All information which the Subscriber has provided concerning
the Subscriber or its financial position and the Subscriber’s knowledge of
financial and business matters is correct and complete as of the date hereof,
and if there should be any material change in such information prior to the
Company’s acceptance of the subscription, the Subscriber will immediately
provide the Company with such information.


 


10.           Miscellaneous.
This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.


 


11.           Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.


 


12.           Form
8-K Filing. On or before the fourth business day following the Closing, the
Company shall file a Current Report or Form 8-K with the SEC describing the
material terms of the transactions contemplated by this Agreement.


 


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SUBSCRIPTION AGREEMENT SIGNATURE PAGE


 


IN
WITNESS WHEREOF, the Subscriber has executed this Subscription Agreement
effective on this the         day
of March 2006.


 


	
  $

  	
  = total payment
  by Subscriber

  
	
   

  	
   

  
	
   

  	
  = Number of
  Shares of Series B-1 Preferred Stock purchased

  
	
   

  	
   

  
	
  $1,000.00

  	
  = per share
  purchase price

  
	
   

  	
   

  
	
   

  	
  = Number of
  Warrants to be issued to Subscriber

  



 


	
   

  	
   

  	
   

  	
   

  
	
  Signature of
  Subscriber

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address

  



Printed or typed name of
Subscriber (in


exactly the form in which
securities are to


be registered and issued)


 


	
   

  	
   

  
	
  Printed
  or Typed Name and Title of person

  



signing


 


 


For
Company Use Only:


 


ACCEPTED
effective on the        day of March 2006 on
behalf of VCampus Corporation for                     
Shares of Series B-1 Preferred Stock.


 


	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title: