Document:

Exhibit 10.115

 

ACQUISITION AND REORGANIZATION AGREEMENT
 
BETWEEN
 
VCAMPUS CORPORATION
 
AND
 
PROSOFT LEARNING CORPORATION AND COMPUTERPREP, INC.
 
 
April 11, 2006
 

 
ACQUISITION AND REORGANIZATION AGREEMENT
 

This Acquisition and Reorganization Agreement (the “Agreement”)
made this 11th day of April, 2006, by and between Prosoft Learning Corporation, a Nevada
corporation (“PLC”), and its Subsidiary (as defined herein), ComputerPREP, Inc., a Delaware corporation (“CP”), both
of whose addresses are 410 N. 44 Street, Suite 600, Phoenix, Arizona 85008
(PLC and CP, collectively, “Prosoft”), and VCampus
Corporation, a Delaware corporation, whose address is 1850
Centennial Park Drive, Suite 200, Reston, Virginia 20191 (“VCampus”).

 

WHEREAS, Prosoft plans to file a voluntary petition
for reorganization under Chapter 11 of Title 11 of the United States Code in
the immediate future; and

 

WHEREAS, subject to approval by the Bankruptcy
Court, VCampus desires to acquire by itself or through one of its affiliates,
all of the newly issued and outstanding capital stock of Reorganized Prosoft on
the Closing Date, as defined below; and

 

WHEREAS, VCampus and Prosoft desire to enter into this Agreement to set forth more fully certain terms and conditions of the reorganization of Prosoft (the “Reorganization”); and
 

WHEREAS, the parties hereto desire to set forth
herein certain representations, warranties and covenants made by each to the
other, as an inducement to the consummation of the Reorganization, and certain
additional agreements relating thereto;

 

NOW, THEREFORE, for valuable consideration,
including the mutual representations, warranties and covenants herein
contained, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

 

DEFINITIONS
 

“Acquired Assets”  has the meaning set forth in Section 1.2
hereof.

 

“Actual Working Capital”
has the meaning set forth in Section 2.3 hereof.

 

“Adjusted Current
Assets” are current assets defined in GAAP less cash retained by
Prosoft (it being understood that all cash and cash equivalents are retained by
Prosoft but, if the parties negotiate for Reorganized Prosoft to retain any
cash, such included cash will increase Adjusted Current Assets on a
dollar-for-dollar basis) and less 70% of any accounts receivable (as defined by
GAAP) over 90 days old and less 100% of any accounts receivable which to the
knowledge of Prosoft are not collectible or are subject to a defense,
counterclaim or offset. Any accounts receivable excluded from the definition of
Adjusted Current Assets as provided above shall nonetheless be a part of
the assets retained by Reorganized Prosoft and VCampus and/or Reorganized
Prosoft shall be entitled to retain any cash collected thereon without
adjustment to the Working Capital.

 

“Adjusted Current
Liabilities” are current liabilities defined by GAAP which VCampus
specifically agrees to retain within Reorganized Prosoft, which shall
specifically exclude the current portion of Prosoft’s long-term liabilities.

 

“Alternative
Transaction” has the meaning set forth in Section 3.3.3 hereof.

 

“Amortized Note”
has the meaning set forth in Section 2.2.2 hereof.

 

“Auditor” has
the meaning set forth in Section 2.3 hereof.

 

“Balloon Note”
has the meaning set forth in Section 2.2.2 hereof.

 

“Bankruptcy Code”
means Title 11 of the United States Code, sections 101 through 1532.

 

2

 

“Bankruptcy Court”
means the United States Bankruptcy Court for the District of Arizona, with
jurisdiction over the Chapter 11 Case.

 

“Breach” has the
meaning set forth in Section 2.4 hereof.

 

“Business Day”
means any day (other than Saturday or Sunday) upon which commercial banks in
Arizona are open for business.

 

“Chapter 11 Case”
means, collectively, the cases under Chapter 11 of the Bankruptcy Code in which
PLC and CP are the debtors and debtors-in-possession pending before the
Bankruptcy Court, including all adversary proceedings in connection therewith.

 

“Closing”
means the completion of the transactions to occur on or shortly after the
Effective Date as provided herein.

 

“Closing Balance Sheet”
has the meaning set forth in Section 2.3 hereof.

 

“Closing Date”
has the meaning set forth in Section 3.4 hereof.

 

“Confirmation Date”
means the date upon which the Bankruptcy Court enters its order confirming the
Plan.

 

“Confirmation
Order” means the order of the Bankruptcy Court confirming the Plan
in accordance with the Bankruptcy Code and this Agreement.

 

“Disclosure
Statement” means the written disclosure statement that relates to
the Plan, as approved by the Bankruptcy Court pursuant to Section 1125 of
the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure statement
may be amended, modified or supplemented from time to time.

 

“Distributions”
has the meaning set forth in Section 3.2(e) hereof.

 

“Effective Date”
means the last to occur of (a) the first Business Day that is at least
eleven (11) days after the Confirmation Date and on which no stay of the
Confirmation Order is in effect and no appeal of the Confirmation Order has
been made, and (b) the Business Day on which all of the conditions set
forth in Article VI of the Plan have been satisfied or waived.

 

“Employee Benefit
Plan” means any (a) nonqualified deferred compensation or
retirement plan or arrangement, (b) qualified defined contribution
retirement plan or arrangement, (c) qualified defined benefit retirement
plan or arrangement, or (d) 401K plan.

 

“Estimated Working Capital”
has the meaning set forth in Section 2.3 hereof.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended and the regulations
promulgated thereunder.

 

“Excluded Assets”
has the meaning set forth in Section 1.2 hereof.

 

“Executory Contracts”
has the meaning set forth in Section 1.3 hereof.

 

“Existing Capital Stock”
has the meaning set forth in Section 4.1 hereof.

 

“Financial Statements”
has the meaning set forth in Section 5.1.6 hereof.

 

3

 

“GAAP”
means United States generally accepted accounting principles as used by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants, consistently applied and maintained.

 

“Intellectual
Property” means all (a) inventions, patents, patent
applications, patent disclosures, and improvements thereto, (b) trademarks,
service marks, trade dress, logos, trade names, corporate names, website
addresses and domain names, all derivative names relating thereto and
registrations and applications for registration thereof, (c) copyrights
and registrations and applications for registration thereof, (d) mask
works and registrations and applications for registration thereof, (e) computer
software, data, documentation, (f) trade secrets and confidential business
information (including ideas, formulas, compositions, inventions (whether
patentable or unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, e-learning content, copyrightable works, marketing, and business data,
pricing and cost information, business and marketing plans, and customer and
supplier lists and information), (g) other proprietary rights, and (h) copies
and tangible embodiments thereof (in whatever form or medium).

 

“Leases” has the
meaning set forth in Section 1.3 hereof.

 

“Liquidating Trust”
means the Liquidating Trust of the Chapter 11 Estate of Prosoft Learning
Corporation, as defined in the Plan.

 

“New Common
Stock” has the meaning set forth in Section 2.1 hereof.

 

“Ordinary Course of Business” means the ordinary course of business of the
business of Prosoft consistent with past practice (including, without
limitation, with respect to collection of accounts receivable, purchases of inventory
and supplies, repairs and maintenance, payment of accounts payable and accrued
expenses, levels of capital expenditures and operation of cash management
practices generally).

 

“Other Employee Benefit”
means any health or other medical plan or insurance, life insurance, disability
insurance or other material fringe benefit that Prosoft, as of the date of this
Agreement, generally makes available to its employees, other than an Employee
Benefit Plan, as further defined in Section 2.5 and identified on Schedule 2.5.

 

“Personal Property Leases”
has the meaning set forth in Section 1.3 hereof.

 

“Petition Date”
means the date the Petition Pleadings are filed.

 

“Petition
Pleadings” means all Chapter 11 petitions and any and all other
documents necessary to commence the Chapter 11 Case.

 

“Person” means
any natural person, business entity, organization or association.

 

“Plan”
means the Plan of Reorganization related to the Chapter 11 Case, either as
filed with the Bankruptcy Court or as it may be amended, supplemented or
modified from time to time, including all exhibits and schedules annexed
thereto or referenced therein and/or in the supplement thereto which is filed
with the Bankruptcy Court and which contains exhibits thereto.

 

“Plan Related
Documents” means, collectively, the Plan, the Disclosure Statement,
this Agreement, and any other related documents, including the agreement
establishing the Liquidating Trust.

 

“Prosoft” as set
forth above means, collectively, PLC and CP. To the extent, however, that this
Agreement uses the term Prosoft in a context applicable to a point in time
following the Closing, Prosoft shall mean the Chapter 11 estates of PLC and CP
and/or the Liquidating Trust, as appropriate.

 

“Purchase Price”
has the meaning set forth in Section 2.1 hereof.

 

4

 

“Real Property Leases”
has the meaning set forth in Section 1.3 hereof.

 

“Reorganized
Prosoft” means Prosoft Learning Corporation, a Nevada corporation,
and all of its existing Subsidiaries on and after the Effective Date.

 

“Retained Liabilities”
has the meaning set forth in Section 1.4 hereof.

 

“Secured Note
Holders” shall mean DKR SoundShore Oasis Holding Fund Ltd., a
company organized under the laws of Bermuda, DKR SoundShore Strategic Holding
Fund Ltd., a company organized under the laws of Bermuda, and Hunt Capital
Growth Fund II, L.P., a Delaware limited partnership.

 

“Set Off Claim”
has the meaning set forth in Section 2.4 hereof.

 

“Subsidiary”
means any corporation of which the securities having a majority of the ordinary
voting power in electing directors are, at the time of determination, owned by
Prosoft directly or through another Subsidiary. A list of the Subsidiaries of
Prosoft is attached hereto as Exhibit A.

 

“Tax” means all
federal, state, local, or foreign income, gross receipts, capital stock,
franchise, profits, withholding, social security, unemployment, disability,
real property, personal property, stamp, excise, occupation, sales, use,
transfer, value added, alternative minimum, estimated, or other taxes,
including any interest, penalty, or additional charge thereto, whether disputed
or not.

 

“Unassumed Liabilities”
has the meaning set forth in Section 1.4 hereof.

 

“Wait List Liabilities”
has the meaning set forth in Section 2.3 hereof.

 

“Working Capital” is defined to be Adjusted Current Assets
minus Adjusted Current Liabilities.

 

“Working Capital Surplus”
has the meaning set forth in Section 2.3 hereof.

 

In addition to the foregoing definitions,
capitalized terms used herein but not defined herein shall have the respective
meanings provided in the Plan.

 

ARTICLE I

 

TERMS OF
REORGANIZATION

 

1.1           General. The parties to this Agreement have agreed
to the Reorganization of Prosoft which shall be implemented by Prosoft
commencing the Chapter 11 Case wherein, among other things, VCampus will
acquire 100% of the New Common Stock (as defined below) of Reorganized Prosoft.
Specifically, Prosoft shall file the Petition Pleadings and shall propound a
pre-negotiated Plan, in the form of Exhibit B attached hereto,
or in such other form as shall be mutually agreeable to Prosoft and
VCampus.

 

1.2           Acquired Assets. Subject to and upon the terms and conditions
set forth herein, Prosoft and VCampus agree that Reorganized Prosoft shall
retain all the assets of Prosoft, other than the assets specifically excluded
as set forth in Section 1.7 hereof (the “Excluded Assets”), as same shall
exist on the Closing Date, as hereinafter defined (collectively, the “Acquired
Assets”), including but not limited to:

 

1.2.1       (a) All
machinery, appliances, equipment, computers and peripherals, tools, supplies,
leasehold improvements, construction in progress, furniture and fixtures owned
by Prosoft, (b) tangible personal property including, but without
limitation, inventories and supplies, (c) account balances and accounts
receivable, (d) originals of all books, records, ledgers, files,
documents, correspondence, customer lists, creative materials, advertising and
promotional materials, causes of action, telephone and fax numbers, e-mail and
internet addresses; and (e) all software and all contents in all computer
discs, CD Roms, DVDs and hard drives.

 

5

 

1.2.2       All
goods, materials, work-in-process, inventory and equipment owned by Prosoft.

 

1.2.3       Customer
lists and related information.

 

1.2.4       All
of Prosoft’s right, title and interest in and to any other assets located at
its facilities and/or relating to the facilities and the business conducted
thereat.

 

1.2.5       All
of Prosoft’s right, title, and interest in and to, the Intellectual Property,
including, but not limited to, the assets listed on Schedule 1.2.5,
including goodwill associated therewith, licenses and sublicenses granted and
obtained with respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests therein under the
laws of all jurisdictions;

 

1.2.6       All
cooperative advertising credits and market development funds (whether accrued
or receivable).

 

1.2.7       All
licenses, permits, certificates, franchises, consents, waivers, registrations
or other regulatory authorizations issued to Prosoft or any of its Subsidiaries
by state or local governmental authority.

 

1.2.8       All
stock or other equity securities of the Subsidiaries and all corporate records,
minute books, corporate seals and related items with respect to such
Subsidiaries, except those Subsidiaries identified on Schedule 1.2.8.

 

1.2.9       All
warranties, guaranties, security agreements and other collateral in respect of
the Acquired Assets.

 

1.2.10     All
deposits and prepayments received by Prosoft under any of the Leases and/or
Executory Contracts.

 

1.3           Assumed and Assigned Leases and Executory Contracts. Prosoft
shall forthwith take all actions in the Chapter 11 Case necessary to seek an
order from the Bankruptcy Court authorizing it to assume for Reorganized
Prosoft all of Prosoft’s right, title and interest in:

 

(a)         except
for those items that are set forth in Schedule 1.3A, all leases or rental
or occupancy agreements of real property under which Prosoft is lessee or
occupant (subject to amendments, the terms of which shall be disclosed as
necessary and appropriate in the Chapter 11 Case) (the “Real Property Leases”);

 

(b)         except
for those items that are set forth in Schedule 1.3B, all leases of
personal property under which Prosoft is lessee (the “Personal Property Leases”
which together with the Real Property Leases shall be referred to herein as the
“Leases”); and

 

(c)         except
for those items that are set forth in Schedule 1.3C, all contracts,
agreements, employment agreements, purchase orders and similar arrangements
(the “Executory Contracts”).

 

1.4           Unassumed Liabilities. VCampus and Prosoft
agree that the Plan and Plan Related Documents shall provide for the assignment
to and assumption by the Liquidating Trust of all obligations and liabilities
of Prosoft (the “Unassumed Liabilities”) other than the following obligations
and liabilities that shall be specifically accepted, assumed and retained by
Reorganized Prosoft:  (i) those
liabilities and obligations as specifically identified on the Closing Balance
Sheet; (ii) prospective liabilities under the Leases and Executory
Contracts as of the date of the Closing; (iii) any cure amounts due under Section 365
of the Bankruptcy Code for the Leases and Executory Contracts (iv) obligations
of Prosoft with respect to inventory ordered by Prosoft in the Ordinary Course
of Business, but not yet received by Prosoft as of the date of the Closing; (v) the
current portion of employee compensation, withholdings, and Other Employee
Benefits incurred in the Ordinary Course of Business, including but not limited
to accrued salary and vacation for both contract and at will employees (and
specifically excluding any Employee Benefit Plan liabilities); (vi) the
current portion of liabilities owed to governmental entities for taxes or other
similar obligations and (vii) any Wait-List Liabilities (as defined in Section 2.3(d))
assumed post-Closing

 

6

 

by Reorganized Prosoft pursuant
to Section 2.3 (the liabilities and obligations set forth in Section 1.4(i) through
1.4(vii) shall be referred to collectively as the “Retained Liabilities”).
Prosoft and VCampus anticipate that the Retained Liabilities, with the
exception of those described in subparagraph (ii), above, will be accounted for
as part of the calculation of Working Capital. Set forth in Schedule 1.4
is a list of the liabilities described in subsections (i) and (iv), above,
and the amounts of such liabilities as of the date represented on Schedule 1.4,
which amounts are subject to change in the Ordinary Course of Business through
the Closing Date.

 

1.5           Taxes and Prorations. Prosoft and VCampus
anticipate that all taxes and prorations will be accounted for as part of
the calculation of Working Capital. For the avoidance of any doubt, except for
any Retained Liabilities that are addressed in the Working Capital calculation,
Prosoft shall be responsible for all ad valorem taxes or assessments relating
to the Acquired Assets for taxable periods up to and including the Closing
Date, regardless of when the same shall become due and payable, and such taxes
shall be pro-rated between Prosoft and VCampus on and as of the Closing Date or
within a reasonable time thereafter. VCampus shall pay directly to the
appropriate entity its pro-rata share. All expense items including but not
limited to insurance, rents, utility charges, and any prepaid agreements shall
be prorated between Prosoft and VCampus as of the Closing Date. The rents for
periods prior to Closing for the Real Property Leases will be prorated as of
the Closing Date, and VCampus shall reimburse Prosoft for VCampus’ pro rata
share as to rent paid in advance. In the case of rent paid in arrears, Prosoft
shall pay VCampus for the pro-rated period up to the Closing. To the extent not
paid at Closing, VCampus shall have the right to offset any amounts which are
the responsibility of Prosoft as provided in Section 2.4.

 

1.6           Expenses. Prosoft and VCampus shall each
remain liable for their own closing expenses, including attorney’s fees.

 

1.7          Excluded Assets. Anything to the contrary
in Sections 1.1 through 1.6 notwithstanding, the Acquired Assets retained by
Reorganized Prosoft shall exclude:

 

1.7.1       All
cash, bank deposits and/or cash equivalents of Prosoft and its Subsidiaries
(except for any non-U.S. domiciled cash, bank accounts and/or cash equivalents
held by Prosoft or any of its Subsidiaries);

 

1.7.2       Claims
for relief under any of the avoiding powers provided for under Chapter 5 of the
Bankruptcy Code and the Notes;

 

1.7.3       Any
Employee Benefit Plan of Prosoft;

 

1.7.4       Any
leases or contracts specifically set forth on Schedules 1.3A, 1.3B and 1.3C;

 

1.7.5       Any
rights of Prosoft under this Agreement;

 

1.7.6       Any
stock or other equity securities of the Subsidiaries listed on Schedule 1.2.8,
and all corporate records, minute books, corporate seals and related items with
respect to such Subsidiaries;

 

1.7.7       Any
tax attributes of Prosoft; and

 

1.7.8       Any
other assets identified and excluded by VCampus at least three days prior to
the Closing.

 

7

 

ARTICLE II

 

PURCHASE
PRICE

 

2.1           Purchase Price. Subject to adjustments as provided in Section 2.3,
at Closing and subject to the terms of the Plan, the purchase price due from
VCampus to Prosoft for the acquisition of 100% of the newly issued and
outstanding common stock of Reorganized Prosoft (the “New Common Stock”) shall
be Two Million Three Hundred Thousand and No/100 Dollars ($2,300,000) (the “Purchase
Price”). At the Closing, Reorganized Prosoft shall issue, and VCampus (or its
designated Affiliate) shall receive, the New Common Stock.

 

2.2          Payment. The Purchase Price shall be paid
at Closing by VCampus to Prosoft as follows:

 

2.2.1       $2,000,000
in cash, certified funds or wire transfer at Closing to the bank account(s)
designated by Prosoft; and

 

2.2.2       $300,000
of the Purchase Price shall be paid in the form of two 6% promissory
notes, one due and payable in one balloon payment on July 1, 2007 in the form of
note attached hereto as Exhibit 2.2.2A (the “Balloon Note”) and the other
note due and payable in six equal monthly installments of principal and
interest beginning on January 1, 2007 in the form of note attached
hereto as Exhibit 2.2.2B (the “Amortized Note,” and together with the
Balloon Note, the “Notes”).

 

2.3          Purchase Price Adjustments.

 

(a)  The Purchase Price
shall be subject to adjustments, on a dollar-for-dollar basis, to the extent
Prosoft’s Working Capital at Closing is greater or less than zero. For the
avoidance of doubt, any balance sheet liabilities assumed by Reorganized
Prosoft or VCampus hereunder will reduce Working Capital by the amount of the
liabilities assumed. Subject to Bankruptcy Court approval, all transaction
expenses, including all fees and expenses payable to East Wind Advisors,
incurred by Prosoft in connection with the Closing shall be paid out from
either: (1) Prosoft’s cash at or prior to Closing, to the extent
available, with the resulting adjustment to Working Capital; or (2) the
cash portion of the Purchase Price. The Purchase Price shall also be subject to
a downward adjustment of $200,000 to the extent that the PTJ Transaction
referenced in Section 5.1.12.8 hereof is consummated prior to the Closing
Date.

 

(b)  Immediately prior to
Closing, Prosoft will prepare and deliver to VCampus a closing balance sheet
prepared in accordance with GAAP (the “Closing Balance Sheet”) that includes
its good faith estimate (“Estimated Working Capital”) of Working Capital at
Closing in a manner consistent with this Agreement. The Closing Balance Sheet
must be in sufficient detail for VCampus to reasonably be able to verify and
agree with Prosoft’s calculations. If this Working Capital number is less than
zero, then the cash portion of the Purchase Price will be reduced by the amount
less than zero. If this Working Capital number is greater than zero, then the
cash portion of the Purchase Price will be increased by the amount greater than
zero.

 

(c)  Within 60 calendar
days of Closing, VCampus will provide to Prosoft an audited closing balance
sheet calculating the actual Working Capital at Closing (the “Actual Working
Capital”). If Prosoft believes the Actual Working Capital determined by VCampus
is inaccurate, then Prosoft shall within 30 days notify VCampus of its belief
and set forth in reasonable detail the alleged inaccuracy or the items disputed
(including its calculation of the Actual Working Capital). If Prosoft does not
so notify VCampus within the 30-day period, then the Actual Working Capital
number determined by VCampus shall be deemed final and binding on the parties. If
Prosoft does so notify VCampus, then VCampus and Prosoft shall attempt in good
faith to resolve such dispute for 20 days from the notice date. If the parties
are unable to resolve any disputed item during such 20-day period, such
disputed item(s) shall be submitted to a nationally recognized accounting firm
mutually acceptable to the parties (the “Auditor”), which shall be instructed
to arbitrate such disputed item(s) and determine the Actual Working Capital
within 40 days of their engagement by the parties. The resolution of the
disputes by the Auditor so selected shall be set forth in writing and shall be
conclusive and binding upon and non-appealable by the parties. The Auditor’s
fees and expenses shall be the responsibility of the party whose calculation of
the Actual Working Capital number is farthest from the Actual

 

8

 

Working Capital number as
determined by the Auditor. During the period of any dispute with respect to the
Actual Working Capital, VCampus shall provide Prosoft full access to the books,
records and facilities of the business, and shall cooperate with Prosoft to the
extent reasonably requested by Prosoft to investigate the basis for such
dispute.

 

(d)  If Actual Working
Capital less the Estimated Working Capital is less than zero by $5,000 or more,
then the principal balance of the Balloon Note will be immediately reduced by
the amount less than zero. If Actual Working Capital less the Estimated Working
Capital is greater than zero by $5,000 or more (a “Working Capital Surplus”),
then such Working Capital Surplus shall be offset, on a dollar-for-dollar
basis, first by VCampus’ assumption of an equal amount of unassumed Prosoft
liabilities (as selected by VCampus from the pre-approved list of such
liabilities designated by VCampus on Schedule 2.3(d) (the “Wait-List
Liabilities”), and to the extent any Working Capital Surplus remains after such
offset, then such remaining surplus shall be applied as an increase to the
principal balance of the Balloon Note. Any adjustment to the principal balance
of the Balloon Note shall be deemed to be an increase or decrease in principal
as of the date of Closing for purposes of calculating interest. Prior to
completion of the post-closing audit, Prosoft shall be free to negotiate
satisfaction and settlement of any Unassumed Liabilities (including any
Wait-List Liabilities not assumed by Reorganized Prosoft or VCampus).

 

(e)  If the absolute value
of the difference between Actual Working Capital less the Estimated Working
Capital is $5,000 or less, then no adjustment will be made to the principal
balance of the Balloon Note or otherwise.

 

2.4          VCampus’ Right of Set Off. Notwithstanding
any other provision of this Agreement, if Prosoft shall breach the terms of
this Agreement, including any breach of the representations, warranties and
covenants of Prosoft contained herein (a “Breach”), from and after the Closing
the terms of this Section 2.4 shall provide the sole remedy of VCampus. Should
a Breach occur, VCampus shall be entitled to set off and deduct the amount of
its damages and expenses resulting from such Breach (including, without
limitation, attorneys fees) from its financial obligations under the Notes;
provided, however, that VCampus must give Prosoft prior notice of its intent to
set off or deduct (a “Set Off Claim”), which Set Off Claim shall be made, if at
all, no later than one-hundred twenty (120) days after the Closing; and
provided further that any set off or deduction shall be effected first against
the Balloon Note, and then against the latest payment(s) due under the
Amortized Note. Should VCampus assert a Set Off Claim, Prosoft shall notify
VCampus within ten (10) Business Days if it disputes the Set Off Claim. If
the parties cannot reach an agreement regarding the disputed Set Off Claim
within thirty (30) days after Prosoft notifies VCampus that it disputes the Set
Off Claim, either party may submit such disputed Set Off Claim to the
Bankruptcy Court for resolution as a contested matter under the Bankruptcy Code.
Should a payment under the Notes that is subject to the disputed Set Off Claim
come due prior to resolution of the disputed Set Off Claim, VCampus shall make
such payment when and as otherwise due into an interest-bearing escrow account,
to be held pending further written agreement between VCampus and Prosoft, or a
final, non-appealable order of the Bankruptcy Court directing disposition of
the payment.

 

2.5          Employment of Prosoft’s Personnel. Set
forth on Schedule 2.5 is a true, correct and complete list of all
employees of Prosoft, with their name, address, title, salary and benefits to
which they were entitled to receive from Prosoft prior to or upon Closing,
which list also identifies any employment agreement applicable to each such
employee, and also lists Other Employee Benefits offered by Prosoft as of the
date of this Agreement. Prosoft will use reasonable efforts to persuade its
employees to make themselves available for continued employment by Reorganized
Prosoft. VCampus shall use reasonable efforts to interview and review said
current employees of Prosoft prior to the Closing Date; provided, however,
continued employment of Prosoft’s personnel by Reorganized Prosoft shall be in
the sole discretion of VCampus in the exercise of its business judgment. It is
not the intent of this Section 2.5 to make Prosoft’s employees third party
beneficiaries of this Agreement. It is understood by the parties, however, that
any employee of Prosoft whose employment is continued by Reorganized Prosoft
following the Closing will receive credit for their time of employment with
Prosoft for the purpose of determining employee benefit eligibility and vesting
under any Employee Benefit Plan of Reorganized Prosoft or VCampus in which such
employee is entitled to participate. Reorganized Prosoft or VCampus shall
maintain, or provide substantially similar substitutes for, the Other Employee
Benefits listed on Schedule 2.5. VCampus covenants that it will have
established a 401K plan for the employees of Reorganized Prosoft on and after
the Closing, the terms of which shall be reasonably equivalent to those
available to similarly situated employees of VCampus.

 

9

 

ARTICLE III

 

BANKRUPTCY
COURT APPROVAL; CLOSING

 

3.1          Filings with Bankruptcy Court; Plan of Reorganization.
Promptly after the execution of this Agreement, but in no event later than four
(4) Business Days after the date of this Agreement, Prosoft shall commence
the Chapter 11 Case and file with the Bankruptcy Court the proposed Plan and
Plan Related Documents, including the forms of any and all documents required
to be filed as schedules and exhibits thereto, so as to expedite confirmation
of the Plan. The Plan and the Plan Related Documents, including schedules and
exhibits thereto, shall be in form and substance reasonably satisfactory
in all respects to VCampus.

 

3.2           Actions with Respect to the
Plan. Prosoft shall:

 

(a)  Make all filings
with applicable governmental authorities as may be required by applicable
law;

 

(b)   File with the Bankruptcy Court the Plan and
Plan Related Documents in the Chapter 11 Case under the Bankruptcy Code, and
file the appropriate pleadings to obtain hearing dates for the approval of the
Disclosure Statement and confirmation of the Plan in each case as promptly as
possible;

 

(c)   Request the earliest practicable date for
consideration and approval of the Disclosure Statement, and time for acceptance
or rejection of the Plan by impaired creditors;

 

(d)  Use its reasonable
efforts to obtain confirmation of the Plan as promptly as practicable following
the Petition Date, with only such changes or modifications thereto as are
acceptable to VCampus (which such acceptance shall not be unreasonably
withheld), and proceed diligently to obtain the dismissal of all appeals,
applications and motions for reconsideration with respect to the Disclosure
Statement, Plan, the Confirmation Order, and any other order or ruling
affecting the confirmation of the Plan, as promptly as practicable;

 

(e)  Subject to the
terms and conditions of the confirmed Plan, use its reasonable efforts to cause
the distributions to be made as contemplated by the confirmed Plan (the “Distributions”)
as promptly as practicable following the Effective Date;

 

(f)  Request that the
Bankruptcy Court approve this Agreement

 

(g)  Use its reasonable
efforts to obtain the Bankruptcy Court’s approval of the provisions of Section 3.3
and 8.10 of this Agreement no later than the time that the Bankruptcy Court
approves the Disclosure Statement and procedures for solicitation of impaired
creditors; provided, however, that the failure of Prosoft to obtain such
approval despite reasonable efforts shall not give rise to a right of VCampus
to terminate this Agreement, or for a termination fee pursuant to Section 8.10
hereof; and

 

(h)  Consult with
VCampus and its counsel on all material aspects of Prosoft’s participation in
the Chapter 11 Case, including the preparation of the Plan and Plan Related
Documents and all other matters described in this Article III.

 

Each of VCampus and Prosoft shall use its reasonable
efforts to obtain confirmation of the Plan in accordance with the Bankruptcy
Code and on terms consistent with this Agreement. Consistent with its fiduciary
duty, Prosoft shall take all necessary and appropriate actions to achieve
confirmation of the Plan.

 

3.3           No Shop; Alternative
Transactions.

 

3.3.1           Prosoft
agrees that during the period commencing on the date hereof and ending on the
earlier of the Closing Date or the termination of this Agreement, except as
otherwise specifically permitted by Section 3.3.2, neither Prosoft nor any
of its officers, directors, employees, agents, representatives or affiliates

 

10

 

(including any investment
banker or financial advisor retained by Prosoft) will directly or indirectly
solicit or initiate discussions or negotiations with any Person concerning an
Alternative Transaction.

 

3.3.2           Notwithstanding
the foregoing, Prosoft and its financial and legal advisors may furnish
information to, or enter into discussions with, any Person that makes an
inquiry or proposal for a Alternative Transaction that was not solicited by
Prosoft from and after the date of this Agreement.

 

3.3.3           For
purposes of this Agreement, “Alternative Transaction” means a proposal for any
of the following (other than the transactions contemplated by this
Agreement):  (a) any merger,
reorganization, consolidation, share exchange, recapitalization, business
combination, liquidation, dissolution, or other similar transaction involving,
or, any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of, all or any significant portion of the business or assets or 25% or more of
the equity securities, of Prosoft (whether through bankruptcy or otherwise); (b) any
tender offer or exchange offer for 50% or more of the outstanding shares of
capital stock of Prosoft or the filing of a registration statement under the
Securities Act in connection therewith; or (c) any public announcement of
a proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.

 

3.3.4           Prosoft
will notify VCampus as promptly as practicable following the receipt of any
Alternative Transaction. Such notice to VCampus shall be made orally and in
writing, and shall include the identity of the Person proposing the Alternative
Transaction and a general description or summary of the terms of such
Alternative Transaction. To the extent possible, Prosoft shall require that any
non-disclosure agreement it enters into with a Person that has proposed or may propose
an Alternative Transaction allows Prosoft’s compliance with the requirements of
this Section 3.3.4. VCampus agrees that it will, to the extent necessary
to facilitate Prosoft’s compliance with this Section 3.3.4, enter into
such reasonable non-disclosure agreement as may be required by a Person
that has proposed or may propose an Alternative Transaction.

 

3.3.5           Prosoft
shall immediately cease and cause to be terminated any pre-existing discussions
with any Person (other than VCampus) that relates to any Alternative
Transaction.

 

3.3.6           Prosoft
and VCampus shall issue a joint press release upon the filing of the Petition
Pleadings. Both Prosoft and VCampus shall reasonably agree upon the content of
any such press release.

 

3.4           Closing. The Closing shall occur on or before the
date (the “Closing Date”) that is the earlier of the following:  (i) so long as the Effective Date has
occurred, then on or before three (3) Business Days following the date
upon which the respective conditions to the parties’ obligations to close under
Section 6.1 hereof have been satisfied or waived; or (ii) if such
conditions have been satisfied or waived prior to the Effective Date, then on
or before three (3) Business Days following the Effective Date. All
computations, adjustments, and transfers for the purposes herein shall be
effective as of 12:01 a.m. on the Closing Date. Time is of the essence
under this Agreement. Subject to the terms and conditions of this Agreement and
the Plan, on the Closing Date:  (a) VCampus
shall provide to Prosoft the Purchase Price for the New Common Stock to be
acquired by VCampus pursuant to Section 2.1 hereof, (b) VCampus shall
receive the New Common Stock from Reorganized Prosoft; and (c) a notice of
effectiveness of the Plan shall be filed and served. After the Closing, the
Distributions shall be made in accordance with the Plan as promptly as
practicable. The Closing shall take place at the offices of VCampus’ counsel
Gallagher & Kennedy, P.A., 2575 E. Camelback Road, Phoenix, Arizona
85016, or by facsimile and overnight courier for the convenience of the
parties.

 

3.5           Closing Documents and
Deliveries. At the Closing,
and thereafter if requested by VCampus, Reorganized Prosoft shall deliver to
VCampus the following items:

 

3.5.1        Duly executed certificates evidencing all of
the New Common Stock to be issued to VCampus or its designee pursuant to Section 2.1;

 

3.5.2        The
Plan and Confirmation Order, which order shall be certified by the clerk of the
Bankruptcy Court;

 

11

 

3.5.3        A certificate of good standing for Prosoft
issued by the appropriate authority of the State of Nevada no more than thirty
(30) days prior to Closing;

 

3.5.4        A closing certificate signed by the president
of Prosoft attesting that, to the best of his knowledge, information and
belief, as of the Closing: (i) the representations and warranties of
Prosoft contained herein continue to be true and complete in all material
respects (or, to the extent any of the same are not true and complete in any
material respect, specifying how the same is not true and complete); and, (ii) that
any covenant of Prosoft contained herein, that by its terms is to have been
performed as of the Closing, has been performed (or, to the extent any of the
same have not been performed in any material respect, specifying how the same
remains unperformed);

 

3.5.5        Resignations of the corporate officers and
directors of Prosoft;

 

3.5.6        A
list of all the Acquired Assets being retained by Reorganized Prosoft.

 

3.5.7        Such
other documents as may be reasonably requested by VCampus in connection
with the transactions contemplated hereby. However, Prosoft may retain and
use copies of any and all records it deems reasonably necessary to resolve and
complete the Chapter 11 Case.

 

ARTICLE IV

 

EFFECTS OF
THE REORGANIZATION

 

4.1           Cancellation of Existing Capital Stock. As
of the Closing Date, any interest in Prosoft represented by any class or series of
common or preferred stock outstanding before the Closing Date (collectively,
the “Existing Capital Stock”), and any warrants, options or other rights to
purchase any Existing Capital Stock shall be cancelled and terminated. The
holders of the Existing Capital Stock (or rights to acquire Existing Capital
Stock) shall not receive any equity or other interest in Reorganized Prosoft
and shall not receive any other consideration in exchange for the Existing
Capital Stock (or rights to acquire Existing Capital Stock).

 

4.2           Certificate of Incorporation and Bylaws. As
of the Closing Date and without any further action by the stockholders or
directors of Prosoft or Reorganized Prosoft, Prosoft’s certificate of
incorporation and bylaws shall be amended and restated in form and
substance reasonably satisfactory to VCampus, the terms of which shall provide
for, among other things, the authorization of all acts necessary to implement
the Plan including, without limitation, the issuance of the New Common Stock.

 

4.3           Public Company Status. Prosoft is currently a public company,
registered under Section 12 of the Exchange Act, and its common stock is
presently traded on the Nasdaq OTC Bulletin Board under the symbol POSO.OB. Prior
to, on or immediately after the Effective Date, Prosoft will take any and all
steps it considers reasonable and necessary to revoke and/or cancel its prior
registration under Section 12 of the Exchange Act. As of the Closing,
Reorganized Prosoft will not be a public company and will not be registered
under Section 12 of the Exchange Act or any other provision of federal or
state securities law.

 

4.4           Substantive Consolidation; Rollup. Pursuant to the Plan and Confirmation
Order, and as of the Closing Date: (i) the assets and liabilities of PLC
and CP shall be substantively consolidated; and,(ii) the stock or equity
securities of CP shall be cancelled and terminated.

 

ARTICLE V

 

REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

5.1           Representations, Warranties
and Covenants of Prosoft. In
addition to any warranties, representations and covenants otherwise contained
herein, Prosoft also represents, warrants and covenants to VCampus as of the
date hereof, as applicable, and as of the Closing, as follows (all
representations, warranties and

 

12

 

covenants
shall survive Closing, but shall terminate upon the expiration of the right of
VCampus to assert a Set Off Claim pursuant to Section 2.4 hereof):

 

5.1.1       Title. Prosoft owns, and has good and marketable
title to, the Acquired Assets to be retained by Reorganized Prosoft pursuant to
this Agreement, and subject to the terms of the Plan, on the Closing Date
Reorganized Prosoft will have good and marketable title to all of such assets
free and clear of all liens.

 

5.1.2       Leased Assets. Prosoft is the lessee of the Leases. Prosoft
is not in default under any of the Leases, which default cannot and will not be
cured pursuant to Section 365 of the Bankruptcy Code under the Plan, and
Prosoft is not aware of any circumstance or event that, through the passage of
time or otherwise, will constitute a default thereunder following Closing.

 

5.1.3        Intellectual Property.

 

5.1.3.1       To the best of Prosoft’s knowledge,
information and belief, Prosoft has title to or has the right to use pursuant
to license, sublicense, agreement or permission all Intellectual Property
necessary for the operation of the businesses of Prosoft and its Subsidiaries
as presently conducted and as presently proposed to be conducted. Each item of
Intellectual Property owned or used by Prosoft immediately prior to the Closing
hereunder will be owned or available for use by Reorganized Prosoft on
identical terms and conditions immediately subsequent to the Closing hereunder.

 

5.1.3.2       Prosoft has no knowledge that Prosoft or any
of its Subsidiaries has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of third
parties, and none of the employees with responsibility for Intellectual
Property matters of Prosoft or any of its Subsidiaries has ever received any
charge, complaint, claim or notice alleging any such interference,
infringement, misappropriation, or violation. To the knowledge of Prosoft and
employees with responsibility for Intellectual Property matters of Prosoft, no
third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of Prosoft.

 

5.1.4       Real Property  Leases. Prosoft has delivered to VCampus correct and complete
copies of all Real Property Leases, including any amendments thereto, other
than those listed in Schedule 1.3A. With respect to each of the Real
Property Leases other than those listed on Schedule 1.3A, Prosoft warrants
that:

 

5.1.4.1       The lease is legal, valid, binding,
enforceable and has not been terminated.

 

5.1.4.2       Subject to satisfying the requirements of the
Bankruptcy Code, including but not limited to Section 365 thereof, the
lease will continue to be legal, valid, binding, enforceable and will not be
terminated as of the Closing.

 

5.1.4.3       Neither Prosoft nor any of its Subsidiaries
has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered
any interest in the leasehold.

 

5.1.4.4       To the best of Prosoft’s knowledge,
information and belief, all facilities leased thereunder have received all
approvals of governmental authorities (including licenses and permits) required
in connection with the operation thereof and have been operated and maintained
in accordance with applicable laws, rules and regulations.

 

5.1.5       No Violations.
Prosoft has no knowledge that Prosoft or any of its Subsidiaries is in
violation of any law or regulation, or under any order of any court or federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality wherever located. Prosoft has no knowledge of any (1) claims,
actions, suits or proceedings instituted or filed and, (2) any claims,
actions, suits or proceedings threatened presently or which in the future may be
threatened by any federal, state, municipal or other governmental department,
commission, board, court, bureau, agency or instrumentality wherever located
against or involving Prosoft or any of its Subsidiaries. The execution and the
delivery of this Agreement and the consummation of the transactions
contemplated hereby, will not violate any statute, regulation, rule, judgment,
order, decree, stipulation,

 

13

 

injunction,
charge or other restriction of any government, governmental agency, or court to
which Prosoft or any of its Subsidiaries is subject or any provision of its
charter or bylaws. To the best of Prosoft’s knowledge, except for the
Confirmation Order, Prosoft and its Subsidiaries do not need to give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the parties to consummate
the transactions contemplated by this Agreement.

 

5.1.6       Financial Statements. Prosoft has provided VCampus with the
following financial statements (collectively, the “Financial Statements”): (i) audited
balance sheet and statement of income and cash flow as of and for the fiscal
years ended July 31, 2004 and July 31, 2005 for Prosoft (the “Most
Recent Audited Financial Statements”); and (ii) unaudited balance sheet
and statement of income and cash flow (the “Most Recent Financial Statements”)
as of and for the quarters ended October 31, 2005 and January 1, 2006
(the “Most Recent Unaudited Financial Statement”) and for the monthly periods
thereafter to the Closing (“Monthly Financial Statements”), said Most Recent Unaudited
Financial Statements and Monthly Financial Statements being materially correct,
subject to usual and customary year end adjustments. The Most Recent Audited
Financial Statements have been prepared in accordance with GAAP, fairly present
in all material respects the financial condition, results of operations and
cash flows of Prosoft as of, and for, the periods presented.

 

5.1.7       Events Subsequent to Most
Recent Fiscal Year End. Since
the Most Recent Unaudited Financial Statements, there has not been any material
adverse change in the assets, liabilities, business, financial condition,
operations, results of operations or future prospects of Prosoft or its
Subsidiaries, as a whole.

 

5.1.8       Present Status. Since the Most Recent Monthly Financial
Statement, neither Prosoft nor any of its Subsidiaries has sold or transferred
any material assets except sales from inventory in the ordinary course of
business, suffered any damage, destruction, or loss (whether or not covered by
insurance) materially affecting its properties, business or prospects; waived
any rights of substantial value; nor entered into any transaction other than in
the Ordinary Course of Business.

 

5.1.9        Tax Returns. Prosoft and each of its Subsidiaries has
filed all state, federal and local tax returns that have been required to be
filed and timely paid all taxes required to be paid by it and its Subsidiaries
prior to Closing, including, without limitation, all payroll and employment
related taxes.

 

5.1.10      Customers. Set forth on Schedule 5.1.10 hereto is
a true, accurate, current and complete list of all of Prosoft’s customers and
clients for the past year.

 

5.1.11      Full Disclosure. Neither (a) the Disclosure Statement
as initially filed by Prosoft in the Chapter 11 Case, nor (b) any further or
amended Disclosure Statement, as of the date filed with the Bankruptcy Court,
nor (c) the final Disclosure Statement in the form distributed to
creditors of Prosoft in connection with confirmation of the Plan, as of the
date so distributed and as of the Closing Date, nor (d) this Agreement nor
any document contemplated hereby or thereby or furnished by or on behalf of
Prosoft to VCampus in connection with the negotiation and the sale of the New
Common Stock, as of the date filed and as of the Closing Date, will:

 

(i)  contain any untrue
statement of a material fact or will omit to state any material fact necessary
to make the statements contained therein or herein, in light of the
circumstances under which they were made, not misleading, or

 

(ii)  fail to comply
with the requirements of Section 1125(e) of the Bankruptcy Code.

 

5.1.12     Operations Until Closing. Between the date of this Agreement and the
Closing Date, Prosoft shall (and, as applicable, shall cause each of its
Subsidiaries to):

 

5.1.12.1  Operate in the Ordinary Course of Business,
including the securing and providing of funding necessary to sustain operations
at the current level. In the event that Prosoft determines in its reasonable
judgment that it does not have the working capital to continue to operate in
the Ordinary Course of Business, then Prosoft shall immediately notify VCampus
of such determination;

 

14

 

5.1.12.2  Use Prosoft’s best efforts to maintain the
Acquired Assets in as good working order and condition as at present, ordinary
wear and tear excepted;

 

5.1.12.3  Use Prosoft’s best efforts to preserve
Prosoft’s business and preserve Prosoft’s present relationships with suppliers,
customers and others having business relationships with Prosoft;

 

5.1.12.4  Keep in full force and effect until Closing
present insurance policies or other comparable insurance coverage;

 

5.1.12.5  Cause to be paid when due all taxes, license
fees, trade accounts and costs of expenses of operation and maintenance of the
Acquired Assets incurred through Closing;

 

5.1.12.6  Not, without VCampus’ prior written consent,
enter into any material contracts or obligations (other than normal customer
contracts in the Ordinary Course of Business); provided, however, that Prosoft
shall be entitled to continue ordering inventory in the Ordinary Course of
Business;

 

5.1.12.7  Not, without VCampus’ prior written consent,
materially modify, amend, cancel or terminate any of its existing contracts or
agreements;

 

5.1.12.8  Not sell, assign, lease or otherwise transfer
or dispose of any of the Acquired Assets except in the Ordinary Course of
Business; provided, however, that VCampus consents to Prosoft’s sale prior to
the Closing Date of certain intellectual property to Prosoft Training Japan, Inc.,
a Japanese corporation, as set forth in the “Letter of Intent—Copyright and
Licensing Transfer Agreement” (the “PTJ Transaction”), and subject to the
Purchase Price Adjustment provided therefor in Section 2.3(a).

 

5.1.12.9  Not enter into any employment contracts which
are not terminable at will; and

 

5.1.12.10  Not settle for less than full payment any
Retained Liabilities (or other liabilities arising between the date hereof and
the Closing Date, which VCampus may elect to include as an additional
Retained Liability at Closing) in excess of $2,500 individually or $10,000 in
the aggregate, without the prior written consent of VCampus.

 

5.1.12.11  Not directly or indirectly do or permit to
occur any of the following:  (a) issue,
sell, pledge, dispose of or encumber any additional shares of, or any options,
warrants, conversion privileges or rights of any kind to acquire any shares of,
any of the Existing Capital Stock; (b) amend or propose to amend its
certificate of incorporation; (c) split, combine or reclassify any
outstanding shares of Existing Capital Stock, or declare, set aside or pay any
dividend or other distribution payable in cash, stock, property or otherwise
with respect to shares of Existing Capital Stock; (d) redeem, purchase or
acquire or offer to acquire any shares of Existing Capital Stock; (e) acquire
(by merger, exchange, consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership, joint venture or other business
organization or division or material assets thereof; (f) incur any
indebtedness for borrowed money or issue any debt securities, other than
debtor-in-possession financing secured by Prosoft in order to maintain its
Ordinary Course of Business operations; or (g) enter into or propose to
enter into, or modify or propose to modify, any agreement, arrangement or
understanding with respect to any of the foregoing.

 

5.1.12.12  Notification
to VCampus. Between the date of this Agreement and the Closing Date,
Prosoft will promptly notify VCampus in writing if Prosoft or one of its
Subsidiaries becomes aware of:  (a) any
fact or condition that causes or constitutes a breach of any of Prosoft’s
covenants as of the date of this Agreement; (b) the occurrence after the
date of this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a breach of any such
covenant had such covenant been made as of the time of occurrence or discovery
of such fact or condition, or (c) any event that would render any
representation or warranty of Prosoft contained in this Agreement, if made on
or as of the date of the event or the Closing, untrue or inaccurate in any
material respect.

 

5.1.12.13  Customer
Notices. Prosoft and VCampus may prepare a joint notice or
letter to be sent by Prosoft at VCampus’ expenses to each of Prosoft’s
customers of the transaction contemplated herein.

 

15

 

Until Closing, Prosoft is not
obligated or required to provide VCampus the name, address and phone number of
any of its customers or clients.

 

5.1.13     Capitalization. Immediately following the
Closing, the only shares of capital stock of Reorganized Prosoft which shall be
issued and outstanding or reserved for issuance shall be the New Common Stock
to be issued to VCampus pursuant to Section 2.1 hereof, which shares, when
issued in accordance with this Agreement and the Plan, shall be duly and
validly issued and shall be fully paid and nonassessable. Immediately following
the Closing, there shall not be any subscriptions, options, warrants, calls,
rights, convertible securities or other agreements or commitments of any
character obligating Reorganized Prosoft to issue, transfer or sell any of its
securities, nor will there be any rights to receive dividends or other
distributions with respect to any such securities. Immediately following the
Closing, the only shares of capital stock of the Subsidiaries which shall be
issued and outstanding or reserved for issuance shall be the shares of capital
stock held by Reorganized Prosoft. Immediately following the Closing, there
shall not be any subscriptions, options, warrants, calls, rights, convertible
securities or other agreements or commitments of any character obligating
Reorganized Prosoft or its Subsidiaries to issue, transfer or sell any of its
Subsidiaries securities, nor will there be any rights or dividends or other
distributions with respect to any such securities.

 

5.1.14     Organizational Representations and Warranties of
Prosoft. Prosoft represents and warrants as follows:

 

5.1.14.1 
Prosoft is a corporation validly existing and in good standing under the
laws of the State of Nevada and each of its Subsidiaries is a corporation
validly existing and in good standing under the laws of its respective
jurisdiction of organization.

 

5.1.14.2 
The execution and delivery of this agreement by Prosoft has been duly
authorized by proper corporate approval and on the Closing Date, Prosoft will
have all necessary power and authority to consummate the transactions provided
herein. The Board of Directors of Prosoft has approved the commencement of the
Chapter 11 Case as provided herein.

 

5.1.14.3 
The officers whose signatures are affixed hereto have the necessary
corporate power and authority to bind Prosoft.

 

5.1.15     Access to Records. Pursuant to and under
the terms and conditions of the Non-Disclosure Agreement between Prosoft and
VCampus, Prosoft will afford VCampus access, during normal business hours, to
all its businesses operations, properties, books, files, and records, and will
cooperate in VCampus’ examination thereof. No such examination, however, shall
constitute a waiver or relinquishment by VCampus of its right to rely upon
Prosoft’s covenants, representations, and warranties as made herein or pursuant
hereto. Until the Closing, VCampus will hold in confidence all information so
obtained, except as hereinafter provided.

 

5.1.16     Financial Reports. Prosoft’s financial
statements filed with the SEC and provided to VCampus and Prosoft’s Tax Returns
for the fiscal years ended July 31, 2004, copies of which have been
furnished to VCampus by Prosoft prior to the execution of this Agreement,
fairly represent the financial position of Prosoft as of their dates, and as of
the date hereof.

 

5.1.17     Environmental Matters. To Prosoft’s knowledge, the properties,
assets and operations of Prosoft and its Subsidiaries are in compliance in all
material respects with all applicable federal, state, local and foreign laws,
permits and licenses relating to public and worker health and safety and to the
protection and clean-up of the natural environment and activities or conditions
related thereto, including, without limitation, those relating to the
generation, handling, disposal, transportation or release of hazardous
materials (“Environmental Laws”), other than any such failure to be in
compliance as would not, singly or in the aggregate, reasonably be expected to
have a material adverse effect on the Purchased Assets or Prosoft’s business. The
term “hazardous materials” shall mean those substances that are regulated by or
form the basis for liabilities under any applicable Environmental Laws. To
Prosoft’s knowledge, Prosoft is not the subject of any federal, state, local or
foreign investigation, and Prosoft has not received any notice or claim
relating to any material liability or remedial action or potential material
liability or remedial action under Environmental Laws.

 

16

 

 5.1.19     Officers and Directors. The corporate officers and directors
serving Prosoft immediately before the Closing Date shall have resigned or be
terminated without cause as of the Closing Date.

 

 5.1.20     ERISA Plans. Except as set forth in Schedule 5.1.20,
neither Prosoft nor any of its Subsidiaries is a party to or participant in any
Employee Benefit Plan and any liabilities of Prosoft under any such plan now or
heretofore in effect are fully funded or otherwise adequately provided for.

 

5.2           Representations and
Warranties of VCampus.

 

5.2.1       VCampus
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware.

 

5.2.2       The
execution and delivery of this agreement by VCampus has been duly authorized by
proper corporate action, and on the Closing Date, VCampus will have all
necessary authority to consummate the transactions provided herein. The
officer(s), whose signatures are affixed hereto, have been duly authorized by
VCampus to execute this Agreement and they have the necessary corporate power
and authority to bind VCampus.

 

5.2.3       Neither
the execution and delivery of this Agreement by VCampus nor the consummation by
VCampus of the transactions contemplated hereby, (i) requires the
authorization, consent, or approval of any third person, including any
governmental authority (other than the Bankruptcy Court), (ii) will
conflict with or result in a breach or violation of, or default under, any
material agreement of other material instrument or obligation to which VCampus
is a party or by which any of VCampus’ assets or properties are bound, or (iii) violate
any judgment, order, injunction, decree, rule or regulation applicable to
VCampus or any of VCampus’ assets or properties.

 

5.2.4       As
of the execution of this Agreement and until Closing, (i) VCampus has and
will maintain financial capability and good faith intent to fulfill all of the
terms and conditions of this Agreement on a timely basis; (ii) VCampus can
establish adequate assurance of future performance of the Retained Liabilities
and Assumed Contracts, as required by the Bankruptcy Code; (iii) VCampus’
ability to comply with subsections (i) and (ii) is not subject to any
financing contingency; and (iv) the Agreement is as of the date hereof,
and both this Agreement and the Notes will be as of Closing, valid obligations
of and enforceable against VCampus, subject to bankruptcy laws and similar laws
affecting the rights of creditors generally.

 

5.2.5       As
of Closing, Reorganized Prosoft or VCampus shall maintain, or provide
substantially similar substitutes for, the Other Employee Benefits listed on Schedule 2.5.
VCampus also will have established a 401K plan for the employees of Reorganized
Prosoft on and after the Closing, the terms of which shall be reasonably
equivalent to those available to similarly situated employees of VCampus.

 

5.2.6       As
of the date of execution of the Non-Disclosure Agreement between Prosoft and
VCampus through Closing, VCampus has and will continue to comply with all
terms, conditions and restrictions of the Non-Disclosure Agreement.

 

5.2.7       Between
the date of this Agreement and the Closing Date, VCampus will promptly notify
Prosoft in writing if VCampus becomes aware of: 
(a) any fact or condition that causes or constitutes a material
breach of any of VCampus’ covenants as of the date of this Agreement; (b) the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
material breach of any such covenant had such covenant been made as of the time
of occurrence or discovery of such fact or condition, or (c) any event
that would render any representation or warranty of VCampus contained in this
Agreement, if made on or as of the date of the event or the Closing, untrue or
inaccurate in any material respect.

 

17

 

ARTICLE VI

 

CONDITIONS
TO OBLIGATION TO CLOSE

 

6.1           Conditions to Obligation to
Close.

 

6.1.1       Conditions to Obligation of VCampus. The
obligation of VCampus to consummate the transactions to be performed by it in
connection with the Closing are subject to the following conditions:

 

6.1.1.1 
Proceedings Relating to the Chapter 11 Case.
As of 90 days following the Petition Date, (i) the Bankruptcy Court shall
have confirmed the Plan (including any amendments or modifications thereto)
which shall be in form and substance acceptable to VCampus, (ii) the
Confirmation Order shall be in form and substance acceptable to VCampus, (iii) the
Confirmation Order shall not be subject to a stay, (iv) no appeal of the
Confirmation Order shall be pending, and (v) with respect to such
Confirmation Order, all appeals periods shall have expired. Should any of the
foregoing not have occurred as of 90 days following the Petition Date, and so
long as the failure of such condition is not due to a breach of this Agreement
by VCampus, VCampus shall have the option, in its sole discretion, to waive
this condition. If VCampus elects to waive this condition, Prosoft shall
continue to exercise its best efforts to satisfy such condition by such later
date as VCampus shall specify. The failure of the foregoing condition to be met
as and when required by this paragraph shall not give rise to a claim by
VCampus to a termination fee under Section 8.10 hereof, so long as the
cause of such failure is or was not reasonably within the control of Prosoft.

 

6.1.1.2   Injunction. There must not be in effect any
legal requirement or any injunction or other order that prohibits or restrains
VCampus’ acquisition of the New Common Stock or the consummation of the
Agreement or which had or could reasonably have a material adverse effect on
Reorganized Prosoft or the Acquired Assets. The purchase of the New Common
Stock by VCampus hereunder shall not be prohibited by any applicable law or
regulation, shall not subject VCampus to any penalty, liability or other
condition reasonably unacceptable to VCampus and shall be permitted by law and
regulations of the jurisdictions to which VCampus is or will at Closing be
subject.

 

6.1.1.3   Additional Agreements. Prosoft shall have
delivered to VCampus on the Closing Date the documents and agreements specified
in Section 3.5.

 

6.1.1.4   The Reorganization Plan. A Confirmation
Order and any other orders by the Bankruptcy Court necessary to confirm the
Plan or implement the Confirmation Order and approve the Plan Related
Documents, any documents related hereto and the transactions contemplated
hereby shall be entered, each of which order or orders shall be a final order
reasonably acceptable in form and substance to VCampus and its counsel in
all material respects, such orders shall not be subject to any stay, no appeal
of such orders shall be pending and all appeals periods with respect to such
orders shall have expired. The Plan Related Documents and all other documents
shall be in the form reasonably approved by VCampus for filing by Prosoft,
with such modifications or amendments as are consistent with this Agreement and
the Plan and are reasonably acceptable in form and substance to VCampus. The
Plan shall provide for the satisfaction or extinguishment of all claims against
Prosoft in a manner reasonably satisfactory to VCampus.

 

6.1.1.5   Consent of Third Parties. All consents by
third parties that are required to permit the transactions contemplated hereby
and by the Plan shall have been obtained.

 

6.1.1.6 
Prosoft’s Representations. The
representations and warranties of Prosoft set forth herein shall be true and
correct when made and at and as of the Closing Date.

 

6.1.1.7 
Prosoft’s Covenants. Prosoft
shall have performed and complied with all of its covenants hereunder in all
material respects through the Closing. Prosoft shall not be in default of its
obligations under this Agreement or any of the Plan Related Documents.

 

6.1.1.8 
No Disposition of Material Assets.
Prosoft and VCampus shall have reinspected the Acquired Assets and VCampus
shall be satisfied that Prosoft has not sold, assigned, leased or

 

18

 

otherwise transferred or
disposed of any material portion of the Acquired Assets (or assets of Prosoft’s
Subsidiaries), except in the Ordinary Course of Business and that sales of
courses and related materials have been substantially consistent with Prosoft’s
prior operations.

 

6.1.1.9 
No Material Adverse Changes.
There shall not have been any material adverse change affecting Prosoft or the
Acquired Assets or the going concern value of Prosoft’s business.

 

The
foregoing conditions contained in this Section 6.1.1 are intended solely
for the benefit of VCampus. VCampus shall at all times have the right to waive
any condition. All waivers given by VCampus under this Section 6.1.1 shall
be in writing. The waiver by VCampus of any condition shall not relieve any
other party of any liability or obligation with respect to any representation,
warranty, covenant or agreement set forth herein.

 

6.1.2       Conditions to Obligations of Prosoft. The
obligations of Prosoft and Reorganized Prosoft to consummate the transactions
to be performed by it in connection with the Closing is subject to satisfaction
of the following conditions:

 

6.1.2.1 
VCampus’ Representations. The
representations and warranties of VCampus set forth herein shall be true and
correct when made and at and as of the Closing Date;

 

6.1.2.2 
VCampus’ Covenants. VCampus
shall have performed and complied with all of its covenants hereunder in all
material respects through the Closing. VCampus shall have provided the
consideration for the New Common Stock to be acquired by VCampus pursuant to Section 2.1
and Section 2.2.

 

6.1.2.3 
Approval by the Bankruptcy Court.
A Confirmation Order and any other orders by the Bankruptcy Court necessary to
confirm the Plan and approve this Agreement, any documents related thereto and
the transactions contemplated hereby shall be entered.

 

The
foregoing conditions contained in this Section 6.1.2 are intended solely
for the benefit of Prosoft and Reorganized Prosoft. Prosoft and Reorganized
Prosoft shall at all times have the right to waive any condition. All waivers
given by Prosoft or Reorganized Prosoft under this Section 6.1.2 shall be
in writing. The waiver by Prosoft or Reorganized Prosoft of any condition shall
not relieve any other party of any liability or obligation with respect to any
representation, warranty, covenant or agreement set forth herein.

 

ARTICLE VII

 

ADDITIONAL
PROVISIONS

 

7.1           Default.

 

7.1.1       VCampus’ Remedies. In the event that a
default under this Agreement occurs prior to Closing, VCampus must, before
taking any other action, give a written notice to Prosoft of such a default. Prosoft
will then have ten (10) Business Days from receipt of notice in which to
cure said default. In addition to any termination fee, VCampus may, upon
default by Prosoft, seek specific performance and/or any remedy available at
law or equity. All remedies hereunder are cumulative and non-exclusive of any
other remedies.

 

7.1.2       Prosoft’s Remedies. In the event all
conditions and contingencies contained herein shall be met and VCampus shall
fail to purchase the New Common Stock as provided herein (other than for a
reason as set forth in Section 8.10.3), Prosoft may seek specific
performance and/or any remedy available at law or equity; provided, however,
that in no case shall Prosoft’s remedies hereunder include an award of monetary
damages against VCampus the amount of which exceeds $2,300,000, less any
portion of the Purchase Price that actually has been paid. All remedies
hereunder are cumulative and non-exclusive of any other remedies.

 

7.2           Continued Inspection.         Subject to the terms, conditions and
restrictions of the existing Non-Disclosure Agreement between Prosoft and
VCampus, VCampus has the right to examine the Acquired Assets,

 

19

 

excluding
the customer list, after acceptance of this contract by Prosoft. This right to
examine the Acquired Assets shall continue until Closing. VCampus’ right to
examine shall be during normal business hours, or as otherwise arranged and
shall not unreasonably interfere with the operation of Prosoft’s business. Upon
request of VCampus, Prosoft shall provide for VCampus’ review of copies of all
leases, agreements or other documents relating to Prosoft’s business.

 

7.3           Best Efforts. Upon the terms and subject to the
conditions herein provided, each of the parties hereto agrees to use their
respective best, good faith efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties hereto in doing, all things necessary, proper or advisable under
applicable laws and regulations to ensure that the conditions set forth in this
Agreement are satisfied and to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, the parties hereto shall
furnish to each other such necessary information and reasonable assistance, as
each may request in connection with Prosoft’s preparation and filing of
the Plan and the Disclosure Statement and the Related Plan Documents, in form and
substance reasonably satisfactory to VCampus, needed to obtain Bankruptcy Court
approval of the transactions contemplated by this Agreement and shall execute
any additional instruments necessary to consummate the transactions
contemplated hereby, whether before or after the Closing.

 

7.4           Disclosure Supplements. From time to time prior to the Closing,
Prosoft shall supplement the Schedules hereto with respect to any matter
hereafter arising or any information obtained after the date hereof of which,
if existing, occurring or known at or prior to the date of this Agreement,
would have been required to be set forth or described in the Schedules, or
which is necessary to complete or correct any information in such schedule or
in any representation and warranty of Prosoft which has been rendered
inaccurate thereby. For purposes of determining the satisfaction of the
conditions set forth in Section 6.1.1 hereof, no such supplement or
amendment shall be considered.

 

ARTICLE VIII

 

MISCELLANEOUS
PROVISIONS

 

8.1           Risk of Loss.        The risk of loss prior to the Closing Date
shall be with Prosoft. In the event a material percentage of Acquired Assets or
a material percentage of operations of Prosoft shall have been damaged adversely
or affected in any material way as a result of any strike, accident or other
casualty or act of God or the public enemy, or any judicial, administrative or
governmental proceeding at such time as Prosoft proposed to close, then VCampus
shall have the options of either (i) prorating the Purchase Price to
adjust for the loss (with consent of Prosoft); or (ii) proceeding to close
with an assignment of any insurance proceeds which may be paid to reflect
such loss or damage, or (iii) terminating this Agreement.

 

8.2           Severability. If any provision of this Agreement is
prohibited by the laws of any jurisdiction as those laws apply to this
Agreement, that provision is ineffective to the extent of such prohibition
and/or is modified to conform with such laws, without invalidating the
remaining provisions hereto; and any such prohibition in any jurisdiction shall
not invalidate such provision in any other jurisdiction.

 

8.3           Choice of Law. This Agreement shall be governed by the
internal laws of the State of Delaware and, to the extent applicable, the
Bankruptcy Code.

 

8.4           Entire Agreement;
Modification. This Agreement
embodies the entire agreement and understanding of the parties hereto and
supersedes any and all prior agreements, arrangements and understandings relating
to the matters provided for herein. No modification, alteration, waiver,
amendment, change or supplement hereto shall be binding or effective unless the
same is set forth in writing signed by a duly authorized representative of each
party to this Agreement.

 

8.5           Survival and Binding
Agreement. The terms and
conditions hereof shall survive the Closing and shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.

 

20

 

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

 

8.7           Assignment. Neither party to this Agreement may assign
any of its rights or delegate any of its responsibilities under this Agreement,
except that VCampus may assign this Agreement to any wholly owned
Subsidiary of VCampus or an affiliate of VCampus, or to any person or entity
that succeeds to all or substantially all of the business of VCampus through a
purchase of assets, merger or otherwise.

 

8.8           Notices. All notices, requests, demands, claims and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two Business Days after) it is sent by personal delivery, by overnight carrier,
or by facsimile transaction, as follows:

 

	
  If to Prosoft:

  	
   

  	
  Copy to:

  
	
   

  	
   

  	
   

  
	
  Prosoft LearningCorporation

  	
   

  	
  Snell & Wilmer, L.L.P.

  
	
  410 N. 44th
  Street, Suite 600

  	
   

  	
  One Arizona Center

  
	
  Phoenix, Arizona 85008

  	
   

  	
  400 E. Van Buren

  
	
  Fax No.: (602) 794-4178

  	
   

  	
  Phoenix, AZ 85004-2202

  
	
   

  	
   

  	
  Steven D. Jerome, Esq.

  
	
   

  	
   

  	
  Fax No.: (602) 382-6070

  

 

	
  If to
  VCampus:

  	
   

  	
  Copy to:

  
	
   

  	
   

  	
   

  
	
  VCampus
  Corporation

  	
   

  	
  Maupin Taylor, P.A.

  
	
  1850 Centennial Park Drive

  	
   

  	
  Post Office Box 19764

  
	
  Suite 200

  	
   

  	
  Raleigh, North Carolina 27619-9764

  
	
  Reston, Virginia 20191

  	
   

  	
  Attn: Kevin A. Prakke, Esq.

  
	
  Attn: Christopher L.
  Nelson, CFO

  	
   

  	
  Fax No.: (919) 981-4300

  
	
  Fax No.: (703) 654-7319

  	
   

  	
   

  

 

8.9           Termination. In addition to the rights of the parties to
terminate this Agreement as set forth elsewhere herein, this Agreement may be
terminated:

 

8.9.1        At
any time prior to the Closing Date, by the mutual agreement of Prosoft and
VCampus.

 

8.9.2        At any time prior to the Closing Date by
VCampus, and subject to the “notice and cure” provisions contained in Section 7.1.2
herein, if Prosoft is in breach of any of its representations, warranties or
covenants set forth herein.

 

8.9.3        At any time prior to the Closing Date by
Prosoft, subject to giving notice of breach to VCampus and expiration of a
10-business-day cure period, if VCampus is and remains in breach of any of its
representations, warranties or covenants set forth herein.

 

8.9.4        At any time prior to the Closing Date by
VCampus pursuant to Section 6.1.1.1.

 

8.9.5        By either Prosoft or VCampus, if any of the
conditions to such party’s obligation to consummate the transactions
contemplated in this Agreement shall have become impossible to satisfy, except
to the extent that such impossibility arises out of or results from actions of
the party seeking to terminate pursuant to this Section 8.9.5.

 

21

 

8.9.6        By Prosoft in connection with entering into a
definitive agreement for an Alternative Transaction, provided Prosoft has
complied with all provisions in Section 3.3.

 

No termination pursuant to Sections 8.9.2, 8.9.3,
8.9.4 or 8.9.5 shall relieve any breaching party of its obligations or
liabilities to the non-breaching party for damages sustained as a result of the
breach. Termination of this Agreement shall not limit VCampus’ right to a
termination fee as provided in Section 8.10, except as limited in Section 6.1.1.1.

 

8.10         Termination Fee.

 

8.10.1      If this Agreement is terminated by Prosoft
pursuant to Section 8.9.6 hereof or if a competing plan of reorganization
supported by a party other than VCampus is confirmed by the Bankruptcy Court,
and VCampus has not breached any of its obligations under this Agreement in any
respect, then Prosoft shall pay to VCampus a single termination fee of $69,000,
payable upon consummation of the Alternative Transaction or confirmation of the
competing plan, as applicable.

 

8.10.2      Prosoft
shall pay, or cause to be paid, to VCampus a single termination fee in the
amount of $69,000, in the event that: (i) Prosoft fails for any reason
which is reasonably within Prosoft’s control, other than a breach of the
Agreement by VCampus, to close the Transaction (subject to the provisions of Section 6.1.1.1);
or (ii) VCampus determines not to close the Transaction based upon either
(x) a material breach of this Agreement by Prosoft that is reasonably within
Prosoft’s control and that has or is reasonably likely to have a material
adverse effect on the Acquired Assets or going concern value of Prosoft’s
business; or (y) the failure of any of the conditions set forth in Sections
6.1.1.5 (but only to the extent that the lack of consent is of the Secured
Noteholders), and 6.1.1.6 through 6.1.1.8, which failure is reasonably in
Prosoft’s control.

 

8.10.3      If:
(i) this Agreement is terminated by Prosoft other than due to a default by
VCampus under this Agreement which is not cured, and (ii) on or before
one-hundred eighty (180) days following the termination of this Agreement,
Prosoft closes an Alternative Transaction with a party other than VCampus,
then, at the time any such Alternative Transaction is consummated, Prosoft will
pay to VCampus, in cash, a termination fee in the amount of $69,000 (unless a
termination fee has already been paid to VCampus by Prosoft). The parties agree
that the sums payable pursuant to this Section 8.10.3 shall constitute
reimbursement of expenses incurred in connection with the contemplated
Reorganization and loss of opportunity, and not penalties. The parties further
acknowledge that (a) the amounts of loss or damages likely to be incurred
is incapable or is difficult to precisely estimate, (b) the amounts
specified herein bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by VCampus in
connection with a sale of Prosoft’s business to a third party in the manner
described in this Section 8.10.3, and (c) the parties are
sophisticated business parties and have been represented by sophisticated and
able legal and financial counsel and negotiated this Agreement at arms’ length.

 

8.10.4      The termination fee payable pursuant to Section 8.10.1,
8.10.2 or 8.10.3 is only due and payable once and under no circumstances is
VCampus entitled to more than one termination fee whether or not multiple
circumstances giving rise to a termination fee occur under one or more of Section 8.10.1,
8.10.2 or 8.10.3. Any termination fee payable pursuant to Section 8.10.1,
8.10.2 or 8.10.3 shall be paid by Prosoft as reimbursement for VCampus’ costs
and expenses incurred in conjunction with the Reorganization. No termination
fee set forth in this Section 8.10 may be modified or cancelled
without the written consent of both parties or pursuant to formal action by the
Bankruptcy Court expressly modifying the fee.

 

8.11         Construction. Headings in this Agreement are for
convenience of reference only, and are not intended to nor shall they be used
to construe the meaning of operative provisions of this Agreement. The words “herein,”
“hereof,” “hereunder,” and words of similar import refer to this Agreement. Terms
defined or used in the singular form herein are intended to include the
plural form. The terms “includes,” or “including” are not limiting, and should
be construed as though followed by the phrase “by way of illustration and not
limitation.”

 

[The
remainder of this page is intentionally left blank.]

 

22

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.

 

 

	
   

  	
   

  	
  PROSOFT:

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  Prosoft Learning Corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Secretary

  	
   

  	
   

  	
   

  	
  , President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMPUTERPREP:

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  By: Prosoft Learning Corporation, its sole

  shareholder

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  , President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VCAMPUS:

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  VCampus Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
												

 

23

 

Exhibit 2.2.2A

 

PROMISSORY NOTE

 

Reston, VA

              ,
2006

 

$150,000.00

 

FOR VALUE RECEIVED the undersigned VCampus
Corporation, a Delaware corporation (the “Maker”), promises to pay to Prosoft
Learning Corporation (“Prosoft”) or its permitted assigns the principal sum of
One Hundred and Fifty Thousand Dollars ($150,000.00), in immediately available
funds, together with simple interest from the date of issuance, at the rate of
six percent (6 %) per annum on the unpaid balance until paid, both principal
and interest payable in lawful money of the United States of America, at the
office of Prosoft, or at such place as the legal holder hereof may designate
in writing. For the sake of clarity, interest shall be calculated based upon a
presumed 360-day year with each month having 30 days. The entire principal and
accrued interest shall be due and payable in one balloon payment on July 1,
2007.

 

This Note may be prepaid in full or in part at
any time without penalty or premium.

 

Each of the following shall constitute a default under this Note:

 

(a)           the
failure of the Maker to make any payments when due on this Note and such
failure continues for more than ten (10) days past the due date.

 

(b)           the
failure of the Maker to comply with or to perform, in any material respect,
when due any other term, obligation, covenant or condition contained in this
Note. If any failure, other than a failure to pay money, is curable, it may be
cured (and no default will have occurred) if the Maker after receiving written
notice from the holder demanding cure of such failure: (i) cures the
failure within thirty (30) days; or (ii) if the cure requires more than
thirty (30) days, immediately initiates steps sufficient to cure the failure
and thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonable;

 

(c)           this
Note, the Reorganization Agreement or any provision thereof shall, for any
reason, not be valid and binding on the Maker, or not be in full force and
effect, or shall be declared to be null and void; the validity or
enforceability of this Note or the Reorganization Agreement shall be contested
by Maker; except with respect to any duly exercised set-off rights of the Maker
hereunder or under the Reorganization Agreement, the Maker shall deny that it
has any or further liability or obligation under this Note or the
Reorganization Agreement; or any default or breach by the Maker in any material
respect under any provision of the Reorganization Agreement shall continue
after the applicable grace or cure period, if any, specified in the
Reorganization Agreement.

 

(d)           the
sale of substantially all of the assets or ownership of the Maker to an
unaffiliated third party or a merger or other change of control transaction in
which both:

 

24

 

(i) holders of the fully diluted equity
of the Maker immediately prior to the transaction hold less than 50% of the
fully diluted equity of the maker as of immediately after the transaction; and (ii) the
Board of Directors of the Maker immediately prior to the transaction comprise
less than 50% of the members of the Board of Directors of the surviving
corporation in the transaction.

 

(e)           the
dissolution or termination of the Maker’s existence, the Maker’s insolvency,
appointment of a receiver for any significant part of the Maker’s
property, any assignment by the Maker for the benefit of creditors, any type of
creditor workout with respect to the Maker, or the commencement of any
proceeding under any bankruptcy or insolvency laws against the Maker (which is
not dismissed within 30 days).

 

(f)            (i) the
Maker shall fail to pay any other indebtedness of the Maker when due (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise)
and the maturity of such indebtedness, but only if in excess of $1,500,000, has
been accelerated; (ii) the Maker shall fail to perform or observe any
term or covenant contained in any agreement or instrument relating to such
indebtedness, when required to be performed or observed, and such failure shall
continue after any applicable grace or cure period, if any, specified in such
agreement or instrument, and would result in acceleration of the maturity of
such indebtedness, but only if in excess of $1,500,000, unless waived by the
lender; or (iii) any such indebtedness, but only if in excess of
$1,500,000, shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or

 

(g)           The
Maker shall have any final judgment(s) outstanding against it for the payment
of $1,500,000 or more, and such judgment(s) shall remain unstayed, in effect,
and unpaid for the period of time after which the judgment holder may cause
the creation of liens against or seizure of any of the Maker’s property.

 

The holder of this Note may declare the
entire balance hereunder to be immediately due and payable upon default (or at
such time as the Maker receives net cash proceeds, determined in accordance
with generally accepted accounting principles, of at least $5,000,000 from the
sale of securities of the Maker pursuant to a financing transaction (or series of
integrated transactions)), whereupon the unpaid capitalized principal balance
and any accrued interest thereupon shall be due and payable without diligence,
presentment, demand, protest, notice of protest or intent to accelerate, notice
of acceleration or notice of any kind, all of which are expressly waived by
Maker.

 

The balance due under this Note is subject to
automatic adjustment and/or set off pursuant to terms of Sections 2.3 and 2.4
of the Acquisition and Reorganization Agreement dated April 11, 2006, by
and between the Maker and Prosoft (the “Reorganization Agreement”).

 

All parties to this Note, including the Maker
and any sureties, endorsers, or guarantors hereby waive protest, presentment,
notice of dishonor, and notice of acceleration of maturity and agree to
continue to remain bound for the payment of principal, interest and all other
sums due

 

25

 

under this Note notwithstanding any change or changes by way of
release, surrender, exchange, modification or substitution of any security for
this Note or by way of any extension or extensions of time for the payment of
principal and interest; and all such parties waive all and every kind of notice
of change or changes and agree that the same may be made without notice or
consent of any of them.

 

Upon default the holder of this Note may employ
an attorney to enforce the holder’s rights and remedies and the Maker,
principal, surety, guarantor and endorsers of this Note hereby agree to pay to
the holder reasonable attorneys’ fees not exceeding a sum equal to fifteen
percent (15%) of the outstanding balance owing on the Note, plus all other
reasonable expenses incurred by the holder in exercising any of the holder’s
rights and remedies upon default. The rights and remedies of the holder as
provided in this Note shall be cumulative and may be pursued singly,
successively or together, in the sole discretion of the holder. The failure to
exercise any such right or remedy shall not be a waiver or release of such
rights or remedies or the right to exercise any of them at another time.

 

This Note is to be governed and construed in
accordance with the laws of the State of Delaware.

 

IN TESTIMONY WHEREOF, the Maker has caused
this instrument to be executed in its corporate name by a duly authorized
officer as of the day and year first above written.

 

	
   

  	
  VCampus
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

26

 

Exhibit 2.2.2B

 

PROMISSORY
NOTE

 

Reston, VA

                ,
2006

 

$150,000.00

 

FOR VALUE RECEIVED the undersigned VCampus
Corporation, a Delaware corporation (the “Maker”), promises to pay to Prosoft
Learning Corporation (“Prosoft”) or its permitted assigns the principal sum of
One Hundred and Fifty Thousand Dollars ($150,000.00), in immediately available
funds, together with simple interest from the date of issuance until December 31,
2006 at the rate of six percent (6%) per annum, on which date the principal and
interest which has accrued thereon will be capitalized into a new principal
amount and the undersigned promises to pay this new capitalized amount,
together with interest at the rate of six percent (6%) per annum on the unpaid
balance from January 1, 2007 until paid, both principal and accrued
interest payable in lawful money of the United States of America, at the office
of Prosoft, or at such place as the legal holder hereof may designate in
writing. For the sake of clarity, interest shall be calculated based upon a
presumed 360-day year with each month having 30 days. The entire principal and
interest on the capitalized amount shall be due and payable as follows:

 

In six (6) equal monthly installments of
principal and accrued interest with the first installment due on January 1,
2007 and the remaining installments due and payable on the first day of each
successive month with a final payment due and payable on June 1, 2007.

 

This Note may be prepaid in full or in part at
any time without penalty or premium.

 

Each of the following shall constitute a default under this Note:

 

(a)           the
failure of the Maker to make any payments when due on this Note and such
failure continues for more than ten (10) days past the due date.

 

(b)           the
failure of the Maker to comply with or to perform, in any material respect,
when due any other term, obligation, covenant or condition contained in this
Note. If any failure, other than a failure to pay money, is curable, it may be
cured (and no default will have occurred) if the Maker after receiving written
notice from the holder demanding cure of such failure: (i) cures the
failure within thirty (30) days; or (ii) if the cure requires more than
thirty (30) days, immediately initiates steps sufficient to cure the failure
and thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonable; and

 

(c)           this
Note, the Reorganization Agreement or any provision thereof shall, for any
reason, not be valid and binding on the Maker, or not be in full force and
effect, or shall be declared to be null and void; the validity or
enforceability of this Note or the Reorganization Agreement shall be contested
by Maker; except with respect to any duly exercised set-off rights of the Maker
hereunder or under the Reorganization Agreement, the Maker shall deny that it
has any or further liability or obligation under this Note or the

 

27

 

Reorganization Agreement; or any default or
breach by the Maker in any material respect under any provision of the
Reorganization Agreement shall continue after the applicable grace or cure
period, if any, specified in the Reorganization Agreement.

 

(d)           the
sale of substantially all of the assets or ownership of the Maker to an
unaffiliated third party or a merger or other change of control transaction in
which both:  (i) holders of the
fully diluted equity of the Maker immediately prior to the transaction hold
less than 50% of the fully diluted equity of the maker as of immediately after
the transaction; and (ii) the Board of Directors of the Maker immediately
prior to the transaction comprise less than 50% of the members of the Board of
Directors of the surviving corporation in the transaction.

 

(e)           the
dissolution or termination of the Maker’s existence, the Maker’s insolvency,
appointment of a receiver for any significant part of the Maker’s
property, any assignment by the Maker for the benefit of creditors, any type of
creditor workout with respect to the Maker, or the commencement of any
proceeding under any bankruptcy or insolvency laws against the Maker (which is
not dismissed within 30 days).

 

(f)            (i) the
Maker shall fail to pay any other indebtedness of the Maker when due (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise)
and the maturity of such indebtedness, but only if in excess of $1,500,000, has
been accelerated; (ii) the Maker shall fail to perform or observe any
term or covenant contained in any agreement or instrument relating to such
indebtedness, when required to be performed or observed, and such failure shall
continue after any applicable grace or cure period, if any, specified in such
agreement or instrument, and would result in acceleration of the maturity of
such indebtedness, but only if in excess of $1,500,000, unless waived by the
lender; or (iii) any such indebtedness, but only if in excess of
$1,500,000, shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or

 

(g)  The
Maker shall have any final judgment(s) outstanding against it for the payment
of $1,500,000 or more, and such judgment(s) shall remain unstayed, in effect,
and unpaid for the period of time after which the judgment holder may cause
the creation of liens against or seizure of any of the Maker’s property.

 

The holder of this Note may declare the entire balance hereunder
to be immediately due and payable upon default (or at such time as the Maker
receives net cash proceeds, determined in accordance with generally accepted
accounting principles, of at least $5,000,000 from the sale of securities of
the Maker pursuant to a financing transaction (or series of integrated
transactions)), whereupon the unpaid capitalized principal balance and any
accrued interest thereupon shall be due and payable without diligence,
presentment, demand, protest, notice of protest or intent to

 

28

 

accelerate, notice of acceleration or notice of any kind, all of which
are expressly waived by Maker.

 

The balance due under this Note is subject to
automatic adjustment and/or set off pursuant to the terms of Section 2.3
and 2.4 of the Acquisition and Reorganization Agreement dated April 11,
2006, by and between the Maker and Prosoft (the “Reorganization Agreement”).

 

All parties to this Note, including the Maker
and any sureties, endorsers, or guarantors hereby waive protest, presentment,
notice of dishonor, and notice of acceleration of maturity and agree to
continue to remain bound for the payment of principal, interest and all other
sums due under this Note notwithstanding any change or changes by way of
release, surrender, exchange, modification or substitution of any security for
this Note or by way of any extension or extensions of time for the payment of
principal and interest; and all such parties waive all and every kind of notice
of change or changes and agree that the same may be made without notice or
consent of any of them.

 

Upon default the holder of this Note may employ
an attorney to enforce the holder’s rights and remedies and the Maker,
principal, surety, guarantor and endorsers of this Note hereby agree to pay to
the holder reasonable attorneys’ fees not exceeding a sum equal to fifteen
percent (15%) of the outstanding balance owing on the Note, plus all other
reasonable expenses incurred by the holder in exercising any of the holder’s
rights and remedies upon default. The rights and remedies of the holder as
provided in this Note shall be cumulative and may be pursued singly,
successively or together, in the sole discretion of the holder. The failure to
exercise any such right or remedy shall not be a waiver or release of such
rights or remedies or the right to exercise any of them at another time.

 

This Note is to be governed and construed in
accordance with the laws of the State of Delaware.

 

IN TESTIMONY WHEREOF, the Maker has caused
this instrument to be executed in its corporate name by a duly authorized
officer as of the day and year first above written.

 

 

	
   

  	
  VCampus
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

29Exhibit
10.116

 

April 11,
2006

 

DKR Soundshore Strategic Holding Fund Ltd.

c/o DKR Oasis Management Company, L.P.

1281 East Main St.

Stamford, Conn. 06920

 

DKR Soundshore Oasis Holding Fund Ltd.

c/o DKR Oasis Management Company, L.P.

1281 East Main St.

Stamford, Conn. 06920

 

Hunt Capital Growth Fund II, LP

2001 Ross Ave., Suite 4800

Dallas. TX 75201 

 

	
  Re:

  	
  Letter
  Agreement Regarding Reorganization and Acquisition of Capital Stock of
  Prosoft Learning Corporation, a Nevada corporation (“Prosoft”)

  

 

Ladies and Gentlemen:

 

This letter serves to
memorialize the agreements that we have reached among VCampus Corporation, a
Delaware corporation (“VCampus”) and each of you who are secured noteholders of
Prosoft, regarding the anticipated reorganization of Prosoft as described
below.

 

Prosoft (together with
at least one of its subsidiaries, Computer PREP, Inc.) plans to file in the
immediate future a voluntary petition for reorganization under Chapter 11 of
Title 11 of the United States Code. VCampus desires to acquire through itself
or one of its affiliates all of the newly issued and outstanding capital stock
of the reorganized Prosoft (the “Acquisition”) through the execution, delivery
and performance of the Acquisition and Reorganization Agreement between VCampus
and Prosoft (the “Acquisition Agreement”), a true and accurate copy of which is
attached hereto as Exhibit “A.” The Acquisition Agreement will be approved and
consummated pursuant to a Plan of Reorganization in Prosoft’s Chapter 11 case
(the “Plan”), a copy of which is appended to the Acquisition Agreement.

 

As an inducement to
make the Acquisition and for other good and valuable consideration, VCampus
desires to set forth certain agreements among VCampus and each of DKR
Soundshore Strategic Holding Fund Ltd., an entity formed under the laws of
Bermuda, DKR Soundshore Oasis Holding Fund Ltd., an entity formed under the
laws of Bermuda, and Hunt Capital Growth Fund II, LP., a Delaware limited
partnership (each a “Noteholder,” and, collectively, the “Noteholders”). All
capitalized terms not otherwise defined herein shall have the meaning assigned
to such terms in the Acquisition Agreement.

 

1. Acknowledgment
of and Consent to Acquisition Agreement. Prior to Prosoft’s Chapter 11
petition date (the “Petition Date”), each Noteholder has been informed of and
involved in certain activity with Prosoft, including pursuit of potential
purchasers of Prosoft and/or its assets. Each Noteholder’s note or notes to
Prosoft currently are or as of the Petition Date are anticipated to be in
material default. The aggregate balance of Noteholders’ notes to

 

 

Prosoft exceeds the value of Prosoft’s assets
that have been pledged as collateral security for the repayment of Noteholders’
notes. It therefore is anticipated that the net proceeds of the Acquisition
will be distributed solely to the Noteholders under the Plan. Each Noteholder
hereby irrevocably acknowledges and agrees that it a) for purpose of any
consent requirement in its note(s) or related security documents, hereby consents;
and b) for purposes of Prosoft’s anticipated Chapter 11 case and
Plan, will not object to, Prosoft’s execution, delivery and performance of the
Acquisition Agreement.

 

2. No Shop
Provision. During the period commencing on the date hereof and ending on the
earlier of the Closing or the termination of the Acquisition Agreement, each
Noteholder agrees that, except as otherwise specifically permitted herein,
neither Noteholder nor any of its officers, directors, employees, agents,
representatives or affiliates will directly or indirectly solicit or initiate
discussions or negotiations with any person concerning an Alternative
Transaction. Notwithstanding the foregoing, each Noteholder and its financial
and legal advisors may furnish information to, or enter into discussions with,
any person that makes a proposal for an Alternative Transaction to Prosoft,
which proposal has not been solicited by either Prosoft or the Noteholders
after the date hereof. Each Noteholder may only consent to an Alternative
Transaction if it provides purchase price consideration to Prosoft of at least
$100,000 more than the Purchase Price, net of any termination fee that is
payable to VCampus pursuant to Section 8.10 of the Acquisition Agreement.

 

3. Distribution of
Notes; Setoff. Pursuant to the Acquisition Agreement, VCampus will deliver
the Notes to Prosoft at Closing. To the extent that the Notes are distributed
to the Noteholders under the Plan, VCampus shall issue to each of the
Noteholders replacement notes in the name of each Noteholder, pari passu, with the amount of each
replacement note calculated pro rata based upon the allowed amount of each
Noteholder’s claim to the total amount of all allowed claims of the Noteholders
under the Plan. Each of the Noteholders acknowledges and consents to the setoff
rights provided to VCampus pursuant to Sections 2.3 and 2.4 of the Acquisition
Agreement, and further agrees to be bound to the provisions of Sections 2.3 and
2.4 should the Notes be distributed to the Noteholders under the Plan, and also
with regard to any replacement notes issued to the Noteholders as provided
herein. Each of the Noteholders hereby consents to the continuing jurisdiction
of the Bankruptcy Court to resolve any disputed Set Off Claim. Finally, VCampus
hereby acknowledges and agrees that the Noteholders, as the holders of the
Notes, shall be entitled to dispute and contest any Set Off Claim to the same
extent as Prosoft is so entitled to dispute and contest the same under
Sections 2.3 and/or 2.4 of the Acquisition Agreement.

 

4. Termination Fee
and Cash Collateral. Each Noteholder hereby acknowledges and agrees that it
does not oppose the termination fee provisions contained in Section 8.10
of the Acquisition Agreement. In addition, each Noteholder specifically agrees
that if a termination fee is due and payable to VCampus by Prosoft pursuant to
Section 8.10 of the Acquisition Agreement, such termination fee may be
paid by Prosoft from each Noteholder’s cash collateral.

 

2

 

5. Anticipated
Prosoft Training Japan, Inc. Transaction. It is anticipated that shortly
before or after the Petition Date, Prosoft will consummate an agreement with
Prosoft Training Japan, Inc., a Japanese corporation (“PTJ”), whereby Prosoft
will transfer or otherwise convey an interest in certain intellectual property
(primarily Japanese translations of Certified Internet Webmaster exams) to PTJ
(the “PTJ Transaction”). The terms of the PTJ Transaction are anticipated to be
substantially as set forth in the “Letter of Intent—Copyright Licensing and
Transfer Agreement,” a working draft of which is appended hereto as Exhibit “B”
(the “PTJ Agreement”).

 

Should Prosoft elect
to go forward with the PTJ Transaction, and consummate an agreement
substantially similar to the PTJ Agreement, VCampus hereby provides its consent
for purposes of any provision of the Acquisition Agreement that might otherwise
limit or preclude Prosoft’s ability to agree to and/or consummate the PTJ
Transaction, including but not limited to Sections 5.1.1, 5.1.3, 5.1.12.6
through 5.1.12.8, 6.1.1.8 and 6.1.1.9 of the Agreement.

 

For their part, each
of the Noteholders hereby consent, and Prosoft acknowledges, that the transfer
of assets that the PTJ Transaction contemplates (to the extent that the PTJ
Transaction is consummated) diminishes the aggregate value of Prosoft’s assets
that VCampus intended to retain in Reorganized Prosoft by $200,000, which
amount shall be reflected on the Closing Balance Sheet and result in a
reduction of Working Capital in that amount (and the Noteholders’ liens and
security interests shall attach to all proceeds paid or payable associated with
the PTJ Agreement and the transactions related thereto).

 

6. Assumption of
Employment Agreement of Benjamin M. Fink. Benjamin M. Fink, the current
President and CEO of Prosoft, has agreed to remain employed by Prosoft in order
to facilitate the Acquisition and Prosoft’s Chapter 11 reorganization. It is
anticipated that Mr. Fink will enter into an amendment of his existing
employment contract with Prosoft, in substantially the form appended hereto as
Exhibit “C,” that will, among other things, provide for a $200,000 severance
payment if his employment is terminated upon the Closing of the Acquisition.
Each of the Noteholders hereby acknowledges and consents that this severance
liability will be reflected upon the Closing Balance Sheet and result in a
reduction of Working Capital in that same amount. VCampus likewise agrees that
Reorganized Prosoft will assume the liability to pay Mr. Fink such
severance. (The parties acknowledge that Section 1.4 of the Acquisition
Agreement contemplates that any accrued vacation pay owed to Mr. Fink upon
his termination, together with any employer share of the taxation of both the
severance and accrued vacation pay will be reflected on the Closing Balance
Sheet and result in a reduction of Working Capital in the amount of such
vacation pay and taxes.)

 

7. Director’s and
Officer’s Liability Insurance Policy. Each of the Noteholders hereby acknowledges
that they have agreed that Prosoft may obtain a “tail coverage” extension of
Prosoft’s existing policy of director’s and officer’s liability insurance that
shall be effective for a period of not more than two (2) years from
Closing (the “Tail Policy”) To the extent that the premium for the Tail Policy
remains unpaid at Closing, VCampus agrees that Reorganized Prosoft shall assume
liability to pay such premium, and each of the Noteholders consents that the
amount of the actual premium paid by Reorganized Prosoft for the Tail Policy
shall be reflected on the Closing Balance Sheet and result in a reduction of
Working Capital in that amount.

 

3

 

Each Noteholder
individually and severally as to itself represents and warrants to VCampus
that: (a) each of the individuals signing on behalf of each Noteholder has
the power and authority to execute and deliver this letter agreement on behalf
of such Noteholder; (b) each Noteholder has the power and authority to
execute and deliver this letter agreement and the execution and delivery of
this letter agreement will not violate any material agreement, obligation or
instrument of each Noteholder; (c) each Noteholder has had the opportunity
to seek and has relied upon independent advice concerning this letter
agreement, the Acquisition, the Acquisition Agreement, the Plan and all other
related matters, including, without limitation, financial and legal advice.

 

The agreements
contained herein will be governed by the laws of the State of Delaware. This
letter agreement may be executed in one or more counterparts each of which will
be deemed an original and all of which will constitute one and same instrument.
If this letter agreement meets with your approval, please execute where
indicated below and return to our attention.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VCAMPUS
  CORPORATION, a Delaware 

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Its

  	
   

  

 

[Signature blocks of the Noteholders and Prosoft appear on
the following page.]

 

4

 

AGREED AND ACCEPTED:

 

	
  DKR SOUNDSHORE STRATEGIC HOLDING FUND LTD.,

  
	
  an entity formed under the laws of Bermuda

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  
	
   

  
	
  DKR SOUNDSHORE OASIS HOLDING FUND LTD.,

  
	
  an entity formed under the laws of Bermuda

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  
	
   

  
	
  HUNT CAPITAL GROWTH FUND II, LP,

  
	
  a Delaware limited partnership

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Hunt Capital Growth, LP

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Hunt Capital Growth, LLC

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  
	
  ACKNOWLEDGED AND
  CONSENTED TO:

  
	
   

  
	
  PROSOFT LEARNING CORPORATION,

  
	
  a Nevada corporation

  
					

 

5

 

	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  

 

[Signature page to Letter Agreement with VCampus

dated April 11, 2006]

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