Document:

Exhibit
10.83

 

VCAMPUS
CORPORATION

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (the “Agreement”) is entered into as of the
            day of May
2003, by and among VCampus Corporation, a Delaware corporation (the “Company”),
and the purchasers listed on Exhibit A hereto (the “Purchasers”).

 

WHEREAS, the
Company desires to enter into this Agreement with the Purchasers to sell and
issue preferred stock and warrants to the Purchasers; and

 

WHEREAS, the
Purchasers desire to enter into this Agreement to acquire preferred stock and
warrants of the Company on the terms and conditions set forth herein;

 

NOW, THEREFORE, in
consideration of the mutual promises, representations, warranties, covenants
and conditions set forth in this Agreement, the parties to this Agreement
mutually agree as follows:

 

1.                                      Authorization
and Sale.

 

1.1                               Authorization.
The Company has authorized the issuance and sale to the Purchasers of:

 

(a)                                                         Up
to 30,000 shares of its Series H Convertible Preferred Stock, $0.01 par value
per share (the “Series H Preferred Stock”), having substantially the rights,
preferences, privileges and restrictions set forth in the Certificate of
Designations of Series H Convertible Preferred Stock in substantially the form
attached hereto as Exhibit B (the “Certificate of Designations”); and

 

(b)                                                        warrants
for the purchase of a number of shares of common stock equal to 25% of the
number of shares of common stock initially issuable upon conversion of the
Series H Preferred Stock purchased hereunder, in substantially the form
attached hereto as Exhibit C (the “Warrants”).

 

1.2                               Sale.
Subject to the terms and conditions hereof, each Purchaser agrees to purchase
from the Company, and the Company agrees to sell and issue to such Purchaser,
the number of shares of Series H referred Stock at a per share purchase price
of $240.00 (the “Shares”) and the
number of Warrants to purchase shares of common stock as set forth on Exhibit
A attached hereto.   Each share of
Series H Preferred Stock shall initially be convertible into one hundred (100)
shares of common stock.

 

2.                                      Closings;
Delivery.

 

2.1                               Closings.
The closing of the purchase and sale of the Shares and Warrants under this
Agreement shall take place at 2:00 p.m. (Eastern time) on May
     , 2003 at the offices of Wyrick Robbins Yates
& Ponton LLP, 4101 Lake Boone Trail, Suite 300, Raleigh, North

 

 

Carolina, or at such
other time and place as the Company and the Purchasers may agree.  Additional Purchasers may enter into this
Agreement with the Company’s consent at additional closings (each closing
hereunder, a “Closing”).

 

2.2                               Delivery.
At each Closing, subject to the terms and conditions hereof, the Company will
deliver to the Purchasers certificates representing the Shares and the Warrants
to be purchased by the Purchasers from the Company at the Closing, dated the
date of the Closing, against payment of the purchase price therefor payable as
of the date of such Closing by wire transfer.

 

3.                                      Representations
and Warranties of the Company. The Company hereby represents and
warrants to each Purchaser as follows.

 

3.1                               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 and as currently proposed to be
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.

 

3.2                               Capitalization.   The authorized and outstanding capital of the
Company, as of April 30, 2003, consisted of: 
1,200,000 shares of Series D Convertible Preferred Stock, $0.01 par
value per share, 1,013,809 of which are issued and outstanding; 1,000,000
shares of Series C Convertible Preferred Stock, $0.01 par value per share,
611,522 shares of which are issued and outstanding; 3,000,000 shares of Series
E Convertible Preferred Stock, 584,835 of which are issued and outstanding;
3,000,000 shares of Series F Convertible Preferred Stock, all of which are
issued and outstanding; 1,458,413 shares of Series F-1 Convertible Preferred
Stock, all of which are issued and outstanding; 60,000 shares of Series F-2
Convertible Preferred Stock, 27,578 of which are issued and outstanding; 80,000
shares of Series G Convertible Preferred Stock, 78,041 of which are issued and
outstanding, 201,587 shares of undesignated and unissued Preferred Stock, $0.01
par value per share; and 36,000,000 shares of common stock, $0.01 par value per
share, 1,581,306 of which were issued and outstanding.  Prior to Closing the Company will have filed
the Certificate of Designations for the Series H Preferred Stock in Delaware
authorizing up to 30,000 shares of Series G Preferred Stock, none of which will
be outstanding prior to Closing.

 

All of
the outstanding shares of common stock and preferred stock 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
(i) the Shares for issuance as contemplated hereby, (ii) a sufficient
number of shares of common stock for issuance upon conversion of the Shares
(the “Conversion Shares”), subject to adjustment pursuant to the terms of the
Certificate of Designations, and (iii) a sufficient number of shares of common
stock for issuance upon exercise of the Warrants (the “Warrant Shares”).  Except for the conversion rights associated
with the Series C, D, E, F,  F-1, F-2, G
and H

 

2

 

Preferred Stock and the
rights created under this Agreement and except as disclosed in the reports and
documents filed by the Company prior to the date of this Agreement under the
Securities Act of 1933, as amended (the “Securities Act”), and the Securities
Exchange Act of 1934, as amended (the “SEC Filings”), 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.

 

3.3                               Authorization.   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 Shares, Conversion Shares, the Warrants and the Warrant Shares
(collectively, 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.

 

3.4                               Validity of the Shares.   The Shares and Warrants, 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 Designation and the
Warrants, will be validly issued, and fully paid and nonassessable and will be
free of any liens or encumbrances; provided, however, that such securities will
be subject to restrictions on transfer under state and/or federal securities
laws as set forth herein and subject to certain other restrictions, including
restrictions imposed pursuant to Nasdaq Marketplace Rules, as set forth in the
Certificate of Designations and the Warrants.

 

3.5                               Compliance with Other
Instruments.   The Company is not in violation of any provisions of its
Certificate of Incorporation or its Bylaws as amended, or 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,
the execution, delivery and performance of this agreement and the issuance and
sale of the Shares and Warrants pursuant hereto and, subject to Nasdaq
shareholder approval rules, the issuance of the Conversion Shares and the
Warrant Shares pursuant to the Certificate of Designations and the Warrants,
respectively, 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.

 

3.6                               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 Securities, or the consummation
of any other transaction contemplated hereby, have been obtained, except for
notices required to be filed with the SEC, the NASD and certain state
securities commissions thereafter, which notices will be filed on a timely
basis.

 

3

 

3.7                               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.

 

3.8                               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.

 

4.                                      Representations
and Warranties of the Purchasers. Each Purchaser hereby represents and
warrants to the Company as follows:

 

4.1                               Power
and Authority. It has the requisite power and authority to enter into
this Agreement, to purchase the Securities and to carry out and perform its
obligations under the terms of this Agreement.

 

4.2                               Due
Execution. This Agreement has been duly authorized, executed and
delivered by it, and, upon due execution and delivery by the Company, will be a
valid and binding agreement of it, 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.

 

4.3                               Investment Representations.

 

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

 

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

 

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

 

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

 

(b)                                 The
Purchaser has read this Agreement carefully and, to the extent believed
necessary, has discussed the representations, warranties and agreements and the
applicable limitations upon the Purchaser’s resale of the Securities with
counsel.

 

4

 

(c)                                  The
Purchaser 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.

 

(d)                                 The
Purchaser 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.

 

(e)                                  The
Purchaser has had access to and has read copies of the Company’s SEC Filings
and has had an adequate opportunity to ask questions of and receive answers
from the Company regarding these documents and to obtain such other information
as the Purchaser desires in order to evaluate an investment in the Securities.

 

(f)                                    The
Purchaser is financially able to bear the economic risk of this investment,
including the ability to afford holding the Securities for an indefinite
period, or to afford a complete loss of its investment.

 

(g)                                 The
Purchaser is purchasing the Securities for the Purchaser’s own account, with
the intention of holding the Securities for investment purposes 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.

 

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

 

5

 

(i)                                     Prior
to registration of the Shares by the Company pursuant to the Registration
Rights Agreement referenced in Section 5.6 hereof, the Purchaser 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 or the shares of
common stock underlying the Securities, and there can be no assurance that the
conditions necessary to permit routine sales of such 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 Purchaser 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.

 

(j)                                     The
Purchaser 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 and the shares of common stock issuable upon exercise or conversion
thereof may not be transferred out of the Purchaser’s name unless either such
securities become registered 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
therefore.  The Purchaser further agrees
that there will be placed on the certificates for the Securities and the
underlying common stock, or any substitutions therefore, a legend stating in
substance as follows, that the Purchaser 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 SECURITIES
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.

 

The Purchaser agrees to
indemnify the Company, its directors, officers and employees, and to hold them
harmless from and against any and all liability, damages, costs or expenses,
including reasonable attorney fees, on account of or arising out of (i) any
inaccuracy in the Purchaser’s representations and warranties hereinabove set
forth; (ii) the disposition of any Securities or common stock which it will
receive, contrary to its foregoing representations and warranties; and (iii)
any action, suit or proceeding based upon either the claim that the Purchaser’s
representations or warranties were inaccurate or misleading or otherwise cause
for obtaining damages or redress from the Company, its directors, officers or
employees, or the disposition of any portion of the Securities or common stock.

 

6

 

4.4                               Government
Consents. No consent, approval or authorization of, or designation,
declaration or filing with, any state, federal or foreign governmental
authority on the part of such Purchaser because of any special characteristic
of such Purchaser is required in connection with the valid execution and
delivery of this Agreement by such Purchaser or the consummation by such
Purchaser of the transactions contemplated hereby; provided, however, that such
Purchaser makes no representations as to compliance with applicable state
securities laws.

 

4.5                               Placement Fee.  To the extent the Purchaser is purchasing
Shares through a placement agent, the Purchaser understands that the Company
might agree to pay such placement agent a placement fee of up to 6% for its
placement services, payable in cash or securities at the election of the  Company.

 

5.                                      Conditions
to the Purchaser’s Obligations at the Closing. The obligations of a
Purchaser to purchase the Securities at the Closing are subject to the
fulfillment on or before such Closing of each of the following conditions:

 

5.1                               Representations
and Warranties. The representations and warranties of the Company
contained in Section 3 shall be true in all material respects on and as of the
Closing with the same force and effect as if they had been made at the Closing.

 

5.2                               Performance.
The Company shall have performed and complied in all material respects with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it on or before the Closing.

 

5.3                               Qualifications.
All authorizations, approvals or permits, if any, of any governmental authority
or regulatory body of the United States or of any state that are required prior
to and in connection with the lawful issuance and sale of the Securities
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the Closing.

 

5.4                               Legal
Investment. At the time of the Closing, the purchase of the Securities
by the Purchaser hereunder shall be legally permitted by all laws and
regulations to which it or the Company is subject.

 

5.5                               Proceedings
and Documents. All corporate and other proceedings in connection with
the transactions contemplated at the Closing hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to the Purchaser, and the Purchaser shall have received all
such counterpart originals or certified or other copies of such documents as it
may reasonably request.

 

5.6                               Registration
Rights Agreement.  The Company
shall have executed and delivered a Registration Rights Agreement to the
Purchaser, in substantially the form attached hereto as Exhibit D,
granting registration rights with respect to the Conversion Shares and the
Warrant Shares.

 

7

 

6.                                      Conditions
to the Company’s Obligations at the Closing. The obligations of the
Company to issue and sell Securities at the Closing are subject to the
fulfillment on or before the Closing of each of the following conditions:

 

6.1                               Representations
and Warranties. The representa­tions and warranties of the Purchasers
contained in Section 4 shall be true in all material respects on and as of the
Closing with the same force and effect as if they had been made at the Closing.

 

6.2                               Performance.
The Purchasers shall have performed and complied in all material respects with
all agreements and conditions contained in this Agreement required to be
performed or complied with by them on or before the Closing.

 

6.3                               Qualifications.
All authorizations, approvals or permits, if any, of any governmental authority
or regulatory body of the United States or of any state that are required prior
to and in connection with the lawful issuance and sale of the Securities
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the Closing.

 

6.4                               Legal
Investment. At the time of the Closing, the purchase of the Securities
by the Purchasers hereunder shall be legally permitted by all laws and
regulations to which it or the Company is subject.

 

7.                                      Miscellaneous.

 

7.1                               Entire
Agreement; Effectiveness. This Agreement and the documents referred to
herein constitute the entire agreement among the parties, and no party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or
therein.  The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.  Nothing in
this Agreement, express or implied, is intended to confer upon any third party
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

 

7.2                               Governing
Law. This Agreement shall be governed by and construed under the laws
of the State of Delaware as applied to agreements among Delaware residents,
made and to be performed entirely within the State of Delaware.

 

7.3                               Counterparts;
Facsimiles.  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.  Delivery by facsimile
transmission of a signature page hereto shall constitute execution hereof.

 

7.4                               Headings.  The headings used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.

 

7.5                               Notices.  Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery or upon deposit

 

8

 

with the United States
Post Office, by registered or certified mail, postage prepaid, or sent by
confirmed telecopy, addressed (a) if 
the Company, at:

 

VCampus
Corporation

1850
Centennial Park Drive, Suite 200

Reston,
Virginia  20191

Attention:  Chief Financial Officer

 

With a
copy to:

Kevin
A. Prakke, Esq.

Wyrick
Robbins Yates & Ponton LLP

4101
Lake Boone Trail, Suite 300

Raleigh,
North Carolina  27607-7506

 

or at such other address
as the Company shall have furnished to a Purchaser in writing, and (b) if
to a Purchaser, at its address on the books and records of the Company.

 

7.6                               Attorneys’
Fees.  Should any litigation or
arbi­tra­tion be commenced between the parties hereto concerning this
Agreement, the party prevailing in such litigation or arbitration shall be
entitled, in addition to such other relief as may be granted, to a reasonable
sum for attorneys’ fees and costs in such litigation or arbitration, which fees
and costs shall be determined by the court or arbitrator, as the case may be.

 

7.7                               Survival.
 The representations, warranties,
covenants and agreements made herein shall survive any investiga­tion made by
any Purchaser and the Closing.  All
statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties made by the Company hereunder as of the date of
such certificate or instrument.

 

7.8                               Severability.
 In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall to the extent
practicable, be modified so as to make it valid, legal and enforceable and to
retain as nearly as practicable the intent of the parties, and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

7.9                               Delays
or Omissions.  No delay or
omission to exercise any right, power or remedy accruing to the Company or a
Purchaser or any subsequent holder of any Securities upon any breach, default
or noncompliance of a Purchaser, any subsequent holder of any Securities or the
Company under this Agreement, the Certificate of Designations or the Warrant
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring.  It is further agreed that
any waiver, permit, consent or approval of any kind or character on the part of
the Company or a Purchaser of any breach, default or noncompliance under this
Agreement, the Certificate of Designations or the Warrant or any waiver on the
Company’s or a Purchaser’s part of any provisions or conditions of this

 

9

 

Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing and that all remedies, either under this Agreement, the
Certificate of Designations or the Warrants, by law, or otherwise afforded to
the Company and the Purchasers, shall be cumulative and not alternative.

 

7.10                        Information
Confidential.   Each Purchaser
acknowledges that this Agreement and all attachments hereto are confidential
and for such Purchaser’s use only, and it will refrain from using such
information and any Company confidential information obtained by it pursuant to
this Agreement (collectively, “Confidential Information”) or reproducing, disclosing
or disseminating Confidential Information to any other person (other than its
employees, affiliates, agents or partners having a need to know the contents of
such information and its attorneys), except in connection with the enforcement
of rights under this Agreement, unless the Company has made such information
available to the public generally or it is required by a governmental body to
disclose such information.

 

7.11                        Amendments
and Waivers.  Except as
otherwise expressly provided herein, any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively
and either for a specified period of time or indefinitely) with the written consent
of the Company and the Purchaser to be bound, or persons holding a majority of
the Securities, on an as-converted to or exercised for common stock basis.  Any amendment or waiver effected in
accordance with this Section shall be binding upon the Purchaser and each
transferee of the Securities.

 

7.12                        Expenses.  The Company and each Purchaser shall be
responsible for its own costs and expenses, including “due diligence”
investigation and attorneys’ fees and expenses, incurred in connection with the
preparation, execution and delivery of this Agreement and other related
documentation.

 

The Next
Page is the Signature Page.

 

10

 

IN WITNESS WHEREOF,
the parties have executed this Securities Purchase Agreement as of the date
first above written.

 

	
  COMPANY:

  	
  VCAMPUS
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
							

 

11

 

EXHIBIT
A

 

SCHEDULE
OF PURCHASERS

 

	
  Purchasers

  	
   

  	
  Amount

  Invested

  	
   

  	
  Series H

  Shares

  	
   

  	
  Common

  Stock

  Initially

  Issuable

  Upon

  Conversion

  	
   

  	
  Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
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12

 

EXHIBIT
B

 

SERIES H CERTIFICATE OF DESIGNATIONS

 

13

 

EXHIBIT
C

 

FORM
OF WARRANT

 

14

 

EXHIBIT
D

 

REGISTRATION
RIGHTS AGREEMENT

 

15Exhibit
10.84

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SUCH ACT.

 

WARRANT TO PURCHASE COMMON STOCK

of

VCAMPUS
CORPORATION

 

This Warrant (the “Warrant”)
is issued to                                 
or his permitted assigns (“Holder”) by VCampus Corporation, a Delaware
corporation (the “Company”), on May       ,
2003  (the “Warrant Issue Date”) for
consideration of $5.00 in the aggregate, receipt of which is hereby
acknowledged.

 

1.                                       Purchase
Shares.  Subject to the terms and
conditions hereinafter set forth, the Holder is entitled, upon surrender of
this Warrant at the principal office of the Company (or at such other place as
the Company shall notify the holder hereof in writing), to purchase from the
Company up to                      
[that number of shares equal to 25% of Common
Stock issuable upon exercise of the Series H shares purchased pursuant to the
Purchase Agreement] shares of Common Stock of the Company (the
“Warrant Shares”) at the Exercise Price (defined below), subject to adjustment
as provided in Section 8 (and subject to adjustment as provided in Section 5 in
the event the Holder elects the “cashless exercise” procedure in Section 5).

 

2.                                       Exercise
Price.  The purchase price for the
Warrant Shares shall be $5.00 per
Warrant Share, as adjusted from time to time pursuant to Section 8 hereof
(the “Exercise Price”).

 

3.                                       Exercise
Period.

 

(a)                                  This
Warrant shall be exercisable commencing immediately upon issuance and ending at
5:00 p.m. on the earlier of: (i) the fifth anniversary of the Warrant Issue
Date; or (ii) fifteen (15) days after the Company notifies the Holder in
writing that the average closing bid price of the Company’s Common Stock on its
Principal Market for twenty (20) consecutive trading days was a price equal to
at least three (3) times the Exercise Price.

 

(b)                                 Notwithstanding
any other provision herein, the Company shall not be obligated to issue any
Warrant Shares upon exercise of this Warrant if and to the extent the issuance
of such Warrant Shares would exceed the number of shares of the Company’s
Common Stock (the “Exchange Cap”) then permitted to be issued without violation
of the rules, regulations or interpretations of the Principal Market, except
that such limitation shall not apply in the event that the Corporation obtains
the approval of its

 

 

stockholders as required
by applicable rules, regulations and interpretations of the Principal Market
for issuances of the Company’s Common Stock in excess of the Exchange Cap.  If and to the extent the Exchange Cap
applies, no Holder shall be issued, upon exercise of this Warrant, shares of
Common Stock in an amount greater than the product of (x) the Exchange Cap
amount multiplied by (y) a fraction, the numerator of which is the number of
Warrant Shares originally obtainable upon exercise of this Warrant and the
denominator of which is the aggregate amount of all Warrant Shares obtainable
upon exercise by all holders of warrants of like tenor issued in connection
with the Company’s Series H Preferred Stock financings (the “Cap Allocation
Amount”).  In the event that any
Holder shall sell or otherwise transfer all or a portion of this Warrant, the
transferee shall be allocated a pro rata portion of such Holder’s Cap
Allocation Amount.  In the event that a
requested exercise would violate the aforementioned rules, the Corporation
agrees to undertake best efforts to obtain such approval within 180 days of
such request for exercise.  For the
purposes of this Warrant, “Principal Market” shall mean the American Stock
Exchange, the New York Stock Exchange, the Nasdaq National Market, or the
Nasdaq Smallcap Market, whichever is at the applicable time the principal
trading exchange or market for the Company’s Common Stock, based upon share
volume.

 

4.                                       Method
of Exercise.  While this Warrant
remains outstanding and exercisable in accordance with Section 3 above,
the Holder may exercise, in whole or in part, the purchase rights evidenced
hereby.  Such exercise shall be effected
by:

 

(a)                                  the
surrender of the Warrant, together with a duly executed copy of the form of
Notice of Exercise attached hereto, to the Secretary of the Company at its
principal offices; and

 

(b)                                 the
payment to the Company of an amount equal to the aggregate Exercise Price for
the number of Warrant Shares being purchased.

 

5.                                       Net
Exercise.  In lieu of exercising
this Warrant pursuant to Section 4, the Holder may elect to receive, without
the payment by the Holder of any additional consideration, Warrant Shares equal
to the value of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
the Notice of Exercise attached hereto indicating such election, in which event
the Company shall issue to the holder hereof a number of Warrant Shares
computed using the following formula:

 

Y (A - B)

X =
             A

 

Where:  X =                                The number of Warrant
Shares to be issued to the Holder pursuant to this net exercise;

 

Y =                                  The
number of Warrant Shares in respect of which the net issue election is made;

 

A =                                The
fair market value of one Warrant Share at the time the net issue election is
made;

 

2

 

B =                                  The
Exercise Price (as adjusted to the date of the net issuance).

 

For purposes of this
Section 5, the fair market value of one Warrant Share as of a particular date
shall be determined as follows: 
(i) if traded on a securities exchange or through the Nasdaq
National Market or the Nasdaq SmallCap Market, the value shall be deemed to be
the average of the closing sale prices of the securities on such exchange over
the five (5) trading day period ending one day prior to the net exercise
election; (ii) if traded over-the-counter, the value shall be deemed to be
the average of the closing bid or sale prices (whichever is applicable) over
the five (5) trading day period ending one day prior to the net exercise; and
(iii) if there is no active public market, the value shall be the fair
market value thereof, as determined in good faith by the Board of Directors of
the Company.

 

6.                                       Certificates
for Shares.  Upon the exercise of
the purchase rights evidenced by this Warrant, one or more certificates for the
number of Warrant Shares so purchased shall be issued as soon as practicable
thereafter (with appropriate restrictive legends, if applicable), and in any
event within ten (10) days of the delivery of the subscription notice.

 

7.                                       Issuance
of Shares.  The Company covenants
that the Warrant Shares, when issued pursuant to the exercise of this Warrant,
will be duly and validly issued, fully paid and nonassessable and free from all
taxes, liens, and charges with respect to the issuance thereof.

 

8.                                       Adjustment
of Exercise Price and Kind and Number of Shares.  The number and kind of securities purchasable upon exercise of
this Warrant and the Exercise Price shall be subject to adjustment from time to
time as follows:

 

(a)                                  Subdivisions,
Combinations and Other Issuances. 
If the Company shall at any time prior to the expiration of this Warrant
(i) subdivide its Common Stock, by split-up or otherwise, or combine its Common
Stock, (ii) issue additional shares of its Common Stock or other equity
securities as a dividend with respect to any shares of its Common Stock, or
(iii) declare a cash dividend with respect to any shares of its Common Stock,
the number of shares of Common Stock issuable on the exercise of this Warrant
shall forthwith be proportionately increased in the case of a subdivision or
stock or cash dividend, or proportionately decreased in the case of a
combination.  Appropriate adjustments
shall also be made to the purchase price payable per share, but the aggregate
purchase price payable for the total number of Warrant Shares purchasable under
this Warrant (as adjusted) shall remain the same.  Any adjustment under this Section 8(a) shall become
effective at the close of business on the date the subdivision or combination
becomes effective, or as of the record date of such dividend, or in the event
that no record date is fixed, upon the making of such dividend.

 

(b)                                 Reclassification,
Reorganization and Consolidation. 
In case of any reclassification, capital reorganization, or change in
the Common Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above), then,
as a condition of such reclassification, reorganization, or change, lawful
provision shall be made, and duly executed documents evidencing the same from
the Company or its successor shall be delivered to the Holder, so that the
Holder shall have the right at any time prior to the expiration of this Warrant
to purchase,

 

3

 

at a total price equal to
that payable upon the exercise of this Warrant (subject to adjustment of the
Exercise Price as provided in Section 8), the kind and amount of shares of
stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of
shares of Common Stock as were purchasable by the Holder immediately prior to
such reclassification, reorganization, or change.  In any such case appropriate provisions shall be made with
respect to the rights and interest of the Holder so that the provisions hereof
shall thereafter be applicable with respect to any shares of stock or other
securities and property deliverable upon exercise hereof, and appropriate
adjustments shall be made to the purchase price per share payable hereunder,
provided the aggregate purchase price shall remain the same.

 

(c)                                  Notice
of Adjustment.  When any adjustment
is required to be made in the number or kind of shares purchasable upon
exercise of the Warrant, or in the Exercise Price, the Company shall promptly
notify the holder of such event and of the number of shares of Common Stock or
other securities or property thereafter purchasable upon exercise of this
Warrant.

 

(d)                                 Issuance
of New Warrant.  Upon the occurrence
of any of the events listed in this Section 8 that results in an adjustment of
the type, number or exercise price of the securities underlying this Warrant,
the Holder shall have the right to receive a new warrant reflecting such
adjustment upon the Holder tendering this Warrant in exchange.  The new warrant shall otherwise have terms
identical to this Warrant.

 

9.                                       Covenants
and Conditions.

 

(a)                                No
Impairment.  Pursuant to the terms
and conditions of this Warrant, Company shall: (i) reserve an appropriate
number of shares of Company’s Common Stock to facilitate the issuance of shares
to Holder pursuant to this Warrant, (ii) not amend its articles or take any
other action that would materially impair Company’s ability to comply with the
terms of the Warrant or otherwise unfairly impair the rights of the Holder, and
(iii) provide Holder with reasonable notice before Company undertakes any
significant corporate action that would have a material impact upon Holder’s
rights under the Warrant or upon the rights of the holders of Common Stock
generally.

 

(b)                                 Registration
Rights.  The Holder shall have the
same registration rights with respect to the Warrant Shares as the holders of
Registrable Securities under that certain Registration Rights Agreement dated
as of the date hereof by and between the Company and the Holder.

 

4

 

10.                                 Representations
and Warranties.  Pursuant to the
terms and conditions of this Warrant, the Company represents and warrants that
(i) the Company is properly organized and structured  pursuant to all applicable corporate laws of the State of
Delaware, (ii) the issuance of this Warrant has been duly authorized by all
necessary corporate action of the Company and does not conflict with the terms
any of the bylaws, articles of incorporation or material agreements of the
Company, and (iii) all reports and other information filed with the United
States Securities Exchange Commission were, on the date they were filed,  complete and accurate in all material
respects, and do not make any material misstatement or omit to state any facts
that are material to the operations, financial results or prospects of the
Company.

 

11.                                 No
Fractional Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant, but in lieu of such fractional shares the Company
shall make a cash payment therefor on the basis of the Exercise Price then in
effect.

 

12.                                 No
Stockholder Rights.  Prior to
exercise of this Warrant, the Holder shall not be entitled to any rights of a
stockholder with respect to the shares of Common Stock issuable on the exercise
hereof, including (without limitation) the right to vote such shares of Common
Stock, receive dividends or other distributions thereon, exercise preemptive
rights or be notified of stockholder meetings, and such holder shall not be
entitled to any notice or other communication concerning the business or
affairs of the Company.  However,
nothing in this Section 12 shall limit the right of the Holder to be provided
the Notices required under this Warrant.

 

13.                                 Successors
and Assigns.  The terms and
provisions of this Warrant shall inure to the benefit of, and be binding upon,
the Company and the Holder and their respective successors and assigns.

 

14.                                 Amendments
and Waivers.  Any term of this
Warrant may be amended and the observance of any term of this Warrant may be
waived (either generally or in a particular instance and either retroactively
or prospectively), with the written consent of the Company and the Holder.  Any waiver or amendment effected in
accordance with this Section shall be binding upon each holder of any shares of
Common Stock purchased under this Warrant at the time outstanding (including securities
into which such shares have been converted), each future holder of all such
Shares, and the Company.

 

15.                                 Notices.  All notices required under this Warrant and
shall be deemed to have been given or made for all purposes (i) upon
personal delivery, (ii) upon confirmation receipt that the communication
was successfully sent to the applicable number if sent by facsimile;
(iii) one day after being sent, when sent by professional overnight
courier service, or (iv) five days after posting when sent by registered
or certified mail.  Notices to the
Company shall be sent to the principal office of the Company (or at such other
place as the Company shall notify the Holder hereof in writing).  Notices to the Holder shall be sent to the
address of the Holder on the books of the Company (or at such other place as
the Holder shall notify the Company hereof in writing).

 

16.                                 Attorneys’
Fees.  If any action of law or
equity is necessary to enforce or interpret the terms of this Warrant, the
prevailing party shall be entitled to its reasonable attorneys’ fees, costs and
disbursements in addition to any other relief to which it may be entitled.

 

5

 

17.                                 Captions.  The section and subsection headings of this
Warrant are inserted for convenience only and shall not constitute a part of
this Warrant in construing or interpreting any provision hereof.

 

18.                                 Governing
Law.  This Warrant shall be governed
by the laws of the State of Delaware as applied to agreements among Delaware
residents made and to be performed entirely within the State of Delaware.

6

 

IN WITNESS WHEREOF, VCampus Corporation caused this
Warrant to be executed by an officer thereunto duly authorized.

 

	
   

  	
  VCAMPUS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  1850 Centennial Park
  Drive, Suite 200

  Reston, Virginia 20191

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax Number: (703)
  654-7311

  
								

 

7

 

NOTICE OF EXERCISE

 

To:

 

	
  The undersigned hereby
  elects to [check
  applicable subsection]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)                                  Purchase
                          
  shares of Common Stock of
                       ,
  pursuant to the terms of the attached Warrant and payment of the Exercise
  Price per share required under such Warrant accompanies this notice;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OR

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)                                 Exercise
  the attached Warrant for [all of the shares]  [             
  of the shares]  [cross out inapplicable phrase]
  purchasable under the Warrant pursuant to the net exercise provisions of
  Section 5 of such Warrant.

  

 

The undersigned hereby
represents and warrants that the undersigned is acquiring such shares for its
own account for investment purposes only, and not for resale or with a view to
distribution of such shares or any part thereof.

 

 

	
   

  	
  WARRANTHOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name in which shares
  should be registered:

  	
   

  

 

8

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