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EXHIBIT 10.50
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR BY THE SECURITIES REGULATORY
AUTHORITY OF ANY OTHER JURISDICTION, NOR HAS ANY COMMISSION OR AUTHORITY PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION CONTRARY TO THE
FOREGOING IS UNLAWFUL. THE SHARES MAY NOT BE TRANSFERRED OR RESOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
SUBSCRIPTION AGREEMENT
COMMON STOCK
VCAMPUS CORPORATION
1. Subscription. The undersigned (hereinafter referred to as
"Subscriber") hereby subscribes for and agrees to purchase the number of shares
of Common Stock of VCampus Corporation (the "Company"), par value $0.01 per
share, set forth on the signature page hereto (the "Shares") in consideration
for payment by the Subscriber of $7.00 per Share pursuant to this Subscription
Agreement (the "Agreement"). The Subscriber herewith tenders the entire amount
of such purchase price by check or wire transfer payable to the Company.
The Subscriber acknowledges that at the time of issuance the Common
Stock will not be registered under the Securities Act of 1933 (the "Act"), in
reliance upon an exemption from registration contained in the Act, and that the
Company's reliance upon such exemption is based, at least partially, on the
Subscriber's representations and warranties contained in this Subscription
Agreement.
2. Acceptance or Rejection of Subscription. Subscriber acknowledges and
agrees that this subscription shall not be effective until accepted in writing
by the Company, and that the Company reserves the right to reject this
subscription in whole or in part. Subscriptions may be rejected for insufficient
documentation or for such other reason as the Company may determine, in its sole
discretion, to be in the best interests of the Company.
3. Subscriber's Representations and Warranties. Subscriber represents,
warrants, acknowledges and agrees to the following.
a. Subscriber is a resident of the state indicated on the signature
page hereof, has its principal office in such state and has not been
organized for the specific purpose of acquiring the Shares.
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b. This Agreement is and shall be irrevocable, except that the
Subscriber shall have no obligations hereunder in the event that the
subscription is not accepted by the Company in whole or in part.
c. The Subscriber has read this Agreement carefully and, to the extent
believed necessary, has discussed the representations, warranties and
agreements and the applicable limitations upon the Subscriber's resale of
the Common Stock with counsel.
d. The Subscriber understands that no federal or state agency has made
any finding or determination regarding the fairness of this offering, or
any recommendation or endorsement of this offering.
e. The Subscriber is an "accredited investor" as defined in Rule 501
of Regulation D promulgated under the Act.
f. The Subscriber has received from the Company or others and has read
copies of the Company's filings with the U.S. Securities and Exchange
Commission (the "SEC"), and has had an adequate opportunity to ask
questions of and receive answers from the Company regarding these documents
(the "SEC Filings").
g. The Subscriber is purchasing the Common Stock for the Subscriber's
own account, with the intention of holding the Common Stock for investment
purposes and not for the purpose of reselling or otherwise participating,
directly or indirectly, in a distribution of the Common Stock, and shall
not make any sale, transfer or other disposition of any portion of the
Common Stock purchased hereby without registration under the Act and any
applicable securities act of any state or unless an exemption from
registration is available under such acts.
h. The Subscriber understands that an investment in the Common Stock
is a highly illiquid investment, and that, the Subscriber will have to bear
the economic risk of the investment indefinitely (or at least until such
shares may become registered as provided under this Agreement) because the
Common Stock has not been registered under the Act and is being issued
pursuant to a private placement exemption under Regulation D, on the
grounds that no public offering is involved. Therefore, the Common Stock
cannot be offered, sold, transferred, pledged or hypothecated to any
person, unless either it is subsequently registered under the Act and
applicable state securities laws or an exemption from registration is
available and the Subscriber obtains a favorable opinion of the Company's
counsel to that effect.
i. The Subscriber understands that the provisions of Rule 144
promulgated under the Act are not available for at least one (1) year, to
permit resale of the Common Stock, and there can be no assurance that the
conditions necessary to permit routine sales of the Common Stock under Rule
144 will ever be satisfied, and, if Rule 144 should become available,
routine sales made in reliance on its provisions could be made only in
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limited amounts and in accordance with the terms and conditions of the
Rule. The Subscriber further understands that in connection with sales for
which Rule 144 is not available, compliance with some other registration
exemption will be required, which may not be available.
j. The Subscriber understands and agrees that stop transfer
instructions will be given to the Company's transfer agent or the officer
in charge of its stock records and noted on the appropriate records of the
Company to the effect that the Common Stock may not be transferred out of
the Subscriber's name unless either the Shares become registered under the
Act or it is established to the satisfaction of counsel for the Company
that an exemption from the registration provisions of the Act and
applicable state securities laws is available therefore. The Subscriber
further agrees that there will be placed on the certificates for the Common
Stock, or any substitutions therefore, a legend stating in substance as
follows, that the Subscriber understands and agrees that the Company may
refuse to permit the transfer of the stock out of its name and that the
stock must be held indefinitely in the absence of compliance with the terms
of such legend.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
ACT AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH
REGISTRATION UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE CORPORATION) REASONABLY SATISFACTORY TO
IT THAT SUCH TRANSFER MAY BE MADE IN COMPLIANCE WITH APPLICABLE
FEDERAL AND STATE SECURITIES LAWS AND REGULATIONS.
k. The Subscriber agrees to indemnify the Company, its directors,
officers and employees, and to hold them harmless from and against any and
all liability, damages, costs or expenses, including reasonable attorney
fees, on account of or arising out of (i) any inaccuracy in the
Subscriber's representations and warranties hereinabove set forth; (ii) the
disposition of any of the Common Stock which it will receive, contrary to
its foregoing representations and warranties; and (iii) any action, suit or
proceeding based upon either the claim that the Subscriber's
representations or warranties were inaccurate or misleading or otherwise
cause for obtaining damages or redress from the Company, its directors,
officers or employees, or the disposition of any portion of the Common
Stock.
4. Company Representations and Warranties. The Company represents,
warrants, acknowledges and agrees to the following.
a. Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to
own and operate its properties and assets and to carry on its business as
now conducted and as currently proposed to be conducted. The Company is
duly qualified and authorized to do business, and is in good
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standing as a foreign corporation, in Virginia and in each other
jurisdiction where the nature of its activities and of its properties (both
owned and leased) makes such qualification necessary, except where a
failure to do so would not have a material adverse effect on the Company.
b. Capitalization. The authorized capital of the Company, immediately
prior to the Closing, will consist of: 1,200,000 shares of Series D
Convertible Preferred Stock, $0.01 par value per share, 1,073,370 of which
are issued and outstanding; 1,000,000 shares of Series C Convertible
Preferred Stock, $0.01 par value per share, 623,339 shares of which are
issued and outstanding; 3,000,000 shares of Series E Convertible Preferred
stock, 147,101 of which are issued and outstanding; 4,800,000 shares of
undesignated and unissued Preferred Stock, $0.01 par value per share; and
36,000,000 shares of Common Stock, $0.01 par value per share, 7,596,664 of
which were issued and outstanding as of March 16, 2000.
All of the outstanding shares of Common Stock and Preferred Stock that
have been duly authorized and validly issued, are fully paid and
nonassessable and were issued in compliance with all applicable federal and
state securities laws. The Company has duly and validly reserved the Shares
for issuance as contemplated hereby. Except as disclosed in the SEC
Filings, there are no outstanding rights of first refusal, preemptive
rights or other rights, options, warrants, conversion rights or other
agreements, either directly or indirectly, for the purchase or acquisition
from the Company of any shares of its capital stock.
c. Authorization. All corporate action on the part of the Company and
its directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all the Company's
obligations hereunder and thereunder, and the authorization, issuance, sale
and delivery of the Shares has been taken. This Agreement, when executed
and delivered by the Company and the respective other parties thereto,
shall constitute a valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors,
rules and laws governing specific performance, injunctive relief and other
equitable remedies.
d. Validity of the Shares. The Shares, when issued pursuant to the
terms of this Agreement, will be validly issued, and fully paid and
nonassessable and will be free of any liens or encumbrances; provided,
however, that the Shares will be subject to restrictions on transfer under
state and/or federal securities laws as set forth herein.
e. Compliance with Other Instruments. The Company is not in violation
of any provisions of its Certificate of Incorporation or its Bylaws as
amended, or of any provisions of any material agreement or any judgment,
decree or order by which it is bound or any statute, rule or regulation
applicable to the Company. Subject to the compliance with such filings as
may be required to be made with the SEC, the National Association of
Securities Dealers, Inc. (the "NASD") and certain state securities
commissions, the execution, delivery and performance of this agreement and
the issuance
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and sale of the Shares pursuant hereto, will not result in any such
violation or be in conflict with or constitute a default under any such
provisions or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company.
f. Governmental Consents. All consents, approvals, orders or
authorization of, or registrations, qualifications, designations,
declarations or filings with, any federal or state governmental authority
on the part of the Company required in connection with the valid execution
and delivery of this agreement, the offer, sale or issuance of the Shares,
or the consummation of any other transaction contemplated hereby, have been
obtained.
g. Accuracy of Reports. The SEC Filings required to be filed by the
Company within the year prior to the date of this Agreement under the
Securities Exchange Act of 1934 have been duly filed, were in substantial
compliance with the requirements of their respective forms, were complete
and correct in all material respects as of the dates at which the
information was furnished, and contained (as of such dates) no untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
h. Disclosure. No representation or warranty of the Company contained
in this Agreement contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they
were made, not misleading.
5. Assignment. This Agreement is not transferable or assignable by the
Subscriber.
6. Expenses. The Company and the Subscriber shall bear their own
expenses with respect to this Agreement and the transactions contemplated
hereby.
7. Correct Information. All information which the Subscriber has
provided concerning the Subscriber or its financial position and the
Subscriber's knowledge of financial and business matters is correct and complete
as of the date hereof, and if there should be any material change in such
information prior to the Company's acceptance of the subscription, the
Subscriber will immediately provide the Company with such information.
8. Miscellaneous. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware. This Agreement constitutes
the entire agreement among the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all parties.
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SUBSCRIPTION AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the Subscriber has executed this Subscription
Agreement effective on this the 20th day of April 2000.
357,143 = Shares of Common Stock
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$ 2,500,000 = total payment by Subscriber
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Signature of Subscriber
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US West Internet Ventures, Inc. Address
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Printed or typed name of Subscriber (in
exactly the form in which securities are to
be registered)
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Printed or Typed Name and Title of person
signing
FOR COMPANY USE ONLY:
ACCEPTED EFFECTIVE ON THE 20TH DAY OF APRIL 2000 ON BEHALF OF VCAMPUS
CORPORATION FOR 357,143 SHARES OF COMMON STOCK.
BY:
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NAME:
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TITLE:
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