AMENDMENT NO. 1 TO THE SECURITIES PURCHASE
AGREEMENT TRANSACTION DOCUMENTS BETWEEN RAMP
CORPORATION, DOUBLE U MASTER FUND LP, ALPHA CAPITAL AG AND
XXXXX INTERNATIONAL LTD. FOR THE PURCHASE OF THE
CONVERTIBLE DEBENTURES, DUE FEBRUARY 1, 2006, COMMON STOCK
PURCHASE WARRANTS AND ADDITIONAL INVESTMENT RIGHTS
This Amendment No. 1 ("Amendment") is made to that certain Securities
Purchase Agreement ("Purchase Agreement") dated as of March 31, 2005 among Ramp
Corporation (the "Company"), Double U Master Fund LP ("Double U Fund"), Alpha
Capital AG ("Alpha") and Xxxxx International Ltd. ("Xxxxx", and each of Xxxxx,
Double U Fund and Alpha shall be referred to herein individually as a
"Purchaser" and collectively as, the "Purchasers"), along with the other
agreements entered into in connection therewith, for the purchase of the 8%
Convertible Debentures, due February 1, 2006 issued to the Purchasers (the
"Debentures"), the Common Stock Purchase Warrants issued to the Purchasers (the
"Warrants") and Additional Investment Rights (the "AIR") granted to the
Purchasers. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Purchase Agreement.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Termination of AIR. Effective immediately, the Company and each
Purchaser, severally and not jointly with the other Purchasers, hereby agrees to
terminate each outstanding AIR held by such Purchaser. Following such
termination, each outstanding AIR shall be null and void, and shall be of no
further force and effect whatsoever, and the Company shall have no liability or
obligation with respect to such AIR.
2. Issuance of New Warrant. The Company hereby agrees to issue to each
Purchaser, severally and not jointly with the other Purchasers, a warrant (the
"New Warrant") to purchase up to a number of shares of Common Stock of the
Company equal to the sum of (a) such Purchaser's Subscription Amount at the
First Closing and (b) such Purchaser's Subscription Amount funded pursuant to
this Amendment, divided by $1.25, which warrant shall have an exercise price
equal to $1.25, subject to adjustment therein, and be otherwise in the form of
the Warrants. The term "Warrant" as used under the Transaction Documents is
hereby amended to include the New Warrant.
3. Replacement Provision in the New Warrant. Solely with respect to the
New Warrant, Section 3(b) of the New Warrant is hereby amended and replaced with
the following provision:
"Subsequent Equity Sales. If the Company or any Subsidiary thereof, as
applicable, at any time while this Warrant is outstanding, shall offer,
sell, grant any option to purchase or offer, sell or grant any right to
reprice its securities, or otherwise dispose of or issue (or announce
any offer, sale, grant or any option to purchase or other disposition)
any Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock, at an effective price per share less
than the then Exercise Price (such lower price, the "Base Share Price"
and such issuances collectively, a "Dilutive Issuance"), as adjusted
hereunder (if the holder of the Common Stock or Common Stock
Equivalents so issued shall at any time, whether by operation of
purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options
or rights per share which is issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per
share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance), then, the Exercise Price shall be reduced
and only reduced to equal the Base Share Price and the number of
Warrant Shares issuable hereunder shall be increased such that the
aggregate Exercise Price payable hereunder, after taking into account
the decrease in the Exercise Price, shall be equal to the aggregate
Exercise Price prior to such adjustment. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are issued.
Notwithstanding the foregoing, no adjustments shall be made, paid or
issued under this Section 3(b) in respect of an Exempt Issuance. The
Company shall notify the Holder in writing, no later than the Trading
Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, indicating therein the applicable
issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms (such notice the "Dilutive
Issuance Notice"). For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section
3(b), upon the occurrence of any Dilutive Issuance, after the date of
such Dilutive Issuance the Holder is entitled to receive a number of
Warrant Shares based upon the Base Share Price regardless of whether
the Holder accurately refers to the Base Share Price in the Notice of
Exercise."
4. Waiver of Conditions Precedent and Receipt of 50% of Additional
Subscription Amounts at Second Closing. Simultaneously upon receipt of the New
Warrant by a Purchaser and receipt by such Purchaser of a Debenture with a
principal amount equal to 50% of the Purchaser's Subscription Amount as to the
Second Closing, such Purchaser, severally and not jointly with the other
Purchasers, shall agree to waive Section 2.3(c) to the Second Closing as it
relates to such principal amount of Debentures and shall wire the amount of 50%
of such Purchaser's Subscription Amount as to the Second Closing (the
"Additional Subscription Amount") to the account as specified in writing by the
Company. Upon the Company's receipt of such Additional Subscription Amount, such
Purchaser shall thereafter have no other obligations to fund the remaining
balance of the Subscription Amount as to the Second Closing, which obligations
shall be deemed terminated and of no further force or effect, and the Purchaser
shall have no other obligations to the Company to purchase any securities of the
Company.
5. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Purchaser that, except as set forth on the
Disclosure Schedules or a schedule attached hereto provided by the Company, that
all representations and warranties of the Company made pursuant to the
Transaction Documents are accurate in all material respects as of the date
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hereof, except as otherwise disclosed under the Amendments, and all obligations,
covenants and agreements of the Company required to be performed under the
Transaction Documents prior to the date hereof have been performed.
6. Representations and Warranties of each Purchaser. Each Purchaser,
severally and not jointly with the other Purchasers, represents and warrants to
the Company that all representations and warranties of such Purchaser made
pursuant to the Transaction Documents are accurate in all material respects as
of the date hereof and all obligations, covenants and agreements of such
Purchaser required to be performed under the Transaction Documents prior to the
date hereof have been performed.
7. Registration Obligations. The definition of "Filing Date" in the
Registration Rights Agreement is hereby amended to be not later than 10:00 p.m.
on Wednesday, May 17, 2005 and the definition of "Effectiveness Date" is hereby
amended to be August 11, 2005. All liquidated damages, late fees and other
Events that have occurred under the Registration Rights Agreement are hereby
waived by each Purchaser through and including the date of this Agreement;
provided, however, that if an Event occurs after the date hereof under the
Registration Rights Agreement, such waiver shall be deemed null and void and
each Purchaser shall be entitled to receive, in addition to any other liquidated
damages and fees that have accrued at such time, all liquidated damages and fees
that have accrued pursuant to the Registration Rights Agreement but have not
been paid prior to the date hereof.
8. Shareholder Approval. Unless (a) the Trading Market notifies the
Company that Shareholder Approval is not required for the issuance in full of
all of the Underlying Shares (including the New Warrant) and (b) the Company
provides the Purchasers with a written representation to such effect and that
the Purchasers are not limited from converting the Debentures pursuant to
Section 4(c)(i) of the Debentures or exercising the Warrants pursuant to Section
2(d)(ii) of the Warrants, the Company shall use reasonable best efforts to
obtain Shareholder Approval for such issuance at its next annual meeting of the
stockholders to be held not later than August 31, 2005 (the "2005 Annual
Meeting"). If the Company does not obtain such Shareholder Approval at the
Annual Meeting, the Company shall call a special meeting of stockholders every
four months thereafter to seek such Shareholder Approval until the earlier of
the date such Shareholder Approval is obtained or the Debentures are no longer
outstanding. Additionally, until the earlier of (a) the date such Shareholder
Approval is obtained or (b) the date that (i) the Trading Market notifies the
Company that Shareholder Approval is not required for the issuance in full of
all of the Underlying Shares (including the New Warrant) and (ii) the Company
provides the Purchasers with a written representation to such effect and that
the Purchasers are not limited from converting the Debentures pursuant to
Section 4(c)(i) of the Debentures in full or exercising the Warrants pursuant to
Section 2(d)(ii) of the Warrants in full, the Company shall not be permitted to
issue any Common Stock or Common Stock Equivalents with an effective per share
purchase price (whether at the time of such issuance or by virtue thereof at a
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later time) for less than $1.25, subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.
9. Waivers and Consents. Each Purchaser, independently of any other
Purchaser: (a) acknowledges and consents to the issuance by the Company of up to
an additional $1,000,000 of 8% convertible debentures and warrants pursuant to a
Second Closing under that certain Securities Purchase Agreement, dated as of
January 12, 2005, by and among the Company and the purchasers which are a party
thereto, as amended by that certain Amendment No. 3, dated as of the date
hereof, by and among the Company and the purchasers which are a party thereto
(the "May Amendment") on the same terms and conditions as the issuance of the
Debentures and Warrants to the Purchasers under the Purchase Agreement, as
amended, and to the New Warrant (as defined in the May Amendment) (such
additional issuance, "Additional Issuance"); (b) consents and agrees that the
shares of Common Stock underlying the Additional Issuance (as required under the
registration rights agreement, dated as of January 12, 2005, by and among the
Company and the purchasers which are a party thereto entered into in connection
with the Additional Issuance) may be included for registration on the initial
registration statement to be filed by the Company under the Registration Rights
Agreement; (c) waives any of its rights under Section 4.13 of the Purchase
Agreement with respect to the Additional Issuance; and (d) waives any
anti-dilution rights under the Warrant with respect to the Additional Issuance.
10. Filing of Form 8-K. Within 2 Trading Days of the date hereof, the
Company shall file a Current Report on Form 8-K disclosing the material terms of
this Amendment and attaching this Amendment as an exhibit thereto.
11. Effect on Purchase Agreement. Except as expressly set forth herein,
all of the terms and conditions of the Purchase Agreement, the Debentures and
the Warrants shall continue in full force and effect after the execution of this
Amendment, and shall not be in any way changed, modified or superseded by the
terms set forth herein and the provisions of this Amendment, if not expressly
set forth herein, shall otherwise be subject to the provisions of the Purchase
Agreement.
12. Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under the Amendment are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under the
Amendment. Nothing contained herein or in this Amendment, and no action taken by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Amendment. Each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of the
Amendment, and it shall not be necessary for any other Purchaser to be joined as
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an additional party in any proceeding for such purpose. Each Purchaser has been
represented by its own separate legal counsel in their review and negotiation of
the Amendment.
13. Definitions. Capitalized terms not otherwise defined herein have
the meanings given to such terms in the Purchase Agreement, the Debentures and
the Warrants.
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Executed as of May 13, 2005 by the undersigned duly authorized
representatives of the Company and Purchasers:
RAMP CORPORATION DOUBLE U MASTER FUND LP
By: ____________________________ By: ____________________________
Name: Name:
Title: Title:
ALPHA CAPITAL XX XXXXX INTERNATIONAL LTD.
By: ____________________________ By: ____________________________
Name: Name:
Title: Title:
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