**Exhibit 10.111**

 

**THESECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION OR BY THE SECURITIES REGULATORYAUTHORITY OF ANY OTHER JURISDICTION, NOR HAS ANY COMMISSION OR AUTHORITY PASSEDUPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THECONTRARY IS UNLAWFUL. THE SHARES MAY NOT BE TRANSFERRED OR RESOLD IN THEABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSELSATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE. INVESTORSSHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THISINVESTMENT FOR AN INDEFINITE PERIOD OF TIME.**

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**SUBSCRIPTIONAGREEMENT**

**SeriesB-1 Preferred Stock**

 

**VCAMPUSCORPORATION**

 

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

 

The Subscriber acknowledges that at the time ofissuance the Common Stock will not be registered under the Securities Act of1933 (the “Act”), in reliance upon an exemption from registration contained inthe Act, and that the Company’s reliance upon such exemption is based, at leastpartially, on the Subscriber’s representations and warranties contained in thisSubscription Agreement.

 

2.             Acceptanceor Rejection of Subscription. Subscriber acknowledges and agrees that thissubscription shall not be effective until accepted in writing by the Company,and that the Company reserves the right to reject this subscription in whole orin part. The Company is raising capital through the sale of up to approximately5,000 Shares through one or more offerings, although it reserves the right tosell any number of shares less than the 5,000 Shares authorized. Subscriptionsmay be rejected for insufficient documentation or for such other

 

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

 

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

 

4.             RegistrationRights. The shares of common stock issuable upon conversion of the Sharespurchased hereunder (the “Conversion Shares”), together with the sharesissuable upon exercise of the Warrants (the “Warrant Shares”), shall haveregistration rights pursuant to the Registration Rights Agreement attachedhereto as Exhibit C.

 

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

 

a.             Subscriber is a resident of thestate indicated on the signature page hereof, is legally competent to executethis Agreement, and:

 

(i)                                     ifSubscriber is an individual, has his or her principal residence in such stateand is at least 21 years of age; or

 

(ii)                                  ifSubscriber is a corporation, partnership, trust or other form of businessorganization, has its principal office in such state; or

 

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

 

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

 

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

 

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

 

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e.             The Subscriber is an “accredited investor” as defined inRule 501 of Regulation D promulgated under the Act. Entities that areaccredited investors under Rule 501 include, among others, certain banks,savings and loan associations, registered securities broker-dealers, insurancecompanies, registered investment companies and trusts. Individuals that areaccredited investors under Rule 501 include, among others, any natural personwhose 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 twomost 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 ofreaching the same income level in the current year.

 

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

 

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

 

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

 

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

 

j.              The Subscriber’s overall commitment to investments thatare not readily marketable is not disproportionate to the Subscriber’s networth, and the Subscriber’s investment in the Securities will not cause suchoverall commitment to become excessive.

 

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

 

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l.              Priorto registration of the Shares by the Company pursuant to Section 4 hereof orthe availability of another exemption that might be available to the Subscriber,the Subscriber understands that the provisions of Rule 144 promulgated underthe Act are not available for at least one (1) year to permit resale of theSecurities, and there can be no assurance that the conditions necessary topermit 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 itsprovisions could be made only in limited amounts and in accordance with theterms and conditions of the Rule. The Subscriber further understands that inconnection with sales for which Rule 144 is not available, compliance with someother registration exemption will be required, which may not be available.

 

m.            The Subscriber understands and agrees that stop transferinstructions will be given to the Company’s transfer agent or the officer incharge of its stock records and noted on the appropriate records of the Companyto the effect that the Securities may not be transferred out of the Subscriber’sname unless either the Securities become registered for resale under the Act orit is established to the satisfaction of counsel for the Company that anexemption from the registration provisions of the Act and applicable statesecurities laws is available therefor. The Subscriber further agrees that therewill be placed on the certificates for the Shares and Warrant Shares, or anysubstitutions therefore, a legend stating in substance as follows, that theSubscriber understands and agrees that the Company may refuse to permit the transferof the stock out of its name and that the stock must be held indefinitely inthe absence of compliance with the terms of such legend.

 

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

 

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

 

o.             TheSubscriber did not learn of the investment in the Securities as a result of anypublic advertising or general solicitation.

 

6.             CompanyRepresentations and Warranties. Except as disclosed in the Company’s SECFilings, the Company represents and warrants to the Subscriber as follows:

 

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a.**            ***Organization and Standing.*The Company is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofDelaware, and has all requisite corporate power and authority to own andoperate 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 goodstanding as a foreign corporation, in Virginia and in each other jurisdictionwhere the nature of its activities and of its properties makes suchqualification necessary, except where a failure to do so would not have amaterial adverse effect on the Company.

 

b.**            ***Capitalization.*The authorized and outstanding capital ofthe Company, as of immediately prior to filing of the Certificate ofDesignation of the Series B-1 Preferred Stock, consisted of:  167,586 shares of undesignated and unissuedPreferred Stock, $0.01 par value per share, 5,000 authorized shares of SeriesA-1 Preferred Stock, of which 2,342 shares were issued and outstanding; and36,000,000 shares of Common Stock, $0.01 par value per share, 9,613,512 ofwhich were issued and outstanding.

 

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

 

c.             *Authorization.*Exceptto the extent as may be required under Nasdaq Marketplace Rules to permitconversion in full of the Conversion Shares and Warrant Shares, all corporateaction on the part of the Company and its directors and stockholders necessaryfor the authorization, execution and delivery of this Agreement, theperformance of all the Company’s obligations hereunder and thereunder, and theauthorization, issuance, sale and delivery of the Securities has been taken. ThisAgreement, when executed and delivered by the Company and the respective otherparties thereto, shall constitute a valid and legally binding obligation of theCompany enforceable in accordance with its terms, subject to laws of generalapplication relating to bankruptcy, insolvency and the relief of debtors, rulesand laws governing specific performance, injunctive relief and other equitableremedies.

 

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

 

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

 

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disclosed in the Company’s SEC Filings, of any provisions of anymaterial agreement or any judgment, decree or order by which it is bound or anystatute, rule or regulation applicable to the Company. Subject to thecompliance with such filings as may be required to be made with the SEC, theNational Association of Securities Dealers, Inc. (the “NASD”) and certain statesecurities commissions and except with respect to shareholder approval thatmight be deemed to be required under Nasdaq Marketplace Rules, the execution,delivery and performance of this agreement and the issuance and sale of theShares pursuant hereto, will not result in any such violation or be in conflictwith or constitute a default under any such provisions or result in thecreation of any mortgage, pledge, lien, encumbrance or charge upon any of theproperties or assets of the Company.

 

f.              *GovernmentalConsents.*All consents, approvals, orders or authorization of, orregistrations, qualifications, designations, declarations or filings with, anyfederal or state governmental authority on the part of the Company required inconnection with the valid execution and delivery of this agreement, the offer,sale or issuance of the Shares, or the consummation of any other transactioncontemplated hereby, have been obtained (other than post-sale filings pursuantto applicable state and federal securities law).

 

g.             *Accuracy of Reports.*TheSEC Filings required to be filed by the Company within the year prior to thedate of this Agreement under the Securities Exchange Act of 1934 have been dulyfiled, were in substantial compliance with the requirements of their respectiveforms, were complete and correct in all material respects as of the dates atwhich the information was furnished, and contained (as of such dates) no untruestatement of a material fact or omitted to state a material fact necessary inorder to make the statements made therein, in light of the circumstances underwhich they were made, not misleading.

 

h.             *Disclosure*. Norepresentation or warranty of the Company contained in this Agreement containsany untrue statement of a material fact or omits to state a material factnecessary in order to make the statements contained herein or therein, in lightof the circumstances under which they were made, not misleading.

 

i.              *FinancialStatements and Commission Filings; Undisclosed Liabilities.*

 

(1)           Included in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2004 (the “2004 10-K”) aretrue and complete copies of the audited consolidated balance sheets (the “BalanceSheets”) of the Company as of December 31, 2003 and 2004, and the relatedaudited statements of income, changes in stockholders’ equity and cash flowsfor the years ended December 31, 2002, 2003 and 2004 (the “Financial Statements”),accompanied by the reports of the Company’s auditors. The Financial Statementshave been prepared in accordance with United States generally acceptedaccounting principles (“GAAP”), applied consistently with the past practices ofthe Company (except as may be indicated in the notes thereto), and as of theirrespective dates, fairly present, in all material respects, the consolidatedfinancial position of the Company and the results of its operations as of thetime and for the periods indicated therein. The Company keeps proper accountingrecords in which all material assets and liabilities and all materialtransactions of the Company are recorded in conformity with GAAP.

 

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

 

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

 

j.              *Litigation*. Exceptas 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 contemplatedhereunder will not be, an “investment company” within the meaning of that termunder the Investment Company Act of 1940, as amended, and the rules andregulations of the SEC.

 

l.              *Listing and MaintenanceRequirements Compliance*. Except as disclosed in the Company’s SECFilings, the Company has not received notice (written or oral) from any stockexchange or market on which the Common Stock is listed to the effect that theCompany is not in compliance with the continuing listing or maintenancerequirements of the exchange or market.

 

**m.            *Compliance*. TheCompany 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 applicableto the Company or any of its assets. The Company has all permits, certificates,licenses, approvals and other authorizations required under applicable laws ornecessary in connection with the conduct of its businesses, except where thefailure to have such permits, certificates, licenses, approvals and otherauthorizations would not have a material adverse effect on the Company.**

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

 

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circumstances that would require registration of any of the Securitiesunder the Securities Act of 1933; nor will the Company take any action or stepsthat would require registration of the Securities under the Securities Act of1933 or cause the offering of the Securities to be integrated with otherofferings in a manner that would require such registration.

 

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

 

p.             *Valid Private Placement*. Subject to the accuracy as tofactual matters of each Subscriber’s representations in Section 5 of eachPurchase Agreement, the Securities may be issued to the Subscribers pursuant tothe transaction documents without registration under the Securities Act of 1933or 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 shallbear their own expenses with respect to this Agreement and the transactionscontemplated hereby.

 

9.             CorrectInformation. All information which the Subscriber has provided concerningthe Subscriber or its financial position and the Subscriber’s knowledge offinancial 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 theCompany’s acceptance of the subscription, the Subscriber will immediatelyprovide the Company with such information.

 

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

 

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

 

12.           Form8-K Filing. On or before the fourth business day following the Closing, theCompany shall file a Current Report or Form 8-K with the SEC describing thematerial terms of the transactions contemplated by this Agreement.

 

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**SUBSCRIPTION AGREEMENT SIGNATURE PAGE**

 

INWITNESS WHEREOF, the Subscriber has executed this Subscription Agreementeffective on this the         dayof 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 ofSubscriber (in

exactly the form in whichsecurities are to

be registered and issued)

 
|                                       |   |
|--------------------------------------------|--------|
| Printed  or Typed Name and Title of person |

signing

 

 

**ForCompany Use Only:**

 

**ACCEPTEDeffective on the        day of March 2006 onbehalf of VCampus Corporation for                     Shares of Series B-1 Preferred Stock.**

 
| **By:**    |       |       |
|------------|------------|------------|
| **Name:**  | ** ** | ** ** |
| **Title:** |       |       |

 

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