Document:

Exhibit
10.86

 

CERTIFICATE OF AMENDMENT OF

 

CERTIFICATE OF DESIGNATIONS,

 

PREFERENCES AND RIGHTS OF

 

SERIES D CONVERTIBLE PREFERRED STOCK OF

 

VCAMPUS CORPORATION

 

Pursuant
to Section 242 of the General

Corporation Law of the State of Delaware

 

The undersigned officer
of VCampus Corporation, a Delaware corporation (the “Corporation”),
pursuant to the provisions of Section 242 of the General Corporation Law of the
State of Delaware, does hereby make this Certificate of Amendment of the
Certificate of Designations, Preferences and Rights of Series D Convertible
Preferred Stock, originally filed with the office of the Secretary of State of
the State of Delaware on June 28, 1998 (the “Series D Certificate of Designations”), and does hereby state
and certify that pursuant to the authority expressly vested in the Board of
Directors of the Corporation by its Certificate of Incorporation, as amended,
the Board of Directors of the Corporation duly adopted a resolution proposing
and declaring advisable the following amendment to the Series D Certificate of
Designations:

 

RESOLVED, that the
Series D Certificate of Designations is hereby amended as follows:

 

(1)           by adding the following new
subsection (g) to Section 6 of Article II:

 

(g)           Mandatory Automatic Conversion.  Effective
immediately upon the filing of this Certificate of Amendment of
Certificate of Designations, all
outstanding shares of Series D Preferred Stock shall automatically convert into
shares of Common Stock on the basis set forth in this Section 6.  Holders of shares subject to conversion
shall deliver to the Corporation at its principal office (or such other office
or agency as the Corporation may designate by notice in writing) during its
usual business hours, the certificate or certificates for shares of Preferred
Stock being converted, and the Corporation shall issue and deliver to such
holders certificates for the number of shares of Common Stock to which such
holders are entitled.  Until such time
as holders of shares of Preferred Stock shall surrender those certificates
therefor as provided above, such certificates shall be deemed to represent the
shares of Common Stock to which the holders shall be entitled upon the
surrender thereof.

 

The aforesaid Resolution
was duly adopted by the affirmative vote of the holders of more than fifty
percent (50%) of the outstanding shares of the Corporation’s Common Stock and
Preferred Stock entitled to vote thereon and voting together as a single class,
together with the affirmative vote of the holders of more than fifty percent
(50%) of the outstanding shares of Series D Convertible Preferred Stock
entitled to vote thereon and voting together as a separate class, in accordance
with Section 242 of the General Corporation Law of the State of Delaware.

 

 

IN WITNESS WHEREOF, VCampus Corporation has caused
this Certificate of Amendment to Certificate of Designations to be signed by
its duly authorized officer as of the 6th day of June 2003.

 

 

	
   

  	
  VCAMPUS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher
  L. Nelson

  	
   

  
	
   

  	
  Name:

  	
  Christopher L. Nelson

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
					

 

2Exhibit 10.87

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made effective as of
June 25, 2003 (the “Effective Date”), between VCampus Corporation, a
corporation organized and existing under the laws of the State of Delaware
(“VCAMPUS”) and Narasimhan P. Kannan (“Kannan”).

 

WHEREAS, the
Company and were parties to that certain Employment Agreement dated as of
January 1, 2003 (the “Prior Agreement”); and

 

WHEREAS, the Company now desires to amend the Prior Agreement; and

 

WHEREAS, upon
Employee’s execution of this Agreement, Employee shall remain continuously
employed by the Company but the Prior Agreement shall terminate and be of no
further effect;

 

WHEREAS, the
parties hereby acknowledge that the goodwill, continued patronage, names,
addresses and specific business requirements of VCAMPUS’ clients and customers,
and the designs, procedures, systems, strategies, business methods and know-how
of VCAMPUS, having been acquired through VCAMPUS’ efforts and the expenditure
of considerable time and money, are among the principal assets of VCAMPUS; and

 

WHEREAS, the
parties hereby acknowledge that as a result of the position(s) in which Kannan
will be employed, Kannan will develop special skills and knowledge peculiar to
VCAMPUS’ business, whereby he will become, through his employment with VCAMPUS,
acquainted with the identities of the clients and customers of VCAMPUS, and
will acquire access to the techniques of VCAMPUS in carrying on its business, as
well as other confidential and proprietary information; and

 

WHEREAS, the
parties hereto acknowledge that the Covenants set forth in Section 8 of this
Agreement are necessary for the reasonable and proper protection of VCAMPUS’
confidential and proprietary information (as defined herein), customer
relationships, and the goodwill of VCAMPUS’ business, and that such Covenants
constitute a material portion of the consideration for Kannan ‘s employment
hereunder.

 

NOW,
THEREFORE, in consideration of the premises and mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1.     Term.  VCAMPUS agrees to employ Kannan, and Kannan agrees
to be employed, as President and Chief Executive Officer of VCAMPUS, for a term
of twelve months

 

 

from the Effective Date (hereinafter, the “term” or the “employment
term”), unless such employment is sooner terminated as provided herein.

 

2.     Compensation.

 

(a)   Base
Salary.  In consideration of Kannan
‘s services as President and Chief Executive Officer (or any other capacity in
which Kannan may be employed by VCAMPUS), VCAMPUS shall pay Kannan a minimum
annual base salary of Two Hundred Eighty Thousand Dollars  ($280,000.00) per annum (equivalent to
$23,333 per month), payable in equal monthly installments in accordance with
VCAMPUS’ normal payroll practices. 
Provided, however, VCAMPUS shall be entitled to retain from any payments
due to Kannan hereunder, on a net (after tax) basis, up to Three Thousand
Dollars ($3,000.00) per month, to be applied to the repayment of any and all
loans owed by Kannan to VCAMPUS.  Both
parties acknowledge and agree that nothing in the foregoing provision of this
Section 3(a) in any way modifies the terms of the outstanding loan from Kannan
to VCAMPUS and that the terms of such loan remain in full force and effect.

 

(b)   Performance
Bonuses.  Kannan shall be eligible
to receive performance bonuses, as determined in the sole discretion of the
Board of Directors of VCAMPUS, based upon factors determined appropriate by the
Board of Directors, which may include, for example, attainment by VCAMPUS of
breakeven operations and profitability during the term of this Agreement and
any renewals thereof.

 

3.     Employee
Benefits, Vacation.  During the term
of this Agreement, Kannan shall be eligible to receive and/or participate in
all regular employee benefits that are offered by VCAMPUS to its executive
employees, including, without limitation, major medical, dental, 401(k)
Retirement Plan and long- and short-term disability insurance coverage for
Kannan.  Except for the specific
employee benefits set forth above, VCAMPUS shall have no obligation to provide
Kannan with life insurance, car allowance, memberships or any other similar
executive benefits.  During the initial
term or any renewal terms hereof, Kannan shall be entitled to receive up to two
hundred (200) hours of paid vacation per calendar year (or a pro rata portion
thereof based on the length of the then current term).  Kannan may not carry over any hours of
accrued but unused vacation from one calendar year or six-month term to the
next.  Except as may be required by law,
VCAMPUS will not provide Kannan with monetary compensation for such accrued but
unused vacation time.

 

4.     Reimbursement
of Expenses. Kannan is authorized to incur reasonable expenses in
connection with the business of VCAMPUS including expenses for travel and
similar items.  VCAMPUS will reimburse
Kannan for all such reasonable and management-approved expenses upon itemized
account of expenditures.  In particular,
Kannan will be entitled to receive reimbursement for mobile phone expenses
related to VCAMPUS matters of up to $175.00 per month.

 

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5.     Termination.

 

(a)     Termination
Without Cause.  Either VCAMPUS or
Kannan may terminate this Agreement without cause with thirty (30) days written
notice to the other party.  Upon
termination without cause, Kannan shall receive accrued but unpaid base salary
for days worked prior to termination. 
If VCAMPUS fails to provide thirty (30) days advance written notice of
its intention to terminate without cause, in its sole discretion VCAMPUS may
elect to pay Kannan his regular base salary in lieu of such notice for all or a
portion of such notice period.  Unless
otherwise provided in this Agreement, Kannan shall not be entitled to a
severance payment in the event of a termination without cause pursuant to this
subparagraph 5(a).

 

(b)    Termination
for “Cause”.  VCAMPUS may discharge
Kannan immediately and without any advance notice for “Cause,” which shall be
limited to:

 

(i)            Kannan’s
gross negligence or willful misconduct that results in material harm to the
financial condition, business, assets, or prospects of VCAMPUS;

 

(ii)           the conviction of, or the entering of a plea of
no contest by, Kannan for a felony or crime involving moral turpitude;

 

(iii)          the Board of Directors determines that Kannan has
engaged in theft, fraud, misappropriation or embezzlement in connection with
his services for the Company; or

 

(iv)          the Board of Directors determines that Kannan has
repeatedly failed to carry out the reasonable directions of the Board of
Directors of the Company, which failure cannot be cured or shall not have been
cured within thirty (30) days after receipt by Kannan of written notice
specifying in reasonable detail the failure to so carry out such directions.

 

(c)     Termination
due to Death or Disability.  In the
event of Kannan’s death or “disability” (as defined below), this Agreement
shall terminate immediately, and VCAMPUS shall pay to Kannan’s spouse or
beneficiary Kannan’s accrued unpaid base salary.  For purposes of this Agreement, “disability” shall mean the event
of Kannan’s physical or mental inability (as verified by a physician selected
by VCAMPUS) to perform his essential functions hereunder, with or without
reasonable accommodation, for a period of at least sixty (60) consecutive days
during the Agreement.

 

6.     Severance
Benefit.  Except for any payments
described in Section 5(a) above, no severance benefit shall be payable to
Kannan in connection with any termination of this Agreement.

 

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7.     Restrictive
Covenants.  In exchange for the
Company’s agreement to extend the employment term from the term set out in the
Prior Agreement, Kannan agrees that the following restrictions shall apply
during Kannan’s employment and for the indicated periods of time following the
termination of Kannan’s employment.

 

(a)   Non-solicitation
of Customers.  During Kannan’s
employment with VCAMPUS, and for the one (1) year period of time following
termination of his employment by either party for any reason whatsoever, Kannan
agrees not to solicit business with any client or customer of VCAMPUS (which
did business with VCAMPUS during Kannan’s employment), whether or not VCAMPUS
is doing work for such client or customer as of the date of termination of
Kannan’s employment.

 

(b)   Nonsolicitation
of Employees.  During Kannan’s
employment with VCAMPUS, and for the one (1) year period following termination
or expiration of his employment by either party for any reason whatsoever,
Kannan further agrees not to initiate contact with, solicit, entice, or attempt
to entice in any form, fashion or manner any employee of VCAMPUS for the
purpose of inducing that employee to terminate his/her employment with VCAMPUS.

 

(c)   Non-disclosure.  During Kannan’s employment and for a period
of one (1) year after termination of his employment by either party for any
reason whatsoever, Kannan agrees not to disclose, or to knowingly allow any
other employee to disclose, to any other person or business entity, or use for
personal profit or gain, any confidential or proprietary information of
VCAMPUS, regardless of whether the same shall be or may have been originated,
discovered or invented by Kannan or by Kannan in conjunction with others.  For purposes of this Agreement, the term
“confidential or proprietary information” shall include, without limitation:
the names, addresses and telephone numbers of past, present and prospective
clients or customers of VCAMPUS, as well as products, designs, business plans,
proposed business development, marketing strategies, customers requirements,
contractual provisions, employee capabilities, proposed marketing initiatives,
pricing methods, company earnings, computer software and reporting systems; and
the procedures, systems and business methods of VCAMPUS.

 

8.     Remedies
for Breach.  Kannan hereby
acknowledges and agrees that a violation of any of the covenants set forth in
Section 7 (the “Covenants”) would result in immediate and irreparable harm to
VCAMPUS, and that VCAMPUS’ remedies at law, including, without limitation, the
award of money damages, would be inadequate relief to VCAMPUS for any such
violation.  Therefore, any violation or
threatened violation by Kannan of the Covenants shall give VCAMPUS the right to
enforce such Covenants through specific performance, temporary restraining
order, preliminary or

 

4

 

permanent injunction, and other equitable relief.  Such remedies shall be cumulative and in
addition to any other remedies VCAMPUS may have, at law or in equity.

 

9.     No
Conflict.  Kannan represents and
warrants to VCAMPUS that to his knowledge, neither the execution and delivery
of this Agreement, nor the performance of his duties hereunder violates or will
violate the provisions of any other agreement to which he is a party or by
which he is bound.  Kannan agrees to
hold harmless and indemnify VCAMPUS in the event that of any claims against
VCAMPUS arising out of such breach.

 

10.   Return
of VCAMPUS Property.  Upon the
termination of Kannan’s employment with VCAMPUS for any reason, Kannan shall
leave with or return to VCAMPUS all personal property belonging to VCAMPUS  (“VCAMPUS Property”) that is in Kannan ‘s
possession or control as of the date of such termination of employment,
including, without limitation, all records, papers, drawings, notebooks,
specifications, marketing materials, software, reports, proposals, equipment,
or any other device, document or possession, however obtained, whether or not
such VCAMPUS Property contains confidential or proprietary information of
VCAMPUS as described in Section 7(c) hereof.

 

11.   Survival.  The provisions of Sections 7, 8, 9, and 10
hereof shall survive the termination of this Agreement, regardless of the
manner or cause of such termination.

 

12.   Effect
of Agreement. This Agreement supercedes and replaces the Prior
Agreement.  The parties agree and
acknowledge that this Agreement sets forth the final and complete Agreement of
the parties. It shall not be assigned by Kannan and may not be modified except
by way of a writing executed by both parties. 
All terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
successors and assigns.

 

13.   Notices.  Any Notice, demand, or other communication
required or permitted hereunder shall be deemed properly given when placed in
writing and deposited in the United States Postal Service, by registered mail,
postage prepaid, overnight mail or personal delivery, addressed as follows:

 

If to Kannan:

Narasimhan P. Kannan

(at his address as shown on the records of VCAMPUS)

 

If to VCAMPUS:

 

VCampus Corporation

1850 Centennial Park Drive, Suite 200

Reston, VA  20191

Attn:  Chief Financial Officer

 

5

 

With a copy to:

 

Wyrick Robbins Yates & Ponton LLP

Suite 300

4101 Lake Boone Trail

Raleigh, NC 27607

Attn:  Kevin A. Prakke

 

14.   Governing
Law.  The provisions of this
Agreement and any disputes arising hereunder shall be governed by and construed
in accordance with the laws of the State of Virginia.

 

15.   Amendment
and Waiver.  No amendment or
modification of this Agreement shall be valid or binding upon VCAMPUS unless
made in writing and signed by a duly authorized representative of VCAMPUS, or
upon Kannan unless made in writing and signed by Kannan.

 

[Signature
page follows.]

 

6

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
their seals affixed hereto as of the day and year first above written.

 

	
   

  	
   

  	
  VCAMPUS Corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Corporate Seal

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Narasimhan P. Kannan

  	
  (SEAL)

  
	
   

  	
   

  	
  Narasimhan P. Kannan

  	
   

  
							

 

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