Exhibit 4.1
NOTE AND WARRANT PURCHASE AGREEMENT
This NOTE AND
WARRANT PURCHASE
AGREEMENT (this
"Agreement"), dated as
of
July 14, 2004, is entered into by and among Ramp Corporation, a Delaware
corporation (the "Company"), and the purchasers listed on Exhibit A attached
hereto (the "Purchasers"), for the issuance and sale to the
Purchasers of the
Notes and Warrants of the Company, in the
manner, and upon the terms, provisions
and conditions set forth in this
Agreement.
WHEREAS,
the parties desire that, upon the terms and subject to the
conditions contained herein, the Company
shall issue and sell to the Purchasers
and Purchasers shall purchase the Notes and
Warrants; and
WHEREAS,
such issuance and sale will be made in reliance upon the
provisions of Section 4(2) of the United States Securities Act of 1933, as
amended, and regulations promulgated thereunder (the
"Securities Act"), or upon
such other exemption from the registration
requirements of the Securities Act as
may be available with respect to any or all of the
purchases of the Notes
and
Warrants to be made hereunder.
NOW,
THEREFORE,
in consideration of
the representations,
warranties and
agreements contained herein and other good and valuable consideration, the
receipt and legal adequacy of which is
hereby acknowledged by
the parties, the
Company and the Purchasers hereby agree as
follows:
1. Purchase and Sale of Notes
and Warrants.
(a) Upon the following
terms and subject to the conditions contained
herein, the Company shall issue and sell
to the Purchasers, and
the Purchasers
shall purchase from the Company,
convertible
promissory notes in
the aggregate
principal amount of four million, two
hundred thousand dollars ($4,200,000) (the
"Purchase Price"), bearing interest at a rate of six
percent (6%) per annum, in
substantially the form attached hereto as Exhibit B (the "Notes"). The
outstanding principal amount of the Notes,
together with all accrued and unpaid
interest, shall be due and payable on or
before the Maturity Date (as defined in
the Notes) in cash; provided, however, that at any time while the Notes are
outstanding and subject to any limitations or other provisions on conversion
contained in the Notes, the Purchasers shall have the option to convert
the
outstanding principal amount of such Notes plus any and
all accrued but unpaid
interest into such number of shares of
common stock of the
Company, par value
$.001 per share (the "Common Stock"), at a conversion price of thirty cents
($.30) per share, subject to the conversion
provisions in the
Note; provided,
further, however, that, if, at any time following the date hereof while the
Notes are outstanding the average closing
sale price of the Common Stock for the
ten (10) trading days immediately prior to
the date of conversion (as determined
by the Bloomberg volume weighted average
price function), is equal to or greater
than forty cents ($0.40) per share,
then, subject to any limitations or other
provisions on conversion contained in the Notes,
the Company
shall have the
option to convert the outstanding principal amount of such Notes plus any
and
all accrued but unpaid interest into such
number of shares of Common Stock, at a
conversion price of thirty cents ($.30) per
share.
<PAGE>
(b) In consideration of and in express reliance upon the
representations, warranties, covenants, terms and
conditions of this Agreement,
the Company agrees to issue and sell to the
Purchasers and the Purchasers agree
to purchase the Notes. The closing under this Agreement
(the "Closing")
shall
take place at the offices of Jenkens &
Gilchrist Parker Chapin LLP, The Chrysler
Building, 405 Lexington Avenue, New York, New York 10174 upon the
satisfaction
of each of the conditions set forth in Sections 4 and 5
hereof (the
"Closing
Date").
(c) As an inducement for the purchase of the Notes by the
Purchasers,
the Company shall issue and deliver to the
Purchasers (pro rata in proportion to
the Purchase Price paid by each Purchaser)
certificates
representing
warrants
(the "Warrants") to purchase shares of
the Company's Common Stock (the "Warrant
Shares") as follows: (i) Warrants to purchase
9,367,646 shares of
Common Stock
at an exercise price of forty cents ($0.40)
per share, (ii) Warrants to purchase
9,367,646 shares of Common Stock at an exercise price of thirty-five cents
($0.35) per share, (iii) Warrants to purchase
9,367,646 shares of
Common Stock
at an exercise price of fifteen cents ($0.15) per share and (iv)
Warrants to
purchase 9,367,646 shares of Common Stock at an
exercise price of eleven cents
($0.11) per share.
(d) On or prior to the Closing Date, each Purchaser shall fund its
portion of the Purchase Price into an escrow account maintained by the law
offices of Jenkens & Gilchrist
Parker Chapin LLP, as escrow agent (the
"Escrow
Agent"). Upon satisfaction of each of the
conditions set forth in Sections 4 and
5 hereof and delivery of the Purchase Price to the Escrow Agent, the Escrow
Agent shall promptly wire transfer the
escrowed funds to an
account designated
by the Company pursuant to its written
instructions.
(e) The Company shall authorize and reserve, free of preemptive
rights
and other similar contractual rights of
stockholders, a number of authorized but
unissued shares of Common Stock to effect
the conversion,
if any, of the
Notes
and the exercise of the Warrants. The shares of Common Stock issuable by the
Company upon conversion of the Notes and
all accrued but unpaid interest thereon
are referred to herein as the "Conversion
Shares". The Notes, Conversion Shares,
Warrants and Warrant Shares are sometimes
collectively referred to herein as the
"Securities".
2.
Representations, Warranties and Covenants of the Purchasers. Each
of the
Purchasers hereby makes the following representations and warranties to the
Company, and covenants for the benefit of
the Company, with
respect solely to
itself and not with respect to any other
Purchaser:
(a) If a Purchaser is
an entity, such
Purchaser is a corporation,
limited liability company or partnership
duly incorporated or organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization.
(b) This Agreement
has been duly
authorized,
validly executed and
delivered by each Purchaser and is a valid
and binding agreement
and obligation
of each Purchaser enforceable against such Purchaser in accordance
with its
terms, subject to limitations on
enforcement by general principles of equity and
by bankruptcy or other laws affecting the enforcement of creditors' rights
generally, and each Purchaser has full power and authority to
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<PAGE>
execute and deliver this Agreement and the other agreements and documents
contemplated hereby and to perform its
obligations hereunder and thereunder.
(c) Each Purchaser understands that no federal, state, local or
foreign governmental body or regulatory authority has made any finding or
determination relating to the fairness of
an investment in any of the Securities
and that no Federal, state, local or foreign governmental body or regulatory
authority has recommended or endorsed, or will recommend or endorse, any
investment in the Securities. Each
Purchaser, in making the decision to purchase
the Securities, has relied upon independent
investigation made by it and has not
relied on any information or
representations made by third parties.
(d) Each Purchaser
understands that the
Securities are being offered
and sold to it in reliance on specific provisions of Federal and state
securities laws and that the Company is
relying upon the truth
and accuracy of
the representations, warranties, agreements,
acknowledgments and understandings
of each Purchaser set forth herein for purposes of
qualifying for
exemptions
from registration under the Securities Act, and applicable state securities
laws.
(e) Each Purchaser is an "accredited investor" as defined under
Rule
501 of Regulation D promulgated under the
Securities Act.
(f) Each Purchaser is
and will be acquiring the Securities for such
Purchaser's own account, and not with a view to any resale
or distribution of
the Securities in whole or in part, in
violation of the
Securities Act or
any
applicable securities laws.
(g) The offer and sale of the Securities is intended to be exempt
from
registration under the Securities Act, by virtue of Section 4(2) of the
Securities Act. Each Purchaser understands that the Securities purchased
hereunder have not been, and may never be,
registered
under the Securities
Act
and that none of the Securities can be sold
or transferred unless they are first
registered under the Securities Act and such
state and other securities laws as
may be applicable or in the opinion of
counsel for the Company an exemption from
registration under the Securities Act is
available (and then the Securities may
be sold or transferred only in compliance
with such exemption and all applicable
state and other securities laws).
3. Representations, Warranties and Covenants of the
Company. The
Company
represents and warrants to each Purchaser,
and covenants for the benefit of each
Purchaser, as follows:
(a) The Company has been duly incorporated and is validly existing
and
in good standing under the laws of the state of
Delaware, with full
corporate
power and authority to own, lease and operate its properties
and to conduct its
business as currently conducted, and is
duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to
register or qualify
would not have a Material Adverse Effect. For purposes of this Agreement,
"Material Adverse Effect" shall mean any effect on the
business, results of
operations, prospects, assets or financial condition of the Company that is
material and adverse to the Company and its
subsidiaries and
affiliates, taken
as
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<PAGE>
a whole, and/or any condition,
circumstance, or situation that would prohibit or
otherwise materially interfere with the ability of the Company
from entering
into and performing any of its obligations
under this Agreement
or the Notes in
any material respect.
(b) The Notes and Warrants have been duly authorized by all necessary
corporate action and, when paid for or
issued in accordance
with the terms of
this Agreement, the Notes shall be validly
issued and
outstanding,
free and
clear of all liens, encumbrances and rights of refusal of any kind. The
Conversion Shares and Warrant Shares have
been duly authorized by all necessary
corporate action and, when paid for or
issued in accordance
with the terms of
this Agreement, will be validly issued and outstanding, fully paid and
nonassessable, free and clear of all liens,
encumbrances and
rights of refusal
of any kind and the holders shall be
entitled to all rights accorded to a holder
of Common Stock.
(c) Each of the Notes,
Warrants and this Agreement (the "Transaction
Documents") have been duly authorized,
validly executed and
delivered on behalf
of the Company and is a valid and binding agreement and obligation of the
Company enforceable against the Company in
accordance with its terms, subject to
limitations on enforcement by general
principles of equity
and by bankruptcy or
other laws affecting the enforcement of creditors'
rights generally, and the
Company has full power and authority to execute and deliver the Transaction
Documents and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and
thereunder.
(d) The execution and
delivery of the
Transaction Documents
and the
consummation of the transactions
contemplated by this
Agreement by the Company,
will not (i) conflict with or result in a breach of or a
default under any
of
the terms or provisions of, (A) the Company's articles of incorporation or
by-laws, or (B) of any material provision
of any indenture,
mortgage, deed of
trust or other material agreement or instrument to which
the Company is a party
or by which it or any of its material
properties or assets is bound, (ii) result
in a violation of any material provision of
any law, statute,
rule, regulation,
or any existing applicable decree, judgment or order by any court,
federal or
state regulatory body, administrative agency, or other
governmental body having
jurisdiction over the Company, or any of its material
properties or assets
or
(iii) result in the creation or
imposition
of any material lien, charge or
encumbrance upon any material property or assets of the Company
or any of its
subsidiaries pursuant to the terms of any
agreement or
instrument to which any
of them is a party or by which any of them
may be bound or to which any of their
property or any of them is subject except
in the case of clauses (i)(B) or (iii)
for any such conflicts, breaches, or defaults or any liens, charges, or
encumbrances which would not have a
Material Adverse Effect.
(e) The sale and issuance of the Securities in accordance with the
terms of and in reliance on the accuracy of
each Purchaser's representations and
warranties set forth in this Agreement will be exempt from the registration
requirements of the Securities Act.
(f) Except for the consent of Hilltop
Services Ltd.
("Hilltop")
which consent
has previously been obtained by the Company
in connection with the
transactions
contemplated by this Agreement and delivered to the Purchasers, no consent,
approval or authorization of or designation, declaration or filing with any
governmental authority on the part of the
Company is required in connection with
the valid execution and delivery of this
Agreement or the offer, sale
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<PAGE>
or issuance of the Notes or the consummation of any other transaction
contemplated by this Agreement.
(g) There is no
action, suit,
claim, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company
which questions the validity of the
Transaction Documents
or the
transactions
contemplated thereby or any action taken or
to be taken pursuant thereto. Except
as disclosed in the Company's Form 10-KSB
for the fiscal year ended December 31,
2003, Form 10-QSB for the fiscal period
ended March 31, 2004, or Forms 8-K filed
with the Securities and Exchange Commission
(collectively, the "SEC Documents"),
there is no action, suit, claim,
investigation or
proceeding pending or, to the
knowledge of the Company, threatened, against or involving the Company or any
subsidiary, or any of their respective
properties or assets which, if adversely
determined, is reasonably likely to result
in a Material Adverse Effect.
(h) The Company has
complied and will comply with all applicable
federal and state securities laws in connection with the offer, issuance and
sale of the Securities hereunder. Neither the Company nor anyone
acting on its
behalf, directly or indirectly, has or will sell, offer to sell or solicit
offers to buy any of the Securities, or
similar securities to, or solicit offers
with respect thereto from, or enter into any preliminary conversations or
nego
