Document:

Exhibit 10.5

AMENDMENT

TO

MASTER EQUIPMENT LEASE AGREEMENT NO. 7667 DATED JUNE 10,1999

AMENDMENT (this “Amendment”) to Master Equipment Lease
Agreement No. 7667 between General Electric Capital Corporation
(successor-in-interest to Oxford Venture Finance, LLC), as lessor (the
“Lessor”) and Genaissance Pharmaceuticals, Inc., as lessee (the “Lessee”) dated
June 10, 1999 (together with all lease schedules, riders, and attendant
documents, the “Lease”).  This Amendment
is entered into pursuant to and incorporates all of the terms and provisions of
the Lease.  By its execution and
delivery of this Amendment, Lessee hereby reaffirms all of the representations,
warranties and covenants contained in the Lease as of the date hereof.

1.             Purpose.  This Amendment supplements the Lease and
provides additional security for Lessee’s payment of the Obligations.

2.             Definition. 
The following terms shall have the following meanings herein:

(a)           “Cash”
shall mean all cash, cash equivalents, marketable securities, money, checks, currency,
and deposit accounts, less funds pledged to secure a standby letter of credit
in favor of Lessor as contemplated herein.

(b)           “Debt”
shall mean Lessee’s principal outstanding indebtedness, as well as accrued and
unpaid interest, reduced by the amount of the standby letter of credit in favor
of Lessor.

3.             Letter
of Credit.  Concurrently with the
execution of this Amendment, Lessee shall execute and enter into the Letter of
Credit Agreement annexed hereto as Exhibit “I”.

4.             Representations,
Warranties and Covenants.  Lessee hereby
acknowledges and agrees that the following shall constitute additional
Representations, Warranties and Covenants under the Lease:

(a)           Lessee
hereby covenants and agrees that commencing upon execution of this Amendment
and continuing until the Obligations are equal to or less than $2,000,000.00,
Lessee, at all times, shall hold and maintain Cash in an amount equal to at
least 125% of Lessee’s total Debt (the “Restricted Cash”).

(b)           Lessee
shall not, without the prior written consent of Lessor, in any manner dispose,
transfer or surrender any of the Restricted Cash.

(c)           Lessee
shall not, directly or indirectly, create, incur or permit to exist any lien,
encumbrance, pledge, attachment or security interest on or with respect to the
Restricted Cash.

(d)           Lessee
shall furnish to Lessor, on or before the 15th day of each month,
commencing March 15, 2003 and continuing until the Obligations are equal to or
less than

 

 

$2,000,000.00, a statement, as of the end of the preceding month,
identifying Lessee’s total current Cash and the location(s)/account(s)
pertaining to such Cash.

 

5.             Events of Default.

(a)           Lessee
hereby acknowledges and agrees that the following shall constitute an
additional Event of Default under the Lease: 
Lessee shall fail to perform or observe any of the obligations,
representations, warranties or covenants set forth in items Paragraphs 4 and 5
of this Amendment, provided that Lessee shall be given thirty (30) days’
written notice and an opportunity to cure before an Event of Default shall be
deemed to have occurred [except as to paragraphs 4(b) and 4(c) for which a
twenty (20) day written notice and opportunity to cure shall be provided].

(b)           On
the date the Obligations shall be equal to or less than $2,000,000.00,
Paragraph 10(n) of the Lease shall be deemed deleted and of no further force
and effect.

6.             Lessee
shall be provided written notice and a thirty (30) day opportunity to cure
prior to any declaration of default under Section 10 of the Lease except
for:  (i) Section 10(a) of the Lease,
for which written notice and a twenty (20) day opportunity to cure shall be
provided; (ii) Section 10(h) for which, with respect to voluntary actions by
Genaissance, there shall be no notice and no cure period; and (iii) Section
(10)(i) for which there shall be no notice and no cure period.  In addition, Lessor acknowledges that no
event of default shall be deemed to have occurred pursuant to Section 10(j) of
the Lease or otherwise as a result of any declaration of default by Finova
Technology Finance, Inc., n/k/a Finova Capital Corporation prior to the date
hereof.

IN WITNESS WHEREOF, Lessor and Lessee have caused their
duly authorized representatives to execute and deliver this Amendment on this
12th day of March 2003.

GENERAL
ELECTRIC CAPITAL CORPORATION

	
  By:

  	
  /s/ Carl
  Peterson

  
	
   

  	
   

  
	
  Name:

  	
  Carl Peterson

  
	
   

  	
   

  
	
  Title:

  	
  Senior Risk
  Analyst

  

GENAISSANCE PHARMACEUTICALS, INC.

	
  By:

  	
  /s/ Joseph Keyes

  
	
   

  	
   

  
	
  Name:

  	
  Joseph Keyes

  
	
   

  	
   

  
	
  Title:

  	
  Vice President —
  CFO

  

 

2Exhibit 10.6

 

Management Incentive Program Summary

 

Overview

 

The
Management Incentive Program (the “Program”) of Genaissance Pharmaceuticals,
Inc. (the “Company”) is an incentive bonus program that provides that certain
employees (each, a “Participant”) are eligible to receive an annual bonus,
payable at the sole discretion of the Chief Executive Officer in cash, in
shares of restricted common stock of the Company, or in options to purchase
shares of common stock of the Company, in recognition of their respective
contributions to the success of the Company. 
Each fiscal year consists of one Program Period (the “Program Period”).

 

The
Board of Directors of the Company (the “Board”), or a committee thereof,
retains the right to modify or terminate the Program at any time.

 

Goal

 

The
goal of the Program is to better motivate, reward and retain senior management
and key contributors of the Company.

 

Eligibility

 

Generally,
employees at or above the level of Vice President are eligible to participate
in the Program.  In order to be eligible
to participate in the Program, a Participant must be actively employed by the
Company at the time the annual bonus under the Program is paid or issued, as
the case may be.  For those Participants
who are hired at or promoted to the level of Vice President or above during the
Program Period, bonuses granted under the Program, if any, will be pro-rated
based on the period of time the Participant was engaged in such eligible
position.

 

Payments Under the
Program

 

All
bonuses paid under the Program will be payable in the first quarter of the
fiscal year following the applicable Program Period.  Such bonuses will be paid to Participants either in cash, in
shares of restricted common stock of the Company, or in options to purchase
shares of common stock of the Company at the sole discretion of the Chief
Executive Officer of the Company, except for any bonus paid to the Chief
Executive Officer, which will be paid at the sole discretion of the
compensation committee of the Board.

 

Bonus
payments made under the Program are determined in accordance with the following
quidelines:

 

•                  50% of the bonus
payable will be based on the Company’s achievement of certain pre-determined
Company-wide objectives; and

 

•                  50% of the bonus
payable will be based on the Participant’s accomplishment of certain
performance objectives set and agreed upon during the first quarter of each
fiscal year between the Participant and his or her supervisor.

 

 

 

Bonus payments
under the Program are targeted to be between 50% and 75% of the Participant’s
respective annual base salary.  The
Board or a committee thereof may determine not to award any bonuses in any
given Program Period.

 

 

2Exhibit
10.82

 

CERTIFICATE
OF DESIGNATIONS,

PREFERENCES
AND RIGHTS OF

SERIES
H CONVERTIBLE PREFERRED STOCK

OF

VCAMPUS
CORPORATION

I.                                         Creation
of Series H Convertible Preferred Stock.

 

The undersigned officer
of VCampus Corporation, a Delaware corporation (the “Corporation”), pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, does hereby make this Certificate of Designations, Preferences and
Rights (the “Series H 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 the Certificate of Incorporation, as amended,
the Board of Directors duly adopted the following resolutions:

 

RESOLVED, that, pursuant
to the Certificate of Incorporation, as amended, of the Corporation (the
“Amended Certificate of Incorporation”), which authorizes 10,000,000 shares of
undesignated preferred stock, par value $0.01 per share, of which:

 

(A)                              1,000,000
shares are designated Series C Convertible Preferred Stock, par value $0.01 per
share (the “Series C Preferred Stock”), 623,339 of which are issued and
outstanding;

 

(B)                                1,200,000
shares are designated Series D Convertible Preferred Stock, par value $0.01 per
share (the “Series D Preferred Stock”), 1,013,809 of which are issued and
outstanding;

 

(C)                                3,000,000
shares are designated Series E Convertible Preferred Stock, par value $0.01 per
share (the “Series E Preferred Stock”), 574,895 of which are issued and
outstanding;

 

(D)                               3,000,000
shares are designated Series F Convertible Preferred Stock, par value $0.01 per
share (the “Series F Preferred Stock”), all of which are issued and
outstanding;

 

(E)                                 1,458,413
shares are designated Series F-1 Convertible Preferred Stock, par value $0.01
per share (the “Series F-1 Preferred Stock”), all of which are issued and
outstanding;

 

(F)                                 60,000
shares are designated Series F-2 Convertible Preferred Stock, par value $0.01
per share (the “Series F-2 Preferred Stock”), 27,578 of which are issued and
outstanding; and

 

 

(G)                                80,000
shares are designated Series G Convertible Preferred Stock, par value $0.01 per
share (the “Series G Preferred Stock”), 78,041 of which are issued and
outstanding;

 

the Board of Directors is
authorized, within the limitations and restrictions stated in the Amended
Certificate of Incorporation, to fix by resolution or resolutions the
designation of each series of preferred stock and the powers, preferences and
relative participating, optional, or other special rights, and qualifications,
limitations, and restrictions thereof; and

 

RESOLVED, that the
Corporation hereby fixes the designations and preferences and relative,
participating, optional, and other special rights, and qualifications,
limitations, and restrictions of the preferred stock consisting of 30,000
shares to be designated Series H Convertible Preferred Stock, par value $0.01
per share (the “Series H Preferred Stock”); and

 

RESOLVED, that the Series
H Preferred Stock is hereby authorized on the terms and with the provisions
herein set forth:

 

II.                                     Provisions
Relating to the Preferred Stock.

 

1.                                       Rank.  The Series H Preferred Stock shall, with
respect to dividend rights and with respect to rights upon liquidation, winding
up or dissolution, rank pari passu to the Series C, D, E, F, F-1, F-2 and G
Preferred Stock and senior and prior in right to (a) each class of Common Stock
of the Corporation, (b) any series of preferred stock hereafter created (except
as may otherwise be consented to by holders of a majority of the Series H
Preferred Stock) and (c) any other equity interests (including, without
limitation, warrants, stock appreciation rights, phantom stock rights, profit
participation rights in debt instruments or other rights with equity features,
calls or options exercisable for or convertible into such capital stock or
equity interests) in the Corporation that by its terms rank junior to the
Series H Preferred Stock (all of such classes or series of capital stock and
other equity interests, including, without limitation, all classes of Common
Stock of the Corporation, are collectively referred to as “Junior Securities”).
As a condition to the automatic conversion into Common Stock of all of the
shares of Series H Preferred Stock pursuant to Section 5(g) hereof, all of the
Corporation’s outstanding shares of Series C, D, E, F, F-1, F-2 and G Preferred
Stock must be converted into Common Stock prior to or simultaneous with such
automatic conversion.

 

2.                                       Dividends.  (a) The holders of Series H Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, dividends payable
either in cash, in property or in shares of capital stock.

 

(b)                                 So
long as any shares of Series H Preferred Stock are outstanding, the Corporation
will not declare, pay or set apart for payment any dividends (except dividends
payable on the existing classes of Preferred Stock or dividends payable in
Common Stock of the Corporation) or make any other distribution on or redeem, purchase
or otherwise acquire any Junior Securities and will not permit any Subsidiary
or other Affiliate (using funds of the Corporation or any Subsidiary) to
redeem, purchase or otherwise acquire for value, any Junior Securities.  Notwithstanding the foregoing provisions of
this Section 2(b), the Corporation or any Subsidiary may (i) make payments in
respect of fractional shares of Junior Securities and

 

2

 

(ii) repurchase, redeem
or otherwise acquire for value any Junior Securities from any employee or
former employee of the Corporation or any Subsidiary in connection with the
termination of employment by the Corporation or any Subsidiary or by such
employee or former employee, whether by reason of death, disability, retirement
or otherwise.

 

3.                                       Liquidation.  Upon a change in control pursuant to which
the stockholders of the Corporation immediately prior to such change in control
possess less than forty percent (40%) of the voting power of the acquiring entity
immediately following such change in control, liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary
(a “Liquidation Event”), the holders of the Series H Preferred Stock shall be
entitled, pari passu with the Liquidation Preference payable to the holders of
the Series C, D, E, F, F-1, F-2 and G Preferred Stock (the “Existing Preferred
Liquidation Preferences”), before any assets of the Corporation shall be
distributed among or paid over to the holders of Junior Securities, to receive
from the assets of the Corporation available for distribution to stockholders,
an amount per share equal to the purchase price per share paid for the Series H
Preferred Stock, as adjusted to reflect any and all subdivisions (by stock
split, stock dividend or otherwise) or combinations or consolidations (by
reclassification or otherwise) of the Series H Preferred Stock occurring after
the Issue Date, plus all declared but unpaid dividends (the “Series H
Liquidation Preference”).  If the assets
of the Corporation legally available for distribution shall be insufficient to
permit the payment in full to the holders of the Series H Preferred Stock and
other classes of our Preferred Stock of their respective Liquidation
Preferences, then the entire assets of the Corporation legally available for
distribution shall be distributed ratably in accordance with the Existing
Preferred Liquidation Preferences and the Series H Liquidation Preferences
among such holders.  For purposes of
this Section 3, a Liquidation Event shall be deemed to be occasioned by, and to
include, (i) the Corporation’s sale of all or substantially all of its assets
or capital stock or (ii) any transaction or series or related transactions
(including, without limitation, any reorganization, merger or consolidation)
that will result in the holders of the outstanding voting equity securities of
the Corporation immediately prior to such transaction or series of related
transactions holding securities representing less than forty percent (40%) of
the voting power of the surviving entity immediately following such transaction
or series of related transactions.

 

4.                                       Voting.  (a) Except as otherwise limited or provided
by law, the rules, regulations, policies and interpretations of the Principal
Market (as determined in good faith in the sole discretion of the Board of
Directors of the Corporation) or by subsection 4(b), the holders of the Series
H Preferred Stock shall be entitled to vote on all matters submitted to the
common stockholders for a vote together with the holders of the Common Stock
voting together as a single class, with each holder of Common Stock entitled to
one vote for each share of Common Stock held by such holder and each holder of
Series H Preferred Stock entitled to a number of votes represented by the
number of shares of Common Stock that could have been purchased at fair market
value on the Issue Date in exchange for the Series H purchase price for each
share of Series H Preferred Stock held by such holder on the record date
relating to the matter being voted on (as ratably adjusted for stock splits,
combinations, recapitalizations, reorganizations, reclassifications, stock
distributions, stock dividends or other similar events with respect to the
Common Stock occurring after the Issue Date).

 

3

 

(b)                                 The
holders of the Series H Preferred Stock shall vote as a separate class on the
creation of any new series of preferred stock or the issuance of additional shares
of capital stock of the Corporation that ranks senior to or on parity with the
Series H Preferred Stock.

 

5.                                       Conversion
of Series H Preferred Stock into Common Stock.

 

(a)                                  Conversion
Procedure.

 

(i)                                     Notwithstanding
any other provision herein, the Corporation shall not be obligated to issue any
shares of Common Stock upon conversion of the Series H Preferred Stock if and
to the extent the issuance of such shares of Common Stock would exceed the
number of shares (the “Exchange Cap”) then permitted to be issued
without violation of the rules, regulations, policies and interpretations of
the Principal Market (as determined in good faith in the sole discretion of the
Board of Directors of the Corporation), except that such limitation shall not
apply in the event that the Corporation obtains the approval of its
stockholders as required by applicable rules, regulations, policies and
interpretations of the Principal Market for issuances of Common Stock in excess
of the Exchange Cap.  If and to the
extent the Exchange Cap applies, no original purchaser of Series H Preferred
Stock shall be issued, upon conversion of Series H Preferred Stock, shares of
Common Stock in an amount greater than the product of (x) the Exchange Cap
amount multiplied by (y) a fraction, the numerator of which is the number of
shares of Series H Preferred Stock originally issued to such purchaser and the
denominator of which is the aggregate amount of all the Series H Preferred
Stock issued to the original purchasers of such securities (the “Cap
Allocation Amount”).  In the event
that any original holder of Series H Preferred Stock shall sell or otherwise
transfer any of such holder’s Series H Preferred Stock, the transferee shall be
subject to and allocated a pro rata portion of such holder’s Cap Allocation
Amount.  In the event that a requested
conversion would violate the aforementioned rules, the Corporation agrees to
undertake best efforts to obtain such approval within 180 days of such request
for conversion.

 

(ii)                                  Subject
to subsection (i) above, at any time, any holder of Series H Preferred Stock
may convert all or any portion of the Series H Preferred Stock held by such
holder into a number of shares of Conversion Stock (as defined in Section 6)
computed by multiplying the number of shares to be converted by the purchase
price thereof and dividing the result by the Conversion Price (as defined in
subsection 5(b)) then in effect.

 

(iii)                               Each
voluntary conversion of Series H Preferred Stock shall be deemed to have been
effected as of the close of business on the date on which notice of election of
such conversion is delivered to the Corporation by such holder.  Until the certificates representing the
shares of Series H Preferred Stock which are being converted have been
surrendered and new certificates representing shares of the Conversion Stock
shall have been issued by the Corporation, such certificate(s) evidencing the
shares of Series H Preferred Stock being converted shall be evidence of the
issuance of such shares of Conversion Stock. 
At such time as such conversion has been effected, the rights of the
holder of such Series H Preferred Stock as such holder shall cease and the
Person or Persons in whose name or names any certificate or certificates for
shares of Conversion Stock are to be issued upon such conversion shall be
deemed to have become the holder or holders of record of the shares of
Conversion Stock represented thereby.

 

4

 

(iv)                            Notwithstanding
any other provision hereof, if a conversion of shares is to be made in
connection with a Public Offering (as defined in Section 6), the conversion of
such shares may, at the election of the holder thereof, be conditioned upon the
consummation of the Public Offering, in which case such conversion shall not be
deemed to be effective until the consummation of the Public Offering.

 

(v)                                 As
soon as practicable after a conversion has been effected in accordance with
clause (ii) above, the Corporation shall deliver to the converting holder:  (A) a certificate or certificates
representing, in the aggregate, the number of shares of Conversion Stock
issuable by reason of such conversion, in the name or names and in such
denomination or denominations as the converting holder has specified; and (B) a
certificate representing any shares which were represented by the certificate
or certificates delivered to the Corporation in connection with such conversion
but which were not converted.

 

(vi)                              The
issuance of certificates for shares of Conversion Stock upon conversion of
Series H Preferred Stock shall be made without charge to the holders of such
Series H Preferred Stock for any issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of shares of Conversion Stock, except for any transfer or similar tax
payable as a result of issuance of a certificate to other than the registered
holder of the shares being converted. 
Upon conversion of any shares of Series H Preferred Stock, the Corporation
shall use its best efforts to take all such actions as are necessary in order
to insure that the Conversion Stock issuable with respect to such conversion
shall be validly issued, fully paid and nonassessable.

 

(vii)                           The
Corporation shall not close its books against the transfer of Series H
Preferred Stock or of Conversion Stock issued or issuable upon conversion of
Series H Preferred Stock in any manner which interferes with the timely
conversion of Series H Preferred Stock. The Corporation shall assist and
cooperate with any holder of shares of Series H Preferred Stock required to
make any governmental filings or obtain any governmental approval prior to or
in connection with any conversion of shares hereunder (including, without
limitation, making any filings reasonably required to be made by the
Corporation).

 

(viii) No fractional
shares of Conversion Stock or scrip representing fractional shares shall be
issued upon conversion of shares of Series H Preferred Stock.  If more than one share of Series H Preferred
Stock shall be surrendered for conversion at one time by the same record
holder, the number of full shares of Conversion Stock issuable upon the
conversion thereof shall be computed on the basis of the aggregate number of
shares of Series H Preferred Stock so surrendered by such record holder.  Instead of any fractional share of
Conversion Stock otherwise issuable upon conversion of any shares of the Series
H Preferred Stock, the Corporation shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of current per share fair
market value of the Conversion Stock as determined in good faith by the Board
of Directors on such basis as it considers appropriate.

 

(ix) The Corporation
shall use its best efforts at all times to reserve and keep available out of
its authorized but unissued shares of Conversion Stock, solely for the purpose
of issuance upon the conversion of the Series H Preferred Stock, such number of
shares of Conversion Stock as are issuable upon the conversion of all
outstanding Series H Preferred 

 

5

 

Stock.  All shares of Conversion Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges, other than those
created or agreed to by the holder.  The
Corporation shall use its best efforts to take all such actions as may be
necessary to assure that all such shares of Conversion Stock may be so issued
without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of
Conversion Stock may be listed (except for official notice of issuance which
shall be immediately delivered by the Corporation upon each such issuance).

 

(b)                                 Conversion
Price.

 

(i)                                     “Conversion
Price” for the Series H Preferred Stock shall initially mean the Initial
Conversion Price described in this Section 5, as the same may be subsequently
adjusted from time to time in accordance with this Section 5.

 

(ii)                                  The
“Initial Conversion Price” shall be one-hundredth (1/100th) of the
per share purchase price for the Series H Preferred Stock.

 

(c)                                  Subdivision
or Combination of Common Stock.  If
the Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, or if the Corporation at any time
combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
applicable Conversion Price in effect immediately prior to such subdivision or
combination shall be proportionately adjusted.

 

(d)                                 Consolidation,
Merger or Sale for Assets.  Any
consolidation, merger, sale of all or substantially all of the Corporation’s
assets to another Person or other transaction which is effected in such a
manner that holders of Common Stock are entitled to receive (either directly or
upon subsequent liquidation) assets other than Conversion Stock (“Assets”) with
respect to or in exchange for Common Stock is referred to herein as a
“Fundamental Change.” Prior to the consummation of any Fundamental Change, the
Corporation shall make appropriate provisions to insure that each of the
holders of Series H Preferred Stock shall thereafter have the right to acquire
and receive, in lieu of or in addition to (as the case may be) the shares of
Conversion Stock immediately theretofore acquirable and receivable upon the
conversion of such holder’s Series H Preferred Stock, such Assets as such
holder would have received in connection with such Fundamental Change if such
holder had converted its Series H Preferred Stock into Conversion Stock
immediately prior to such Fundamental Change. 
The Corporation shall not effect any Fundamental Change, consolidation,
merger or sale unless prior to the consummation thereof, the successor
corporation (if other than the Corporation) resulting from consolidation or
merger or the corporation purchasing such assets assumes by written instrument
the obligation to deliver to each such holder such shares of stock, securities
or assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.

 

(e)                                  Certain
Events.  If an event not
specifically enumerated in this Section 5 occurs which has substantially the
same economic effect on the Series H Preferred Stock as those specifically
enumerated shall occur, then this Section 5 shall be construed liberally,
mutatis

 

6

 

mutandis, in order to
give the Series H Preferred Stock the benefit of the protections provided under
this Section 5. In such event, the Corporation’s Board of Directors shall make
an appropriate adjustment in the applicable Conversion Price so as to protect
the rights of the holders of Series H Preferred Stock.

 

(f)                                    Notices.

 

(i)                                     Promptly
upon any adjustment of the applicable Conversion Price, the Corporation shall
give written notice thereof to all holders of Series H Preferred Stock, setting
forth in reasonable detail and certifying the calculation of such adjustment.

 

(ii)                                  The
Corporation shall give written notice to all holders of Series H Preferred
Stock at least 10 days prior to the date on which the Corporation closes its
books or takes a record (A) with respect to any dividend or distribution upon
Common Stock, (B) with respect to any pro rata subscription offer to holders of
Common Stock, or (C) for determining rights to vote with respect to any Fundamental
Change, dissolution or liquidation.

 

(iii)                             The
Corporation shall give written notice to the holders of Series H Preferred
Stock at least twenty (20) days prior to the date on which any Fundamental
Change shall take place, which notice may be one and the same as that required
by (ii) above.

 

(g)                                 Automatic
Conversion.

 

(i)                                     Each
share of Series H Preferred Stock shall automatically be converted into shares
of Common Stock at the then applicable Conversion Price (or upon such other
terms as holders of 50% or more of the shares of Series H Preferred Stock may
agree) upon the written consent of the holders of 50% or more of the shares of
Series H Preferred Stock.

 

(ii)                                  Each
share of Series H Preferred Stock shall automatically be converted into shares
of Common Stock at the then applicable Conversion Price effective immediately
upon the ratification of the Series H financing by the Corporation’s
stockholders and the stockholders’ approval, as and to the extent required by
the Principal Market, authorizing the conversion in full of all issued and
outstanding shares of Series H Preferred Stock to Common Stock.

 

(iii)                               Following
completion of an automatic conversion pursuant to this Section 5(g), each
former holder of Series H Preferred Stock shall promptly surrender to the
Corporation for cancellation such holder’s Series H Preferred Stock
certificate(s), or lost instrument declarations and indemnifications reasonably
satisfactory to the Corporation, duly endorsed. The Corporation shall have no
obligation to issue certificates representing the Common Stock issuable upon
conversion until such documents are delivered to the Corporation.

 

6.                                       Definitions.  The following terms have the meanings
specified below:

 

(a)                                  Affiliate.  The term “Affiliate” shall mean (i) any
Person directly or indirectly controlling, controlled by or under direct or
indirect common control with the Corporation (or other specified Person), (ii)
any Person who is a beneficial owner of at least 10% of the then outstanding
voting capital stock (or options, warrants or other securities which, after

 

7

 

giving effect to the
exercise thereof, would entitle the holder thereof to hold at least 10% of the
then outstanding voting capital stock) of the Corporation (or other Specified
Person), (iii) any director or executive officer of the Corporation (or other
Specified Person) or Person of which the Corporation (or other Specified
Person) shall, directly or indirectly, either beneficially or of record, own at
least 10% of the then outstanding equity securities of such Person, and (iv) in
the case of Persons specified above who are individuals, Family Members of such
Person; provided, however, that no holder of Preferred Stock nor any of their
designated members of the Board of Directors shall be an Affiliate of the
Corporation for purposes hereof.

 

(b)                                 Board
of Directors.  The term “Board of
Directors” shall mean the Board of Directors of the Corporation.

 

(c)                                  Conversion
Stock.  The term “Conversion Stock”
shall mean the shares of Common Stock issuable upon conversion of shares of
Series H Preferred Stock; provided that if there is a change such that the
securities issuable upon conversion of the Series H Preferred Stock are issued
by an entity other than the Corporation or there is a change in the class of
securities so issuable, then the term “Conversion Stock” shall mean shares of
the security issuable upon conversion of the Series H Preferred Stock if such
security is issuable in shares, or shall mean the smallest unit in which such
security is issuable if such security is not issuable in shares.

 

(d)                                 Family
Members.  The term “Family Members”
shall mean, as applied to any individual, any spouse, child, grandchild,
parent, brother or sister thereof or any spouse of any of the foregoing, and
each trust created for the benefit of one or more of such Persons (other than
any trust administered by an independent trustee) and each custodian of
property of one or more such Persons.

 

(e)                                  Issue
Date.  The term “Issue Date” shall
mean the date on which the Corporation issues the applicable share(s) of Series
H Preferred Stock.

 

(f)                                    Person.  The term “Person” shall mean an individual,
corporation, partnership, limited liability company, association, trust, joint
venture or unincorporated organization or any government, governmental
department or any agency or political subdivision thereof.

 

(g)                                 “Principal
Market” means the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market, or the Nasdaq SmallCap Market, whichever is at the
applicable time the principal trading exchange or market for the Common Stock,
based upon share volume.

 

(h)                                 Public
Offering.  The term “Public
Offering” shall mean any offering by the Corporation of its equity securities to
the public pursuant to an effective registration statement under the Securities
Act of 1933, as amended, or any successor federal statute, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder,
all as the same shall be in effect from time to time, or any comparable
statement under any similar federal statute then in force, other than an
offering in connection with an employee benefit plan.

 

8

 

(i)                                     Subsidiary.  The term “Subsidiary” shall mean any Person
of which the Corporation shall at the time own, directly or indirectly through
another Subsidiary, 50% or more of the outstanding voting capital stock (or
other shares of beneficial interest with voting rights), or which the
Corporation shall otherwise control.

 

9

 

IN WITNESS WHEREOF, VCampus Corporation has caused
this certificate to be signed by its duly authorized officer as of the 8th day
of May 2003.

 

 

	
   

  	
  VCAMPUS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher L. Nelson

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Christopher
  L. Nelson

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
					

 

10

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