Promissory Note - Ramp Corp. and Canon Ventures Ltd.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION THAT IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS.
PROMISSORY NOTE
U.S. $1,000,000.00 May 19, 2004
For value received, the undersigned, Ramp Corporation, a Delaware
corporation (the "Maker"), promises to pay to the order of Canon Ventures
Limited, a British Virgin Islands partnership (the "Holder"), the aggregate
principal amount of One Million Dollars (US $1,000,000.00) together with
interest on the unpaid principal amount of this Promissory Note (the "Note"),
computed quarterly (or on the Maturity Date, if earlier) on the basis of a 360
day year, at the rate of two hundred basis points plus a variable per annum
interest rate equal to the "Prime Rate" published in the "Money Rates" section
of The Wall Street Journal from time-to-time, adjusted when such Prime Rate
changes (the "Prime Rate"). All payments by the Maker hereunder shall be made in
United States Dollars and in immediately available funds.
1. Interest. Interest on the principal amount outstanding at any
time under this Note (and on any unpaid interest, to the extent permitted
by applicable law), shall accrue and be paid quarterly (or on a Maturity
Date, if earlier), in arrears, computed on the basis of a 360 day year, at
the rate per annum of two hundred basis points plus the Prime Rate.
Accrual of interest shall commence on the date hereof and continue until
payment in full of the unpaid principal and all accrued and unpaid
interest on this Note on or before the Maturity Date (as defined in
Section 2 hereof). Upon the Maker's failure to pay any principal, interest
or other amount if and when due under this Note and such breach shall
continue uncured for ten (10) consecutive days (the "Cure Period"), then
to the extent permitted by law, the Maker will pay interest to the Holder
on the outstanding principal amount of the Note on a monthly basis, from
the date of the Cure Period until payment in full, at the rate of six
hundred basis points plus the Prime Rate per annum.
2. Maturity Date and Payment.
(a) The outstanding principal amount of this Note, plus all accrued and
unpaid interest, shall be due and payable by Maker on the Maturity Date. For
purposes of this Agreement, the term "Maturity Date" shall mean the earliest to
occur of any of the following events:
(i) the earlier of: (a) June 30, 2004; or (b) five (5) business days
following the effectiveness, as declared by the Securities and
Exchange Commission, of that
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certain Registration Statement on Form S-3 (No. 333-114734), filed
with the Securities and Exchange Commission on April 22, 2004;
(ii) immediately prior to the occurrence of a Change in Control (as
defined below); and
(iii) upon the occurrence of an Event of Default (as defined in Section 4
hereof).
(b) The Maker may prepay all or a portion of the outstanding principal and
interest of this Note, at any time and from time to time, prior to the Maturity
Date without premium or penalty. Each prepayment shall be applied first to the
payment of all interest accrued hereunder on the date of any prepayment, and the
balance of any such prepayment shall be applied to the principal amount hereof.
(c) Change in Control. As used herein the term "Change in Control" shall
be deemed to have occurred if: (a) any "person" or "group" (as such terms are
used in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Act")), becomes a "beneficial owner" (as such term is used in Rule
13d-3 promulgated under the Act), after the date hereof, directly or indirectly,
of securities of the Maker representing more than 50% of the combined voting
power of the Maker's then outstanding securities; (b) a change in "control" of
the Maker (as the term "control" is defined in Rule 12b-2 or any successor rule
promulgated under the Act) shall have occurred; (c) the Maker shall consummate
the sale or disposition of all or substantially all of the Maker's assets; or
(d) the Maker shall consummate a merger, consolidation, recapitalization or
other similar transaction, other than a merger or consolidation which would
result in the combined voting power of the Maker's voting securities outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) 50% or more of the combined voting power of the voting securities of the
Maker or such surviving entity outstanding immediately after such merger or
consolidation.
3. Holder's Representations and Warranties. As of the date of this Note,
the Holder represents and warrants to the Maker that: (a) it is an "accredited
investor" as defined under Rule 501(a) of Regulation D promulgated under the
Securities Act, (b) it is not a "U.S. person", as defined under Rule 902(o) of
Regulation S of the Securities Act and is not acquiring the Note for the account
or benefit of any U.S. person, (c) the Holder is acquiring the Note in an
"offshore transaction", as defined in Rule 902(i) of Regulation S, (d) the Note
was not offered to the Holder in the United States and, at the time of execution
of this Note and the time of any offer to the Holder hereunder, the Holder was
physically located outside of the United States, and (e) the Note has been sold
pursuant to Regulation S under the Securities Act.
4. Events of Default. The occurrence at any time of any one or more of the
following events shall constitute an "Event of Default" under this Note: (a) the
Maker's failure to pay any principal, interest or other amount if and when due
under this Note and such breach shall continue uncured for ten (10) consecutive
days; (b) failure of the Maker to perform its agreements and obligations, or a
material breach of any of the Maker's representations and warranties or other
obligations under this Note; (c) a material breach of any of the Maker's
covenants under this Note and such breach shall continue uncured for a period of
ten (10) business days after notice from the Holder of such breach; (d) the
dissolution, liquidation or termination of the legal existence of the Maker; (e)
the appointment of a receiver, trustee or similar judicial officer or agent to
take charge of or liquidate any property of assets of the Maker, or action by
any court to take jurisdiction of all or substantially all of the property or
assets of the Maker; and (f) the commencement of any proceeding under any
provision of the Bankruptcy Code of the United States, as now in existence or
hereafter amended, or of any other proceeding under any federal or state law,
now existing or hereafter in effect, relating to
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bankruptcy, reorganization, insolvency, liquidation or otherwise, for the relief
of debtors or readjustment of indebtedness, by or against the Maker.
5. Remedies. Upon the occurrence of an Event of Default, subject to any
notice and cure periods as provided herein, the Holder shall have the immediate
right, at its sole discretion, and without further notice, demand, presentment,
notice of nonpayment or nonperformance, protest, notice of protest, notice of
intent to accelerate, notice of acceleration or any other notice, all of which
are hereby irrevocably and unconditionally waived by the Maker to declare the
entire unpaid principal balance, and all accrued but unpaid interest and costs
at once immediately due and payable (and upon such declaration, the same shall
be at once immediately due and payable) and may be collected forthwith, whether
or not there has been a prior demand for payment and regardless of the
stipulated Maturity Date.
6. Maximum Interest Rate. It is the intention of the Holder that the
interest on the Note that may be charged to, collected from or received from the
Maker shall not exceed the maximum rate permissible under applicable law.
Accordingly, anything in this Note to the contrary notwithstanding, in the event
any interest is charged to, collected from or received from the Maker by the
Holder pursuant hereto or thereto in excess of such maximum lawful rate, then
the excess of such payment over that maximum shall be applied to the reduction
of the outstanding principal balance of the Note (without any prepayment premium
or penalty), and any portion of such excess payment remaining after payment and
satisfaction in full of the Note shall be returned by the Holder to the Maker.
7. Subsequent Financing; Right of First Refusal. (a) From the date hereof
until payment in full of the unpaid principal and all accrued and unpaid
interest on this Note, in cash or debt or equity securities of the Maker (the
"Termination Date"), the Maker covenants and agrees to promptly notify (in no
event later than five (5) calendar days after making or receiving an applicable
offer) in writing (a "Rights Notice") the Holder of the terms and conditions of
any proposed offer or sale to, or exchange with (or other type of distribution
to) any third party (a "Subsequent Financing"), of Common Stock or any
securities convertible, exercisable or exchangeable into Common Stock, including
convertible debt securities. The Rights Notice shall describe, in reasonable
detail, the proposed Subsequent Financing, the proposed closing date of the
Subsequent Financing, which shall be not less than three (3) calendar days from
the date the Rights Notice is received by the Maker, including, without
limitation, all of the material terms and conditions thereof, to the extent
available, and the proposed definitive documentation to be entered into in
connection therewith. The Rights Notice shall provide the Holder an option (the
"Rights Option") during the five (5) business days following receipt of the
Rights Notice by the Holder (the "Option Period"), to purchase all or a portion
of the securities being offered in such Subsequent Financing on the same,
absolute terms and conditions as contemplated by such Subsequent Financing (the
"First Refusal Rights"). If the Holder elects not to participate in such
Subsequent Financing or elects to purchase only a portion of the securities
offered, any other person may participate in the Subsequent Financing on a
pro-rata basis. If the Maker does not receive notice of exercise of the Rights
Option from the Holder within the Option Period, the Maker shall have the right
to close the Subsequent Financing on the scheduled closing date with a third
party; provided that all of the material terms and conditions of the closing are
substantially the same as those provided to the Holder in the Rights Notice. If
the closing of the proposed Subsequent Financing does not occur within thirty
(30) days from the date the Rights Notice is given, any closing of the
contemplated Subsequent Financing or any other Subsequent Financing shall be
subject to all of the provisions of this Section, including, without limitation,
the delivery of a new Rights Notice. Following the Termination Date, this
Section 9 shall terminate in its entirety and have no further force and effect.
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(b) For purposes of this Note, a Permitted Financing (as defined
hereinafter) shall not be considered a Subsequent Financing. A "Permitted
Financing" shall mean (i) shares of Common Stock to be issued in connection with
a strategic merger or acquisition, including, without limitation, the
acquisition of the assets of Berdy Medical Systems, Inc.; (ii) shares of Common
Stock or the issuance of options to purchase shares of Common Stock to
employees, officers, directors, consultants and vendors in accordance with the
Company's equity incentive policies or stock option plan; (iii) the issuance of
securities pursuant to a bona fide firm underwritten public offering of the
Company's securities; or (iv) the conversion or exercise of convertible or
exercisable securities issued or outstanding prior to the date hereof.
8. Miscellaneous.
(a) Governing Law; Jurisdiction. This Note shall be governed by and
construed and interpreted in accordance with, the laws of the State of New York
without regard to its principles of conflicts of laws or choice of laws. The
Maker and the Holder unconditionally and irrevocably consent to the jurisdiction
of the federal and state courts located in the State of New York, County of New
York with respect to any suit, action or proceeding arising out of or relating
to this Note, and, by execution and delivery of this Note, the Maker and the
Holder hereby accept for respectively for themselves, and in respect of their
property, generally and unconditionally the personal jurisdiction of the
aforesaid courts. The Maker and the Holder hereby unconditionally and
irrevocably waive any objection including, without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens which they
may now or hereafter have to the bringing of any such action or proceeding in
such courts. The Maker and the Holder hereby irrevocably consent to the service
of process on an agent of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid. Nothing herein shall affect the right of the Maker or the
Holder to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against the other party in any other
jurisdiction.
THE MAKER AND THE HOLDER HEREBY WAIVE ANY AND ALL RIGHTS THAT IT MAY NOW
OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA, ANY STATE OR
TERRITORY, TO A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING EITHER DIRECTLY OR
INDIRECTLY IN ANY ACTION OR PROCEEDING BETWEEN THE MAKER AND THE HOLDER OR THEIR
SUCCESSORS AND PERMITTED ASSIGNS, OUT OF OR IN ANY WAY CONNECTED WITH THIS NOTE.
(b) Waiver of Presentment and Notice. Subject to the terms and conditions
of this Note, the Maker hereby waives presentment for payment, demand, notice of
non-payment, nonperformance or dishonor, protest, notice of protest, notice of
intent to accelerate, and notice of acceleration of this Note, and all other
notices in connection with the delivery, acceptance, performance, default, or
enforcement of the terms of this Note and the Maker hereby agrees that its
liability under this Note shall be irrevocable and unconditional and shall not
be affected in any manner by any indulgence, extension of time, renewal, waiver
or modification granted or consented to by the Holder. The Maker hereby consents
to any and all extensions of time, renewals, waivers or modifications that may
be granted by the Holder in writing with respect to the payment or other
provisions of this Note. Failure by the Holder to insist upon the strict
performance by the Maker of any terms and provisions herein shall not be deemed
to be a waiver of any terms and provisions herein, and the Holder shall retain
the right thereafter to insist upon strict performance by the Maker of any and
all terms and provisions of this Note or any document securing the repayment of
this Note.
(c) Replacement. Upon receipt of a duly executed, notarized and unsecured
written statement from the Holder with respect to the loss, theft or destruction
of this Note (or any replacement
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hereof), and without requiring an indemnity bond or other security, or, in the
case of a mutilation of this Note, upon surrender and cancellation of such Note,
the Maker shall issue a new Note, of like tenor and amount, in lieu of such
lost, stolen, destroyed or mutilated Note.
(d) Enforcement Expenses. The Maker agrees to pay all out-of-pocket costs
and expenses incurred by the Holder in connection with the enforcement of this
Note, including, without limitation, all reasonable attorneys' fees and
expenses.
(e) Assignment. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part by the Maker to any person or entity, except with the consent
of the Holder.
(f) Notices. All notices and other communications required or permitted to
be given pursuant to this Note shall be in writing signed by the sender, and
shall be deemed duly given (i) on the date delivered if personally delivered,
(ii) on the date sent by telecopier with automatic confirmation by the
transmitting machine, (iii) on the business day after being sent by Federal
Express or another recognized overnight mail service for next day or next
business day delivery, or (iv) five business days after mailing, if mailed by
United States postage-prepaid certified or registered mail, return receipt
requested, in each case addressed to the Maker or the Holder at the following
respective addresses:
if to the Maker to: Canon Ventures Limited
11 Lamed Hae Street
Givatayim, Israel
Attention: Ms. Michal Cohen
Facsimile: (____) ___-______
if to the Holder to: Ramp Corporation
33 Maiden Lane
New York, New York 10038
Attention: Mr. Andrew Brown
Facsimile: (509) 757-4801
with a copy to: Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Facsimile: (212) 704-6288
Attention: Martin Eric Weisberg, Esq.
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this paragraph.
(g) Severability. If any provision of this Note is found by a court of
competent jurisdiction to be invalid or unenforceable as written, then the
parties intend and desire that such provision be enforceable to the full extent
permitted by law, and that the invalidity or unenforceability of such provision
shall not affect the validity or enforceability of the remainder of this Note.
(h) Headings. Article and section headings in this Note are included
herein for purposes of convenience of reference only and shall not constitute a
part of this Note for any other purpose.
RAMP CORPORATION
By:
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Name: Andrew Brown
Title: President
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