-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fu0sjaW0RXXmr28XErD2wAgATbhKLDqPA1e02Aq08AyaQnYuKCqcfuSpRuzpgmtw pGDxI+qm7H1JCwWlKb+m0Q== 0000910680-04-000903.txt : 20040823 0000910680-04-000903.hdr.sgml : 20040823 20040820212806 ACCESSION NUMBER: 0000910680-04-000903 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 31 FILED AS OF DATE: 20040823 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAMP CORP CENTRAL INDEX KEY: 0000890784 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 841123311 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-118457 FILM NUMBER: 04989988 BUSINESS ADDRESS: STREET 1: 33 MAIDEN LANE CITY: NEW YORK STATE: NY ZIP: 10038 BUSINESS PHONE: 212-440-1500 MAIL ADDRESS: STREET 1: 33 MAIDEN LANE CITY: NEW YORK STATE: NY ZIP: 10038 FORMER COMPANY: FORMER CONFORMED NAME: MEDIX RESOURCES INC DATE OF NAME CHANGE: 19980218 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL NURSING SERVICES INC DATE OF NAME CHANGE: 19940719 S-3 1 s3-08202004.txt AUGUST 20, 2004 As filed with the Securities and Exchange Commission on August 20, 2004 Registration No. 333- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 RAMP CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 84-1123311 - ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 33 Maiden Lane New York, New York 10038 (212) 440-1500 ------------------------------------------------------------- (Address, including zip code, and telephone number, Including area code, of registrant's principal executive offices) Mitchell Cohen 33 Maiden Lane New York, New York 10038 (212) 440-1500 --------------------------------------------------------- (Name, address, including zip code, and telephone number, Including area code, of agent for service) Copy to: Martin Eric Weisberg, Esq. Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 (212) 704-6000 ---------------------- Approximate date of commencement of proposed sale to public: As soon as practicable after the effective date of this Registration Statement. If the only securities on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------------------ Proposed Maximum Proposed Maximum Amount of Title of Each Class Amount to be Offering Price Aggregate Registration of Securities to be Registered Registered(1) Per Share Offering Price Fee(8) - ------------------------------------------------ ------------------- ------------------- ------------------ -------------- Common Stock, $.001 par value per share... 32,341,046(2) $0.11 (3) $3,557,515.06 $ 450.74 - ------------------------------------------------ ------------------- ------------------- ------------------ -------------- Common Stock, $.001 par value per share... 20,400,000(2)(4) $0.30 (6) $6,120,000.00 $ 775.40 - ------------------------------------------------ ------------------- ------------------- ------------------ -------------- Common Stock, $.001 par value per share... 14,000,000(2)(5) $0.11 (7) $1,540,000.00 $ 195.12 - ------------------------------------------------ ------------------- ------------------- ------------------ -------------- Common Stock, $.001 par value per share... 14,000,000(2)(5) $0.15 (7) $2,100,000.00 $ 266.07 - ------------------------------------------------ ------------------- ------------------- ------------------ -------------- Common Stock, $.001 par value per share... 2,000,000(2)(5) $0.18 (7) $ 360,000.00 $ 45.61 - ------------------------------------------------ ------------------- ------------------- ------------------ -------------- Common Stock, $.001 par value per share... 14,000,000(2)(5) $0.35 (7) $4,900,000.00 $ 620.83 - ------------------------------------------------ ------------------- ------------------- ------------------ -------------- Common Stock, $.001 par value per share... 14,000,000(2)(5) $0.40 (7) $5,600,000.00 $ 709.52 - -------------------------------------------------------------------------------------------------------------- -------------- Total Registration Fee.................................................................................. $3,063.29 - ------------------------------------------------------------------------------------------------------------------------------
(1) Represents the shares of common stock being registered for resale by the selling stockholders, the number of shares of common stock issuable upon the conversion of promissory notes and the number of shares of common stock issuable upon the exercise of warrants to purchase shares of our common stock by the selling stockholders. (2) Pursuant to Rule 416 of the Securities Act of 1933, as amended (the "Securities Act"), the shares of common stock offered hereby also include such presently indeterminate number of shares of common stock as shall be issued by us to the selling stockholders upon adjustment under anti-dilution provisions covering the additional issuance of shares by Ramp resulting from stock splits, stock dividends or similar transactions. (3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act; based on the average of the high ($0.12) and low ($0.10) prices as reported on the American Stock Exchange on August 16, 2004. (4) Represents the number of shares of our common stock issuable upon the conversion of promissory notes. (5) Represents the number of shares of common stock issuable upon the exercise of warrants to purchase shares of our common stock. (6) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(i) of the Securities Act, based on the offering price of the convertible securities. (7) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) of the Securities Act, based on the higher of (a) the exercise price of the warrants or (b) the offering price of securities of the same class included in this Registration Statement. (8) Calculated pursuant to Section 6(b) of the Securities Act based upon Proposed Maximum Aggregate Offering Price multiplied by .0001267. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. The information in this prospectus is not complete and may be changed. No dealer, salesman or other person has been authorized to give any information or to make any representation not contained in or incorporated by reference in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by us, the selling stockholders or any other person. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such an offer in such jurisdiction. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information herein is correct as of any time subsequent to the date hereof or that there has been no change in our affairs since such date. Subject to completion, dated August 20, 2004 PROSPECTUS RAMP CORPORATION 110,741,046 Shares of Common Stock This prospectus relates to the sale by the selling stockholders identified in this prospectus of up to an aggregate of 110,741,046 shares of our common stock, including: o 32,341,046 shares of our common stock; o 20,400,000 shares issuable upon the conversion of promissory notes with an initial conversion price of $0.30 cents per share; o 14,000,000 shares issuable upon the exercise of warrants with an exercise price of $0.11 cents per share; o 14,000,000 shares issuable upon the exercise of warrants with an exercise price of $0.15 cents per share; o 2,000,000 shares issuable upon the exercise of warrants with an exercise price of $0.18 cents per share. o 14,000,000 shares issuable upon the exercise of warrants with an exercise price of $0.35 cents per share; and o 14,000,000 shares issuable upon the exercise of warrants with an exercise price of $0.40 cents per share. The conversion price of the promissory notes and the exercise price of the warrants are subject to adjustment under certain circumstances. Please see the sections of this prospectus titled "Description of the Transactions", "Plan of Distribution" and "Description of Our Securities" for more information about the terms and conditions of our common stock, promissory notes and warrants. We will not receive any of the proceeds from the sale of these shares by the selling stockholders. However, we will receive the proceeds from any exercise of warrants to purchase shares to be sold hereunder. See "Use of Proceeds". We have agreed to pay the expenses in connection with the registration of these shares. Our common stock is traded on the American Stock Exchange under the symbol "RCO". On August 17, 2004, the closing price of our common stock was reported as $0.11 cents per share. Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 4 of this prospectus for certain risks that should be considered by prospective purchasers of the securities offered hereby. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is August __, 2004. 2 TABLE OF CONTENTS Page ---- PROSPECTUS SUMMARY.............................................................4 RECENT DEVELOPMENTS............................................................6 RISK FACTORS...................................................................7 FORWARD-LOOKING STATEMENTS....................................................16 USE OF PROCEEDS...............................................................16 DESCRIPTION OF THE TRANSACTIONS...............................................16 SELLING STOCKHOLDERS..........................................................19 DESCRIPTION OF SECURITIES.....................................................23 PLAN OF DISTRIBUTION..........................................................24 INDEMNIFICATION OF OFFICERS AND DIRECTORS.....................................26 WHERE YOU CAN FIND MORE INFORMATION ABOUT US..................................26 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.............................27 LEGAL MATTERS.................................................................27 EXPERTS.......................................................................28 3 PROSPECTUS SUMMARY The following summary highlights aspects of the offering and the information incorporated by reference in this prospectus. This prospectus does not contain all of the information that you should consider before making an investment decision. You should read this entire prospectus carefully, including the "Risk Factors" section and the financial statements, related notes and the other more detailed information appearing elsewhere or incorporated by reference in this prospectus. Unless otherwise indicated, "we", "us", "our" and similar terms, as well as references to the "Company" and "Ramp", refer to Ramp Corporation and its subsidiaries HealthRamp, LifeRamp and its newly acquired division, Frontline, and not to the selling security holders. All industry statistics incorporated by reference in this prospectus were obtained from data prepared or provided by recognized industry sources. Ramp Corporation Ramp Corporation (formerly known as Medix Resources, Inc.), through its wholly-owned HealthRamp subsidiary, provides Internet based communication, data integration, and transaction processing designed to provide access to safer and better healthcare. Ramp's products enable communication of high value-added healthcare information among physician offices, hospitals, health management organizations, and health insurance companies. In 2002, we organized a wholly-owned subsidiary, PS Purchase Corp., in Delaware, and in 2003 changed its name to HealthRamp, Inc. ("HealthRamp") to continue this healthcare technology business. In 2003, we acquired the businesses and assets of Frontline Physicians Exchange and Frontline Communications ("Frontline") used in or necessary for the conduct of its 24-hour telephone answering and messaging services to physicians and other medically-related businesses and virtual office services to non-medical businesses and professionals, and the business and assets of ePhysician, Inc., whose technology has been integrated with those of our previously developed Cymedix suite of technologies, resulting in the CarePoint(TM) Suite (the "CarePoint Suite") that we are currently marketing to physicians and other healthcare professionals. In 2003 we also formed a wholly-owned subsidiary, LifeRamp Family Financial, Inc. ("LifeRamp"), in Utah that has not yet commenced business operations. LifeRamp's business purpose is the making of non-recourse loans to terminally ill cancer patients secured by their life insurance policies. In July 2004, we decided to indefinitely delay the commencement of business operations of LifeRamp while we explore financing and other possible alternatives. There can be no assurance that we will secure financing on favorable terms necessary to fund LifeRamp's proposed business model, that the necessary regulatory approvals will be obtained or that the business, if commenced, will be cash flow positive or profitable. We have limited revenues from current operations and are funding the development and deployment of our products through the sales of our securities. See "Risk Factors". Because of our significant recurring losses, and the lack of certain sources of capital to fund our operations, our independent accountants included a "going concern" uncertainty in their audit reports on our audited financial statements for the years ended December 31, 2003, 2002 and 2001. The "going concern" uncertainty signifies that substantial doubt exists about our ability to continue our business. For a complete description of risks regarding our business and operations, we refer you to the section of this prospectus entitled "Risk Factors". Our principal executive office is located at 33 Maiden Lane, New York, New York 10038, and our telephone number is (212) 440-1500. 4 The Offering - -------------------------------------------------------------------------------- Common stock offered by selling stockholders 110,741,046 - -------------------------------------------------------------------------------- Use of Proceeds We will not receive any proceeds from the sale of shares in this offering. We may receive up to $14,500,000 upon exercise of the warrants. - -------------------------------------------------------------------------------- American Stock Exchange Symbol RCO - -------------------------------------------------------------------------------- 5 RECENT DEVELOPMENTS On May 27, 2004, we adopted a stockholder rights agreement that can be triggered if any person or group acquires 20% or more of our common stock. On June 1, 2004, we registered under Section 12(b) of the Securities Exchange Act of 1934 the class of preferred share purchase rights issued under the stockholder rights agreement. On April 22, 2004, we entered into a letter of intent to acquire substantially all of the electronic medical record software business operated by Berdy Medical Systems, Inc. Such letter of intent is subject to the satisfaction of customary closing conditions including the negotiation and execution of a definitive purchase agreement. We anticipate that the acquisition will be completed in the third quarter of 2004, however, no assurance can be given that such transaction will be consummated. On June 1, 2004, we entered into an employment agreement with Andrew Brown, our Chairman of the Board, President and Chief Executive Officer. During the employment period, which will end on June 30, 2006, Mr. Brown will be paid a base salary at an annual rate of $240,000 per year; provided that, during the six-month period ending November 30, 2004, Mr. Brown will be paid a base salary at the rate of $120,000 per year and receive a retention bonus of three times the amount of his reduction in pay payable in the form of shares of our common stock, but only if he either remains employed as our Chief Executive Officer on November 30, 2004, is terminated before that date without "cause" or resigns before that date for "good reason". The employment agreement also provides for the payment of performance-based bonuses tied to the growth of our gross revenues, the grant of up to 6,000,000 options under our 2004 Plan, with an exercise price of $0.18 per share, and the issuance to Mr. Brown of a warrant whereby he will be entitled to purchase up to one-nineteenth of the outstanding shares, at an exercise price to be determined. The employment agreement also provides that in the event that Mr. Brown's employment is terminated for good reason within six months or his employment is terminated within one year without cause after any person or group acquires more than 25% of the combined voting power of our then outstanding common stock, all of Mr. Brown's options will become fully vested and immediately exercisable and Mr. Brown will be paid an amount equal to twice his annual base salary and twice his bonus compensation received during the twelve months immediately preceding the date of termination of Mr. Brown's employment; provided that if the change in control resulted from the sale of Ramp for less than $31 million, the payments to Mr. Brown will be in amounts as described above in this paragraph as if the word "twice" had been deleted. In June 2004, we entered into amendments of our employment agreements with Louis Hyman, our Chief Technology Officer, and Mitchell M. Cohen, our Chief Financial Officer, which provide that in the event that Mr. Hyman's or Mr. Cohen's employment is terminated within one year without cause after any person or group acquires more than 25% of the combined voting power of our then outstanding common stock, all of their options will become fully vested and immediately exercisable and each will be paid an amount equal to twice his annual base salary and twice his bonus compensation received during the twelve months immediately preceding the date of termination of his employment; provided that if the change in control resulted from the sale of Ramp for less than $31 million, the payments to Mr. Hyman and/or Mr. Cohen will be in amounts as described above in this paragraph as if the word "twice" had been deleted. In June 2004, we implemented a reduction work force and salary reduction program, pursuant to which 41 employees were terminated and some of the remaining employees agreed to accept, during the six-month period ending November 30, 2004, in lieu of a portion of their base salaries, a retention 6 bonus equal to an individually negotiated multiple of the amount of their reduction in pay in the form of shares of our common stock, payable only if they remained employed with us on November 30, 2004. The net realization of savings and cash outflows resulting from the reduction in force and changes in compensation is expected to be evident beginning in the third quarter of 2004. RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and other information in this prospectus before investing in our common stock. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. We have incurred and reported significant recurring net losses which endanger our viability as a going-concern and caused our accountants to issue a "going concern" qualification in their annual audit report. We have reported net losses applicable to our common stockholders of ($31,321,000), ($9,014,000) and ($10,636,000) for the years ended December 31, 2003, 2002, and 2001, respectively, and ($15,955,000) for the six months ended June 30, 2004. At June 30, 2004, we had an accumulated deficit of ($87,482,000). These losses and negative operating cash flows have caused our independent accountants to include a "going concern" uncertainty in their reports in connection with their audits of our financial statements for the years ended December 31, 2003, 2002 and 2001. Our independent accountants have advised our management and our Audit Committee that there were material weaknesses in our internal controls and procedures during fiscal year 2003, which management believes have continued through the fiscal period ended June 30, 2004. Although progress was made in both the first and second quarters, management believes that if these material weaknesses are not corrected, a potential misapplication of GAAP or potential accounting error in our consolidated financial statements could occur. Enhancing our internal controls to correct the material weaknesses has and will result in increased costs to us. Based upon management's review of our internal controls and procedures, our management, including our current Chief Executive Officer and current Chief Financial Officer, has determined that we had inadequate controls and procedures constituting material weaknesses as of December 31, 2003 which persisted during the first and second quarters of fiscal year 2004. These inadequate controls and procedures included: o Inadequate accounting staffing and records to identify and record all accounting entries. o Lack of management review of our bank reconciliations, timely review of expense reports, and timely review of agreements governing complex financing transactions, employee and non-employee stock based compensation arrangements and other transactions having accounting ramifications. o Failure to perform an adequate internal review of financial information in periodic reports to ensure accuracy and completeness. o Inadequate segregation of duties consistent with our internal control objectives. o Ineffective utilization of existing administrative personnel to perform ministerial accounting functions, which would allow our accounting department the opportunity to perform bookkeeping, record keeping and other accounting functions effectively. o Lack of management review of entries to the general ledger. 7 Our management has implemented and continues to implement potential enhancements to our internal controls and procedures that it believes will remedy the inadequacies in our internal controls and procedures. The following sets forth the steps we have taken through the fiscal period ended June 30, 2004. o In November, 2003, we hired a permanent Chief Financial Officer with public company reporting experience. o In December, 2003, we hired a staff accountant responsible for, among other things, recording accounts payable. The individual assists the Chief Financial Officer to identify, report and record transactions in a timely manner and provides additional segregation of duties consistent with our internal control objectives. o Management reassigned certain tasks among the expanded accounting department, as well as existing administrative personnel to perform ministerial accounting functions, to improve and better accomplish the bookkeeping, record keeping and other accounting functions. o We commenced a search for a new position of Vice President of Finance, which position was filled on August 2, 2004. The new Vice President of Finance will be wholly dedicated to areas of internal control, financial accounting and reporting. o The review and sign off on all monthly bank reconciliations by the Chief Financial Officer has been instituted. o The review of all underlying agreements, contracts and financing arrangements prior to their execution for accounting ramifications has already been undertaken by the Chief Financial Officer to the extent possible. o We strengthened certain controls over cash disbursements including adopting a policy that requires dual signatures of two senior officers, at least one of whom is not involved in the transaction, on disbursements in excess of $10,000. o We implemented a policy requiring attendance by outside counsel at all Board and Audit Committee meetings, including the timely preparation of minutes of such meetings and reports to management to discuss our implementation of any plans to address conditions constituting the material weaknesses in its internal controls. We have implemented and intend on implementing the following plans to enhance our internal controls in the fiscal quarter ending September 30, 2004. o As the new Vice President of Finance (hired on August 2, 2004) transitions into his responsibilities and gains a full understanding of our business, it is anticipated that this additional resource will allow further redistribution of responsibilities among the expanded accounting department and, more specifically, provide the Chief Financial Officer with the necessary time to perform oversight and supervisory functions in future periods. This includes timely review of all underlying agreements, contracts and financing arrangements, expense reports, entries to the general ledger and periodic filings with the Securities and Exchange Commission. o Our implementation of formal mechanized month end, quarter end and year end closing and consolidation processes. o In July 2004 we appointed two (2) additional independent directors to serve on our Audit Committee. While we believe that the remedial actions that have been or will be taken will result in correcting the conditions constituting the material weaknesses in our internal controls as soon as practicable, the exact timing of when the conditions will be corrected is dependent upon future events which may 8 or may not occur. We are making every effort to correct the conditions expediently and expect to correct the conditions, thereby eliminating the material weaknesses no later than the fourth quarter of fiscal year 2004. It is estimated that the cost to implement the actions set forth above will be approximately $300,000 for our fiscal year ended December 31, 2004 and approximately $200,000 for each fiscal year thereafter. In addition, substantial additional costs may be necessary to implement the provisions of Section 404 of the Sarbanes-Oxley Act of 2002 as relates to our documentation and testing of the effectiveness of internal controls in 2005. We rely on investments and financings to provide working capital. While we believe that we can continue to sell our securities to raise the cash needed to continue operating until cash flow from operations can support our business, there can be no assurance that this will occur. There can be no assurance that additional investments in our securities or other debt or equity financings will be available to us on favorable terms, or at all, to adequately support the development and deployment of our technology. Moreover, failure to obtain such capital on a timely basis could result in lost business opportunities. The success of the development, distribution and deployment of our technology is dependent to a significant degree on our key management and technical personnel. We believe that our success will also depend upon our ability to attract, motivate and retain highly skilled, managerial, sales and marketing, and technical personnel, including software programmers and systems architects skilled in the computer languages in which our technology operates. Competition for such personnel in the software and information services industries is intense. The loss of key personnel, or the inability to hire or retain qualified personnel, could have a material adverse effect on our results of operations, financial condition and/or business. We expect to continue to experience losses until such time as our technology can be successfully deployed and produce revenues. The continuing development, marketing and deployment of our technology will depend upon our ability to obtain additional financing. Our technology has generated limited recurring revenues to date. We are funding our operations now through the sale of our securities. We are currently exploring the feasibility of using LifeRamp to commence a new business, making non-recourse loans to terminally ill cancer patients secured by their life insurance policies. There can be no assurance that we will secure financing on favorable terms necessary to fund that proposed business model, that the necessary regulatory approvals will be obtained or that the business, if commenced, will be cash flow positive or profitable. During 2003 and for the first three months of 2004, we invested approximately $1.1 million and $0.9 million in LifeRamp, respectively. In July 2004, we decided to indefinitely delay the commencement of business operations of LifeRamp while we explore financing and other possible alternatives. There can be no assurance that we will secure financing on favorable terms necessary to fund LifeRamp's proposed business model, that the necessary regulatory approvals will be obtained or that the business, if commenced, will be cash flow positive or profitable. We may not be able to retain our listing on the American Stock Exchange. The American Stock Exchange has not notified us of any listing concerns. However, should our common stock trade at a low price for a substantial period of time or should the American Stock Exchange consider our circumstances for continued listing in a negative light, we may not be able to retain our listing. The American Stock Exchange has certain listing requirements in order for us to continue to have our common stock traded on this exchange. Although the American Stock Exchange does not identify a specific minimum price per share that our stock must trade above or any other rigid standards compelling delisting, we may risk delisting if our common stock trades at a low price per share for a substantial period of time or if it fails to meet the financial condition, result of operations, market capitalization or other 9 financial or non-financial standards considered by the American Stock Exchange. Trading in our common stock after a delisting, if any, would likely be conducted in the over-the-counter markets in the so-called "pink sheets" or on the National Association of Securities Dealers' Electronic Bulletin Board. As a consequence of a delisting our shareholders would find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, our common stock, and our common stock would become substantially less attractive as collateral for margin and purpose loans, for investment by financial institutions under their internal policies or state investment laws or as consideration in future capital raising transactions. Although we have had operations since 1988, because of our move away from temporary healthcare staffing to provide healthcare connectivity solutions at the point of care, we have a relatively short operating history in the healthcare connectivity solutions business and limited financial data to evaluate our business and prospects. In addition, our business model is likely to continue to evolve as we attempt to develop our product offerings and enter new markets. As a result, our potential for future profitability must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies that are attempting to move into new markets and continuing to innovate with new and unproven technologies. We are still in the process of gaining experience in marketing physician connectivity products, providing support services, evaluating demand for products, financing a technology business and dealing with government regulation of health information technology products. While we are putting together a team of experienced executives, they have come from different backgrounds and may require some time to develop an efficient operating structure and corporate culture for our company. Furthermore, our executive management and Board of Directors have been subject to change as executives have left or been terminated and others have been hired to take their places and directors have left and others have been elected or appointed to take their places. Such changes can cause disruption and distraction. Although we have focused our business on healthcare connectivity, we may decide to explore new business models before our core business generates cash flow, if at all. Until feasibility is proven for any such new business models, such as those of our LifeRamp subsidiary described above, some of our scarce resources may be allocated to endeavors which may never be commercialized. The success of our products and services in generating revenue may be subject to the quality and completeness of the data that is generated and stored by the physician or other healthcare professionals and entered into our interconnectivity systems, including the failure to input appropriate or accurate information. Failure or unwillingness by the healthcare professional to accommodate the required information may result in our not being paid for our services. As a developer of connectivity technology products, we will be required to anticipate and adapt to evolving industry standards and regulations and new technological developments. The market for our technology is characterized by continued and rapid technological advances in both hardware and software development, requiring ongoing expenditures for research and development, and timely introduction of new products and enhancements to existing products. Our future success, if any, will depend in part upon our ability to enhance existing products, to respond effectively to technology changes and changes in applicable regulations, and to introduce new products and technologies that are functional and meet the evolving needs of our clients and users in the healthcare information systems market. We rely on a combination of internal development, strategic relationships, licensing and acquisitions to develop our products and services. The cost of developing new healthcare information services and technology solutions is inherently difficult to estimate. Our development of proposed 10 products and services may take longer than originally expected, require more testing than originally anticipated and require the acquisition of additional personnel and other resources. In addition, there can be no assurance that the products or services we develop or license will be able to compete with the alternatives available to our customers. New or newly integrated products and services will not become profitable unless they achieve sufficient levels of market acceptance. There can be no assurance that healthcare providers will accept from us new products and services, or products and services that result from integrating existing and/or acquired products and services, including the products and services we are developing to integrate our services into the physician's office or other medical facility, such as our handheld solution. In addition, there can be no assurance that any pricing strategy that we implement for any such products and services will be economically viable or acceptable to the target markets. Failure to achieve broad penetration in target markets with respect to new or newly integrated products and services could have a material adverse effect on our business prospects. The market for our connectivity products and services in the healthcare information systems may be slow to develop due to the large number of practitioners who are resistant to change, as well as the financial investment and workflow interruptions associated with change, particularly in a period of rising pressure to reduce costs in the marketplace. Achieving market acceptance of new or newly integrated products and services is likely to require significant efforts and expenditures. Achieving market acceptance for new or newly integrated products and services is likely to require substantial marketing efforts and expenditure of significant funds to create awareness and demand by participants in the healthcare industry. In addition, deployment of new or newly integrated products and services may require the use of additional resources for training our existing sales force and customer service personnel and for hiring and training additional salespersons and customer service personnel. There can be no assurance that the revenue opportunities from new or newly integrated products and services will justify amounts spent for their development, marketing and roll-out. We could be subject to breach of warranty claims if our software products, information technology systems or transmission systems contain errors, experience failures or do not meet customer expectations. We could face breach of warranty or other claims or additional development costs if the software and systems we sell or license to customers or use to provide services contain undetected errors, experience failures, do not perform in accordance with their documentation, or do not meet the expectations that our customers have for them. Undetected errors in the software and systems we provide or those we use to provide services could cause serious problems for which our customers may seek compensation from us. We attempt to limit, by contract, our liability for damages arising from negligence, errors or mistakes. However, contractual limitations on liability may not be enforceable in certain circumstances or may otherwise not provide sufficient protection to us from liability for damages. If our systems or the Internet experience security breaches or are otherwise perceived to be insecure, our business could suffer. A security breach could damage our reputation or result in liability. We retain and transmit confidential information, including patient health information. Despite the implementation of security measures, our infrastructure or other systems that we interface with, including the Internet, may be vulnerable to physical break-ins, hackers, improper employee or contractor access, computer viruses, programming errors, attacks by third parties or similar disruptive problems. Any compromise of our security, whether as a result of our own systems or systems that they interface with, could reduce demand for our services. Our products provide applications that relate to patient medication histories and treatment plans. Any failure by our products to provide and maintain accurate, secure and timely information could result in product 11 liability claims against us by our clients or their affiliates or patients. We maintain insurance that we believe currently is adequate to protect against claims associated with the use of our products, but there can be no assurance that our insurance coverage would adequately cover any claim asserted against us. A successful claim brought against us in excess of our insurance coverage could have a material adverse effect on our results of operations, financial condition and/or business. Even unsuccessful claims could result in the expenditure of funds in litigation, as well as diversion of management time and resources. Certain of our products are subject to compliance with HIPAA. Failure to comply with HIPAA may have a material adverse effect on our business. Government regulation of healthcare and healthcare information technology, are in a period of ongoing change and uncertainty and creates risks and challenges with respect to our compliance efforts and our business strategies. The healthcare industry is highly regulated and is subject to changing political, regulatory and other influences. Federal and state legislatures and agencies periodically consider programs to reform or revise the United States healthcare system. These programs may contain proposals to increase governmental involvement in healthcare or otherwise change the environment in which healthcare industry participants operate. Particularly, compliance with HIPAA and related regulations are causing the healthcare industry to incur substantial cost to change its procedures. Healthcare industry participants may respond by reducing their investments or postponing investment decisions, including investments in our products and services. Although we expect these regulations to have the beneficial effect of spurring adoption of our software products, we cannot predict with any certainty what impact, if any, these and future healthcare reforms might have on our business. Existing laws and regulations also could create liability, cause us to incur additional cost or restrict our operations. The effect of HIPAA on our business is difficult to predict and there can be no assurance that we will adequately address the business risks created by the HIPAA. We may incur significant expenses relating to compliance with HIPAA. Furthermore, we are unable to predict what changes to HIPAA, or the regulations issued pursuant to HIPAA, might be made in the future or how those changes could affect our business or the costs of compliance with HIPAA. Government regulation of the Internet could adversely affect our business. The Internet and its associated technologies are subject to government regulation. Our failure to accurately anticipate the application of applicable laws and regulations, or any other failure to comply, could create liability for us, result in adverse publicity, or negatively affect our business. In addition, new laws and regulations may be adopted with respect to the Internet or other online services covering user privacy, patient confidentiality, consumer protection and other services. We cannot predict whether these laws or regulations will change or how such changes will affect our business. Government regulation of the Internet could limit the effectiveness of the Internet for the methods of healthcare e-commerce that we are providing or developing or even prohibit the sale of particular products and services. Our Internet-based services are dependent on the development and maintenance of the Internet infrastructure and data storage facilities maintained by third parties. Our ability to deliver our Internet-based products and services is dependent on the development and maintenance of the infrastructure of the Internet and the maintenance of data storage facilities by third parties. This includes maintenance of a reliable network backbone and data storage facilities with the necessary speed, data capacity and security, as well as timely development of complementary products such as high-speed modems, for providing reliable Internet access and services. If the Internet continues to experience increased usage, the Internet infrastructure may be unable to support the demands placed on it. In addition, the performance of the Internet may be harmed by increased usage. The Internet has experienced a variety of outages and other delays as a result of damages to portions of its infrastructure, and it 12 could face outages and delays in the future. These outages and delays could reduce the level of Internet usage as well as the availability of the Internet to us for delivery of our Internet-based products and services. Some of our products and services will not be widely adopted until broadband connectivity is more generally available. Some of our products and services and planned services require a continuous broadband connection between the physician's office or other healthcare provider facilities and the Internet. The availability of broadband connectivity varies widely from location to location and even within a single geographic area. The future availability of broadband connections is unpredictable and is not within our control. While we expect that many physician's offices and other healthcare provider facilities will remain without ready access to broadband connectivity for some period of time, we cannot predict how long that will be. Accordingly, the lack of these broadband connections will continue to place limitations on the number of sites that are able to utilize our Internet-based products and services and the revenue we can expect to generate form those products and services. Compliance with legal and regulatory requirements will be critical to LifeRamp's operations, if any. If we, directly or indirectly through our subsidiaries, erroneously disclose information that could be confidential and/or protected health information, we could be subject to legal action by the individuals involved, and could possibly be subject to criminal sanctions. In addition, if LifeRamp is launched and fails to comply with applicable insurance and consumer lending laws, states could bring actions to enforce statutory requirements, which could limit its business practices in such states, including, without limitation, limiting or eliminating its ability to charge or collect interest on its loans or related fees, or limit or eliminate its ability to secure its loans with its borrowers' life insurance policies. Any such actions if commenced, would have a material and adverse impact on LifeRamp's business, operations and financial condition. We have been granted certain patent rights, trademarks and copyrights relating to our software. However, patent and intellectual property legal issues for software programs, such as the our products, are complex and currently evolving. Since patent applications are secret until patents are issued in the United States, or published in other countries, we cannot be sure that we are first to file any patent application. In addition, there can be no assurance that competitors, many of which have far greater resources than we do, will not apply for and obtain patents that will interfere with our ability to develop or market product ideas that we have originated. Furthermore, the laws of certain foreign countries do not provide the protection to intellectual property that is provided in the United States, and may limit our ability to market our products overseas. We cannot give any assurance that the scope of the rights we have are broad enough to fully protect our technology from infringement. Litigation or regulatory proceedings may be necessary to protect our intellectual property rights, such as the scope of our patent. Such litigation and regulatory proceedings are very expensive and could be a significant drain on our resources and divert resources from product development. There is no assurance that we will have the financial resources to defend our patent rights or other intellectual property from infringement or claims of invalidity. We have been notified by a party that it believes our pharmacy product may infringe on patents that it holds. We have retained patent counsel who has made a preliminary investigation and determined that our product does not infringe on the identified patents. At this time no legal action has been instituted. We also rely upon unpatented proprietary technology and no assurance can be given that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to or disclose our proprietary technology or that we can meaningfully protect our rights in such unpatented proprietary technology. No assurance can be given that efforts to protect such information and techniques will be successful. The failure to 13 protect our intellectual property could have a material adverse effect on our operating results, financial position and business. As of August 11, 2004, we had 200,691,217 outstanding shares of common stock and 58,205,107 shares of common stock reserved for issuance upon the exercise of options, warrants, and shares of our convertible preferred stock and convertible debentures and notes outstanding on such date. Most of these shares will be immediately saleable upon exercise or conversion under registration statements we have filed with the SEC. The exercise prices of options, warrants or other rights to acquire common stock presently outstanding range from $0.01 per share to $4.97 per share. During the respective terms of the outstanding options, warrants, preferred stock and other outstanding derivative securities, the holders are given the opportunity to profit from a rise in the market price of our common stock, and the exercise of any options, warrants or other rights may dilute the book value per share of our common stock and put downward pressure on the price of our common stock. The existence of the options, conversion rights, or any outstanding warrants may adversely affect the terms on which we may obtain additional equity financing. Moreover, the holders of such securities are likely to exercise their rights to acquire common stock at a time when we would otherwise be able to obtain capital on terms more favorable than could be obtained through the exercise or conversion of such securities. We have raised substantial amounts of capital in private placements from time to time. The securities offered in such private placements were not registered with the SEC or any state agency in reliance upon exemptions from such registration requirements. Such exemptions are highly technical in nature and if we inadvertently failed to comply with the requirements of any of such exemptive provisions, investors would have the right to rescind their purchase of our securities or sue for damages. If one or more investors were to successfully seek such rescission or prevail in any such suit, we could face severe financial demands that could materially and adversely affect our financial position. Financings that may be available to us under current market conditions frequently involve sales at prices below the prices at which our common stock currently trades on the American Stock Exchange, as well as the issuance of warrants or convertible securities at a discount to market price. Investors in our securities may suffer dilution. The issuance of shares of common stock, or shares of common stock underlying warrants, options or preferred stock or convertible notes will dilute the equity interest of existing stockholders and could have a significant adverse effect on the market price of our common stock. The sale of common stock acquired at a discount could have a negative impact on the market price of our common stock and could increase the volatility in the market price of our common stock. In addition, we may seek additional financing which may result in the issuance of additional shares of our common stock and/or rights to acquire additional shares of our common stock. The issuance of our common stock in connection with such financing may result in substantial dilution to the existing holders of our common stock. Those additional issuances of common stock would result in a reduction of your percentage interest in our company. Historically, our common stock has experienced significant price fluctuations. One or more of the following factors influence these fluctuations: o unfavorable announcements or press releases relating to the technology sector; o regulatory, legislative or other developments affecting us or the healthcare industry generally; 14 o conversion of our preferred stock and convertible debt into common stock at conversion rates based on then current market prices or discounts to market prices of our common stock and exercise of options and warrants at below current market prices; o sales by those financing our company through convertible securities the underlying common stock of which have been registered with the SEC and may be sold into the public market immediately upon conversion; and o market conditions specific to technology and internet companies, the healthcare industry and general market conditions. In addition, in recent years the stock market has experienced significant price and volume fluctuations. These fluctuations, which are often unrelated to the operating performance of specific companies, have had a substantial effect on the market price for many healthcare related technology companies. Factors such as those cited above, as well as other factors that may be unrelated to our operating performance, may adversely affect the price of our common stock. We have not had earnings, but if earnings were available, it is our general policy to retain any earnings for use in our operations. Therefore, we do not anticipate paying any cash dividends on our common stock in the foreseeable future despite the recent reduction of the federal income tax rate on dividends. Any payment of cash dividends on our common stock in the future will be dependent upon our financial condition, results of operations, current and anticipated cash requirements, preferred rights of holders of preferred stock, plans for expansion, as well as other factors that our Board of Directors deems relevant. We anticipate that our future financing agreements may prohibit the payment of common stock dividends without the prior written consent of those investors. We may have to lower prices or spend more money to compete effectively against companies with greater resources than us, which could result in lower revenues. The eventual success of our products in the marketplace will depend on many factors, including product performance, price, ease of use, support of industry standards, competing technologies and customer support and service. Given these factors we cannot assure you that we will be able to compete successfully. For example, if our competitors offer lower prices, we could be forced to lower prices which could result in reduced or negative margins and a decrease in revenues. If we do not lower prices we could lose sales and market share. In either case, if we are unable to compete against our main competitors, which include established companies with significant financial resources, we would not be able to generate sufficient revenues to grow our company or reverse our history of operating losses. In addition, we may have to increase expenses to effectively compete for market share, including funds to expand our infrastructure, which is a capital and time intensive process. Further, if other companies choose to aggressively compete against us, we may have to increase expenses on advertising, promotion, trade shows, product development, marketing and overhead expenses, hiring and retaining personnel, and developing new technologies. These lower prices and higher expenses would adversely affect our operations and cash flows. As with any business, growth in absolute amounts of selling, general and administrative expenses or the occurrence of extraordinary events could cause actual results to vary materially and adversely from the results contemplated by the forward-looking statements. Budgeting and other management decisions are subjective in many respects and thus susceptible to incorrect decisions and periodic revisions based on actual experience and business developments, the impact of which may cause us to alter our marketing, capital 15 expenditures or other budgets, which may, in turn, affect our results of operations. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate, and therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans for the Company will be achieved. FORWARD-LOOKING STATEMENTS Certain information contained in this prospectus and the documents incorporated by reference into this prospectus include forward-looking statements (as defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act), which mean that they relate to events or transactions that have not yet occurred, our expectations or estimates for our future operations, our growth strategies or business plans or other facts that have not yet occurred. Such statements can be identified by the use of forward-looking terminology such as "might," "may," "will," "could," "expect," "anticipate," "estimate," "likely," "believe," or "continue" or the negative thereof or other variations thereon or comparable terminology. The above risk factors contain discussions of important factors that should be considered by prospective investors for their potential impact on forward-looking statements included in this prospectus and in the documents incorporated by reference into this prospectus. These important factors, among others, may cause actual results to differ materially and adversely from the results expressed or implied by the forward-looking statements. USE OF PROCEEDS The selling security holders will receive the net proceeds from the sale of shares. We will not receive any of the proceeds from any sale of the shares by the selling security holders. However, we will receive the proceeds from the cash exercise of warrants to purchase certain of the shares offered hereunder. If all warrants covered hereby are exercised for cash in accordance with their terms, we would receive gross proceeds of $14,500,000. Any such gross proceeds will be used for working capital purposes. DESCRIPTION OF THE TRANSACTIONS On July 14, 2004, we entered into a Note and Warrant Purchase Agreement (the "Note Purchase Agreement") with Cottonwood Ltd. and Willow Bend Management Ltd., each an accredited investor. Under the terms of the Note Purchase Agreement, we issued a convertible promissory note in the aggregate principal amount of $2,100,000 to each of Cottonwood Ltd. and Willow Bend Management Ltd. Each promissory note is convertible into shares of our common stock at an initial conversion price of $0.30 cents per share, or 7,000,000 shares of common stock. In addition, we issued to each of Cottonwood Ltd. and Willow Bend Management Ltd. warrants exercisable into 4,683,823 shares of common stock at an exercise price of $0.11 cents per share, warrants exercisable into 4,683,823 shares of common stock at an exercise price of $0.15 cents per share, warrants exercisable into 4,683,823 shares of common stock at an exercise price of $0.35 cents per share and warrants exercisable into 4,683,823 shares of common stock at an exercise price of $0.40 cents per share. The warrants have a term of one year. 16 Pursuant to the Registration Rights Agreement, dated concurrently with the Note Purchase Agreement (the "Registration Rights Agreement"), we have agreed to register the shares of common stock underlying the convertible promissory notes and warrants with the SEC on a registration statement (of which this prospectus forms a part) and to pay to Cottonwood Ltd. and Willow Bend Management Ltd. liquidated damages if the Registration Statement is not filed on or before August 13, 2004 and/or is not declared effective within 90 days following the date the Registration Statement (of which this prospectus forms a part) is filed with the SEC, an amount, at the option of the Company, in cash or shares of common stock registered with the SEC equal to: (i) one percent (1.0%) of the initial investment amount for each calendar month or portion thereof of delayed effectiveness, up to two calendar months, and (ii) two percent (2.0%) of the initial investment amount for each calendar month or portion thereof thereafter until effectiveness, less any amount of convertible promissory note that has been converted or redeemed. Redwood Capital Partners, Inc. agreed to perform financial advisory services for us. In connection with such services, as a portion of compensation owed to Redwood and in addition to payment in cash of $320,000 from us to Redwood, we agreed to issue to Redwood warrants exercisable into 350,000 shares of our common stock exercisable at $0.11 cents per share, warrants exercisable into 350,000 shares of our common stock exercisable at $0.15 cents per share, warrants exercisable into 350,000 shares of our common stock exercisable at $0.35 cents per share and warrants exercisable into 350,000 shares of our common stock exercisable at $0.40 cents per share. The warrants have a term of one year. In connection with the issuance of warrants, we agreed to register the shares underlying the warrants with the SEC on a registration statement (of which this prospectus forms a part). On July 14, 2004 we entered into a Letter Agreement (the "Letter Agreement") with Hilltop Services, Ltd. in connection with the anti-dilution provisions contained in that certain Common Stock and Warrant Purchase Agreement, dated March 4, 2004, between Hilltop Services, Ltd. and the Company. Under the terms of the Letter Agreement and in consideration for the waiver by Hilltop of its anti-dilution rights, we issued to Hilltop Services, Ltd. an additional 24,130,435 shares of our common stock (of which an aggregate of 13,260,870 are being registered on a registration statement of which this prospectus forms a part), a convertible promissory note in the aggregate principal amount of $1,920,000 convertible into shares of our common stock at a conversion price of $0.30 cents per share, or 6,400,000 shares of common stock, and warrants exercisable into 4,282,354 shares of common stock at an exercise price of $0.11 cents per share, warrants exercisable into 4,282,354 shares of common stock at an exercise price of $0.15 cents per share, warrants exercisable into 4,282,354 shares of common stock at an exercise price of $0.35 cents per share and warrants exercisable into 4,282,354 shares of common stock at an exercise price of $0.40 cents per share. The warrants have a term of one year. Pursuant to the Registration Rights Agreement we agreed to register the shares of common stock as well as the shares of common stock underlying the convertible promissory note and warrants on a registration statement (of which this prospectus is a part). In connection with the anti-dilution provisions contained in the agreements applicable to each person, Messrs. Richard Rosenblum and David Stefansky each received 860,158 shares of our common stock (of which an aggregate of 656,680 are being registered on a registration statement of which this prospectus forms a part). We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). Messrs. Rosenblum and Stefanksy each received 500,000 shares of our common stock and warrants exercisable into 1,000,000 shares of common stock at an exercise price of $0.18 cents per share as compensation for financial advisory services performed for us. The warrants have a term of five years. We 17 agreed to register the shares of common stock as well as the shares of common stock underlying the warrants on a registration statement (of which this prospectus is a part). Pursuant to that certain Fee Payment Agreement, dated August 20, 2004 (the "Fee Payment Agreement"), Martin Eric Weisberg, Esq., an accredited investor and a partner at the law firm of Jenkens & Gilchrist Parker Chapin LLP, was issued 4,000,000 shares of our common stock as payment for legal services previously rendered and to be rendered to us in connection with representation on our general corporate and securities matters, including the sale of the notes and warrants pursuant to the Note Purchase Agreement. We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). Each of Advantage Technologies, Inc., Conceptual Litho Reproductions, Ellis Advertising, Mathe, Inc., Soffront Software Inc., Something Digital.Com L.L.C., PowerTest, Inc. and Kate McGowan Consulting are accredited investors and vendors that provide products or services to us in connection with vendor agreements between each vendor and us. Under the terms of an agreement for payment of account (the "Payment of Account Agreement") between each vendor and us, in lieu of cash compensation we agreed to issue an aggregate of 8,763,117 shares of our common stock to such vendors as compensation for delivery of certain products or services to us. The shares of common stock were issued at approximately $0.10 cents per share based upon the average of the closing bid price of our common stock for the week prior to the date of such agreement. We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). Each of Stride & Associates, Mr. Colin Parlett and Lagniappe Resources, Inc. is a vendor that provides products or services to us in connection with vendor agreements between each vendor and us. Under the terms of a settlement agreement (the "Settlement Agreement") between each vendor and us, in lieu of cash compensation we agreed to issue an aggregate of 1,225,000 shares of our common stock to such vendors as compensation for delivery of certain products or services to us. The shares of common stock were issued at approximately $0.10 cents per share, representing an approximate 10% discount to the closing market price of our common stock on the date of such agreement. We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). Each of Phoenix PMT LLC, Search Net Corporation, Mr. Ron Munkittrick, Mr. Xavier Hansen and Mr. Gennady Shpits provides consulting services to us in connection with consulting arrangements between each consultant and us. Under the terms of a retention bonus program (the "Retention Bonus Program") between each consultant and us, in lieu of cash compensation we agreed to issue an aggregate of 344,395 shares of our common stock to such consultants as compensation for performance of certain consulting services to us. The shares of common stock were issued at approximately $0.10 cents per share, representing an approximate 10% discount to the lesser of: (i) the closing market price of our common stock on the due date of such payment and (ii) the average closing price of the common stock for the five days preceding such payment date. We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). Pursuant to that certain Settlement Agreement and Mutual Release, dated August 19, 2004 (the "Locke Lidell Agreement"), the law firm of Locke Liddell & Sapp LLP, was issued 755,045 shares of our common stock as payment for $77,467.63 owed for legal services previously rendered to us in connection with representation of LifeRamp on our general corporate matters. We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). 18 On or about July 16, 2004, Clinton Group, Inc., as plaintiff and sub sub-landlord, filed a summons and complaint against us, as defendant, with the Supreme Court of the State of New York, County of New York (Index No. 110371) alleging, among other things, breach of an alleged sublease agreement by us for non-payment of the security deposit and one month's rent for the premises located at 55 Water Street, New York, New York. In the summons and complaint, Clinton sought repossession of the premises, damages for non-payment of rent in the sum of $128,629.16, additional damages under the sublease through the date of trial for the remainder of the term of the Sublease, plus interest and attorneys fees. On August 20, 2004, we entered into a Settlement Agreement and Release with Clinton (the "Clinton Settlement Agreement") pursuant to which, in full settlement of, and release from, any and all claims against us by Clinton relating to the alleged sublease, we agreed to pay to Clinton, an accredited investor, (i) the amount of $75,000 in cash, (ii) the amount of $150,000 due upon the earlier of the one year anniversary of our agreement or upon our raising an aggregate of $5,000,000 in gross proceeds from third party investors, and (iii) issue to Clinton 1,150,000 shares of our common stock. We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). Pursuant to that certain Settlement Agreement and Mutual Release, dated August 19, 2004 (the "Buckley Kolar Settlement Agreement"), the law firm of Buckley Kolar LLP, was issued 529,259 shares of our common stock as payment for $54,302.01 owed for legal services previously rendered to us in connection with representation of LifeRamp on our general corporate matters. We agreed to register the shares of common stock on a registration statement (of which this prospectus is a part). Reference is made to the Note Purchase Agreement, the Registration Rights Agreement, the Letter Agreement, the Fee Payment Agreement, the Payment of Account Agreement, the Settlement Agreement, the Retention Bonus Program, the Locke Lidell Agreement, the Clinton Settlement Agreement and the Buckley Kolar Settlement Agreement that are filed as exhibits to the Registration Statement (of which this prospectus forms a part) for more complete descriptions of the provisions that are summarized under this caption. SELLING STOCKHOLDERS The following table sets forth the shares beneficially owned, as of August 20, 2004, by the selling stockholders prior to the offering contemplated by this prospectus, the number of shares each selling stockholder is offering by this prospectus and the number of shares which each would own beneficially if all such offered shares are sold. The selling stockholders acquired their beneficial interests in the shares being offered hereby in transactions described under the heading "Description of the Transactions." Except as expressly set forth below, none of the selling stockholders is a registered broker-dealer or an affiliate of a registered broker-dealer. Each of the selling stockholders has acquired his, her or its shares solely for investment and not with a view to or for resale or distribution of such securities. Beneficial ownership is determined in accordance with SEC rules and includes voting or investment power with respect to the securities. However, each of the selling stockholders is subject to certain limitations on the exercise of their warrants or conversion of their promissory notes, if any. The most significant of these limitations is that such selling stockholder may not exercise its warrants or convert its promissory notes, if such exercise or conversion would cause such holder's beneficial ownership of our common stock (excluding shares underlying any of their unexercised warrants or unconverted promissory notes) to exceed 4.99% of the outstanding shares of common stock. 19
Number of Percentage of Shares of Common Stock Shares of Common Common Stock Owned After Stock Owned Prior Shares of Common Owned After Name and Addresses to Offering Stock to be Sold the Offering the Offering ------------------ ----------------- ---------------- ------------ ------------ Hilltop Services, Ltd. (1) 36,790,286 36,790,286 (2) 0 0 Cottonwood Ltd. (3) 25,735,292 25,735,292 (4) 0 0 Willow Bend Management Ltd. (5) 25,735,292 25,735,292 (6) 0 0 Martin Eric Weisberg, Esq. (7) 4,000,000 4,000,000 0 0 Redwood Capital Partners, Inc. (8) 1,400,000 1,400,000 (9) 0 0 Richard Rosenblum (10) 2,156,680 2,156,680 (11) 0 0 David Stefansky (12) 2,156,680 2,156,680 (13) 0 0 Advantage Technologies, Inc. (14) 101,890 101,890 0 0 Conceptual Litho Reproductions (15) 959,846 959,846 0 0 Ellis Advertising (16) 2,300,000 2,300,000 0 0 Mathe, Inc. (17) 3,000,000 3,000,000 0 0 Soffront Software Inc. (18) 954,000 954,000 0 0 Something Digital.Com L.L.C. (19) 750,000 750,000 0 0 Stride & Associates (20) 840,000 840,000 0 0 PowerTest, Inc. (21) 576,608 576,608 0 0 Kate McGowan Consulting (22) 120,773 120,773 0 0 Buckley Kolar LLP (23) 529,259 529,259 0 0 Locke Liddell & Sapp LLP (24) 755,045 755,045 0 0 Colin Parlett (25) 320,000 320,000 0 0 Lagniappe Resources, Inc. (26) 65,000 65,000 0 0 Phoenix PMT LLC (27) 53,082 53,082 0 0 Search Net Corporation (28) 85,283 85,283 0 0 20 Ron Munkittrick (29) 150,260 150,260 0 0 Xavier Hansen (30) 29,291 29,291 0 0 Gennady Shpits (31) 26,479 26,479 0 0 Clinton Group, Inc. (32) 1,150,000 1,150,000 0 0
- ---------- * Less than 1% (1) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Ms. Mary Lowenthal. The address of the selling stockholder is Mevot David 8, Ramat Gan, Israel. (2) Includes 17,129,416 shares issuable upon exercise of warrants to purchase shares of common stock and 6,400,000 shares of our common stock issuable upon conversion of promissory notes. (3) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Neil Smollett. The address of the selling stockholder is Moshav Bitzaron, Israel. (4) Includes 18,735,292 shares issuable upon exercise of warrants to purchase shares of common stock and 7,000,000 shares of our common stock issuable upon conversion of promissory notes. (5) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Michael Raviv. The address of the selling stockholder is 2 Nevim Street, Ramat Hasharon, Israel. (6) Includes 18,735,292 shares issuable upon exercise of warrants to purchase shares of common stock and 7,000,000 shares of our common stock issuable upon conversion of promissory notes. (7) The selling stockholder is a partner at the law firm of Jenkens & Gilchrist Parker Chapin LLP. The address of the selling stockholder is c/o Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405 Lexington Avenue, New York, New York 10174. (8) The selling stockholder advised us that the natural persons having voting or dispositive power over such shares of common stock are Messrs. Richard Rosenblum and David Stefansky. The address of the selling stockholder is 19 Horizon Drive, Wayne, New Jersey 07470. (9) Represents shares issuable upon exercise of warrants to purchase share of common stock. (10) The address of the selling stockholder is 19 Horizon Drive, Wayne, New Jersey 07470. (11) Includes 1,000,000 shares issuable upon exercise of warrants to purchase share of common stock. (12) The address of the selling stockholder is 2317 Avenue K, Brooklyn, New York 11210. (13) Includes 1,000,000 shares issuable upon exercise of warrants to purchase share of common stock. (14) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Barry Malter. The address of the selling stockholder is 30 Miller Circle, Armonk, New York 10504. (15) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Eric Bernstein. The address of the selling stockholder is 420 West 25th Street, New York, New York 10001. 21 (16) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Ron Ellis. The address of the selling stockholder is 6100 Wilshire Boulevard, Suite 310, Los Angeles, California 90048. (17) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Mark Hicks. The address of the selling stockholder is 1259 Route 46, Bldg. 1, Parsippany, New Jersey 07054. (18) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. James Boger. The address of the selling stockholder is 45437 Warm Spring Blvd., Freemont, Illinois 94539. (19) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Jonathan P. Klonsky. The address of the selling stockholder is 60 East 42nd Street, Suite 1630, New York, New York 10165. (20) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Ms. Jane Woodworth, as attorney for Stride & Associates. The address of the selling stockholder is 76 Fiske Hill Road, Sturbridge, Massachusetts 01566. (21) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Thomas R. Lynch. The address of the selling stockholder is 145 Natoma Street, 3rd Floor, San Francisco, California 94105. (22) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Ms. Catherine McGowan. The address of the selling stockholder is 70 Chestnut Avenue, Clarendon Hills, Illinois 60514. (23) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Jeremiah Buckley. The address of the selling stockholder is Buckley Kolar LLP, 1250 24th Street, N.W., Suite 700, Washington, D.C. 20037. (24) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. David Taylor. The address of the selling stockholder is Locke Liddell & Sapp LLP, 3400 JP Morgan Chase Tower, 600 Travis, Houston, Texas 77002. (25) The address of the selling stockholder is 406 Feather Rock Drive, Rockville, Maryland 20850. (26) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Ms. Geri Hand. The address of the selling stockholder is 1640 Mount McKinley Drive, Grayson, Georgia 30017-2980. (27) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. John Tsemberides. The address of the selling stockholder is 25-40 Shore Boulevard, #7A, Astoria, New York 11102. (28) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. Marco Trezza. The address of the selling stockholder is 106 West 80th Street, 1R, New York, New York 10024-6333. (29) The address of the selling stockholder is 760 Warren Street, Westfield, New Jersey 07090. (30) The address of the selling stockholder is 873 Davidson Road, Piscataway, New Jersey 08854. (31) The address of the selling stockholder is 40 Donna Court, #11, Staten Island, New York 10314. 22 (32) The selling stockholder advised us that the natural person having voting or dispositive power over such shares of common stock is Mr. John Hall. The address of the selling stockholder is 9 West 57th Street, New York, New York 10019. Relationship Between Ramp and the Selling Stockholders Except as disclosed in this prospectus, none of the selling stockholders are affiliates or controlled by our affiliates. Except as disclosed in this prospectus, none of the selling stockholders are now or were at any time in the past an officer or director of ours or of any of our predecessors or affiliates. We have separate contractual obligations to file this registration statement (of which this prospectus forms a part) with each of the selling stockholders. DESCRIPTION OF SECURITIES Our authorized capital consists of 400,000,000 shares of common stock, par value $.001 per share, and 2,500,000 shares of preferred stock, par value $1.00 per share. As of August 11, 2004, we had outstanding 200,691,217 shares of common stock and 1 share of 1996 Preferred Stock. As of such date, our common stock was held of record by approximately 460 persons and beneficially owned by approximately 10,000 persons. Common Stock Each share of common stock is entitled to one vote at all meetings of stockholders. Stockholders are not permitted to accumulate votes in the election of directors. Currently, the Board of Directors consists of five directors, who serve for staggered terms of three years, with at least two directors elected at every annual meeting. All shares of common stock are equal to each other with respect to liquidation rights and dividend rights. There are no preemptive rights to purchase any additional shares of common stock. In the event of our liquidation, dissolution or winding up, holders of the common stock will be entitled to receive on a pro rata basis all of our assets remaining after satisfaction of all liabilities and preferences of the outstanding preferred stock. Preferred Stock We are authorized to issue up to 2,500,000 shares of preferred stock. Our preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our Board of Directors, without further action by stockholders and may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions. The issuance of preferred stock could reduce the rights, including voting rights, of the holders of common stock, and, therefore, reduce the value of our common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with or sell our assets to a third party, thereby preserving control of Ramp Corporation by existing management. Convertible Promissory Notes On July 14, 2004, we issued promissory notes to each of Cottonwood Ltd., Willow Bend Management Ltd. and Hilltop Services, Ltd. in the aggregate principal amount of $6,120,000. The Cottonwood and Willow Bend promissory notes were issued in connection with the Note Purchase Agreement. The Hilltop promissory note was issued in connection with the Letter Agreement. The promissory notes mature on the earliest of January 14, 2005 or the acceleration 23 of the obligations as contemplated by the promissory notes (the "Maturity Date"). The promissory notes bear interest at the rate of six percent (6.0%) per annum. Interest is payable on the Maturity Date in cash or shares of our common stocks in accordance with the terms of the promissory notes. The promissory notes are convertible, at the option of the holder and us, into shares of our common stock at a fixed conversion price of $0.30 per share, on the terms and conditions and subject to adjustment as provided in the notes. If, on any day following the forty-five day anniversary of July 14, 2004, the average closing sale price of our common stock for the ten trading days immediately prior to such date is less than $0.15 cents per share, then the indebtedness represented by each promissory note shall be automatically, and without further action by the holder or us, secured by a first priority lien against all of our assets and property, including any and all of our intellectual property, software code, trademarks and trade names. The terms of the promissory notes prohibit conversion of the notes to the extent that conversion of the notes would result in any holder beneficially owning in excess of 4.99% of our outstanding shares of common stock. A holder may waive the 4.99% limitation upon 65 days prior written notice to us. Reference is made to the promissory notes and the Note Purchase Agreement that are filed as exhibits to the Registration Statement (of which this prospectus forms a part) for a more complete description of the terms and conditions of the agreements with the holders of our promissory notes including restrictive covenants relating to the incurrence of liens or encumbrances on assets, cash expenditures, a board designee, and consent to subsequent financings. Transfer Agent and Registrar We have retained Computershare Trust Company, Inc., 350 Indiana Street, Suite 800, Golden, Colorado 80401, as Transfer Agent and Registrar, for our common stock. Computershare Trust Company's telephone number is (303) 262-0600. PLAN OF DISTRIBUTION The selling security holders and any of their pledgees, donees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded. These sales may be at fixed or negotiated prices. The selling security holders may use any one or more of the following methods when selling shares: o ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; o block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; o purchases by a broker-dealer as principal and resale by the broker-dealer for its account; o an exchange distribution in accordance with the rules of the applicable exchange; o privately negotiated transactions; 24 o short sales, but, if at all, only after the effectiveness of the Registration Statement and the approval for listing by the American Stock Exchange of the shares of common stock offered hereby; o broker-dealers may agree with the selling security holders to sell a specified number of such shares at a stipulated price per share; o a combination of any such methods of sale; and o any other method permitted pursuant to applicable law. The selling security holders may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), if available, rather than under this prospectus. The selling security holders may also engage in short sales against the box, puts and calls and other transactions in our securities or derivatives of our securities and may sell or deliver shares in connection with these trades. The selling security holders may pledge their shares to their brokers under the margin provisions of customer agreements. If a selling stockholder defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. We believe that the selling security holders have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares other than ordinary course brokerage arrangements, nor is there an underwriter or coordinating broker acting in connection with the proposed sale of shares by the selling security holders. Broker-dealers engaged by the selling security holders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling security holders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling security holders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. Selling security holders and any broker-dealers or agents that are involved in selling the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. If the selling security holders are deemed to be underwriters, the selling security holders may be subject to certain statutory and regulatory liabilities, including liabilities imposed pursuant to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act. We are required to pay all fees and expenses incident to the registration of the shares. Otherwise, all discounts, commissions or fees incurred in connection with the sale of the common stock offered hereby will be paid by the selling security holders. Upon our being notified by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In order to comply with the securities laws of certain states, if applicable, the shares will be sold in such jurisdictions, if required, only through registered or licensed brokers or dealers. In addition, in certain 25 states the shares may not be sold unless the shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and complied with. We advised the selling security holders that the anti-manipulative provisions of Regulation M promulgated under the Exchange Act may apply to their sales of the shares offered hereby. INDEMNIFICATION OF OFFICERS AND DIRECTORS Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") provides, in general, that a corporation incorporated under the laws of the State of Delaware, such as the registrant, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect of any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or any other court in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such expenses. Our Certificate of Incorporation and Bylaws provide that we shall indemnify our directors, and officers, employees and agents to the extent and in the manner permitted by the provisions of the laws of the State of Delaware, as amended from time to time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders' or directors' resolution or by contract. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Ramp pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. WHERE YOU CAN FIND MORE INFORMATION ABOUT US We file reports, proxy statements, information statements and other information with the SEC. You may read and copy this information, for a copying fee, at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on its public reference rooms. Our SEC filings are also available to the public from commercial document retrieval services, from the American Stock Exchange and at the web site maintained by the SEC at http://www.sec.gov. 26 We have filed the Registration Statement under the Securities Act, with respect to the securities offered pursuant to this prospectus. This prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is made to the Registration Statement and the exhibits filed as a part thereof, which may be found at the locations and website referred to above. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The Securities and Exchange Commission (the "SEC") allows us to "incorporate by reference" into this prospectus the information we file with the SEC, which means that we can disclose important information to you by referring to those documents. The information incorporated by reference is an important part of this prospectus. We incorporate by reference the following documents we filed with the SEC: o Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004, filed on August 16, 2004; o Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004, filed on May 17, 2004; o Our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, filed on April 14, 2004; o Our Current Report on Form 8-K, filed on August 11, 2004; o Our Current Report on Form 8-K, filed on July 20, 2004; o Our Current Report on Form 8-K, filed on June 9, 2004; o Our Current Report on Form 8-K/A, filed on January 26, 2004; o Our Definitive Proxy Statement to Shareholders, dated April 4, 2003; and o Our Definitive Proxy Statement to Shareholders, dated November 6, 2003. We are also incorporating by reference additional documents that we may file with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act prior to the termination of this offering. If you are a stockholder, we may have sent you some of the documents incorporated by reference, but you can obtain any of them through the Commission or us. Documents incorporated by reference are available from us without charge, except exhibits, unless we have specifically incorporated by reference an exhibit into a document that this prospectus incorporates. Stockholders may obtain documents incorporated by reference into this prospectus by requesting them in writing or by telephone from: Ramp Corporation Investor Relations 33 Maiden Lane New York, New York 10038 (212) 440-1500 LEGAL MATTERS The validity of the shares of common stock offered hereby will be passed upon for us by Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405 Lexington Avenue, New York, New York 10174. 27 EXPERTS Our consolidated financial statements as of and for the year ended December 31, 2003 appearing in our 2003 Form 10-K have been audited by BDO Seidman, LLP, an independent registered public accounting firm, as stated in their report appearing therein which contained an explanatory paragraph indicating that substantial doubt exists as to the Company's ability to continue as a going concern, and have been incorporated herein by reference in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. Our consolidated financial statements as of December 31, 2002, and for each of the two years in the period ended December 31, 2002 appearing in our 2003 Form 10-K have been audited by Ehrhardt Keefe Steiner & Hottman PC, an independent registered public accounting firm, as stated in their report appearing therein, and have been incorporated herein by reference in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The financial statements of The Duncan Group, Inc. (d/b/a Frontline Physicians Exchange) as of and for the years ended December 31, 2002 and 2001, appearing in our current report on Form 8-K/A, filed on January 26, 2004, and in our current report on Form 8-K, filed on June 9, 2004, were audited by BDO Seidman, LLP, an independent registered public accounting firm, as stated in their report appearing therein, and have been incorporated herein by reference in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 28
=============================================================== =================================================== We have not authorized any dealer, salesperson or any other person to give any information or to represent anything other than those contained in this prospectus in connection with the offer contained herein, and, if given or made, you should not rely upon such information or representations as having been authorized by Ramp Corporation. This prospectus 110,741,046 does not constitute an offer of any securities other than SHARES OF COMMON STOCK those to which it relates or an offer to sell, or a solicitation of an offer to buy, those to which it relates in any state to any person to whom it is not lawful to make such offer in such state. The delivery of this prospectus at any time does not imply that the information herein is correct as of any time after the date of this prospectus. RAMP CORPORATION TABLE OF CONTENTS Page ---- PROSPECTUS SUMMARY 4 RECENT DEVELOPMENTS 6 RISK FACTORS 7 FORWARD-LOOKING STATEMENTS 16 USE OF PROCEEDS 16 DESCRIPTION OF THE TRANSACTIONS 16 SELLING STOCKHOLDERS 19 DESCRIPTION OF SECURITIES 23 PLAN OF DISTRIBUTION 24 INDEMNIFICATION OF OFFICERS AND DIRECTORS 26 WHERE YOU CAN FIND MORE INFORMATION ABOUT US 26 ____________ INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 27 LEGAL MATTERS 27 PROSPECTUS EXPERTS 28 ____________ August __ , 2004 =============================================================== ===================================================
PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The following is a list of the estimated expenses to be incurred by the Registrant in connection with the issuance and distribution of the shares being registered hereby. Securities and Exchange Commission registration fee. $ 3,063.29 Printing and engraving expenses. 1,000.00 Legal fees and expenses. 20,000.00 Accounting fees and expenses. 20,000.00 Transfer Agent and Trustee fees and expenses. 1,000.00 Miscellaneous. 20,000.00 --------- Total. $ 65,063.29 Item 15. Indemnification of Directors and Officers. Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") provides, in general, that a corporation incorporated under the laws of the State of Delaware, such as the registrant, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect of any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or any other court in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such expenses. Our Certificate of Incorporation and Bylaws provide that we shall indemnify our directors, and officers, employees and agents to the extent and in the manner permitted by the provisions of the laws of the State of Delaware, as amended from time to time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders' or directors' resolution or by contract. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Ramp pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. II-1 Item 16. Exhibits. Exhibit Number Description - -------------- ----------- 4.1 Note and Warrant Purchase Agreement, dated as of July 14, 2004, relating to the sale of convertible promissory notes by and between the Company, Cottonwood Ltd. and Willow Bend Management Ltd. 4.2 Convertible Promissory Note dated July 14, 2004 issued to Cottonwood Ltd. in the aggregate principal amount of $2,100,000. 4.3 Convertible Promissory Note dated July 14, 2004 issued to Willow Bend Management Ltd. in the aggregate principal amount of $2,100,000. 4.4 Convertible Promissory Note dated July 14, 2004 issued to Hilltop Services, Ltd. in the aggregate principal amount of $1,920,000. 4.5 Warrant dated July 14, 2004 issued to each of Cottonwood Ltd. and Willow Bend Management Ltd. at an exercise price of $0.11 cents. 4.6 Warrant dated July 14, 2004 issued to each of Cottonwood Ltd. and Willow Bend Management Ltd. at an exercise price of $0.15 cents. 4.7 Warrant dated July 14, 2004 issued to each of Cottonwood Ltd. and Willow Bend Management Ltd. at an exercise price of $0.35 cents. 4.8 Warrant dated July 14, 2004 issued to each of Cottonwood Ltd. and Willow Bend Management Ltd. at an exercise price of $0.40 cents. 4.9 Warrant dated July 14, 2004 issued to Hilltop Services, Ltd. at an exercise price of $0.11 cents. 4.10 Warrant dated July 14, 2004 issued to Hilltop Services, Ltd. at an exercise price of $0.15 cents. 4.11 Warrant dated July 14, 2004 issued to Hilltop Services, Ltd. at an exercise price of $0.35 cents. 4.12 Warrant dated July 14, 2004 issued to Hilltop Services, Ltd. at an exercise price of $0.40 cents. 4.13 Warrant dated July 14, 2004 issued to Redwood Capital Partners, Inc. at an exercise price of $0.11 cents. 4.14 Warrant dated July 14, 2004 issued to Redwood Capital Partners, Inc. at an exercise price of $0.15 cents. 4.15 Warrant dated July 14, 2004 issued to Redwood Capital Partners, Inc. at an exercise price of $0.35 cents. 4.16 Warrant dated July 14, 2004 issued to Redwood Capital Partners, Inc. at an exercise price of $0.40 cents. 4.17 Warrants dated August 18, 2004 issued to Mr. Richard Rosenblum at an exercise price of $0.18 cents. II-2 4.18 Warrants dated August 18, 2004 issued to Mr. David Stefansky at an exercise price of $0.18 cents. 4.19 Letter Agreement, dated as of July 14, 2004, by and between the Company and Hilltop Services, Ltd. 4.20 Fee Payment Agreement, dated as of August 20, 2004, by and between the Company and Jenkens & Gilchrist Parker Chapin LLP. 4.21 Retention Bonus Program Agreement by and between the Company and each of Phoenix PMT LLC, Search Net Corporation, Mr. Ron Munkittrick, Mr. Xavier Hansen and Mr. Gennady Shpits. 4.22 Agreement for Payment of Account by and between the Company and each of Advantage Technologies, Inc., Conceptual Litho Reproductions, Ellis Advertising, Mathe, Inc., Soffront Software Inc., Something Digital.Com L.L.C., PowerTest, Inc. and Kate McGowan Consulting. 4.23 Registration Rights Agreement, dated as of July 14, 2004, by and between the Company, Cottonwood Ltd. and Willow Bend Management Ltd. 4.24 Settlement Agreement by and between the Company and each of Stride & Associates, Mr. Colin Parlett and Lagniappe Resources, Inc. 4.25 Settlement Agreement and Release, dated as of August 20, 2004, by and between the Company and Clinton Group, Inc. 4.26 Settlement Agreement and Mutual Release, dated as of August 19, 2004, by and among the Company, LifeRamp Family Financial, Inc. and Locke Liddell & Sapp LLP. 4.27 Settlement Agreement and Mutual Release, dated as of August 19, 2004, by and among the Company, LifeRamp Family Financial, Inc. and Buckley Kolar LLP. 5.1 Opinion of Jenkens & Gilchrist Parker Chapin LLP. 23.1 Consent of Ehrhardt Keefe Steiner & Hottman PC. 23.2 Consent of BDO Seidman, LLP. 23.3 Consent of Jenkens & Gilchrist Parker Chapin LLP (included in Exhibit 5.1). 24.1 Power of Attorney (included on signature page). II-3 Item 17. Undertakings. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (a) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (b) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; (c) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that clauses (a) and (b) do not apply if the information required to be included in a post-effective amendment by such clauses is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the II-4 Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on August 20, 2004. RAMP CORPORATION By: /s/ Andrew Brown ----------------------- Andrew Brown Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below in so signing also makes, constitutes and appoints Andrew Brown his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign and file Registration Statement(s) and any and all pre- or post-effective amendments to such Registration Statement(s), with all exhibits thereto and hereto, and other documents with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signature Title Date - ---------- ------ ---- /s/ Andrew Brown Chairman, Chief Executive Officer, President and Director August 20, 2004 - ---------------- Andrew Brown (Principal Executive Officer) /s/ Mitchell Cohen Chief Financial Officer, Executive Vice President and August 20, 2004 - ------------------ Mitchell Cohen Secretary (Principal Financial and Accounting Officer) /s/ Steven A. Berger Director August 20, 2004 - -------------------- Steven A. Berger /s/ Steve Shorr Director August 20, 2004 - --------------- Steve Shorr /s/ Tony Soich Director August 20, 2004 - -------------- Tony Soich /s/ Jeffrey A. Stahl Director August 20, 2004 - -------------------- Jeffrey A. Stahl
II-6 EX-4 2 ex4_1s3-04.txt 4.1 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. (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 -2- 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 -3- 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 -4- 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 negotiations relating thereto with, any person, or has taken or will take any action so as to bring the issuance and sale of any of the Securities under the registration provisions of the Securities Act and any other applicable federal and state securities laws. Neither the Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any of the Securities. (i) To the Company's knowledge, neither this Agreement nor the Transaction Documents hereto contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein or therein, in the light of the circumstances under which they were made herein or therein, not misleading. (j) The authorized capital stock of the Company and the shares thereof issued and outstanding are set forth in the SEC Documents. All of the outstanding shares of the Company's Common Stock have been duly and validly authorized, and are fully paid and non-assessable. Except as set forth in this Agreement or in the SEC Documents or with respect to Hilltop, as of the date hereof, no shares of the Company's Common Stock are entitled to preemptive rights and there are no registration rights or outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company. Except as set forth in the SEC Documents or with respect to Hilltop, as of the date hereof, the Company is not a party to any agreement granting registration rights to any person with respect to any of its equity or debt securities. The Company is not a party to, and its executive officers have no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the Company. The offer and sale of all capital stock, convertible securities, rights, warrants, or options of the Company issued prior to the Closing complied with all applicable federal and state securities laws, and no stockholder has a right of rescission or damages with respect thereto which is reasonably likely to have a Material Adverse Effect. True and correct copies of the Company's -5- Articles of Incorporation as in effect on the date hereof (the "Articles"), and the Company's Bylaws as in effect on the date hereof (the "Bylaws") are available in the SEC Documents. (k) So long as any Notes remain outstanding, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock to effect the conversion of the Notes and the issuance of Conversion Shares. (l) So long as any Warrants remain outstanding, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock to effect the exercise of the Warrants and the issuance of the Warrant Shares. (m) 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 negotiations relating thereto with, any person, or has taken or will take any action so as to bring the issuance and sale of any of the Securities under the registration provisions of the Securities Act and applicable state securities laws. Neither the Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities. (n) There are no proposals currently under consideration or currently anticipated to be under consideration by the Board of Directors or the executive officers of the Company which would materially or substantially change the management, business or assets or of the Company, including its interests in, and ownership of, its subsidiaries, or result in a change to the current composition of the Board of Directors. 4. Conditions Precedent to the Obligation of the Company to Sell the Notes and Warrants. The obligation hereunder of the Company to issue and sell the Notes to each Purchaser is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below. These conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion. (a) Each Purchaser shall have executed and delivered this Agreement. (b) Each Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing Date. (c) The representations and warranties of each Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date. -6- (d) At the Closing Date, upon receipt of the Transaction Documents, each Purchaser shall have delivered to the Company immediately available funds as payment in full of the Purchase Price for the Notes and Warrants. 5. Conditions Precedent to the Obligation of the Purchasers to Purchase the Notes and Warrants. The obligation hereunder of each Purchaser to acquire and pay for the Notes is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below. These conditions are for each Purchaser's sole benefit and may be waived by each Purchaser at any time in its sole discretion. (a) The Company shall have executed and delivered the Notes, this Agreement and any other Transaction Document. (b) The Company shall have delivered certificates representing the Warrants to the Escrow Agent. (c) The Company shall have delivered the Purchase Price to the Escrow Agent. (d) The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date. (e) Each of the representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a particular date), which shall be true and correct in all material respects as of such date. (f) No statute, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement at or prior to the Closing Date. (g) As of the Closing Date, no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, shall be pending against or affecting the Company, or any of its properties, which questions the validity of the Agreement, the Notes, Warrants or the transactions contemplated thereby or any action taken or to be take pursuant thereto. As of the Closing Date, no action, suit, claim or proceeding before or by any court or governmental agency or body, domestic or foreign, shall be pending against or affecting the Company, or any of its properties, which, if adversely determined, is reasonably likely to result in a Material Adverse Effect. (h) No Material Adverse Effect shall have occurred at or before the Closing Date. (i) The Company shall have delivered to the Purchasers the resolutions of the board of directors of the Company authorizing the transactions contemplated by this Agreement. -7- 6. Legend. Each Note, the Warrants, the Conversion Shares and the Warrant Shares shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required by applicable state securities or "blue sky" laws): "THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR RAMP CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." The Company agrees to reissue the Notes, and the Company shall reissue certificates representing the Conversion Shares and the Warrant Shares, without the legend set forth above if at such time, prior to making any transfer of any such Securities, such holder thereof shall give written notice to the Company, describing the manner and terms of such transfer and removal as the Company may reasonably request. Such proposed transfer will not be effected until: (a) the Company has notified such holder that either (i) in the opinion of its counsel, the registration of the Securities under the Securities Act is not required in connection with such proposed transfer; or (ii) a registration statement under the Securities Act covering such proposed disposition has been filed by the Company with the Securities and Exchange Commission and has become effective under the Securities Act; and (b) the Company has notified such holder that either: (i) in the opinion of its respective counsel, the registration or qualification under the securities or "blue sky" laws of any state is not required in connection with such proposed disposition, or (ii) compliance with applicable state securities or "blue sky" laws has been effected. The Company will use its best efforts to respond to any such notice from a holder within five (5) days following its receipt of such notice. In the case of any proposed transfer under this Section 6, the Company will use reasonable efforts to comply with any such applicable state securities or "blue sky" laws, but shall in no event be required, in connection therewith, to qualify to do business in any state where it is not then qualified or to take any action that would subject it to tax or to the general service of process in any state where it is not then subject. The restrictions on transfer contained in this Section 6 shall be in addition to, and not by way of limitation of, any other restrictions on transfer contained in any other section of this Agreement. 7. Covenants of the Company. The Company covenants and agrees as follows: (a) At all times during the period the Notes are outstanding, the Company shall not, directly or indirectly, make, create, incur, assume or permit to exist any lien, pledge, security interest, or similar charge or encumbrance of any nature in, to or against any part of any asset or property of the Company, or offer, commit or agree to or cause or assist the inception or continuation of any of such lien, without the prior written consent of the Purchasers holding at least a majority of the principal amount of the Notes. (b) Commencing for the monthly period beginning August 1, 2004 and at all times during the period any principal amount of the Notes are outstanding, the Company shall not incur aggregate expenses which result in cash expenditures by the Company less actual cash inflows from customer collections and other cash from operations in excess of $550,000 on a -8- monthly basis, without the prior written consent of the Purchasers holding at least a majority of the principal amount of the Notes. (c) At all times during the period the Notes are outstanding, the Purchasers holding at least a majority of the principal amount of the Notes shall be entitled to nominate one (1) member to the Board of Directors of the Company, who shall serve on the board until the later of April 15, 2005 or the next annual meeting of stockholders of the Company at which directors are elected. Any board nominee by the Purchasers shall meet the requirements under the definition of independence set forth by the Securities and Exchange Commission and the American Stock Exchange. (d) (i) At all times during the period the Notes are outstanding, the Company covenants and agrees that it will not, without the prior written consent of the holders of a majority of the Notes outstanding at the time consent is required, enter into any subsequent 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 preferred stock, convertible debt securities or warrants (collectively, the "Financing Securities"), and shall not incur any indebtedness, including loans or debts, except for a Permitted Financing. For purposes of this Agreement, "Permitted Financing" shall mean any transaction involving (i) the Company's issuance of any Financing Securities (other than for cash) in connection with a merger, acquisition or consolidation, (ii) the Company's issuance of Financing Securities in connection with strategic license agreements and other partnering agreements so long as such issuances are not for the purpose of raising capital, (iii) the Company's issuance of Financing Securities in connection with bona fide firm underwritten public offerings of its securities, (iv) the Company's issuance of Common Stock or the issuance or grants of options to purchase Common Stock pursuant to the Company's stock option plans and employee stock purchase plans outstanding on the date hereof, (v) as a result of the exercise of options or warrants or conversion of convertible notes or preferred stock which are granted or issued as of the date of this Agreement, (vi) the Company's issuance of shares of Common Stock issued as payment of any interest on the Notes, or (vii) any Warrants issued to the Purchasers in connection with the transactions contemplated by this Agreement. (ii) Notwithstanding any rights and remedies of the Purchasers as a result of the Company's breach of Section 7(d)(i) above for its failure to obtain prior written consent of the Purchasers, the Company covenants and agrees that if the Company enters into a Subsequent Financing whereby any Financing Securities are issued or issuable by the Company at a price less than $0.25 cents per share (as such price may be adjusted from time to time as a result of any stock split, combination or other recapitalization of the Company's Common Stock) then, in addition to any other rights and remedies available to the Purchasers under this Agreement or under applicable law (i) the Conversion Price (as defined in the Notes) with respect to the principal amount of the Notes plus any accrued but unpaid interest outstanding at the time of the Subsequent Financing shall, without further action by the Purchasers, be automatically adjusted to equal eighty-percent (80%) of the lowest issuance price or conversion price per share for the Financing Securities issued in the Subsequent Financing, and (ii) with respect to the principal amount of the Notes plus any accrued but unpaid interest converted prior to the time of such Subsequent Financing, the Company shall issue additional shares of Common -9- Stock to each Purchaser in an amount equal to (A) the principal amount of the Note plus any accrued but unpaid interest converted by such Purchaser prior to the time of such Subsequent Financing divided by eighty-percent (80%) of the lowest issuance price or conversion price per share for the Financing Securities issued in such Subsequent Financing, minus (B) the number of shares of Common Stock received by such Purchaser pursuant to all conversions of its Note prior to the time of such Subsequent Financing. 8. Fees and Expenses. Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement, provided, however, that the Company shall pay (i) all actual attorneys' fees and expenses (exclusive of disbursements and out-of-pocket expenses) incurred by the Purchasers up to $15,000 in connection with the preparation, negotiation, execution and delivery of this Agreement, the Notes and the transactions contemplated thereunder, which payment shall be made at Closing; (ii) the costs of any amendments, modifications or waivers of this Agreement, the Notes or any other Transaction Document; and (iii) any consulting or other fees payable to Redwood Capital Partners, L.P., or any other consultant or advisor to the Company, as a result of the transactions contemplated by this Agreement. 9. Indemnification. (a) The Company hereby agrees to indemnify and hold harmless each Purchaser and its officers, directors, shareholders, employees, agents and attorneys against any and all losses, claims, damages, liabilities and reasonable expenses (collectively "Claims") incurred by each such person in connection with defending or investigating any such Claims, whether or not resulting in any liability to such person, to which any such indemnified party may become subject, insofar as such Claims arise out of or are based upon any breach of any representation or warranty or agreement made by the Company in this Agreement. (b) Each Purchaser severally but not jointly hereby agrees to indemnify and hold harmless the Company and its officers, directors, shareholders, employees, agents and attorneys against any and all losses, claims, damages, liabilities and expenses incurred by each such person in connection with defending or investigating any such claims or liabilities, whether or not resulting in any liability to such person, to which any such indemnified party may become subject under the Securities Act, or under any other statute, at common law or otherwise, insofar as such Claims arise out of or are based upon any breach of any representation or warranty or agreement made by a Purchaser in this Agreement. 10. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without giving effect to the rules governing the conflicts of laws. Each of the parties consents to the exclusive jurisdiction of the federal courts whose districts encompass any part of the County of New York located in the City of New York in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions. Each party waives its right to a trial by jury. Each party to this Agreement irrevocably consents to the service of process in any such proceeding by the mailing of copies thereof by registered or -10- certified mail, postage prepaid, to such party at its address set forth herein. Nothing herein shall affect the right of any party to serve process in any other manner permitted by law. 11. Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, express overnight courier, registered first class mail, or telecopier (provided that any notice sent by telecopier shall be confirmed by other means pursuant to this Section 16), initially to the address set forth below, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section. (a) if to the Company: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attention: Martin Eric Weisberg, Esq. Tel. No.: (212) 704-6000 Fax No.: (212) 704-6288 (b) if to the Purchasers: At the address of such Purchaser set forth on Exhibit A to this Agreement. with a copy to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when receipt is acknowledged, if telecopied; or when actually received or refused if sent by other means. 12. Entire Agreement. This Agreement, the Notes, the Warrants and any other Transaction Document constitute the entire understanding and agreement of the parties with -11- respect to the subject matter hereof and supersedes all prior and/or contemporaneous oral or written proposals or agreements relating thereto all of which are merged herein. This Agreement may not be amended or any provision hereof waived in whole or in part, except by a written amendment signed by both of the parties. 13. Counterparts. This Agreement may be executed by facsimile signature and in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [Signature Page Follows] -12- IN WITNESS WHEREOF, this Agreement was duly executed on the date first written above. RAMP CORPORATION By: -------------------------------------- Name: Title: COTTONWOOD LTD By: -------------------------------------- Name: Title: WILLOW BEND MANAGEMENT LTD By: -------------------------------------- Name: Title: -13- EXHIBIT A PURCHASERS
Names and Addresses Dollar Amount Aggregate Principal Aggregate No. of of Purchasers of Investment Amount of Note Warrant Shares ------------- ------------- -------------- -------------- Cottonwood Ltd $2,100,000 $2,100,000 18,735,292 Willow Bend Management Ltd $2,100,000 $2,100,000 18,735,292
EXHIBIT B FORM OF NOTE EX-4 3 ex4_2s3-04.txt 4.2 Exhibit 4.2 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR RAMP CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. RAMP CORPORATION CONVERTIBLE PROMISSORY NOTE U.S. $2,100,000 New York, New York No.: J-1 July 14, 2004 FOR VALUE RECEIVED, the undersigned, RAMP CORPORATION, a Delaware corporation (the "Company"), hereby promises to pay to the order of COTTONWOOD LTD, or any future permitted holder of this promissory note (the "Payee"), at the principal office of the Payee set forth herein, or at such other place as the Payee may designate in writing to the Company, the principal sum of Two Million One Hundred Thousand Dollars (U.S. $2,100,000), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Note and Warrant Purchase Agreement dated as of July 14, 2004 between the Company and the purchasers named therein (the "Purchase Agreement"). Concurrently with the issuance of this Note, the Company is issuing separate notes to separate purchasers pursuant to the Purchase Agreement (the "Other Notes"). Capitalized terms used and not otherwise defined herein shall the meanings set forth for such terms in the Purchase Agreement. 1. Principal and Interest Payments; Transaction. (a) The Company shall repay in full (or the Payee, at its sole option, shall elect to convert pursuant to Section 2 hereof, or the Company, at its sole option, shall elect to convert pursuant to Section 3 hereof) the entire principal balance then outstanding under this Note on the earliest to occur of (the "Maturity Date"): (i) six (6) months following the date hereof, or January 14, 2005, or (ii) the acceleration of the obligations as contemplated by this Note. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of six percent (6%) per annum for the period commencing on the date hereof through the Maturity Date. Interest shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable on the Maturity Date in cash or, if converted by the Payee in accordance with Section 2 hereof, or by the Company in accordance with Section 3 hereof, in shares of the Company's common stock, par value $.001 per share (the "Common Stock"), which shares shall have been registered with the Securities and Exchange Commission. If the Company pays interest in shares of Common Stock, the number of shares to be issued to the Payee shall be an amount equal to the quotient of (i) the amount of the interest payment divided by (ii) the applicable conversion price (as defined in Section 2(b) or 3(b) hereof, as applicable). Upon the occurrence of an Event of Default (as defined in Section 12 hereof), then to the extent permitted by law, the Company will pay interest to the Payee, payable on demand, on the outstanding principal balance of this Note from the date of the Event of Default until payment in full at the rate of eighteen percent (18%) per annum. (c) The Company, at its option, may prepay all or a portion of the outstanding principal amount of this Note, at any time and from time to time, prior to the Maturity Date; provided, however, that the Company's right to make any such prepayment shall be subject to the Payee's right of conversion pursuant to Section 2 hereof. Each prepayment shall be applied first to the payment of all interest accrued under this Note on the date of any prepayment, and the balance of any such prepayment shall be applied to the principal amount of this Note. 2. Payee Conversion Option; Conversion Price; Mechanics of Conversion (a) At any time on or after the date hereof, this Note shall be convertible (in whole but not in part), at the option of the Payee (the "Payee Conversion Option"), into such number of fully paid and non-assessable shares of Common Stock (the "Conversion Shares") as is determined by dividing (x) that portion of the outstanding principal balance under this Note, plus any accrued but unpaid interest, as of such date by (y) the Conversion Price (as hereinafter defined) then in effect on the date on which the Payee faxes a notice of conversion (the "Payee Conversion Notice"), duly executed, to the Company (the "Payee Conversion Date"). The Payee shall deliver this Note to the Company at the address set forth in Section 17 of this Note at such time that this Note is fully converted. (b) The Conversion Price shall be equal to $0.30 cents, as adjusted pursuant to Section 6 hereof. (c) Not later than three (3) trading days after any Payee Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and deliver to the Depository Trust Company ("DTC") account on the Payee's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Payee Conversion Notice, registered in the name of the Payee or its designee, for the number of shares of Common Stock to which the Payee shall be entitled. In the alternative, not later than five (5) trading days after any Payee Conversion Date, the Company shall deliver to the applicable Payee by express courier a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Payee Conversion Notice such certificate or certificates are not delivered to or as directed by the applicable Payee by the third trading day after the Payee Conversion Date (the "Payee Delivery Date"), the Payee shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company -2- shall immediately return this Note tendered for conversion, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation. 3. Company Conversion Option; Conversion Price; Mechanics of Conversion (a) If, at any time following the date hereof, 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 $0.40 cents per share, then this Note shall be convertible (in whole but not in part), at the option of the Company (the "Company Conversion Option"), into such number of Conversion Shares which shares shall have been registered with the Securities and Exchange Commission, as is determined by dividing (x) that portion of the outstanding principal balance under this Note, plus any accrued but unpaid interest, as of such date by (y) the Conversion Price then in effect on the date on which the Company faxes a notice of conversion (the "Company Conversion Notice"), duly executed, to the Payee (the "Company Conversion Date"). The Payee shall deliver this Note to the Company at the address set forth in Section 17 of this Note at such time that this Note is fully converted. (b) Not later than three (3) trading days after any Company Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and deliver to the Depository Trust Company ("DTC") account on the Payee's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Company Conversion Notice, registered in the name of the Payee or its designee, for the number of shares of Common Stock to which the Payee shall be entitled. In the alternative, not later than five (5) trading days after any Company Conversion Date, the Company shall deliver to the applicable Payee by express courier a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by Section the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Company Conversion Notice such certificate or certificates are not delivered to or as directed by the applicable Payee by the third trading day after the Company Conversion Date (the "Company Delivery Date" and, together with the Payee Delivery Date, the "Delivery Date"), the Payee shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return this Note tendered for conversion, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation. 4. Security. (a) If, on any day following the forty-five day (45) anniversary of the date hereof, the average closing sale price of the Common Stock for the ten (10) trading days immediately prior to such date (as determined by the Bloomberg volume weighted average price function) is less than $0.15 cents per share, then the indebtedness represented by this Note shall be automatically, and without further action by the Payee or the Company, secured by a first priority lien against all of the assets and property of the Company, including any and all of the Company's intellectual property, software code, trademarks and trade names (collectively, the "Collateral"). -3- (b) Power of Attorney to the Payee. With respect to the various assets and properties included or required to be included in the Collateral hereunder, the Company hereby absolutely, unconditionally and irrevocably makes, constitutes and appoints the Payee and the Payee's executive officers, and each of them, with full power of substitution, as the Company's true and lawful attorney-in-fact, each with full power and authority from time to time in the Company's name, place and stead to (without any notice to or consent from the Company), in addition to and without in any way limiting any right, power or authority of the Payee to do so under applicable law: (i) prepare and execute on behalf of the Company any mortgage, financing statement or other evidence of a security interest contemplated by this Note, or any modification, refiling, continuation or extension thereof; (ii) take any other action contemplated by this Note; and (iii) sign, execute, acknowledge, swear to, verify, deliver, file, record and publish any one or more of the foregoing. This Power of Attorney is hereby declared to be absolute and irrevocable, with full power of substitution and coupled with an interest, and shall continue in full force and effect until all of the obligations under this Note have been fully paid and satisfied. This Power of Attorney shall survive the dissolution, reorganization or bankruptcy of the Company and shall extend to and be binding upon the Company's successors, assigns, heirs and legal representatives. A facsimile signature shall be effective if so affixed. The Payee shall not be liable for any failure to collect or enforce the payment of any of those assets and properties. 5. Ownership Cap and Certain Conversion Restrictions. Notwithstanding anything to the contrary set forth in this Note, at no time may the Payee convert this Note if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by the Payee at such time, the number of shares of Common Stock which would result in the Payee beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess of 4.99% of all of the then issued and outstanding shares of Common Stock, including shares issuable upon such conversion of the Note as set forth in the Conversion Notice; provided, however, that upon the Payee providing the Company with sixty-five (65) days notice (pursuant to Section 15 hereof) (the "Waiver Notice") that such holder would like to waive this Section 5 with regard to any or all shares of Common Stock issuable upon conversion of this Note, this Section 5 will be of no force or effect with regard to all or a portion of the Note referenced in the Waiver Notice. 6. Adjustment of Conversion Price; Delivery. (a) The Conversion Price shall be subject to adjustment from time to time as follows: (i) Adjustments for Stock Splits and Combinations. If the Company shall at any time or from time to time after the date hereof, effect a stock split of the outstanding Common Stock, the applicable Conversion Price in effect immediately prior to the stock split shall be proportionately decreased. If the Company shall at any time or from time to time after the date hereof, combine the outstanding shares of Common Stock pursuant to a reverse stock split, the applicable Conversion Price in effect immediately prior to the combination shall be proportionately increased. Any adjustments under this Section 6(a)(i) shall be effective at the close of business on the date the stock split or combination occurs. -4- (ii) Adjustments for Certain Dividends and Distributions. If the Company shall at any time or from time to time after the date hereof, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in shares of Common Stock, then, and in each event, the applicable Conversion Price in effect immediately prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of the close of business on such record date, by multiplying, as applicable, the applicable Conversion Price then in effect by a fraction: (1) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; and (2) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution. (iii) Adjustment for Other Dividends and Distributions. If the Company shall at any time or from time to time after the date hereof, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in other than shares of Common Stock, then, and in each event, an appropriate revision to the applicable Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the holder of this Note shall receive upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon, the number of securities of the Company which they would have received had this Note been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities (together with any distributions payable thereon during such period), giving application to all adjustments called for during such period under this Section 6(a)(iii) with respect to the rights of the holders of this Note and the Other Notes (iv) Adjustment for Spin Off. If, for any reason, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then: (1) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Payee in the event all of the Payee's Notes outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Notes") had been converted as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Payee on the conversion of all or any of the outstanding Notes, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of -5- which (I) the numerator is the amount of the Outstanding Notes then being converted, and (II) the denominator is the amount of the Outstanding Notes; and (2) the Conversion Price on the Outstanding Notes shall be adjusted immediately after consummation of the Spin Off by multiplying the Conversion Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Conversion Price shall be deemed to be the Conversion Price with respect to the Outstanding Notes after the Record Date. (b) Issue Taxes. The Company shall pay any and all issue and other taxes, excluding federal, state or local income taxes, that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of this Note pursuant thereto; provided, however, that the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such conversion. (c) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. If a Payee is entitled to a fractional share, the fraction shall be rounded up or down to that whole number of shares which is closest to that fraction. (d) Reservation of Common Stock. The Company shall, at all times when this Note shall be outstanding, reserve and keep available out of the Company's authorized but unissued shares of Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note plus all accrued but unpaid interest. (e) Delivery. The Company understands that a delay in the issuance of the Conversion Shares beyond the Delivery Date could result in economic loss to the Payee. As compensation to the Payee for such loss, the Company agrees to pay late payments to the Payee for late issuance of the Conversion Shares upon receipt of the Payee Conversion Notice in accordance with the following schedule (where "No. Business Days Late" refers to the number of business days which is beyond two (2) business days after the Delivery Date): Late Payment For Each $10,000 of Notes Principal or Interest No. Business Days Late Amount Being Converted - --------------------------------------------------------------------- 1 $100 2 $200 3 $300 4 $400 5 $500 6 $600 -6- 7 $700 8 $800 9 $900 10 $1,000 >10 $1,000 + $200 for each Business Day Late beyond 10 days for example, Payee Conversion Notice is delivered on Tuesday, October 12, 2004. The Delivery Date would be Friday, October 15, 2004 (the third trading day after such delivery). If the Conversion Shares are delivered by Tuesday, October 19, 2004 (two (2) business days after the Delivery Date), no payment under this provision is due. If the Conversion Shares are delivered on October 20, that is one (1) "Business Day Late" in the table below; if delivered on October 27, that is 6 "Business Days Late" in the table. The Company shall pay any payments incurred under this Section in immediately available funds upon demand as the Payee's exclusive remedy (other than the following provisions of this Section 6(e) and the provisions of Section 13 of this Note) for such delay. Furthermore, as discussed in Section 2(c) hereof, in addition to any other remedies which may be available to the Payee, in the event that the Company fails for any reason to effect delivery of the Conversion Shares by close of business on the Delivery Date, the Payee will be entitled to revoke the relevant Payee Conversion Notice by delivering a notice to such effect to the Company, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion; provided, however, that an amount equal to any payments contemplated by this Section 6(e) which have accrued through the date of such revocation notice shall remain due and owing to the Converting Holder (as defined below) notwithstanding such revocation. (i) If, by the relevant Delivery Date, the Company fails for any reason to deliver the Conversion Shares and after such Delivery Date, the Holder of the Note being converted (a "Converting Holder") purchases, in an arm's-length open market transaction or otherwise, shares of Common Stock (the "Covering Shares") in order to make delivery in satisfaction of a sale of Common Stock by the Converting Holder (the "Sold Shares"), which delivery such Converting Holder anticipated to make using the shares of Common Stock to be issued upon such conversion (a "Buy-In"), the Converting Holder shall have the right, to require the Company to pay to the Converting Holder, in addition to and not in lieu of the amounts due under Section 6(e) hereof (but in addition to all other amounts contemplated in other provisions of the Note or the Purchase Agreement, and not in lieu of any such other amounts), the Buy-In Adjustment Amount (as defined below). The "Buy-In Adjustment Amount" is the amount equal to the excess, if any, of (x) the Converting Holder's total purchase price (including brokerage commissions, if any) for the Covering Shares over (y) the net proceeds (after brokerage commissions, if any) received by the Converting Holder from the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Converting Holder in immediately available funds immediately upon demand by the Converting Holder. By way of illustration and not in limitation of the foregoing, if the Converting Holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In -7- Adjustment Amount which Company will be required to pay to the Converting Holder will be $1,000. (ii) The Payee shall be entitled to exercise its conversion privilege with respect to the Note notwithstanding the commencement of any case under 11 U.S.C.ss.101 et seq. (the "Bankruptcy Code"). In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C.ss.362 in respect of the Payee Conversion Option. The Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C.ss.362 in respect of the conversion of the Note. The Company agrees, without cost or expense to such holder, to take or to consent to any and all action necessary to effectuate relief under 11 U.S.C.ss.362. (iii) The Company will authorize its transfer agent to give information relating to the Company directly to the Payee or the Payee's representatives upon the request of the Payee or any such representative, to the extent such information relates to (i) the status of shares of the Conversion Shares or Common Stock issued or claimed to be issued to the Payee in connection with a Payee Conversion Notice or exercise of a Warrant, or (ii) the number of outstanding shares of Common Stock of all shareholders as of a current or other specified date. On the Delivery Date, the Company will provide the Payee with a copy of the authorization so given to the transfer agent. 7. No Rights as Shareholder. Nothing contained in this Note shall be construed as conferring upon the Payee, prior to the conversion of this Note, the right to vote or to receive dividends or to consent or to receive notice as a shareholder in respect of any meeting of shareholders for the election of directors of the Company or of any other matter, or any other rights as a shareholder of the Company. 8. Payment on Non-Business Days. Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day. 9. Representations and Warranties of the Company. The Company represents and warrants to the Payee 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. (b) This Note has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding 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 this Note and to perform its obligations hereunder. -8- (c) The execution, delivery and performance of this Note 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) 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 (as defined in the Purchase Agreement). (d) Except as disclosed in the Purchase Agreement, 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 Note. 10. Payee's Representations and Warranties. As of the date of this Note, the Payee represents and warrants to the Company 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 Payee 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 Payee in the United States and, at the time of execution of this Note and the time of any offer to the Payee hereunder, the Payee was physically located outside of the United States, and (e) the Note has been sold pursuant to Regulation S under the Securities Act. 11. [Intentionally Omitted]. 12. Events of Default. The occurrence of any of the following events shall be an "Event of Default" under this Note: (a) the Company shall fail to make the payment of any amount of any principal outstanding on the date such payment shall become due and payable hereunder; or (b) the Company shall fail to make the interest payments on the date such payment shall become due and payable hereunder; or (c) any representation, warranty or certification made by the Company herein, in the Transaction Documents or in any certificate or financial statement shall prove to have been false or incorrect or breached in a material respect on the date as of which made; or -9- (d) the holder of any indebtedness of the Company or any of its subsidiaries shall accelerate any payment of any amount or amounts of principal or interest on any indebtedness (the "Indebtedness") (other than the Indebtedness hereunder and the Other Notes) prior to its stated maturity or payment date the aggregate principal amount of which Indebtedness of all such persons is in excess of $100,000, whether such Indebtedness now exists or shall hereinafter be created, and such accelerated payment entitles the holder thereof to immediate payment of such Indebtedness which is due and owing and such indebtedness has not been discharged in full or such acceleration has not been stayed, rescinded or annulled within ten (10) business days of such acceleration; or (e) A judgment or order for the payment of money shall be rendered against the Company or any of its subsidiaries in excess of $500,000 in the aggregate (net of any applicable insurance coverage) for all such judgments or orders against all such persons (treating any deductibles, self insurance or retention as not so covered) that shall not be discharged, and all such judgments and orders remain outstanding, and there shall be any period of sixty (60) consecutive days following entry of the judgment or order in excess of $500,000 or the judgment or order which causes the aggregate amount described above to exceed $500,000 during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (f) the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) admit in writing its inability to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), (v) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors' rights generally, (vi) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing; or (g) a proceeding or case shall be commenced in respect of the Company or any of its subsidiaries without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of sixty (60) consecutive days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic) against the Company or any of its subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company or any of its subsidiaries and shall continue undismissed, or unstayed and in effect for a period of sixty (60) consecutive days; -10- (h) failure to issue the Conversion Shares or notice from the Company to the Payee, including by way of public announcement, at any time, of its inability to comply or its intention not to comply with proper requests for conversion of this Note into shares of Common Stock; or (i) the Company shall breach any of its covenants or agreements set forth in Section 7 of the Purchase Agreement. 13. Remedies Upon An Event of Default. If an Event of Default shall have occurred and shall be continuing, the Payee of this Note may at any time at its option, (a) declare the entire unpaid principal balance of this Note, together with all accrued but unpaid interest, due and payable, and thereupon, the same shall be accelerated and so due and payable; provided, however, that upon the occurrence of an Event of Default described in Sections 8(f) and (g), without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Company, the outstanding principal balance of this Note plus all accrued but unpaid interest shall be automatically due and payable; or (b) exercise or otherwise enforce any one or more of the Payee's rights, powers, privileges, remedies and interests under this Note or applicable law. No course of delay on the part of the Payee shall operate as a waiver thereof or otherwise prejudice the right of the Payee. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. Notwithstanding the foregoing, Payee agrees that its rights and remedies hereunder are limited to receipt of cash or shares of Common Stock in the amounts described herein. 14. Replacement. Upon receipt of a duly executed, notarized and unsecured written statement from the Payee with respect to the loss, theft or destruction of this Note (or any replacement 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 Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 15. Parties in Interest, Transferability. This Note shall be binding upon the Company and its successors and assigns and the terms hereof shall inure to the benefit of the Payee and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 23 of this Note, or pledged, hypothecated or otherwise granted as security by the Payee. 16. Amendments. This Note may not be modified or amended in any manner except in writing executed by the Company and the Payee. 17. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective upon delivery by telecopy, facsimile or prepaid courier service at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received). The Company will give written notice to the Payee at least twenty (20) days prior to the date on which dissolution, -11- liquidation or winding-up will take place and in no event shall such notice be provided to the Payee prior to such information being made known to the public. Address of the Payee: Cottonwood Ltd Moshav Bitzaron, Israel Attention: Neil Smollett Tel. No.: ______________________ Fax No.: ______________________ With a copy to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Address of the Company: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attention: Martin Eric Weisberg, Esq. Tel. No.: (212) 704-6000 Fax No.: (212) 704-6288 18. Governing Law. This Note shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions. This Note shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 19. 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. 20. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other -12- remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Payee's right to pursue actual damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Payee and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Payee and that the remedy at law for any such breach may be inadequate. Therefore the Company agrees that, in the event of any such breach or threatened breach, the Payee shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 21. Failure or Indulgence Not Waiver. No failure or delay on the part of the Payee in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 22. Enforcement Expenses. The Company agrees to pay all costs and expenses of enforcement of this Note, including, without limitation, reasonable attorneys' fees and expenses. 23. Binding Effect. The obligations of the Company and the Payee set forth herein shall be binding upon the successors and assigns of each such party, whether or not such successors or assigns are permitted by the terms hereof. 24. Compliance with Securities Laws. The Payee of this Note acknowledges that this Note is being acquired solely for the Payee's own account and not as a nominee for any other party, and for investment, and that the Payee shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note, any Note issued in substitution or replacement therefore and the Conversion Shares shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR RAMP CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." -13- 25. Severability. The provisions of this Note are severable, and if any provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction. 26. Consent to Jurisdiction. Each of the Company and the Payee (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in New York county for the purposes of any suit, action or proceeding arising out of or relating to this Note and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Payee consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in Section 17 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 26 shall affect or limit any right to serve process in any other manner permitted by law. 27. Company Waivers. Except as otherwise specifically provided herein, the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Company liable for the payment of this Note, and do hereby waive trial by jury. (a) No delay or omission on the part of the Payee in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Payee, nor shall any waiver by the Payee of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. [Signature Page Follows] -14- IN WITNESS WHEREOF, the Company has executed and delivered this Note as of the date first written above. RAMP CORPORATION By: ---------------------------------------- Name: Title: -15- EX-4 4 ex4_3s3-04.txt 4.3 Exhibit 4.3 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR RAMP CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. RAMP CORPORATION CONVERTIBLE PROMISSORY NOTE U.S. $2,100,000 New York, New York No.: J-2 July 14, 2004 FOR VALUE RECEIVED, the undersigned, RAMP CORPORATION, a Delaware corporation (the "Company"), hereby promises to pay to the order of WILLOW BEND MANAGEMENT LTD, or any future permitted holder of this promissory note (the "Payee"), at the principal office of the Payee set forth herein, or at such other place as the Payee may designate in writing to the Company, the principal sum of Two Million One Hundred Thousand Dollars (U.S. $2,100,000), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Note and Warrant Purchase Agreement dated as of July 14, 2004 between the Company and the purchasers named therein (the "Purchase Agreement"). Concurrently with the issuance of this Note, the Company is issuing separate notes to separate purchasers pursuant to the Purchase Agreement (the "Other Notes"). Capitalized terms used and not otherwise defined herein shall the meanings set forth for such terms in the Purchase Agreement. 1. Principal and Interest Payments; Transaction. (a) The Company shall repay in full (or the Payee, at its sole option, shall elect to convert pursuant to Section 2 hereof, or the Company, at its sole option, shall elect to convert pursuant to Section 3 hereof) the entire principal balance then outstanding under this Note on the earliest to occur of (the "Maturity Date"): (i) six (6) months following the date hereof, or January 14, 2005, or (ii) the acceleration of the obligations as contemplated by this Note. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of six percent (6%) per annum for the period commencing on the date hereof through the Maturity Date. Interest shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable on the Maturity Date in cash or, if converted by the Payee in accordance with Section 2 hereof, or by the Company in accordance with Section 3 hereof, in shares of the Company's common stock, par value $.001 per share (the "Common Stock"), which shares shall have been registered with the Securities and Exchange Commission. If the Company pays interest in shares of Common Stock, the number of shares to be issued to the Payee shall be an amount equal to the quotient of (i) the amount of the interest payment divided by (ii) the applicable conversion price (as defined in Section 2(b) or 3(b) hereof, as applicable). Upon the occurrence of an Event of Default (as defined in Section 12 hereof), then to the extent permitted by law, the Company will pay interest to the Payee, payable on demand, on the outstanding principal balance of this Note from the date of the Event of Default until payment in full at the rate of eighteen percent (18%) per annum. (c) The Company, at its option, may prepay all or a portion of the outstanding principal amount of this Note, at any time and from time to time, prior to the Maturity Date; provided, however, that the Company's right to make any such prepayment shall be subject to the Payee's right of conversion pursuant to Section 2 hereof. Each prepayment shall be applied first to the payment of all interest accrued under this Note on the date of any prepayment, and the balance of any such prepayment shall be applied to the principal amount of this Note. 2. Payee Conversion Option; Conversion Price; Mechanics of Conversion (a) At any time on or after the date hereof, this Note shall be convertible (in whole but not in part), at the option of the Payee (the "Payee Conversion Option"), into such number of fully paid and non-assessable shares of Common Stock (the "Conversion Shares") as is determined by dividing (x) that portion of the outstanding principal balance under this Note, plus any accrued but unpaid interest, as of such date by (y) the Conversion Price (as hereinafter defined) then in effect on the date on which the Payee faxes a notice of conversion (the "Payee Conversion Notice"), duly executed, to the Company (the "Payee Conversion Date"). The Payee shall deliver this Note to the Company at the address set forth in Section 17 of this Note at such time that this Note is fully converted. (b) The Conversion Price shall be equal to $0.30 cents, as adjusted pursuant to Section 6 hereof. (c) Not later than three (3) trading days after any Payee Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and deliver to the Depository Trust Company ("DTC") account on the Payee's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Payee Conversion Notice, registered in the name of the Payee or its designee, for the number of shares of Common Stock to which the Payee shall be entitled. In the alternative, not later than five (5) trading days after any Payee Conversion Date, the Company shall deliver to the applicable Payee by express courier a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Payee Conversion Notice such certificate or certificates are not delivered to or as directed by the applicable Payee by the third trading day after the Payee Conversion Date (the "Payee Delivery Date"), the Payee shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company -2- shall immediately return this Note tendered for conversion, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation. 3. Company Conversion Option; Conversion Price; Mechanics of Conversion (a) If, at any time following the date hereof, 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 $0.40 cents per share, then this Note shall be convertible (in whole but not in part), at the option of the Company (the "Company Conversion Option"), into such number of Conversion Shares which shares shall have been registered with the Securities and Exchange Commission, as is determined by dividing (x) that portion of the outstanding principal balance under this Note, plus any accrued but unpaid interest, as of such date by (y) the Conversion Price then in effect on the date on which the Company faxes a notice of conversion (the "Company Conversion Notice"), duly executed, to the Payee (the "Company Conversion Date"). The Payee shall deliver this Note to the Company at the address set forth in Section 17 of this Note at such time that this Note is fully converted. (b) Not later than three (3) trading days after any Company Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and deliver to the Depository Trust Company ("DTC") account on the Payee's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Company Conversion Notice, registered in the name of the Payee or its designee, for the number of shares of Common Stock to which the Payee shall be entitled. In the alternative, not later than five (5) trading days after any Company Conversion Date, the Company shall deliver to the applicable Payee by express courier a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by Section the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Company Conversion Notice such certificate or certificates are not delivered to or as directed by the applicable Payee by the third trading day after the Company Conversion Date (the "Company Delivery Date" and, together with the Payee Delivery Date, the "Delivery Date"), the Payee shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return this Note tendered for conversion, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation. 4. Security. (a) If, on any day following the forty-five day (45) anniversary of the date hereof, the average closing sale price of the Common Stock for the ten (10) trading days immediately prior to such date (as determined by the Bloomberg volume weighted average price function) is less than $0.15 cents per share, then the indebtedness represented by this Note shall be automatically, and without further action by the Payee or the Company, secured by a first priority lien against all of the assets and property of the Company, including any and all of the Company's intellectual property, software code, trademarks and trade names (collectively, the "Collateral"). -3- (b) Power of Attorney to the Payee. With respect to the various assets and properties included or required to be included in the Collateral hereunder, the Company hereby absolutely, unconditionally and irrevocably makes, constitutes and appoints the Payee and the Payee's executive officers, and each of them, with full power of substitution, as the Company's true and lawful attorney-in-fact, each with full power and authority from time to time in the Company's name, place and stead to (without any notice to or consent from the Company), in addition to and without in any way limiting any right, power or authority of the Payee to do so under applicable law: (i) prepare and execute on behalf of the Company any mortgage, financing statement or other evidence of a security interest contemplated by this Note, or any modification, refiling, continuation or extension thereof; (ii) take any other action contemplated by this Note; and (iii) sign, execute, acknowledge, swear to, verify, deliver, file, record and publish any one or more of the foregoing. This Power of Attorney is hereby declared to be absolute and irrevocable, with full power of substitution and coupled with an interest, and shall continue in full force and effect until all of the obligations under this Note have been fully paid and satisfied. This Power of Attorney shall survive the dissolution, reorganization or bankruptcy of the Company and shall extend to and be binding upon the Company's successors, assigns, heirs and legal representatives. A facsimile signature shall be effective if so affixed. The Payee shall not be liable for any failure to collect or enforce the payment of any of those assets and properties. 5. Ownership Cap and Certain Conversion Restrictions. Notwithstanding anything to the contrary set forth in this Note, at no time may the Payee convert this Note if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by the Payee at such time, the number of shares of Common Stock which would result in the Payee beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess of 4.99% of all of the then issued and outstanding shares of Common Stock, including shares issuable upon such conversion of the Note as set forth in the Conversion Notice; provided, however, that upon the Payee providing the Company with sixty-five (65) days notice (pursuant to Section 15 hereof) (the "Waiver Notice") that such holder would like to waive this Section 5 with regard to any or all shares of Common Stock issuable upon conversion of this Note, this Section 5 will be of no force or effect with regard to all or a portion of the Note referenced in the Waiver Notice. 6. Adjustment of Conversion Price; Delivery. (a) The Conversion Price shall be subject to adjustment from time to time as follows: (i) Adjustments for Stock Splits and Combinations. If the Company shall at any time or from time to time after the date hereof, effect a stock split of the outstanding Common Stock, the applicable Conversion Price in effect immediately prior to the stock split shall be proportionately decreased. If the Company shall at any time or from time to time after the date hereof, combine the outstanding shares of Common Stock pursuant to a reverse stock split, the applicable Conversion Price in effect immediately prior to the combination shall be proportionately increased. Any adjustments under this Section 6(a)(i) shall be effective at the close of business on the date the stock split or combination occurs. -4- (ii) Adjustments for Certain Dividends and Distributions. If the Company shall at any time or from time to time after the date hereof, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in shares of Common Stock, then, and in each event, the applicable Conversion Price in effect immediately prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of the close of business on such record date, by multiplying, as applicable, the applicable Conversion Price then in effect by a fraction: (1) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; and (2) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution. (iii) Adjustment for Other Dividends and Distributions. If the Company shall at any time or from time to time after the date hereof, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in other than shares of Common Stock, then, and in each event, an appropriate revision to the applicable Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the holder of this Note shall receive upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon, the number of securities of the Company which they would have received had this Note been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities (together with any distributions payable thereon during such period), giving application to all adjustments called for during such period under this Section 6(a)(iii) with respect to the rights of the holders of this Note and the Other Notes (iv) Adjustment for Spin Off. If, for any reason, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then: (1) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Payee in the event all of the Payee's Notes outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Notes") had been converted as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Payee on the conversion of all or any of the outstanding Notes, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of -5- which (I) the numerator is the amount of the Outstanding Notes then being converted, and (II) the denominator is the amount of the Outstanding Notes; and (2) the Conversion Price on the Outstanding Notes shall be adjusted immediately after consummation of the Spin Off by multiplying the Conversion Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Conversion Price shall be deemed to be the Conversion Price with respect to the Outstanding Notes after the Record Date. (b) Issue Taxes. The Company shall pay any and all issue and other taxes, excluding federal, state or local income taxes, that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of this Note pursuant thereto; provided, however, that the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such conversion. (c) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. If a Payee is entitled to a fractional share, the fraction shall be rounded up or down to that whole number of shares which is closest to that fraction. (d) Reservation of Common Stock. The Company shall, at all times when this Note shall be outstanding, reserve and keep available out of the Company's authorized but unissued shares of Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note plus all accrued but unpaid interest. (e) Delivery. The Company understands that a delay in the issuance of the Conversion Shares beyond the Delivery Date could result in economic loss to the Payee. As compensation to the Payee for such loss, the Company agrees to pay late payments to the Payee for late issuance of the Conversion Shares upon receipt of the Payee Conversion Notice in accordance with the following schedule (where "No. Business Days Late" refers to the number of business days which is beyond two (2) business days after the Delivery Date): Late Payment For Each $10,000 of Notes Principal or Interest No. Business Days Late Amount Being Converted - -------------------------------------------------------------------------------- 1 $100 2 $200 3 $300 4 $400 5 $500 6 $600 7 $700 -6- 8 $800 9 $900 10 $1,000 >10 $1,000 + $200 for each Business Day Late beyond 10 days for example, Payee Conversion Notice is delivered on Tuesday, October 12, 2004. The Delivery Date would be Friday, October 15, 2004 (the third trading day after such delivery). If the Conversion Shares are delivered by Tuesday, October 19, 2004 (two (2) business days after the Delivery Date), no payment under this provision is due. If the Conversion Shares are delivered on October 20, that is one (1) "Business Day Late" in the table below; if delivered on October 27, that is 6 "Business Days Late" in the table. The Company shall pay any payments incurred under this Section in immediately available funds upon demand as the Payee's exclusive remedy (other than the following provisions of this Section 6(e) and the provisions of Section 13 of this Note) for such delay. Furthermore, as discussed in Section 2(c) hereof, in addition to any other remedies which may be available to the Payee, in the event that the Company fails for any reason to effect delivery of the Conversion Shares by close of business on the Delivery Date, the Payee will be entitled to revoke the relevant Payee Conversion Notice by delivering a notice to such effect to the Company, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion; provided, however, that an amount equal to any payments contemplated by this Section 6(e) which have accrued through the date of such revocation notice shall remain due and owing to the Converting Holder (as defined below) notwithstanding such revocation. (i) If, by the relevant Delivery Date, the Company fails for any reason to deliver the Conversion Shares and after such Delivery Date, the Holder of the Note being converted (a "Converting Holder") purchases, in an arm's-length open market transaction or otherwise, shares of Common Stock (the "Covering Shares") in order to make delivery in satisfaction of a sale of Common Stock by the Converting Holder (the "Sold Shares"), which delivery such Converting Holder anticipated to make using the shares of Common Stock to be issued upon such conversion (a "Buy-In"), the Converting Holder shall have the right, to require the Company to pay to the Converting Holder, in addition to and not in lieu of the amounts due under Section 6(e) hereof (but in addition to all other amounts contemplated in other provisions of the Note or the Purchase Agreement, and not in lieu of any such other amounts), the Buy-In Adjustment Amount (as defined below). The "Buy-In Adjustment Amount" is the amount equal to the excess, if any, of (x) the Converting Holder's total purchase price (including brokerage commissions, if any) for the Covering Shares over (y) the net proceeds (after brokerage commissions, if any) received by the Converting Holder from the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Converting Holder in immediately available funds immediately upon demand by the Converting Holder. By way of illustration and not in limitation of the foregoing, if the Converting Holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required to pay to the Converting Holder will be -7- $1,000. (ii) The Payee shall be entitled to exercise its conversion privilege with respect to the Note notwithstanding the commencement of any case under 11 U.S.C.ss.101 et seq. (the "Bankruptcy Code"). In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C.ss.362 in respect of the Payee Conversion Option. The Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C.ss.362 in respect of the conversion of the Note. The Company agrees, without cost or expense to such holder, to take or to consent to any and all action necessary to effectuate relief under 11 U.S.C.ss.362. (iii) The Company will authorize its transfer agent to give information relating to the Company directly to the Payee or the Payee's representatives upon the request of the Payee or any such representative, to the extent such information relates to (i) the status of shares of the Conversion Shares or Common Stock issued or claimed to be issued to the Payee in connection with a Payee Conversion Notice or exercise of a Warrant, or (ii) the number of outstanding shares of Common Stock of all shareholders as of a current or other specified date. On the Delivery Date, the Company will provide the Payee with a copy of the authorization so given to the transfer agent. 7. No Rights as Shareholder. Nothing contained in this Note shall be construed as conferring upon the Payee, prior to the conversion of this Note, the right to vote or to receive dividends or to consent or to receive notice as a shareholder in respect of any meeting of shareholders for the election of directors of the Company or of any other matter, or any other rights as a shareholder of the Company. 8. Payment on Non-Business Days. Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day. 9. Representations and Warranties of the Company. The Company represents and warrants to the Payee 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. (b) This Note has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding 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 this Note and to perform its obligations hereunder. (c) The execution, delivery and performance of this Note 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) any material provision of any indenture, mortgage, deed of trust or other material agreement or instrument to which the Company is a -8- 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 (as defined in the Purchase Agreement). (d) Except as disclosed in the Purchase Agreement, 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 Note. 10. Payee's Representations and Warranties. As of the date of this Note, the Payee represents and warrants to the Company 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 Payee 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 Payee in the United States and, at the time of execution of this Note and the time of any offer to the Payee hereunder, the Payee was physically located outside of the United States, and (e) the Note has been sold pursuant to Regulation S under the Securities Act. 11. [Intentionally Omitted]. 12. Events of Default. The occurrence of any of the following events shall be an "Event of Default" under this Note: (a) the Company shall fail to make the payment of any amount of any principal outstanding on the date such payment shall become due and payable hereunder; or (b) the Company shall fail to make the interest payments on the date such payment shall become due and payable hereunder; or (c) any representation, warranty or certification made by the Company herein, in the Transaction Documents or in any certificate or financial statement shall prove to have been false or incorrect or breached in a material respect on the date as of which made; or (d) the holder of any indebtedness of the Company or any of its subsidiaries shall accelerate any payment of any amount or amounts of principal or interest on any indebtedness (the "Indebtedness") (other than the Indebtedness hereunder and the Other Notes) prior to its stated maturity or payment date the aggregate principal amount of which Indebtedness of all such persons is in excess of $100,000, whether such Indebtedness now exists -9- or shall hereinafter be created, and such accelerated payment entitles the holder thereof to immediate payment of such Indebtedness which is due and owing and such indebtedness has not been discharged in full or such acceleration has not been stayed, rescinded or annulled within ten (10) business days of such acceleration; or (e) A judgment or order for the payment of money shall be rendered against the Company or any of its subsidiaries in excess of $500,000 in the aggregate (net of any applicable insurance coverage) for all such judgments or orders against all such persons (treating any deductibles, self insurance or retention as not so covered) that shall not be discharged, and all such judgments and orders remain outstanding, and there shall be any period of sixty (60) consecutive days following entry of the judgment or order in excess of $500,000 or the judgment or order which causes the aggregate amount described above to exceed $500,000 during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (f) the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) admit in writing its inability to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), (v) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors' rights generally, (vi) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing; or (g) a proceeding or case shall be commenced in respect of the Company or any of its subsidiaries without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of sixty (60) consecutive days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic) against the Company or any of its subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company or any of its subsidiaries and shall continue undismissed, or unstayed and in effect for a period of sixty (60) consecutive days; (h) failure to issue the Conversion Shares or notice from the Company to the Payee, including by way of public announcement, at any time, of its inability to comply or its intention not to comply with proper requests for conversion of this Note into shares of Common Stock; or -10- (i) the Company shall breach any of its covenants or agreements set forth in Section 7 of the Purchase Agreement. 13. Remedies Upon An Event of Default. If an Event of Default shall have occurred and shall be continuing, the Payee of this Note may at any time at its option, (a) declare the entire unpaid principal balance of this Note, together with all accrued but unpaid interest, due and payable, and thereupon, the same shall be accelerated and so due and payable; provided, however, that upon the occurrence of an Event of Default described in Sections 8(f) and (g), without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Company, the outstanding principal balance of this Note plus all accrued but unpaid interest shall be automatically due and payable; or (b) exercise or otherwise enforce any one or more of the Payee's rights, powers, privileges, remedies and interests under this Note or applicable law. No course of delay on the part of the Payee shall operate as a waiver thereof or otherwise prejudice the right of the Payee. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. Notwithstanding the foregoing, Payee agrees that its rights and remedies hereunder are limited to receipt of cash or shares of Common Stock in the amounts described herein. 14. Replacement. Upon receipt of a duly executed, notarized and unsecured written statement from the Payee with respect to the loss, theft or destruction of this Note (or any replacement 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 Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 15. Parties in Interest, Transferability. This Note shall be binding upon the Company and its successors and assigns and the terms hereof shall inure to the benefit of the Payee and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 23 of this Note, or pledged, hypothecated or otherwise granted as security by the Payee. 16. Amendments. This Note may not be modified or amended in any manner except in writing executed by the Company and the Payee. 17. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective upon delivery by telecopy, facsimile or prepaid courier service at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received). The Company will give written notice to the Payee at least twenty (20) days prior to the date on which dissolution, liquidation or winding-up will take place and in no event shall such notice be provided to the Payee prior to such information being made known to the public. Address of the Payee: Willow Bend Management Ltd 2 Nevim Street Ramat Hasharon, Israel -11- Attention: Neil Smollett Tel. No.: ______________________ Fax No.: ______________________ With a copy to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Address of the Company: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attention: Martin Eric Weisberg, Esq. Tel. No.: (212) 704-6000 Fax No.: (212) 704-6288 18. Governing Law. This Note shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions. This Note shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 19. 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. 20. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Payee's right to pursue actual damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Payee and shall not, -12- except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Payee and that the remedy at law for any such breach may be inadequate. Therefore the Company agrees that, in the event of any such breach or threatened breach, the Payee shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 21. Failure or Indulgence Not Waiver. No failure or delay on the part of the Payee in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 22. Enforcement Expenses. The Company agrees to pay all costs and expenses of enforcement of this Note, including, without limitation, reasonable attorneys' fees and expenses. 23. Binding Effect. The obligations of the Company and the Payee set forth herein shall be binding upon the successors and assigns of each such party, whether or not such successors or assigns are permitted by the terms hereof. 24. Compliance with Securities Laws. The Payee of this Note acknowledges that this Note is being acquired solely for the Payee's own account and not as a nominee for any other party, and for investment, and that the Payee shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note, any Note issued in substitution or replacement therefore and the Conversion Shares shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR RAMP CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 25. Severability. The provisions of this Note are severable, and if any provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction. 26. Consent to Jurisdiction. Each of the Company and the Payee (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern -13- District of New York and the courts of the State of New York located in New York county for the purposes of any suit, action or proceeding arising out of or relating to this Note and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Payee consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in Section 17 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 26 shall affect or limit any right to serve process in any other manner permitted by law. 27. Company Waivers. Except as otherwise specifically provided herein, the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Company liable for the payment of this Note, and do hereby waive trial by jury. (a) No delay or omission on the part of the Payee in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Payee, nor shall any waiver by the Payee of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. [Signature Page Follows] -14- IN WITNESS WHEREOF, the Company has executed and delivered this Note as of the date first written above. RAMP CORPORATION By: ------------------------------------- Name: Title: -15- EX-4 5 ex4_4s3-04.txt 4.4 Exhibit 4.4 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR RAMP CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. RAMP CORPORATION CONVERTIBLE PROMISSORY NOTE U.S. $1,920,000 New York, New York No.: J-3 July 14, 2004 FOR VALUE RECEIVED, the undersigned, RAMP CORPORATION, a Delaware corporation (the "Company"), hereby promises to pay to the order of HILLTOP SERVICES LTD, or any future permitted holder of this promissory note (the "Payee"), at the principal office of the Payee set forth herein, or at such other place as the Payee may designate in writing to the Company, the principal sum of One Million Nine Hundred Twenty Thousand Dollars (U.S. $1,920,000), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Letter Agreement dated as of July 14, 2004 between the Company and the Payee (the "Letter Agreement"). Concurrently with the issuance of this Note, the Company is issuing separate notes to separate purchasers (the "Other Notes") pursuant to the Note and Warrant Purchase Agreement dated as of July 14, 2004 (the "Purchase Agreement"). Capitalized terms used and not otherwise defined herein shall the meanings set forth for such terms in the Purchase Agreement. 1. Principal and Interest Payments; Transaction. (a) The Company shall repay in full (or the Payee, at its sole option, shall elect to convert pursuant to Section 2 hereof, or the Company, at its sole option, shall elect to convert pursuant to Section 3 hereof) the entire principal balance then outstanding under this Note on the earliest to occur of (the "Maturity Date"): (i) six (6) months following the date hereof, or January 14, 2005, or (ii) the acceleration of the obligations as contemplated by this Note. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of six percent (6%) per annum for the period commencing on the date hereof through the Maturity Date. Interest shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable on the Maturity Date in cash or, if converted by the Payee in accordance with Section 2 hereof, or by the Company in accordance with Section 3 hereof, in shares of the Company's common stock, par value $.001 per share (the "Common Stock"), which shares shall have been registered with the Securities and Exchange Commission. If the Company pays interest in shares of Common Stock, the number of shares to be issued to the Payee shall be an amount equal to the quotient of (i) the amount of the interest payment divided by (ii) the applicable conversion price (as defined in Section 2(b) or 3(b) hereof, as applicable). Upon the occurrence of an Event of Default (as defined in Section 12 hereof), then to the extent permitted by law, the Company will pay interest to the Payee, payable on demand, on the outstanding principal balance of this Note from the date of the Event of Default until payment in full at the rate of eighteen percent (18%) per annum. (c) The Company, at its option, may prepay all or a portion of the outstanding principal amount of this Note, at any time and from time to time, prior to the Maturity Date; provided, however, that the Company's right to make any such prepayment shall be subject to the Payee's right of conversion pursuant to Section 2 hereof. Each prepayment shall be applied first to the payment of all interest accrued under this Note on the date of any prepayment, and the balance of any such prepayment shall be applied to the principal amount of this Note. 2. Payee Conversion Option; Conversion Price; Mechanics of Conversion (a) At any time on or after the date hereof, this Note shall be convertible (in whole but not in part), at the option of the Payee (the "Payee Conversion Option"), into such number of fully paid and non-assessable shares of Common Stock (the "Conversion Shares") as is determined by dividing (x) that portion of the outstanding principal balance under this Note, plus any accrued but unpaid interest, as of such date by (y) the Conversion Price (as hereinafter defined) then in effect on the date on which the Payee faxes a notice of conversion (the "Payee Conversion Notice"), duly executed, to the Company (the "Payee Conversion Date"). The Payee shall deliver this Note to the Company at the address set forth in Section 17 of this Note at such time that this Note is fully converted. (b) The Conversion Price shall be equal to $0.30 cents, as adjusted pursuant to Section 6 hereof. (c) Not later than three (3) trading days after any Payee Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and deliver to the Depository Trust Company ("DTC") account on the Payee's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Payee Conversion Notice, registered in the name of the Payee or its designee, for the number of shares of Common Stock to which the Payee shall be entitled. In the alternative, not later than five (5) trading days after any Payee Conversion Date, the Company shall deliver to the applicable Payee by express courier a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Payee Conversion Notice such certificate or certificates are not delivered to or as directed by the applicable Payee by the third trading day after the Payee Conversion Date (the "Payee Delivery Date"), the Payee shall be entitled by written notice to the Company at any time on or before its receipt of such -2- certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return this Note tendered for conversion, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation. 3. Company Conversion Option; Conversion Price; Mechanics of Conversion (a) If, at any time following the date hereof, 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 $0.40 cents per share, then this Note shall be convertible (in whole but not in part), at the option of the Company (the "Company Conversion Option"), into such number of Conversion Shares which shares shall have been registered with the Securities and Exchange Commission, as is determined by dividing (x) that portion of the outstanding principal balance under this Note, plus any accrued but unpaid interest, as of such date by (y) the Conversion Price then in effect on the date on which the Company faxes a notice of conversion (the "Company Conversion Notice"), duly executed, to the Payee (the "Company Conversion Date"). The Payee shall deliver this Note to the Company at the address set forth in Section 17 of this Note at such time that this Note is fully converted. (b) Not later than three (3) trading days after any Company Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and deliver to the Depository Trust Company ("DTC") account on the Payee's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Company Conversion Notice, registered in the name of the Payee or its designee, for the number of shares of Common Stock to which the Payee shall be entitled. In the alternative, not later than five (5) trading days after any Company Conversion Date, the Company shall deliver to the applicable Payee by express courier a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by Section the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Company Conversion Notice such certificate or certificates are not delivered to or as directed by the applicable Payee by the third trading day after the Company Conversion Date (the "Company Delivery Date" and, together with Payee the Delivery Date, the "Delivery Date"), the Payee shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return this Note tendered for conversion, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation. 4. Security. (a) If, on any day following the forty-five day (45) anniversary of the date hereof, the average closing sale price of the Common Stock for the ten (10) trading days immediately prior to such date (as determined by the Bloomberg volume weighted average price function) is less than $0.15 cents per share, then the indebtedness represented by this Note shall be automatically, and without further action by the Payee or the Company, secured by a first priority lien against all of the assets and property of the Company, including any and all of the -3- Company's intellectual property, software code, trademarks and trade names (collectively, the "Collateral"). (b) Power of Attorney to the Payee. With respect to the various assets and properties included or required to be included in the Collateral hereunder, the Company hereby absolutely, unconditionally and irrevocably makes, constitutes and appoints the Payee and the Payee's executive officers, and each of them, with full power of substitution, as the Company's true and lawful attorney-in-fact, each with full power and authority from time to time in the Company's name, place and stead to (without any notice to or consent from the Company), in addition to and without in any way limiting any right, power or authority of the Payee to do so under applicable law: (i) prepare and execute on behalf of the Company any mortgage, financing statement or other evidence of a security interest contemplated by this Note, or any modification, refiling, continuation or extension thereof; (ii) take any other action contemplated by this Note; and (iii) sign, execute, acknowledge, swear to, verify, deliver, file, record and publish any one or more of the foregoing. This Power of Attorney is hereby declared to be absolute and irrevocable, with full power of substitution and coupled with an interest, and shall continue in full force and effect until all of the obligations under this Note have been fully paid and satisfied. This Power of Attorney shall survive the dissolution, reorganization or bankruptcy of the Company and shall extend to and be binding upon the Company's successors, assigns, heirs and legal representatives. A facsimile signature shall be effective if so affixed. The Payee shall not be liable for any failure to collect or enforce the payment of any of those assets and properties. 5. Ownership Cap and Certain Conversion Restrictions. Notwithstanding anything to the contrary set forth in this Note, at no time may the Payee convert this Note if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by the Payee at such time, the number of shares of Common Stock which would result in the Payee beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess of 4.99% of all of the then issued and outstanding shares of Common Stock, including shares issuable upon such conversion of the Note as set forth in the Conversion Notice; provided, however, that upon the Payee providing the Company with sixty-five (65) days notice (pursuant to Section 15 hereof) (the "Waiver Notice") that such holder would like to waive this Section 5 with regard to any or all shares of Common Stock issuable upon conversion of this Note, this Section 5 will be of no force or effect with regard to all or a portion of the Note referenced in the Waiver Notice. 6. Adjustment of Conversion Price; Delivery. (a) The Conversion Price shall be subject to adjustment from time to time as follows: (i) Adjustments for Stock Splits and Combinations. If the Company shall at any time or from time to time after the date hereof, effect a stock split of the outstanding Common Stock, the applicable Conversion Price in effect immediately prior to the stock split shall be proportionately decreased. If the Company shall at any time or from time to time after the date hereof, combine the outstanding shares of Common Stock pursuant to a reverse stock split, the applicable Conversion Price in effect immediately prior to the combination shall be -4- proportionately increased. Any adjustments under this Section 6(a)(i) shall be effective at the close of business on the date the stock split or combination occurs. (ii) Adjustments for Certain Dividends and Distributions. If the Company shall at any time or from time to time after the date hereof, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in shares of Common Stock, then, and in each event, the applicable Conversion Price in effect immediately prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of the close of business on such record date, by multiplying, as applicable, the applicable Conversion Price then in effect by a fraction: (1) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; and (2) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution. (iii) Adjustment for Other Dividends and Distributions. If the Company shall at any time or from time to time after the date hereof, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in other than shares of Common Stock, then, and in each event, an appropriate revision to the applicable Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the holder of this Note shall receive upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon, the number of securities of the Company which they would have received had this Note been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities (together with any distributions payable thereon during such period), giving application to all adjustments called for during such period under this Section 6(a)(iii) with respect to the rights of the holders of this Note and the Other Notes (iv) Adjustment for Spin Off. If, for any reason, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then: (1) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Payee in the event all of the Payee's Notes outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Notes") had been converted as of the close of business on the trading day immediately prior to the Record Date (the -5- "Reserved Spin Off Shares"), and (b) to be issued to the Payee on the conversion of all or any of the outstanding Notes, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Notes then being converted, and (II) the denominator is the amount of the Outstanding Notes; and (2) the Conversion Price on the Outstanding Notes shall be adjusted immediately after consummation of the Spin Off by multiplying the Conversion Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Conversion Price shall be deemed to be the Conversion Price with respect to the Outstanding Notes after the Record Date. (b) Issue Taxes. The Company shall pay any and all issue and other taxes, excluding federal, state or local income taxes, that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of this Note pursuant thereto; provided, however, that the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such conversion. (c) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. If a Payee is entitled to a fractional share, the fraction shall be rounded up or down to that whole number of shares which is closest to that fraction. (d) Reservation of Common Stock. The Company shall, at all times when this Note shall be outstanding, reserve and keep available out of the Company's authorized but unissued shares of Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note plus all accrued but unpaid interest. (e) Delivery. The Company understands that a delay in the issuance of the Conversion Shares beyond the Delivery Date could result in economic loss to the Payee. As compensation to the Payee for such loss, the Company agrees to pay late payments to the Payee for late issuance of the Conversion Shares upon receipt of the Payee Conversion Notice in accordance with the following schedule (where "No. Business Days Late" refers to the number of business days which is beyond two (2) business days after the Delivery Date): Late Payment For Each $10,000 of Notes Principal or Interest No. Business Days Late Amount Being Converted - -------------------------------------------------------------------------------- 1 $100 2 $200 3 $300 4 $400 -6- 5 $500 6 $600 7 $700 8 $800 9 $900 10 $1,000 >10 $1,000 + $200 for each Business Day Late beyond 10 days for example, Payee Conversion Notice is delivered on Tuesday, October 12, 2004. The Delivery Date would be Friday, October 15, 2004 (the third trading day after such delivery). If the Conversion Shares are delivered by Tuesday, October 19, 2004 (two (2) business days after the Delivery Date), no payment under this provision is due. If the Conversion Shares are delivered on October 20, that is one (1) "Business Day Late" in the table below; if delivered on October 27, that is 6 "Business Days Late" in the table. The Company shall pay any payments incurred under this Section in immediately available funds upon demand as the Payee's exclusive remedy (other than the following provisions of this Section 6(e) and the provisions of Section 13 of this Note) for such delay. Furthermore, as discussed in Section 2(c) hereof, in addition to any other remedies which may be available to the Payee, in the event that the Company fails for any reason to effect delivery of the Conversion Shares by close of business on the Delivery Date, the Payee will be entitled to revoke the relevant Payee Conversion Notice by delivering a notice to such effect to the Company, whereupon the Company and the Payee shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion; provided, however, that an amount equal to any payments contemplated by this Section 6(e) which have accrued through the date of such revocation notice shall remain due and owing to the Converting Holder (as defined below) notwithstanding such revocation. (i) If, by the relevant Delivery Date, the Company fails for any reason to deliver the Conversion Shares and after such Delivery Date, the Holder of the Note being converted (a "Converting Holder") purchases, in an arm's-length open market transaction or otherwise, shares of Common Stock (the "Covering Shares") in order to make delivery in satisfaction of a sale of Common Stock by the Converting Holder (the "Sold Shares"), which delivery such Converting Holder anticipated to make using the shares of Common Stock to be issued upon such conversion (a "Buy-In"), the Converting Holder shall have the right, to require the Company to pay to the Converting Holder, in addition to and not in lieu of the amounts due under Section 6(e) hereof (but in addition to all other amounts contemplated in other provisions of the Note or the Purchase Agreement, and not in lieu of any such other amounts), the Buy-In Adjustment Amount (as defined below). The "Buy-In Adjustment Amount" is the amount equal to the excess, if any, of (x) the Converting Holder's total purchase price (including brokerage commissions, if any) for the Covering Shares over (y) the net proceeds (after brokerage commissions, if any) received by the Converting Holder from the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Converting Holder in immediately available funds immediately upon demand by the Converting Holder. By way of illustration and not in limitation of the foregoing, if the Converting Holder purchases shares of Common Stock -7- having a total purchase price (including brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required to pay to the Converting Holder will be $1,000. (ii) The Payee shall be entitled to exercise its conversion privilege with respect to the Note notwithstanding the commencement of any case under 11 U.S.C.ss.101 et seq. (the "Bankruptcy Code"). In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C.ss.362 in respect of the Payee Conversion Option. The Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C.ss.362 in respect of the conversion of the Note. The Company agrees, without cost or expense to such holder, to take or to consent to any and all action necessary to effectuate relief under 11 U.S.C.ss.362. (iii) The Company will authorize its transfer agent to give information relating to the Company directly to the Payee or the Payee's representatives upon the request of the Payee or any such representative, to the extent such information relates to (i) the status of shares of the Conversion Shares or Common Stock issued or claimed to be issued to the Payee in connection with a Payee Conversion Notice or exercise of a Warrant, or (ii) the number of outstanding shares of Common Stock of all shareholders as of a current or other specified date. On the Delivery Date, the Company will provide the Payee with a copy of the authorization so given to the transfer agent. 7. No Rights as Shareholder. Nothing contained in this Note shall be construed as conferring upon the Payee, prior to the conversion of this Note, the right to vote or to receive dividends or to consent or to receive notice as a shareholder in respect of any meeting of shareholders for the election of directors of the Company or of any other matter, or any other rights as a shareholder of the Company. 8. Payment on Non-Business Days. Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day. 9. Representations and Warranties of the Company. The Company represents and warrants to the Payee 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. (b) This Note has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding 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 this Note and to perform its obligations hereunder. -8- (c) The execution, delivery and performance of this Note 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) 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 (as defined in the Purchase Agreement). (d) Except as disclosed in the Purchase Agreement, 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 Note. 10. Payee's Representations and Warranties. As of the date of this Note, the Payee represents and warrants to the Company 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 Payee 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 Payee in the United States and, at the time of execution of this Note and the time of any offer to the Payee hereunder, the Payee was physically located outside of the United States, and (e) the Note has been sold pursuant to Regulation S under the Securities Act. 11. [Intentionally Omitted]. 12. Events of Default. The occurrence of any of the following events shall be an "Event of Default" under this Note: (a) the Company shall fail to make the payment of any amount of any principal outstanding on the date such payment shall become due and payable hereunder; or (b) the Company shall fail to make the interest payments on the date such payment shall become due and payable hereunder; or (c) any representation, warranty or certification made by the Company herein, in the Transaction Documents or in any certificate or financial statement shall prove to have been false or incorrect or breached in a material respect on the date as of which made; or -9- (d) the holder of any indebtedness of the Company or any of its subsidiaries shall accelerate any payment of any amount or amounts of principal or interest on any indebtedness (the "Indebtedness") (other than the Indebtedness hereunder and the Other Notes) prior to its stated maturity or payment date the aggregate principal amount of which Indebtedness of all such persons is in excess of $100,000, whether such Indebtedness now exists or shall hereinafter be created, and such accelerated payment entitles the holder thereof to immediate payment of such Indebtedness which is due and owing and such indebtedness has not been discharged in full or such acceleration has not been stayed, rescinded or annulled within ten (10) business days of such acceleration; or (e) A judgment or order for the payment of money shall be rendered against the Company or any of its subsidiaries in excess of $500,000 in the aggregate (net of any applicable insurance coverage) for all such judgments or orders against all such persons (treating any deductibles, self insurance or retention as not so covered) that shall not be discharged, and all such judgments and orders remain outstanding, and there shall be any period of sixty (60) consecutive days following entry of the judgment or order in excess of $500,000 or the judgment or order which causes the aggregate amount described above to exceed $500,000 during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (f) the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) admit in writing its inability to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), (v) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors' rights generally, (vi) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing; or (g) a proceeding or case shall be commenced in respect of the Company or any of its subsidiaries without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of sixty (60) consecutive days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic) against the Company or any of its subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company or any of its subsidiaries and shall continue undismissed, or unstayed and in effect for a period of sixty (60) consecutive days; -10- (h) failure to issue the Conversion Shares or notice from the Company to the Payee, including by way of public announcement, at any time, of its inability to comply or its intention not to comply with proper requests for conversion of this Note into shares of Common Stock; or (i) the Company shall breach any of its covenants or agreements set forth in Section 7 of the Purchase Agreement. 13. Remedies Upon An Event of Default. If an Event of Default shall have occurred and shall be continuing, the Payee of this Note may at any time at its option, (a) declare the entire unpaid principal balance of this Note, together with all accrued but unpaid interest, due and payable, and thereupon, the same shall be accelerated and so due and payable; provided, however, that upon the occurrence of an Event of Default described in Sections 8(f) and (g), without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Company, the outstanding principal balance of this Note plus all accrued but unpaid interest shall be automatically due and payable; or (b) exercise or otherwise enforce any one or more of the Payee's rights, powers, privileges, remedies and interests under this Note or applicable law. No course of delay on the part of the Payee shall operate as a waiver thereof or otherwise prejudice the right of the Payee. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. Notwithstanding the foregoing, Payee agrees that its rights and remedies hereunder are limited to receipt of cash or shares of Common Stock in the amounts described herein. 14. Replacement. Upon receipt of a duly executed, notarized and unsecured written statement from the Payee with respect to the loss, theft or destruction of this Note (or any replacement 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 Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 15. Parties in Interest, Transferability. This Note shall be binding upon the Company and its successors and assigns and the terms hereof shall inure to the benefit of the Payee and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 23 of this Note, or pledged, hypothecated or otherwise granted as security by the Payee. 16. Amendments. This Note may not be modified or amended in any manner except in writing executed by the Company and the Payee. 17. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective upon delivery by telecopy, facsimile or prepaid courier service at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received). The Company will give written notice to the Payee at least twenty (20) days prior to the date on which dissolution, -11- liquidation or winding-up will take place and in no event shall such notice be provided to the Payee prior to such information being made known to the public. Address of the Payee: Hilltop Services Ltd. Mevot David 8 Ramat Gan, Israel Attention: Tel. No.: ______________________ Fax No.: ______________________ With a copy to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Address of the Company: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attention: Martin Eric Weisberg, Esq. Tel. No.: (212) 704-6000 Fax No.: (212) 704-6288 18. Governing Law. This Note shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions. This Note shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 19. 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. 20. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other -12- remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Payee's right to pursue actual damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Payee and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Payee and that the remedy at law for any such breach may be inadequate. Therefore the Company agrees that, in the event of any such breach or threatened breach, the Payee shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 21. Failure or Indulgence Not Waiver. No failure or delay on the part of the Payee in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 22. Enforcement Expenses. The Company agrees to pay all costs and expenses of enforcement of this Note, including, without limitation, reasonable attorneys' fees and expenses. 23. Binding Effect. The obligations of the Company and the Payee set forth herein shall be binding upon the successors and assigns of each such party, whether or not such successors or assigns are permitted by the terms hereof. 24. Compliance with Securities Laws. The Payee of this Note acknowledges that this Note is being acquired solely for the Payee's own account and not as a nominee for any other party, and for investment, and that the Payee shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note, any Note issued in substitution or replacement therefore and the Conversion Shares shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR RAMP CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." -13- 25. Severability. The provisions of this Note are severable, and if any provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction. 26. Consent to Jurisdiction. Each of the Company and the Payee (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in New York county for the purposes of any suit, action or proceeding arising out of or relating to this Note and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Payee consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in Section 17 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 26 shall affect or limit any right to serve process in any other manner permitted by law. 27. Company Waivers. Except as otherwise specifically provided herein, the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Company liable for the payment of this Note, and do hereby waive trial by jury. (a) No delay or omission on the part of the Payee in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Payee, nor shall any waiver by the Payee of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. [Signature Page Follows] -14- IN WITNESS WHEREOF, the Company has executed and delivered this Note as of the date first written above. RAMP CORPORATION By: ---------------------------------------- Name: Title: -15- EX-4 6 exhb4-5.txt 4.5 Exhibit 4.5 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-A-__ Number of Shares: 4,683,823 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), ______________, or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Six Hundred Eighty Three Thousand Eight Hundred Twenty Three (4,683,823) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.11 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the 3 Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: 4 (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 5 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 6 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:______________________________________ Name: Title: 7 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ -------------------------------------- By: __________________________________ Name: Title: 8 EX-4 7 exhb4-6.txt 4.6 Exhibit 4.6 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-B-_ Number of Shares: 4,683,823 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), ______________, or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Six Hundred Eighty Three Thousand Eight Hundred Twenty Three (4,683,823) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.15 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the 3 Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: 4 (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 5 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 6 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:______________________________________ Name: Title: 7 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ -------------------------------------- By: __________________________________ Name: Title: 8 EX-4 8 exhb4-7.txt 4.7 Exhibit 4.7 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-C-_ Number of Shares: 4,683,823 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), ______________, or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Six Hundred Eighty Three Thousand Eight Hundred Twenty Three (4,683,823) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.35 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, 2 such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. [INTENTIONALLY OMITTED]. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 3 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 4 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:_______________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ -------------------------------------- By: __________________________________ Name: Title: 7 EX-4 9 exhb4-8.txt 4.8 Exhibit 4.8 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-D-_ Number of Shares: 4,683,823 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), ______________, or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Six Hundred Eighty Three Thousand Eight Hundred Twenty Three (4,683,823) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.40 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. [INTENTIONALLY OMITTED]. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 3 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 4 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:_______________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ -------------------------------------- By: __________________________________ Name: Title: 7 EX-4 10 exhb4-9.txt 4.9 Exhibit 4.9 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-A-3 Number of Shares: 4,282,354 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), HILLTOP SERVICES LTD., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Two Hundred Eighty Two Thousand Three Hundred Fifty Four (4,282,354) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.11 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the 3 Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: 4 (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 5 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 6 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:_______________________________________ Name: Title: 7 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ---------------------------------------- By: ____________________________________ Name: Title: 8 EX-4 11 exhb4-10.txt 4.10 Exhibit 4.10 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-B-3 Number of Shares: 4,282,354 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), HILLTOP SERVICES LTD., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Two Hundred Eighty Two Thousand Three Hundred Fifty Four (4,282,354) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.15 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the 3 Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: 4 (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 5 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 6 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:_______________________________________ Name: Title: NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ---------------------------------------- By: ____________________________________ Name: Title: 7 EX-4 12 exhb4-11.txt 4.11 Exhibit 4.11 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-C-3 Number of Shares: 4,282,354 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), HILLTOP SERVICES LTD., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Two Hundred Eighty Two Thousand Three Hundred Fifty Four (4,282,354) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.35 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, 2 such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. [INTENTIONALLY OMITTED]. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 3 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 4 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:____________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ---------------------------------------- By: ____________________________________ Name: Title: 7 EX-4 13 exhb4-12.txt 4.12 Exhibit 4.12 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-D-3 Number of Shares: 4,282,354 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), HILLTOP SERVICES LTD., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Four Million Two Hundred Eighty Two Thousand Three Hundred Fifty Four (4,282,354) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.40 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. [INTENTIONALLY OMITTED]. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 3 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 4 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:_______________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ---------------------------------------- By: ____________________________________ Name: Title: 7 EX-4 14 exhb4-13.txt 4.13 Exhibit 4.13 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-A-4 Number of Shares: 350,000 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), REDWOOD CAPITAL PARTNERS, INC., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Three Hundred Fifty Thousand (350,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.11 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the 3 Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: 4 (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 5 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 6 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:_____________________________________ Name: Title: 7 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ----------------------------------------- By: ______________________________________ Name: Title: 8 EX-4 15 exhb4-14.txt 4.14 Exhibit 4.14 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-B-4 Number of Shares: 350,000 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), REDWOOD CAPITAL PARTNERS, INC., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Three Hundred Fifty Thousand (350,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.15 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the 3 Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: 4 (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 5 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 6 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:______________________________________ Name: Title: 7 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ----------------------------------------- By: ______________________________________ Name: Title: 8 EX-4 16 exhb4-15.txt 4.15 Exhibit 4.15 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-C-4 Number of Shares: 350,000 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), REDWOOD CAPITAL PARTNERS, INC., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Three Hundred Fifty Thousand (350,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.35 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, 2 such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. [INTENTIONALLY OMITTED]. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 3 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 4 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:______________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ----------------------------------------- By: ______________________________________ Name: Title: 7 EX-4 17 exhb4-16.txt 4.16 Exhibit 4.16 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES JULY 14, 2005 No.: J-04-D-4 Number of Shares: 350,000 Date of Issuance: July 14, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), REDWOOD CAPITAL PARTNERS, INC., or its registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on July 14, 2005 (the "Expiration Date"), Three Hundred Fifty Thousand (350,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.40 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash, by certified or official bank check or by a reduction of the principal amount of that certain Promissory Note dated the date hereof executed by the Company and issued in favor of the Holder. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 1 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and 2 (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. [INTENTIONALLY OMITTED]. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant or the Note and Warrant Purchase Agreement of even date herewith (the "Purchase Agreement"), (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 3 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), pursuant to the registration rights provisions contained in the Registration Rights Agreement dated the date hereof by and between the Holder and the Company. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 4 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant and the Purchase Agreement, of even date herewith, by and between the Company and the Holder contain the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [Remainder of Page Intentionally Left Blank] 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this __day of July, 2004. RAMP CORPORATION By:______________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. ________ dated as of July __, 2004, to purchase ______________ shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ----------------------------------------- By: ______________________________________ Name: Title: 7 EX-4 18 ex4_17s304.txt EX-4.17 Exhibit 4.17 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION Expires August 18, 2009 No.: A-04-2 Number of Shares: 500,000 Date of Issuance: August 18, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), RICHARD ROSENBLUM, or his registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on August 18, 2009 (the "Expiration Date"), Five Hundred Thousand (500,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.18 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash or by certified or official bank check. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and 1 deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and -2- (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant, (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For -3- purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), within thirty (30) days following the date hereof. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue -4- New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof and there are no representations, warranties, agreements or understandings other than expressly contained herein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. -5- IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this 18th day of August, 2004. RAMP CORPORATION By: --------------------------------------- Name: Title: -6- NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. A-04-2 dated as of August 18, 2004, to purchase Five Hundred Thousand (500,000) shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ----------------------------------------- By: ------------------------------------- Name: Title: -7- THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION Expires August 18, 2009 No.: A-04-4 Number of Shares: 500,000 Date of Issuance: August 18, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), RICHARD ROSENBLUM, or his registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on August 18, 2009 (the "Expiration Date"), Five Hundred Thousand (500,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.18 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash or by certified or official bank check. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and -1- deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding -2- Warrants; and (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant, (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or -3- other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), within thirty (30) days following the date hereof. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 with a copy to: -4- Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof and there are no representations, warranties, agreements or understandings other than expressly contained herein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. -5- IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this 18th day of August, 2004. RAMP CORPORATION By: --------------------------------------- Name: Title: -6- NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. A-04-4 dated as of August 18, 2004, to purchase Five Hundred Thousand (500,000) shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- Dated: _____ day of __________, 200_ ----------------------------------------- By: ------------------------------------- Name: Title: -7- EX-4 19 exhb4-18.txt 4.18 Exhibit 4.18 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES AUGUST 18, 2009 No.: A-04-1 Number of Shares: 500,000 Date of Issuance: August 18, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), DAVID STEFANSKY, or his registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on August 18, 2009 (the "Expiration Date"), Five Hundred Thousand (500,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.18 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash or by certified or official bank check. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and 1 deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and 2 (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant, (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or 3 other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), within thirty (30) days following the date hereof. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 4 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof and there are no representations, warranties, agreements or understandings other than expressly contained herein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this 18th day of August, 2004. RAMP CORPORATION By:___________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. A-04-1 dated as of August 18, 2004, to purchase Five Hundred Thousand (500,000) shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ Dated: _____ day of __________, 200_ _________________________________________ By: ______________________________________ Name: Title: 7 THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COMMON STOCK PURCHASE WARRANT RAMP CORPORATION EXPIRES AUGUST 18, 2009 No.: A-04-3 Number of Shares: 500,000 Date of Issuance: August 18, 2004 1. Issuance. For good and valuable consideration, the receipt of which is hereby acknowledged by Ramp Corporation, a Delaware corporation (the "Company"), DAVID STEFANSKY, or his registered assigns (the "Holder") is hereby granted the right to purchase at any time until 5:00 P.M., New York City time, on August 18, 2009 (the "Expiration Date"), Five Hundred Thousand (500,000) shares of the Company's common stock, par value $.001 per share (the "Common Stock") at an exercise price (the "Exercise Price") equal to $0.18 cents per share. The Exercise Price shall be subject to further adjustment as set forth in Section 6 hereof. 2. Exercise of Warrants. This Warrant is exercisable in whole or in part at the Exercise Price per share of Common Stock payable hereunder, payable, at the option of the Holder, in cash or by certified or official bank check. Upon surrender of this Warrant Certificate with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. 3. Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and 1 deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 5. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 6. Protection Against Dilution. (a) Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6, the Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total purchase price before adjustment. (b) Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original purchase price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section 6 shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders of the Company shall be deemed a stock dividend to the extent such rights are exercised by the stockholders. (c) Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then (i) the Company shall cause (a) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder in the event all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the trading day immediately prior to the Record Date (the "Reserved Spin Off Shares"), and (b) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and 2 (ii) the Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but only if, such fraction is less than 1.0), the numerator of which is the average Closing Bid Price of the Common Stock for the five (5) trading days immediately following the fifth trading day after the Record Date, and the denominator of which is the average Closing Bid Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 7. Warrant Call. At any time or from time to time following the forty-fifth (45th) day after the Registration Statement (as defined in Section 9(b) hereof) has been declared effective and only if such Registration Statement remains effective at all times during the Call Exercise Period (as defined below), the Company, at its option, may, upon written notice to the Holder (the "Call Notice"), call up to one hundred percent (100%) of the Warrant Shares if the Common Stock trades at a price equal to or greater than $0.20 cents per share for five (5) consecutive trading days prior to the date the Company calls the Warrant. To be effective, the Call Notice must be given within ten (10) business days after the aforementioned five (5) day period. The rights and privileges granted pursuant to this Warrant with respect to such Warrant Shares subject to the Call Notice shall terminate if this Warrant is not exercised by the Holder in accordance with the Call Notice with respect to such Warrant Shares by the Holder within ten (10) business days after the Call Notice is received by the Holder (the "Call Exercise Period"). In the event that this Warrant is not exercised by the Holder with respect to the Warrant Shares subject to the Call Notice within the Call Exercise Period, this Warrant shall automatically expire at 5:00 p.m. eastern time on the last day of the Call Exercise Period and the Company will remit to the Holder $0.001 per Warrant Share and a new Warrant certificate representing the number of Warrant Shares, if any, with respect to which this Warrant has not been exercised or subject to a Call Notice upon such Holder tendering to the Company the expired Warrant certificate. 8. Limitation on Exercise. Notwithstanding anything to the contrary set forth in this Warrant, (i) the Holder shall not be entitled to exercise this Warrant and the Company shall have no obligation to issue shares of Common Stock upon such exercise of all or any portion of this Warrant, and (ii) the Company shall not be entitled to issue a Call Notice under Section 7 hereof, to the extent that, following the exercise by the Holder, the Beneficial Ownership Number (as defined below) is equal to or greater than 4.99% of the outstanding shares of Common Stock (including the shares to be issued to the Holder upon such exercise). Notwithstanding the foregoing, this Section 8 shall have no further force and effect if there is an outstanding tender offer for any or all of the shares of the Company's Common Stock, or the Holder, at its option, provides at least sixty-five (65) days' advance written notice from the Holder that this Section 8 shall have no further force and effect. For purposes of this Section, "Beneficial Ownership Number" shall equal the sum of (i) the number of shares of Common Stock owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of this Warrant or 3 other rights to purchase Common Stock or through the ownership of convertible securities), and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant. For purposes of this Section, "beneficial ownership" shall be defined in accordance with Rule 13(d)-3 of the Securities Exchange Act of 1934, as amended. The Holder, by its acceptance of this Warrant, further agrees that if the Holder transfers or assigns any of the Warrants to any party, such assignment shall be made subject to the transferee's or assignee's specific agreement to be bound by the provisions of this Section 8 as if such transferee or assignee were the original Holder hereof. 9. Transfer to Comply with the Securities Act; Registration Rights. (a) This Warrant has not been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws, and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section. (b) The Company agrees to file a registration statement, which shall include the Warrant Shares, on Form S-3 or another available form (the "Registration Statement"), within thirty (30) days following the date hereof. 10. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two (2) days after the date of deposit in the United States mails, as follows: (i) if to the Company, to: Ramp Corporation 33 Maiden Lane New York, New York 10038 Attn: President Telephone No.: (212) 440-1500 Facsimile No.: (212) 480-4962 4 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attn: Martin Eric Weisberg, Esq. Telephone No.: (212) 704-6000 Facsimile No.: (212) 704-6288 (ii) if to the Holder, to: Krieger & Prager LLP 39 Broadway, Suite 1440 New York, New York 10006 Attn: Samuel M. Krieger, Esq. Telephone No.: (212) 363-2900 Facsimile No.: (212) 363-2999 Any party may be notice given in accordance with this Section to the other parties designate another address or person for receipt of notices hereunder. 11. Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof and there are no representations, warranties, agreements or understandings other than expressly contained herein. 12. Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 13. Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 14. Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 5 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of this 18th day of August, 2004. RAMP CORPORATION By:_____________________________________ Name: Title: 6 NOTICE OF EXERCISE OF WARRANT The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant Certificate No. A-04-3 dated as of August 18, 2004, to purchase Five Hundred Thousand (500,000) shares of the Common Stock, par value $.001 per share, of Ramp Corporation and tenders herewith payment in accordance with Section 1 of said Common Stock Purchase Warrant. Please deliver the stock certificate to: ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ Dated: _____ day of __________, 200_ _________________________________________ By: ______________________________________ Name: Title: 7 EX-4 20 exhb4-19.txt 4.19 Exhibit 4.19 Ramp Corporation 33 Maiden Lane New York, New York 10038 (212) 440-1500 July 14, 2004 Hilltop Services, Ltd. Mevot David 8 Ramat Gan Israel Re: Consent under, and termination of, Section 4(l) to Common Stock --------------------------------------------------------------- and Warrant Purchase Agreement and Issuance of Hilltop Note and --------------------------------------------------------------- Hilltop Warrants ---------------- Gentlemen: Reference is made to: (i) that certain Common Stock and Warrant Purchase Agreement, dated as of March 4, 2004 (the "Purchase Agreement"), by and between Ramp Corporation, a Delaware corporation (the "Company"), and Hilltop Services, Ltd., an Anguilla corporation ("Hilltop"), (ii) that certain Common Stock Purchase Warrant No. W-M04-1, dated March 5, 2004 (the "Original Hilltop Warrant"), exercisable into 2,173,913 shares of common stock, par value $.001 per share, of the Company ("Common Stock"), at an exercise price of $.80 cents per share ("Exercise Price"), issued by the Company to the Investor; (iii) that certain Note and Warrant Purchase Agreement (the "New Purchase Agreement"), dated as of the date hereof, by and between the Company and each of Cottonwood Ltd. and Willow Bend Management Ltd. (together, the "New Investors"), (iv) those certain Promissory Notes, dated as of the date hereof, in the aggregate principal amount of $4,200,000 issued by the Company (collectively, the "Notes") and payable to the New Investors, and (v) those certain warrants issued to the New Investors as of the date hereof as follows: (a) Common Stock Purchase Warrants (the "First Warrants") exercisable into an aggregate of 9,367,646 shares of Common Stock at an exercise price of $0.11 cents per share, (b) Common Stock Purchase Warrants (the "Second Warrants"), exercisable into an aggregate of 9,367,646 shares of Common Stock, at an exercise price of $0.15 cents per share, (c) Common Stock Purchase Warrants (the "Third Warrants"), exercisable into an aggregate of 9,367,646 shares of Common Stock at an exercise price of $0.35 cents per share and (d) Common Stock Purchase Warrants (the "Fourth Warrants" and, collectively with the First Warrants, the Second Warrants and the Third Warrants, the "Warrants"), exercisable into an aggregate of 9,367,646 shares of Common Stock at an exercise price of $0.40 cents per share. The entering into the New Purchase Agreement with the New Investors, and the issuance of the Notes and Warrants to the New Investors in connection with the New Purchase Agreement to a price below the Purchase Price (as defined in the Purchase Agreement) are hereby collectively referred to herein as the "Transactions". Hilltop acknowledges and agrees that the Company is entering into the Note Purchase Agreement and issuing the Notes in order to provide the necessary financing to allow the Company to meet its current cash needs for the continuation of its business operations. Therefore, Hilltop hereby consents to the closing of the Transactions pursuant to Section 4(1)(i) of the Purchase Agreement and Hilltop and the Company agree that the Purchase Price (as defined in the Purchase Agreement) shall be reduced from $0.46 cents per share. As a result of the anti-dilution provisions contained in Section 4(1)(ii) of the Purchase Agreement, Hilltop and the Company agree that the Adjusted Purchase Price shall equal eighty percent (80%) multiplied by $0.11 cents per share (the exercise price of the First Warrant), or $0.088 cents per share, and the Company shall issue to Hilltop an aggregate of 56,818,182 shares of Common Stock less the Unissued Shares (as defined below), for an aggregate number of shares equal to 35,000,000 as a result of the Transactions (the "Additional Shares of Common Stock"). The Company and Hilltop Hilltop Services Ltd. July 14, 2004 Page 2 agree that any Additional Shares of Common Stock that have not been previously registered with the Securities and Exchange Commission under that certain registration rights agreement dated as of March 4, 2004 by and between the Company and Hilltop shall be included for registration on the Company's next registration statement filed with the Securities and Exchange Commission. Hilltop and the Company further agree that, in consideration for Hilltop's agreement to waive any and all of its rights to an additional 21,818,182 shares (the "Unissued Shares") otherwise issuable to Hilltop under Section 4(l)(i) and 4(l)(ii) of the Purchase Agreement, and for Hilltop's agreement that, in connection with this agreement, Section 4(l)(i) and 4(l)(ii) of the Purchase Agreement shall be terminated in their entirety and null and void, the Company shall issue to Hilltop: (i) a promissory note (the "Hilltop Note") in favor of Hilltop in the principal amount of $1,920,000, (ii) Common Stock Purchase Warrants (the "First Hilltop Warrants") exercisable into 4,282,354 shares of Common Stock at an exercise price of $0.11 cents per share, (b) Common Stock Purchase Warrants (the "Second Hilltop Warrants"), exercisable into 4,282,354 shares of Common Stock, at an exercise price of $0.15 cents per share, (c) Common Stock Purchase Warrants (the "Third Hilltop Warrants"), exercisable into an aggregate of 4,282,354 shares of Common Stock at an exercise price of $0.35 cents per share and (d) Common Stock Purchase Warrants (the "Fourth Hilltop Warrants" and, collectively with the First Hilltop Warrants, the Second Hilltop Warrants and the Third Hilltop Warrants, the "Hilltop Warrants"), exercisable into an aggregate of 4,282,354 shares of Common Stock at an exercise price of $0.40 cents per share. The Hilltop Note and the Hilltop Warrants shall contain the identical terms and conditions as set forth in the Notes and Warrants. The Company and Hilltop agree that any shares of Common Stock issuable upon conversion of the Hilltop Note and the exercise of the Hilltop Warrants shall be included for registration on the Company's next registration statement filed with the Securities and Exchange Commission, and Hilltop shall have registration rights identical to the terms and conditions set forth in the Registration Rights Agreement dated as of the date hereof by and among the Company and the New Investors. On the condition that the Original Hilltop Warrant with respect to all of the shares of Common Stock underlying such warrant is exercised and the aggregate exercise price of $2,174 is received by the Company within three (3) days from the date hereof, the Exercise Price with respect to all of the shares of Common Stock underlying the Original Hilltop Warrant then being exercised shall be reduced from $.80 cents per share to $.001 cent per share, and each of the Purchase Agreement and Original Hilltop Warrant are hereby deemed amended to reflect the foregoing. As promptly as practicable but no later than three (3) business days following the exercise of the Original Hilltop Warrant, the Company shall take such actions as it shall deem necessary or appropriate to deliver the final prospectus, as amended or supplemented, relating to the sale of the shares of Common Stock underlying the Original Hilltop Warrant under the Securities Act of 1933, as amended, and deliver same to the Investor prior to its sale of shares of Common Stock underlying the Original Hilltop Warrant. The Investor agrees that it shall not sell any shares of Common Stock underlying the Original Hilltop Warrant pursuant to the Registration Statement on Form S-3, No. 333-114734, without proper delivery of the final prospectus, as amended or supplemented. Hilltop further agrees that, in connection with this agreement, it hereby waives any and all liquidated damages resulting from the late filing and effectiveness of the Registration Statement covering the initial shares issued to Hilltop. Except as set forth herein, the provisions of the Purchase Agreement shall be unmodified and shall remain in full force and effect. [The remainder of this page intentionally left blank.] Hilltop Services Ltd. July 14, 2004 Page 3 Please confirm your agreement to the foregoing by executing the enclosed copy of this letter and returning it to the undersigned, whereupon it shall become a binding agreement between us as of the date hereof. Very truly yours, RAMP CORPORATION By: ________________________ Name: Andrew Brown Title: President ACCEPTED AND AGREED TO: HILLTOP SERVICES, LTD. By:____________________________ Name: Title: EX-4 21 exhb4-20.txt 4.20 Exhibit 4.20 FEE PAYMENT AGREEMENT THIS FEE PAYMENT AGREEMENT, dated as of August 20, 2004 (this "Agreement"), is by and between Ramp Corporation, a Delaware corporation ("Company"), having an address at 33 Maiden Lane, New York, New York 10038 and Jenkens & Gilchrist Parker Chapin LLP, a New York limited liability partnership (the "Firm"), having an address at The Chrysler Building, 405 Lexington Avenue, New York, New York 10174. WITNESSETH: WHEREAS, the Firm has represented the Company and its subsidiaries in various general corporate and securities matters and the Firm has rendered invoices for the periods ended June 30, 2004 and July 31, 2004 (the "Outstanding Invoices") in connection with such matters in the amount of $167,981.32; WHEREAS, the Company desires to make payment of the Outstanding Invoices to the Firm for such representation and to provide for payment of future invoices by the Firm for such matters; and WHEREAS, the Company has offered to pay one-third of the Outstanding Invoices in cash and two-thirds of the Outstanding Invoices in shares of common stock, par value $.001, of the Company, and the Firm is willing to accept such payment of the Outstanding Invoices, on the terms set forth in this Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Firm hereby agree as follows: 1. Payment in Stock. The Company shall issue an aggregate of 4,000,000 shares of common stock, par value $.001 per share (the "Shares"), to Martin Eric Weisberg, Esq., an accredited investor and a partner at the Firm in payment of services rendered by the Firm in connection with the representation of the Company with regards to general corporate and securities matters for the period ending through July 31, 2004 and for services to be rendered thereafter (the "Transaction Matters"). One-third of the balance of the unpaid Outstanding Invoices owed to the Firm shall be paid in cash and the remaining two-thirds of the balance of the Outstanding Invoices owed to the Firm shall be paid in Shares. The Company agrees that if the sale of the Shares by the Firm results in net cash proceeds to the Firm that is less than the Outstanding Invoices owed or any future balances owed to the Firm in connection with the Transaction Matters, the Company shall pay the Firm an amount of cash so that the net cash proceeds from the sale of such Shares together with such cash payment shall equal the Outstanding Invoices owed or any future balance owed to the Firm in connection with the Transaction Matters. The issuance of the Shares and the effectiveness of this Agreement is conditioned upon the effectiveness of a registration statement on Form S-3 covering the Shares which registration statement shall be filed by the Company with the Securities and Exchange Commission. The Company covenants and agrees to prepare and file the Form S-3 on or before August 20, 2004. 2. Miscellaneous. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. All the terms of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective assigns of the parties hereto, whether so expressed or not. This Agreement embodies the entire agreement and understanding among the parties hereto relating to the subject matter of this Agreement. All notices from any party to this Agreement shall be mailed or delivered to the other party to the address set forth in the preamble to this Agreement. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. RAMP CORPORATION By:_________________________________ Name: Andrew Brown Title: Chief Executive Officer JENKENS & GILCHRIST PARKER CHAPIN LLP By:_________________________________ Name: Martin Eric Weisberg Title: Partner 2 EX-4 22 exhb4-21.txt 4.21 Exhibit 4.21 June __, 2004 [Employee Name] [Street Address] [City /State /Zip] Re: Reduction of Consulting Payments and Retention Bonus Program Dear _____________ : In connection with your continued consulting arrangement with Ramp Corporation, a Delaware corporation (the "Company"), you have agreed to accept shares of the Company's common stock ("Common Stock"), par value $.001 per share, in lieu of a portion of the cash compensation payable to you as a consultant to the Company. As a result of your entering into this agreement with us, effective for the period commencing as of June 1, 2004 and terminating on November 30, 2004 or earlier in accordance with this agreement (the "Adjustment Period"), the cash portion of your consulting fees shall be reduced by [_______] percent [__ %] during the Adjustment Period resulting in the cash portion of your consulting fees being reduced by a total amount of $_______ during the Adjustment Period (the "Cash Reduction Amount"). For purposes of this agreement, the amount of your initial consulting fees less the Cash Reduction Amount shall mean your "Adjusted Consulting Fees". In consideration of your agreement to the Cash Reduction Amount, the Company has agreed to provide you with the following bonus compensation, payable in Common Stock, all upon the terms and conditions set forth below: 1. Immediately following the Adjustment Period, in lieu of consulting fees, the Company agrees to issue to you such number of shares (the "Retention Bonus Shares") of its Common Stock equal to $XX,XXX on 11/30/04 (the "Retention Bonus Amount"), with the number of shares being obtained by dividing the Retention Bonus Amount (less any applicable withholding tax) by the average closing price of the Common Stock on the American Stock Exchange for the five (5) trading days immediately preceding the termination of the Adjustment Period. The Retention Bonus Shares shall be issued to you as performance compensation under the Company's Stock Incentive Plan (the "Stock Plan"). Any Retention Bonus Shares issued to you in accordance with the terms of this agreement shall be freely tradable without restriction. Prior to the issuance and delivery of the Retention Bonus Shares to you, the Company hereby agrees and undertakes to register the Stock Plan and underlying Retention Bonus Shares with the Securities and Exchange Commission (the "SEC") on a Registration Statement on Form S-8 ("Form S-8") under the Securities Act of 1933, as amended (the "Securities Act"), and under all applicable state securities or blue sky laws. The Company represents and warrants to you that it is in compliance with all Securities Act requirements for use of Form S-8 and the Stock Plan and Retention Bonus Shares can be registered with the SEC by a filing of a Form S-8 with the SEC prior to the issuance and delivery of the Retention Bonus Shares to you. You hereby acknowledge your receipt of the Company's Stock Plan, annual report on Form 10-K for the Company's fiscal year ended December 31, 2003, quarterly report on Form 10-Q for the Company's fiscal quarter ended March 31, 2004 and such other reports as filed by the Company with the SEC under the Securities Exchange Act of 1934, as amended, and otherwise required to be delivered to you by the Company under Rule 428 promulgated by the SEC under the Securities Act of 1933. 2. Commencing on each payroll date during the Adjustment Period, in lieu of consulting fees, the Company shall pay to you _______ percent ( ___%) of your Adjusted Consulting Fees (the "Adjusted Consulting Fees Percentage Amount") through the issuance to you of shares of its Common Stock (the "Consulting Fee Shares" and, together with the Retention Bonus Shares, the "Shares") equal to the number obtained by dividing the Adjusted Consulting Fees Percentage Amount for such pay period (less any applicable withholding tax), by the lesser of (a) ninety percent (90%) of the closing price of the Common Stock on the American Stock Exchange on the day immediately preceding each payroll date, or (b) ninety percent (90%) of the average closing price of the Common Stock on the American Stock Exchange for the five (5) trading days immediately preceding each payroll date. The Consulting Fee Shares shall be issued to you as performance compensation under the Company's Stock Plan. Any Consulting Fee Shares issued to you in accordance with the terms of this agreement shall be freely tradable without restriction. Prior to the issuance and delivery of the Consulting Fee Shares to you, the Company hereby agrees and undertakes to register the Stock Plan and underlying Consulting Fee Shares with the SEC on Form S-8 under the Securities Act, and under all applicable state securities or blue sky laws. The Company represents and warrants to you that it is in compliance with all Securities Act requirements for use of Form S-8 and the Stock Plan and Consulting Fee Shares can be registered with the SEC by a filing of a Form S-8 with the SEC prior to the issuance and delivery of the Consulting Fee Shares to you. 3. The Company agrees to issue and deliver to you certificates representing the Retention Bonus Shares only as follows: (a) Voluntary Termination or Termination With Cause - If, at any time during the Adjustment Period, you: (i) voluntarily terminate your employment with the Company, or (ii) are involuntarily terminated by the Company for "cause", as determined by the board of directors of the Company in its reasonable discretion, you will forfeit any and all of your rights to the Retention Bonus Shares and the Cash Reduction Amount shall remain in full force and effect. -2- (b) Involuntary Termination Without Cause - If, at any time during the Adjustment Period, you are involuntarily terminated by the Company without cause (e.g., due to a general reduction in employees by the Company) your Retention Bonus Shares will automatically be issued to you upon such termination. (c) Change of Control - If, at any time during the Adjustment Period, a "Change of Control" (as defined below) event occurs, your Retention Bonus Shares will automatically be issued to you on the date of the Change of Control. For purposes of this agreement, Change of Control means (A) a sale of all or substantially all of the assets of the Company; (B) a merger or consolidation in which the stockholders of the Company immediately before such merger or consolidation own, immediately after the merger or consolidation, less than 50% of the voting power of the surviving entity; or (C) any transaction or series of related transactions in which in excess of 50% of the Company's voting power is transferred. (d) Continued Employment - If you are employed by the Company during the entire Adjustment Period, the Retention Bonus Shares will automatically be issued to you for the Adjustment Period. 4. You acknowledge, represent and warrant to the Company that: (a) Your receipt of the Shares are speculative and involves the risk of loss of the entire value of the Shares and you may not be able to liquidate the Shares readily in the event of an emergency. You understand the risks associated with this agreement and your agreement to accept Shares as compensation and are able to bear those risks. You have a sufficient net worth to sustain a loss of the entire value of the Shares in the event such a loss should occur. (b) You have such knowledge and expertise in financial and business matters that you are capable of evaluating the merits and risks involved in receiving the Shares in lieu of cash compensation. You are aware that your receipt of the Shares may be subject to applicable withholding taxes as set forth in the Stock Plan. (c) In making your decision to receive the Shares, you have relied upon independent investigations and due diligence performed by you regarding the business of the Company. You are not relying upon any representations or warranties made by or on behalf of the Company. (d) You understand that the market price of the Common Stock is volatile and can increase or decrease and, as a result, if you do not immediately sell the Shares or you determine to hold the Shares for speculative purposes, the Shares may decline to a market value that is less than the amount of the Adjusted Consulting Fees or the Cash Reduction Amount, as applicable. -3- (e) You are aware that the Company is relying on these representatives in entering into this agreement. 5. Except as set forth above, the terms and conditions of your employment shall remain in full force and effect. You acknowledge and agree that this letter agreement does not constitute an agreement by us to employ you for a specific duration. The terms and conditions of your employment will continue to be governed by such policies and directives as we may implement, modify or terminate at any time. Your employment relationship with us throughout your employment will continue to be that of an employee at-will. Accordingly, you are free to resign at any time, for any reason. Similarly, we may conclude our employment relationship with you at any time, with or without cause and with or without prior notice. Please acknowledge your agreement to the above by signing a copy this letter where indicated below and returning an executed copy to the undersigned. Very truly yours, Ramp Corporation By: --------------------------------------------- Name: Andrew Brown Title: President and Chief Executive Officer ACKNOWLEDGED AND AGREED TO THIS ____ DAY OF JUNE, 2004: - ----------------------------------- -4- EX-4 23 exhb4-22.txt 4.22 Exhibit 4.22 AGREEMENT FOR PAYMENT OF ACCOUNT -------------------------------- AGREEMENT FOR PAYMENT OF ACCOUNT dated as of Date (this "Agreement"), by and between RAMP CORPORATION, a Delaware corporation ("Ramp"), and Company Name, a _________ corporation ("Company Name"). WHEREAS, Ramp wishes to reach an agreement on a payment plan to compensate Company Name for the balance owed to Company Name of $_________as of Date; and WHEREAS, Ramp and Company Name have reached agreement on the terms for the satisfaction of such balances owing to Company Name. NOW, THEREFORE, for good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Payment of Account. The total unpaid balance of the account owed by Ramp to Company Name, including, but not limited to, all services and expenses provided by Company Name to Ramp from Date through and up to Date, is for all purposes agreed by the parties to be $____________(the "Past Due Balance"). Company Name hereby agrees to accept and receive as payment for the Past Due Balance a stock payment (a "Stock Payment") to be paid by Ramp on Date. Ramp and Company Name will accept as payment in full the issuance of shares of Ramp common stock, par value $0.01 per share (the "Common Stock") priced at the average of the closing bid prices from the prior week as provided for herein (the "Stock Grants"). 2. Company Name Representations. Company Name represents and warrants to Ramp that (a) it is an "accredited investor", which is defined under Rule 501(a)(3) of the Securities Act of 1933, as amended (the "Act"), as a corporation with total assets in excess of $5,000,000; (b) it is acquiring the shares of Common Stock issued in respect of the Stock Grant for its own account and for investment purposes only; (c) it has no present intention to distribute any of such shares publicly and has no present agreement, understanding or arrangement to subdivide, sell, assign, transfer or otherwise dispose of all or any part of such shares subscribed for to any other person or entity. Notwithstanding the above, it is acknowledged that Company Name may publicly sell the shares in the open market without restriction through its broker if a registration statement covering the shares is declared effective (and remains effective at the time of sale) by the Commission. Company Name acknowledges that Ramp will be relying on the representations and warranties of Company Name set forth in this Section 2 in issuing the Common Stock to Company Name under an exemption from registration under the Act. 3. Company Name Release. Provided Ramp is not in breach under the terms of this Agreement, Company Name shall forebear and suspend any legal, equitable or other action against Ramp for collection of the Past Due Balance. Upon execution of this Agreement Company Name will release Ramp, its subsidiaries, officers, directors, employees, agents, successors and assigns from any and all claims, damages, liabilities, actions or causes of action for money owed by Ramp to Company Name, its subsidiaries, officers, directors, employees, agents, successors and assigns for services rendered through the date of this Agreement and thereafter in any regard relating to the Past Due Balance. 4. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the law of the State of New York, without regard to New York's conflicts of law principles. This Agreement shall not be interpreted or construed with any presumption against the party that caused this Agreement to be drafted. Company Name and Ramp hereby consent to the jurisdiction of the Federal District Court of the Southern District of New York with respect to any action, suit or other proceeding arising out of or relating to this Agreement. 5. Miscellaneous. (a) This Agreement may not be amended, modified or waived, except by an instrument in writing signed by each of the parties hereto. This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof. 2 (b) Should there be any conflict between the terms and provisions of the Master Agreement and this Agreement, the terms and provisions of this Agreement shall govern and be controlling. (c) This Agreement may not be assigned by either party without the prior written consent of the Company Name hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their authorized officers as of the date first written above. RAMP CORPORATION Company Name By: ___________________________ By: ___________________________ Name: ___________________________ Name: ___________________________ Title: ___________________________ Title: ___________________________ 3 EX-4 24 exhb4-23.txt 4.23 Exhibit 4.23 REGISTRATION RIGHTS AGREEMENT ----------------------------- This Registration Rights Agreement (this "Agreement") is made and entered into as of July 14, 2004, by and among Ramp Corporation, a Delaware corporation (the "Company"), and the purchasers listed on Schedule I hereto (the "Purchasers"). This Agreement is being entered into pursuant to the Note and Warrant Purchase Agreement, dated as of the date hereof among the Company and the Purchasers (the "Purchase Agreement"). The Company and the Purchasers hereby agree as follows: 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Advice" shall have meaning set forth in Section 3(m). "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, "control," when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms of "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. "Board" shall have the meaning set forth in Section 3(n). "Business Day" means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the state of New York generally are authorized or required by law or other government actions to close. "Closing Date" means the date of the closing of the purchase and sale of the Note and Warrants pursuant to the Purchase Agreement. "Commission" means the Securities and Exchange Commission. "Common Stock" means the Company's Common Stock, par value $0.001 per share. "Conversion Shares" means the shares of Common Stock issuable upon conversion of, or otherwise in respect of, the Note. "Effectiveness Date" means with respect to the Registration Statement the earlier of the ninetieth (90th) day following the Filing Date or the date which is within five (5) days of the date on which the Commission informs the Company that the Commission (i) will not review the Registration Statement or (ii) that the Company may request the acceleration of the effectiveness of the Registration Statement and the Company makes such request. "Effectiveness Period" shall have the meaning set forth in Section 2. "Event" shall have the meaning set forth in Section 7(e). "Event Date" shall have the meaning set forth in Section 7(e). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Filing Date" means the date the Registration Statement is filed which date shall be on or before the date that is thirty (30) days following the Closing Date. "Holder" or "Holders" means each of the Purchasers and any transferee of any of them to whom Registrable Securities have been transferred in accordance with this Agreement, other than a transferee to whom Registrable Securities have been transferred pursuant to a Registration Statement under the Securities Act or Rule 144 or Regulation S under the Securities Act (or any successor rule thereto). "Indemnified Party" shall have the meaning set forth in Section 5(c). "Indemnifying Party" shall have the meaning set forth in Section 5(c). "Losses" shall have the meaning set forth in Section 5(a). "Note" means the Convertible Promissory Notes in the aggregate principal amount of $4,200,000 issued to the Purchasers by the Company under the Purchase Agreement and convertible into shares of Common Stock at a conversion price of $0.30 cents per share. "Person" means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "Prospectus" means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities -2- covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus. "Registrable Securities" means the Conversion Shares and the Warrant Shares; provided, however, that Registrable Securities shall include (but not be limited to) a number of shares of Common Stock equal to no less than 100% of the maximum number of shares of Common Stock which would be issuable upon conversion of the Note and upon exercise of the Warrants, assuming such conversion and exercise occurred on the Closing Date or the Filing Date, whichever date would result in the greater number of Registrable Securities. Such registered shares of Common Stock shall be allocated among the Holders pro rata based on the total number of Registrable Securities issued or issuable as of each date that a Registration Statement, as amended, relating to the resale of the Registrable Securities is declared effective by the Commission. Notwithstanding anything herein contained to the contrary, if the actual number of shares of Common Stock issuable upon conversion of the Note and upon exercise of the Warrants exceeds 100% of the number of shares of Common Stock issuable upon conversion of the Note and upon exercise of the Warrants based upon a computation as at the Closing Date or the Filing Date, the term "Registrable Securities" shall be deemed to include such additional shares of Common Stock. "Registration Statement" means the registration statements and any additional registration statements contemplated by Section 2, including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 158" means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended. "Special Counsel" means any special counsel to the Holders, for which the Holders will be reimbursed by the Company pursuant to Section 4. "Warrants" means the Company's Warrants issued to the Purchasers under the Purchase Agreement and representing the right to purchase an aggregate of 37,470,584 shares of Common Stock. -3- "Warrant Shares" means the shares of Common Stock issuable upon exercise of, or otherwise in respect of, the Warrants. 2. Shelf Registration. On or prior to the Filing Date the Company shall prepare and file with the Commission a "shelf" Registration Statement covering all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith). Except as set forth on Schedule II, the Company shall (i) not permit any securities other than the Registrable Securities to be included in the Registration Statement and (ii) use its best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the Effectiveness Date, and to keep such Registration Statement continuously effective under the Securities Act until such date as is the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) the date on which the Registrable Securities may be sold without any restriction pursuant to Rule 144 as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company's transfer agent to such effect (the "Effectiveness Period"). If at any time and for any reason, an additional Registration Statement is required to be filed because at such time the actual number of shares of Common Stock into which the Note is convertible and the Warrants are exercisable exceeds the number of shares of Registrable Securities remaining under the Registration Statement, the Company shall have twenty (20) Business Days to file such additional Registration Statement, and the Company shall use its commercially reasonable efforts to cause such additional Registration Statement to be declared effective by the Commission as soon as possible, but in no event later than sixty (60) days after filing. 3. Registration Procedures. In connection with the Company's registration obligations hereunder, the Company shall: (a) Prepare and file with the Commission, on or prior to the Filing Date, a Registration Statement on Form S-3 (or if the Company is not then eligible to register for resale the Registrable Securities on Form S-3 such registration shall be on another appropriate form in accordance herewith) including the method or methods of distribution thereof as specified by the Holders (except if otherwise directed by the Holders) and in accordance with applicable law, and cause the Registration Statement to become effective and remain effective as provided herein; provided, however, that not less than three (3) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall (i) furnish to the Holders and any Special Counsel, copies of all such documents proposed to be filed, which documents will be subject to the review of such Holders and such Special Counsel, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of -4- counsel to such Holders, to conduct a reasonable review of such documents. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities or any Special Counsel shall reasonably object in writing within three (3) Business Days of their receipt thereof. (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as promptly as possible, but in no event later than ten (10) business days, to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented. (c) Notify the Holders of Registrable Securities and any Special Counsel as promptly as possible (and, in the case of (i)(A) below, not less than three (3) days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than two (2) Business Days following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is filed; (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation of any Proceeding for such purpose; and (v) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. -5- (d) Use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of, as promptly as possible, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction. (e) If requested by the Holders of a majority in interest of the Registrable Securities, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment. (f) Furnish to such Holder and any Special Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. (g) Promptly deliver to each Holder and any Special Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and subject to the provisions of Section 3(m), the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders and any Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction where it is not then so subject. (i) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement, which certificates, to the extent permitted by the Purchase Agreement and applicable federal and state securities laws, shall be free of all restrictive legends, and to enable such -6- Registrable Securities to be in such denominations and registered in such names as any Holder may request at least two (2) Business Days prior to any sale of Registrable Securities. (j) Upon the occurrence of any event contemplated by Section 3(c)(v), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) Use its commercially reasonable efforts to cause all Registrable Securities relating to such Registration Statement to be listed on the American Stock Exchange, OTC Bulletin Board, or any other securities exchange, quotation system or market, if any, on which similar securities issued by the Company are then listed as and when required pursuant to the Purchase Agreement. (l) Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158. (m) The Company may require each selling Holder to furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, Prospectus, or any amendment or supplement thereto, and the Company may exclude from such registration the Registrable Securities of any such Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. Each Holder covenants and agrees that (i) it will not sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated in Section 3(g) and notice from the Company that such Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will comply with the prospectus delivery requirements of the Securities Act as applicable to them in connection with sales of Registrable Securities pursuant to the Registration Statement. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(n), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement -7- contemplated by Section 3(j), or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. (n) If (i) there is material non-public information regarding the Company which the Company's Board of Directors (the "Board") reasonably determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company's best interest to disclose, then the Company may postpone or suspend filing or effectiveness of a registration statement for a period not to exceed 15 consecutive days, provided that the Company may not postpone or suspend its obligation under this Section 3(n) for more than 45 days in the aggregate during any 12 month period; provided, however, that no such postponement or suspension shall be permitted for consecutive 15 day periods, arising out of the same set of facts, circumstances or transactions. 4. Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company, except as and to the extent specified in Section 4, shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the American Stock Exchange and each other securities exchange or market on which Registrable Securities are required hereunder to be listed, (B) with respect to filings required to be made with the National Association of Securities Dealers, Inc. and the NASD Regulation, Inc. and (C) in compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel for the Holders in connection with Blue Sky qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Holders of a majority of Registrable Securities may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) reasonable fees and disbursements of counsel for the Company and Special Counsel for the Holders, in the case of the Special Counsel, up to a maximum amount of $5,000, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company's independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this -8- Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. 5. Indemnification. (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto), in the light of the circumstances under which they were made, not misleading, except to the extent, but only to the extent, that such untrue statements or omissions arise out of or are based upon information regarding the Holders or such other Indemnified Party furnished in writing to the Company by a Holder expressly for use therein, which information was reasonably relied on by the Company for use therein or to the extent that such information relates to a Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by a Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, the directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto), in the light of the circumstances under which they were made, not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder or other Indemnified Party -9- to the Company expressly for use therein and that such information was reasonably relied upon by the Company for use therein, or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or any amendment or supplement thereto. (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the "Indemnifying Party) in writing, and the Indemnifying Party shall be entitled to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such parties shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party is a party and indemnity has been sought hereunder, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten (10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnified Party shall reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). -10- (d) Contribution. If indemnification under Section 5(a) or 5(b) is owed but unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying, Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties pursuant to federal or state law. 6. Rule 144. As long as any Holder owns the Note, Conversion Shares, Warrants or Warrant Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. As long as any Holder owns the Note, Conversion Shares, Warrants or Warrant Shares, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and quarterly financial statements, together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to be included in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as any other information required thereby, in the time period that such filings would have been required to have been made under the Exchange Act. The Company -11- further covenants that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Person to sell Conversion Shares and Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act, including providing any legal opinions relating to such sale pursuant to Rule 144. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements. 7. Miscellaneous. (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, such Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has, as of the date hereof entered into and currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority of the then outstanding Registrable Securities, the Company shall not grant to any Person the right to request the Company to register any securities of the Company under the Securities Act unless the rights so granted are subject in all respects to the prior rights in full of the Holders set forth herein, and are not otherwise in conflict with the provisions of this Agreement. (c) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement, and the Company shall not after the date hereof enter into any agreement providing such right to any of its securityholders, unless the right so granted is subject in all respects to the prior rights in full of the Holders set forth herein, and is not otherwise in conflict with the provisions of this Agreement. (d) Piggy-Back Registrations. If at any time when there is not an effective Registration Statement covering (i) Conversion Shares or (ii) Warrant Shares, the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to each holder of Registrable Securities -12- written notice of such determination and, if within thirty (30) days after receipt of such notice, or within such shorter period of time as may be specified by the Company in such written notice as may be necessary for the Company to comply with its obligations with respect to the timing of the filing of such registration statement, any such holder shall so request in writing, (which request shall specify the Registrable Securities intended to be disposed of by the Purchasers), the Company will use its commercially reasonable efforts to cause the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to such holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay expenses in accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 7(d) for the same period as the delay in registering such other securities. The Company shall use its commercially reasonable efforts to include in such registration statement all or any part of such Registrable Securities such holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if the Company after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities would materially adversely affect the offering contemplated in such registration statement, and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of the Holders, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced pro-rata among such Holders (based upon the number of Registrable Securities requested to be included in the registration), if the Company after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if the Company after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if Securities are being offered for the account of other persons or entities as well as the Company, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than the Company). (e) Failure to File Registration Statement and Other Events. The Company and the Purchasers agree that the Holders will suffer damages if the Registration Statement is not filed on or prior to the Filing Date and not declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Time. The Company and the Holders further agree that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if, except as set forth in Section 3(n), (A) the Registration Statement is not filed on or prior to the Filing Date, or (B) the -13- Registration Statement is not declared effective by the Commission on or prior to the Effectiveness Date (or in the event an additional Registration Statement is filed because the actual number of shares of Common Stock into which the Note is convertible and the Warrants are exercisable exceeds the number of shares of Common Stock initially registered is not filed and declared effective with the time periods set forth in Section 2), or (C) the Company fails to file with the Commission a request for acceleration in accordance with Rule 461 promulgated under the Securities Act within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be "reviewed," or is not subject to further review, or (D) the Registration Statement is filed with and declared effective by the Commission but thereafter ceases to be effective as to all Registrable Securities at any time prior to the expiration of the Effectiveness Period, without being succeeded immediately by a subsequent Registration Statement filed with and declared effective by the Commission in accordance with Section 2 hereof or (E) trading in the Common Stock shall be suspended or if the Common Stock is delisted from the American Stock Exchange, New York Stock Exchange, Nasdaq, or the OTC Bulletin Board for any reason for more than three Business Days in the aggregate without subsequent listing on another securities exchange, quotation system or market (any such failure or breach being referred to as an "Event," and for purposes of clauses (A) and (B) the date on which such Event occurs, or for purposes of clause (C) the date on which such five Business Day period is exceeded, or for purposes of clause (D) after more than fifteen Business Days, or for purposes of clause (E) the date on which such three Business Day period is exceeded, being referred to as "Event Date"), the Company shall pay an amount as liquidated damages to each Holder, at the Company's option, in cash or shares of Common Stock registered with the Commission, equal to: (i) one percent (1.0%) for each calendar month or portion thereof of the Holder's initial investment in the Note from the Event Date through the two month anniversary of the Event Date, and (ii) two percent (2.0%) for each calendar month or portion thereof of the Holder's initial investment in the Note from the two month anniversary of the Event Date until the applicable Event is cured, less any amount of Note that has been converted or redeemed by such Holder. If the Company elects to pay in shares of Common Stock, the number of such shares of Common Stock to be issued to the Holders pursuant to this paragraph (e) shall be based on the liquidated damage amount divided by the closing bid price for the five trading days prior to such Event Date and shall be issuable promptly upon receipt by the Company of a written demand from a Holder made on or after the Event Date. (f) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each of the Holders. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. -14- (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., New York City time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., New York City time, on any date and earlier than 11:59 p.m., New York City time, on such date, (iii) the Business Day following the date of mailing, if sent by overnight delivery by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to each Holder at its address set forth under its name on Schedule 1 attached hereto, or with respect to the Company, addressed to: Ramp Corporation 33 Maiden Lane New York, NY 10038 Attention: President Tel. No.: (212) Fax No.: (212) or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Company shall be sent to Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405 Lexington Avenue, New York, NY, 10174 Attention: Martin Eric Weisberg, Esq., Tel. No.: (212) 704-6050, Fax No.: (212) 704-6288. (h) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its successors and assigns. Permitted assigns of the Company shall include any person or entity which acquires all or substantially all of the capital stock or assets of the Company or is the successor to the Company by merger, consolidation or other similar transaction. No Holder shall assign its rights hereunder, by operation of law or otherwise, without the prior written consent of the Company. (i) Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be automatically assignable by each Holder to any Affiliate of such Holder or any other Holder or Affiliate of any other Holder of all or a portion of the Note or the Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice -15- contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement, (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement, and (vi) at least 100,000 shares of Registrable Securities (appropriately adjusted for any stock dividend, split or combination of the Common Stock) are being transferred to such transferee or assignee in connection with such assignment of rights. In addition, each Holder shall have the right to assign its rights hereunder to any other Person with the prior written consent of the Company, which consent shall not be unreasonably withheld. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns. (j) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. (k) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law thereof. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted. (l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (m) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (n) Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. (o) Shares Held by the Company and its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than any Holder or transferees or successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -16- IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized persons as of the date first indicated above. RAMP CORPORATION: By: ------------------------------------- Name: Title: COTTONWOOD LTD. By: ------------------------------------- Name: Title: WILLOW BEND MANAGEMENT LTD. By: ------------------------------------- Name: Title: -17- Schedule I ---------- Cottonwood Ltd. Willow Bend Management Ltd. -18- Schedule II ----------- Other Registration Rights Hilltop Services, Ltd. Redwood Capital Partners, Inc. Richard Rosenblum David Stefansky Shares of Common Stock held by other persons as may be mutually agreed upon between the Company and the Purchasers -19- EX-4 25 exhb4-24.txt 4.24 Exhibit 4.24 SETTLEMENT AGREEMENT -------------------- This Settlement Agreement is made and entered into, by and between Company Name and Ramp Corporation with respect to a certain dispute between the parties relating to Name/Type of Services Rendered to Ramp Corporation. The parties hereby agree that Company Name provided Name/Type of Services Rendered to Ramp Corporation (and/or its affiliates) totaling $________. Ramp Corporation hereby agrees to make full payment on that debt in accordance with the Payment Agreement provided herein. Payment Agreement - ----------------- (1) Ramp Corporation agrees to pay the debt totaling $__________in full, plus associated costs and fees in accordance with the terms and conditions outlined below. (a) Upon execution of this Settlement Agreement, Ramp Corporation agrees to issue Number of Shares Spelled Out (number of shares) shares of stock to Company Name (or its attorney on its behalf). (b) Ramp Corporation shall pay for all brokerage costs and fees associated to complete this transaction. (c) After the stock is sold and Company Name collects its proceeds from the sale, in the event the debt is not paid in full to Company Name, Ramp shall pay in cash or stock, the balance remaining. This agreement may not be modified or altered except upon the written consent of all parties hereto. The Execution Date of the Agreement shall be the date on which the last party to do so signs this agreement. COMPANY NAME RAMP CORPORATION By: ______________________________ By:_______________________________ Print:____________________________ Print:____________________________ Its::_____________________________ Its:______________________________ Date:_____________________________ Date:____________________________ EX-4 26 exhb4-25.txt 4.25 - SETTLEMENT AGREEMENT Exhibit 4.25 SETTLEMENT AGREEMENT AND RELEASE This SETTLEMENT AGREEMENT AND RELEASE dated as of August 20, 2004 (this "Settlement Agreement"), by and between Ramp Corporation, a Delaware corporation ("Ramp") and Clinton Group, Inc, a Delaware corporation ("Clinton"). WHEREAS, on May 28, 2004, Ramp, as sub-subtenant, received written notice (the "Notice") from Clinton, as subtenant and sub-sub landlord stating, in relevant part, that Ramp is in default under that certain Agreement of Sublease (the "Sublease Agreement"), dated as of April 15, 2004, by and between Clinton and Ramp for the premises located at on the 31st Floor at 55 Water Street, New York, New York; WHEREAS, on or about July 16, 2004, Clinton, as plaintiff, filed a summons and complaint against Ramp, as defendant, with the Supreme Court of the State of New York, County of New York (Index No. 110371/04) (the "Summons and Complaint") alleging, among other things, breach of the Sublease Agreement for non-payment of the security deposit, one month's rent and damages through the date of trial in an amount up to seven million dollars; WHEREAS, the Summons and Complaint has not yet been served upon Ramp and an answer is not yet due; WHEREAS, without admitting any wrongdoing or liability, or acknowledging the validity of any claim, asserted or unasserted, including, without limitation, the due authorization, valid execution or validity of the Sublease Agreement, Ramp and Clinton have reached an amicable settlement and has agreed to resolve all claims and other disputes between them arising out of, and relating to, the Summons and Complaint, the Sublease Agreement and any and all transactions contemplated thereby, in the manner set forth herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein and the other good and valuable consideration as set forth in this Settlement Agreement, the legal adequacy of which is hereby acknowledged, the parties agree as follows: 1. No Admission of Fault. Each of Ramp and Clinton acknowledges and agrees that it is entering into this Settlement Agreement in order to settle and resolve all disputed matters among them arising out of or in any way relating to the Summons and Complaint, the Sublease Agreement and any and all transactions contemplated thereby, and each of Ramp and Clinton is not admitting any wrongdoing or liability on its part in any way relating to such matters, and no inference regarding any such wrongdoing or liability is intended by virtue of the parties entering into this Settlement Agreement, including, without limitation, the due authorization, valid execution or validity of the Sublease Agreement. 2. Cash and Share Consideration by Ramp to Clinton. Upon execution and delivery of this Settlement Agreement by each of Clinton and Ramp, (i) Ramp hereby agrees to pay Clinton the amount of USD $75,000, payable in immediately available funds by wire transfer or delivery of a certified check and (ii) Ramp hereby agrees to issue to Clinton 1,150,000 "restricted" shares of Ramp's common stock, par value $.001 per share (the "Shares,"). Ramp agrees that the Shares shall be included for registration on Ramp's next Registration Statement on Form S-3 to be filed with the Securities and Exchange Commission (the "SEC") on or before August 30, 2004. Clinton acknowledges and agrees that its name, address, and designation of this settlement shall be included on the Registration Statement. Upon the effectiveness of the Registration Statement with the SEC, the Shares shall be freely tradable and shall not be subject to any lock-up provisions or other restrictions on resale by Clinton. 3. Deferred Consideration by Ramp to Clinton. In addition to the cash and Share consideration set forth in Section 2 above, Ramp hereby agrees to pay to Clinton the principal amount of USD $150,000 (the "Note"), bearing interest at the prime rate per annum as published in the Wall Street Journal from time to time, with principal amount and interest due and payable in full on or before the earlier to occur of: (i) the one (1) year anniversary of the date of execution of this Settlement Agreement, or (ii) the closing of an equity or debt financing transaction or series of financing transactions pursuant to which Ramp raises total gross proceeds equal to at least USD $5,000,000. 4. Withdrawal and Termination of Summons and Complaint. Upon execution and delivery of this Settlement Agreement by Clinton and Ramp, Clinton agrees to immediately withdraw and terminate the Summons and Complaint with prejudice and file a Stipulation of Discontinuance with the Supreme Court of the State of New York, County of New York with respect to the Summons and Complaint. 5. Mutual Indemnification by Clinton and Ramp. (a) Upon execution and delivery of this Settlement Agreement, Clinton agrees to indemnify, defend, and hold harmless each Company Released Party (as defined below) from and against 2 any and all causes of action, claims, and demands of whatsoever kind on account of all known, and unknown injuries, losses, and damages allegedly sustained by a Company Released Party to the extent resulting from, arising from, or in any way connected with any and all claims against Ramp that are made by Clinton under the Summons and Complaint, Sublease Agreement or the transactions contemplated thereby (it being understood that Clinton and Ramp intend all such claims to have been resolved and settled pursuant to this Settlement Agreement). Nothing herein shall require Clinton to establish a reserve against any such potential claim, unless and until an actual claim is asserted and made known to Clinton. Nothing contained herein shall be construed or deemed to include an indemnification from Clinton in favor of a Company Released Party in connection with the enforcement of the terms of this Settlement Agreement. (b) Upon execution and delivery of this Settlement Agreement, Ramp agrees to indemnify, defend, and hold harmless each Clinton Released Party (as defined below) from and against any and all causes of action, claims, and demands of whatsoever kind on account of all known, and unknown injuries, losses, and damages allegedly sustained by a Clinton Released Party to the extent resulting from, arising from, or in any way connected with any and all claims against Clinton that are made by Ramp under the Sublease Agreement or the transactions contemplated thereby (it being understood that Clinton and Ramp intend all such claims to have been resolved and settled pursuant to this Settlement Agreement). Nothing herein shall require Ramp to establish a reserve against any such potential claim, unless and until an actual claim is asserted and made known to Ramp. Nothing contained herein shall be construed or deemed to include an indemnification from Ramp in favor of a Clinton Released Party in connection with the enforcement of the terms of this Settlement Agreement. 6. Release by Clinton of Ramp. Upon execution and delivery of this Settlement Agreement, Clinton, for itself and on behalf of its subsidiaries and affiliates, hereby releases and forever discharges Ramp, together with its subsidiaries, affiliates, successors and assigns, as well as its present and former directors, officers, employees, shareholders, agents, attorneys and other representatives and the successors, assigns and personal representatives of each of them (each, a "Company Released Party"), from any and all claims, suits, debts, liens, liabilities, losses, causes of action, rights, damages (whether actual, compensatory, consequential or punitive), demands, obligations, promises, costs and expenses (including, without limitation, attorneys' fees and 3 expenses and the fees and expenses of other professionals and experts) of every kind, nature and description, whether in law or in equity, whether known or unknown, or known in the future, fixed or contingent, billed or unbilled, suspected, disclosed or undisclosed, claimed or concealed, from the beginning of time through the date of this Settlement Agreement, which Clinton, for itself and subsidiaries and affiliates, could assert against any Company Released Party relating to or arising out of the Summons and Complaint, the Sublease Agreement, the transactions contemplated thereby, or otherwise. 7. Release by Ramp of Clinton. Upon execution and delivery of this Settlement Agreement, Ramp, for itself and on behalf of its subsidiaries and affiliates hereby releases and forever discharges Clinton, and its respective subsidiaries, affiliates, successors and assigns, as well as its respective present and former managers, directors, officers, employees, agents, attorneys and other representatives and the successors, assigns and personal representatives (each, a "Clinton Released Party"), from any and all claims, suits, debts, liens, liabilities, losses, causes of action, rights, damages (whether actual, compensatory, consequential or punitive), demands, obligations, promises, costs and expenses (including, without limitation, attorneys' fees and expenses and the fees and expenses of other professionals and experts) of every kind, nature and description, whether in law or in equity, whether known or unknown, or known in the future, fixed or contingent, billed or unbilled, suspected, disclosed or undisclosed, claimed or concealed, from the beginning of time through the date of this Settlement Agreement, which Ramp could assert against any Clinton Released Party relating to or arising out of the Summons and Complaint, the Sublease Agreement, the transactions contemplated thereby, or otherwise. 8. Waiver. The parties hereby waive and assume the risk of any and all claims for loss and damages which exist as of this date, including but not limited to those set forth in this Settlement Agreement but of which they are unaware, whether through ignorance, oversight, error, negligence, or otherwise in which, if known, would materially affect their decision to enter into this 4 Settlement Agreement. The parties hereby expressly assume the risk that they may suffer damages in the future as a result of any matter referred to herein, and they hereby waive all rights or benefits which they have now, or in the future may have, under any applicable law. The parties acknowledge that there is a risk of the damages which they believe they have suffered or will suffer may turn out to be other than or greater than those now known, suspected, or believed to be true. In addition, the cost and damages they have incurred or have suffered may be greater than or other than those known now. Facts on which they have been relying in entering into this Settlement Agreement may later turn out to be other than or different from those now known, suspected or believed to be true. The parties acknowledge that in entering into this Settlement Agreement, they have expressed that they agree to accept the risk of any such possible unknown damages, claims, facts, demands, actions, and causes of action. The parties acknowledge and present that in waiving all rights and benefits they may have as set forth herein, they have had the advice, or have had the opportunity to have the advice, of counsel and independent consultants and further represent, warrant, and guarantee that this Settlement Agreement shall remain in full force and effect notwithstanding current and such possible changes or differences of material fact. This relief shall apply to any and all claims other than for breach of this Settlement Agreement. 9. Representations, Warranties and Covenants of Ramp. Ramp hereby represents and warrants to Clinton as follows: (a) Ramp has the corporate power and authority to execute, deliver and perform this Settlement Agreement. (b) The execution, delivery and performance of this Settlement Agreement has been duly authorized by Ramp in accordance with all requisite corporate power and authority. (c) No consents or approvals of, notices to or filings with, any person or entity are required to be obtained by Ramp in connection with its execution, delivery and performance of this Settlement Agreement, except for Ramp's filing of a Registration Statement on Form S-3 with the SEC pursuant to the terms and conditions of Section 2 of this Settlement Agreement. (d) Ramp has received independent legal advice from attorneys of its choice with respect to the terms and provisions of this Settlement Agreement, the advisability of entering into this Settlement Agreement and of the consequences of entering into this Settlement Agreement. (e) This Settlement Agreement constitutes a legal, valid and binding obligation of Ramp, enforceable against Ramp in accordance with its terms, except as enforcement may be limited by (i) applicable bankruptcy, 5 insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (f) The execution, delivery and performance of this Settlement Agreement by Ramp does not (i) violate or contravene the certificate of incorporation or by-laws of Ramp; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Ramp or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Ramp; or (iv) violate any law or regulation applicable to Ramp. (g) Ramp has no knowledge or reason to believe that the Registration Statement on Form S-3 will not be declared effective by the SEC, subject to any written comments from the SEC that Ramp may receive following the filing of same. (h) Ramp has no plans to file for bankruptcy protection, and has no knowledge of any efforts by any creditors of Ramp to file a petition for involuntary bankruptcy against Ramp. (i) If there is any bankruptcy filing by or against Ramp, and any cash payments, Shares, or payments under the Note tendered hereunder or to be tendered hereunder are not received by Clinton, or are otherwise required to be disgorged to Ramp ("Unreturned Payment(s)"), then any such Unreturned Payment(s) shall be deemed to have never been made, and Clinton shall have all rights to pursue a claim, subject to any defenses and/or counterclaims of Ramp, in a bankruptcy proceeding for lease rejection damages as if this Settlement Agreement had never been made, except that any payments made pursuant to this Settlement Agreement that are not required to be disgorged shall be credited against Clinton's damages claim; provided, however, that the maximum dollar amount that Clinton shall be entitled to recover shall be equal to $340,000. For purposes of this Section 9(i), Ramp and Clinton agree that the Shares shall have an imputed agreed upon valuation of $0.10 cents per Share. (j) Ramp agrees to cooperate with Clinton with respect to any potential claim by Colliers ABR, Inc. for brokers' commissions due in connection with the Sublease Agreement. Such cooperation shall include, but not be limited to, providing affidavits or witnesses for deposition or trial. 6 10. Representations and Warranties of Clinton. Clinton hereby represents and warrants to Ramp as follows: (a) Clinton has the corporate power and authority to execute, deliver and perform this Settlement Agreement. (b) The execution, delivery and performance of this Settlement Agreement has been duly authorized by Clinton in accordance with all requisite corporate power and authority. (c) No consents or approvals of, notices to or filings with, any person or entity are required to be obtained by Clinton in connection with its execution, delivery and performance of this Settlement Agreement. (d) Clinton has received independent legal advice from attorneys of its choice with respect to the terms and provisions of this Settlement Agreement, the advisability of entering into this Settlement Agreement and of the consequences of entering into this Settlement Agreement. (e) This Settlement Agreement constitutes a legal, valid and binding obligation Clinton, enforceable in accordance with its terms against Clinton, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law). (f) The execution, delivery and performance of this Settlement Agreement by Clinton does not (i) violate or contravene the certificate of incorporation of Clinton; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Clinton or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Clinton; or (iv) violate any law or regulation applicable to Clinton. 7 (g) Clinton is an "accredited investor", which is defined under Rule 501(a)(3) of the Securities Act of 1933, as amended (the "Act"), as a corporation with total assets in excess of $5,000,000; (h) Clinton is acquiring the Shares for its own account and for investment purposes only; and (i) Clinton acknowledges that the Shares are "restricted", as that term is defined under Rule 144 of the Securities Act of 1933, as amended (the "Securities Act") has no present intention to distribute any of such Shares publicly and has no present agreement, understanding or arrangement to subdivide, sell, assign, transfer or otherwise dispose of all or any part of such shares subscribed for to any other person or entity. Notwithstanding the above, it is acknowledged that Clinton may publicly sell the Shares in the open market without restriction through its broker if a registration statement covering the Shares is declared effective (and remains effective at the time of sale) by the SEC pursuant to Section 2 hereof to the extent such sale is not otherwise prohibited by this Agreement. Clinton acknowledges that Ramp will be relying on the representations and warranties of Clinton set forth in this Section 10 in issuing the Shares to Clinton under an exemption from registration under the Securities Act. 11. Ownership of Claims. Each of Ramp and Clinton represents and warrants to the other, that it is the lawful and sole owner of the claims being released by it pursuant to this Settlement Agreement and it has not sold, transferred, assigned, pledged, hypothecated or otherwise encumbered any such claim. 12. Governing Law. This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State, without regard to any of its principles of conflicts of laws or other laws, which would result in the application of the laws of another jurisdiction. This Settlement Agreement shall be construed and interpreted without regard to any presumption against the party causing this Settlement Agreement to be drafted. 13. Notices. All notices, demands, consents, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Settlement Agreement or in connection with the transactions contemplated hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal 8 delivery service), (ii) if mailed certified or registered mail return receipt requested (with all costs having been prepaid), four (4) business days after being mailed, (iii) if delivered by an overnight courier of recognized international reputation (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service), or (iv) if delivered by facsimile transmission, on the business day of such delivery if sent by 5:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party's telecopier machine). If any notice, demand, consent, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 13), or the refusal to accept same, the notice, demand, consent, instruction or other communication shall be deemed received on the second business day after the notice is sent (as evidenced by a sworn affidavit of the sender). All such notices, demands, consents, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable: If to Ramp: Ramp Corporation 33 Maiden Lane, 5th Floor New York, NY 10038 Telephone: (212) 440-1548 Facsimile: (509) 757-4801 Attention: Chief Executive Officer with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, NY 10174 Telephone: (212) 704-6050 Facsimile: (212) 704-6288 Attention: Martin Eric Weisberg, Esq. If to Clinton: Clinton Group, Inc. 9 West 57th Street New York, NY 10019 Telephone: (212) 739-1828 Facsimile: (212) 377-4368 Attention: Ms. Wendy Ruberti 9 with a copy to: Stempel Bennett Claman & Hochberg, P.C. 675 Third Avenue New York, NY 10017 Telephone: (212) 681-6500 Facsimile: (212) 681-4041 Attention: Richard L. Claman, Esq. or to such other address as any party may specify by notice given to the other party in accordance with this Section 13. 14. Arbitration. Any disagreement, dispute, controversy or claim arising out of or relating to this Settlement Agreement shall be submitted to binding arbitration before the American Arbitration Association ("AAA"), in accordance with its rules of Commercial Arbitration. The decision of the arbitrator shall be final and binding upon the parties, and it may be entered in any court of competent jurisdiction. The arbitration shall take place in New York County, New York. The arbitrator shall be bound by the laws of the State of New York applicable to all relevant privileges and the attorney work product doctrine. Each party shall be required to provide the other party with copies of all documentation and other written, electronic or photographic materials that it intends to introduce into evidence at least ten (10) days in advance of the hearing date. The arbitrator shall have the power to grant equitable relief where applicable under New York law. The arbitrator shall issue a written opinion setting forth his or her decision and the reasons therefor within thirty (30) days after the arbitration proceeding is concluded. The obligation of the parties to submit any dispute arising under or related to this Settlement Agreement to arbitration as provided in this Section 14 shall survive the expiration or earlier termination of this Settlement Agreement. Notwithstanding the foregoing, a party may seek an injunction or other appropriate relief from a court of competent jurisdiction to preserve or protect the status quo with respect to any matter pending conclusion of the arbitration proceeding, but no such application to a court shall in any way be permitted to stay or otherwise impede the progress of the arbitration proceeding. Each party shall pay its own costs (including, without limitation, attorney's fees and disbursements) and expenses in connection with any arbitration proceeding; provided, however, the prevailing party shall be entitled to recover its reasonable attorney's fees and disbursements. Each of Ramp and Clinton hereby consent to the jurisdiction of the AAA in the State of New York for the purpose of any arbitration arising out of any of their obligations arising hereunder. 10 15. Miscellaneous. (a) No party may assign any of its rights or delegate any of its duties under this Settlement Agreement without the prior written consent of the other parties hereto; provided, however, that Ramp and/or Clinton may assign any of its rights or delegate any of its duties hereunder, by operation of law or otherwise, or in connection with a Change of Control (as defined below) and, following such Change of Control, this Settlement Agreement shall be enforceable by, among others, any direct or indirect parent or affiliate of Ramp or any direct or indirect holder of greater than 50% of the voting capital stock of Ramp. This Settlement Agreement shall be binding upon the successors and their respective representatives, subsidiaries, affiliates, successors, and permitted assigns of the parties and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. For purposes of this Settlement Agreement, a Change of Control shall be deemed to have occurred in any of the following events: (i) a merger of Ramp and/or Clinton with or into another entity (whether or not Ramp is the surviving corporation) resulting in a change of ownership of greater than 50% of the outstanding voting capital stock of Ramp and/or Clinton; (ii) a tender offer by a third party resulting in a change of ownership of not less than 50% of the outstanding voting capital stock of Ramp and/or Clinton; or (iii) the sale of all or substantially all of the assets of Ramp and/or Clinton to a third party. (b) Except as specifically provided in Sections 5, 6 and 7 of this Settlement Agreement, no party other than Ramp and Clinton shall be deemed intended or incidental beneficiaries of this Settlement Agreement; provided, however, that a party (a "Potential Acquiror") who enters into a definitive agreement with Ramp to engage in a transaction with Ramp which contemplates a Change of Control shall be deemed an intended third party beneficiary of this Settlement Agreement, including, without limitation, all of the representations, warranties and covenants contained herein, and shall be entitled to enforce this Settlement Agreement to the same extent as if the Potential Acquiror was a party hereto. (c) The provisions of this Settlement Agreement shall not be construed as a waiver of any party's right to bring suit to enforce the terms and provisions of this Settlement Agreement. (d) This Settlement Agreement contains a complete statement of all the arrangements, understandings and agreements among the parties with respect to the subject matter hereof, supersedes all other arrangements, understandings and agreements, whether written or oral, among them relating to such subject matter, all of which are merged herein. This Settlement Agreement cannot be altered, modified, waived or amended, except by an instrument in writing executed by each of the parties hereto. 11 (e) Section headings contained in this Settlement Agreement are included herein solely for convenience of reference only and are not intended to affect the interpretation or construction of any of the terms or provisions of this Settlement Agreement. (f) This Settlement Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which, when taken together shall constitute one and the same instrument. The facsimile signature of a party hereto shall constitute a valid and effective signature. [The remainder of this page has been intentionally left blank] 12 IN WITNESS WHEREOF each of the parties has duly executed this Settlement Agreement as of the date first above written. RAMP CORPORATION By: /s/ Mitchell Cohen --------------------------------- Name: Mitchell Cohen Title: Chief Financial Officer CLINTON GROUP, INC. By: /s/ Francis Ruchalski --------------------------------- Name: Francis Ruchalski Title: Director 13 EX-4 27 ex4_26s304.txt EX-4.26-SETTLEMENT AGREEMENT AND MUTUAL RELEASE Exhibit 4.26 SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release ("Agreement") is entered into by and among Ramp Corporation, a Delaware corporation ("Ramp"), LifeRamp Family Financial, Inc. ("LifeRamp") (Ramp and LifeRamp are hereinafter referred to collectively as the "Company Parties") and Locke Liddell & Sapp LLP, a Texas limited liability partnership (the "Firm"). RECITALS A. In April and May 2004, the Firm provided legal services to LifeRamp and invoiced LifeRamp $77,467.63 in May and June, 2004 for such services. B. The business of LifeRamp and Ramp have both benefited from the Firm's provision of legal services to LifeRamp. C. The Firm has agreed to accept 755,045 shares of registered Ramp Common Stock, $0.01 par value (the "Shares") in lieu of payment of its fees for legal services, and the Company Parties have agreed to issue such Shares to the Firm in lieu of such payment, subject to the terms and conditions set forth herein. D. The Company Parties and the Firm desire to settle all outstanding claims and potential claims between the Company Parties and the Firm. NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, and for good and valuable consideration, the adequacy and receipt of which is hereby acknowledged by all parties, the parties agree as follows: AGREEMENT 1. Payment of Account. The total unpaid balance of the account owed by the Company Parties to the Firm through the date hereof, including, but not limited to, all outstanding fees for services and expenses provided by the Firm to LifeRamp from April 2004 through the date hereof, is for all purposes agreed by the parties to be $77,467.63 (the "Total Due Balance"). The Firm hereby agrees to accept and receive as full payment and settlement for the Total Due Balance an aggregate of 755,045 "restricted" shares of common stock, par value $.01 per share, of Ramp to be issued by Ramp promptly after the execution of this Agreement. 2. Firm Representations. The firm represents and warrants to the Company Parties that (a) it is an "accredited investor," which is defined under Rule 501(a)((3) of the Securities Act of 1933, as amended (the "Act"), due to its being a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000, (b) it is acquiring the Shares for its own account and for investment purposes only; and (c) it has no present intention to distribute any of such Shares publicly and has no present agreement, understanding or arrangement to subdivide, sell, assign, transfer or otherwise dispose of all or any part of such Shares subscribed for to any other person or entity. Notwithstanding the above, it is acknowledged that the Firm may publicly sell the Shares in the open market without restriction through its broker if a registration statement covering the Shares is declared effective (and remains effective at the time of sale) by the Securities and Exchange Commission. The Firm acknowledges that the Company Parties will be relying on the representations and warranties of the Firm set forth in this Section 2 in issuing the shares to the Firm under and exemption from registration under the Act. 3. Release by the Company Parties: The Company Parties and their respective officers, directors, partners and affiliates (the "Company Releasing Parties") do knowingly, voluntarily, and intentionally agree to, and do settle, RELEASE, waive, and discharge the Firm and/or the Firm's predecessors, successors, affiliates, partners, officers, administrators, employees, former employees, insurers, agents, and representatives (together, the "Firm Related Persons"), jointly and severally, from any and all claims, causes of action, arbitrations, rights, suits, judgments, and demands whatsoever, whether legal, equitable, or administrative, whether currently known or not known to the Company Releasing Parties, which the Company Releasing Parties may have now or in the future against the Firm and/or the Firm Related Persons, concerning any and all matters arising up through the date that the Company Parties sign this Agreement (but excluding any matters arising under the terms of this Agreement). 4. Release by the Firm: The Firm does knowingly, voluntarily, and intentionally agree to, and does, settle, release, waive, and discharge the Company Parties and their respective predecessors, successors, affiliates, partners, officers, administrators, employees, former employees, insurers, agents, attorneys, and representatives (collectively, the "Company Related Persons"), jointly and severally, from any and all claims, causes of action, suits, rights, arbitrations, judgments and demands, whether legal, equitable, or administrative, whether currently known or not known to the Firm which the Firm may have now or in the future against the Company Parties or the Company Related Persons, concerning any and all matters arising up through the date that the Firm signs this Agreement (but excluding any matters arising under the terms of this Agreement), including without limitation any nonpayment of legal fees and associated expenses in connection with the rendition of legal services. 5. Delivery of Shares; Release of Corporate Records: Upon execution of this Agreement by the parties, Ramp will promptly deliver to the Firm certificates representing the "unregistered" Shares with an appropriate restrictive legend thereon. Such certificates representing the Shares shall be delivered to the Firm no later than five (5) days after the execution of this Agreement by both parties. Upon receipt of the certificates representing the Shares, the Firm shall promptly deliver to the Company Parties corporate records of the Company Parties held by the Firm. 6. Registration of the Shares; Compliance with the Securities Act: 6.1 Registration Procedures and Expenses. Ramp ("Registrant") shall: (a) Subject to receipt of necessary information from the Firm, prepare and file with the SEC a registration statement (the "Registration Statement") as soon as practicable, but in no event later than the earlier of (i) August 30, 2004 or (ii) the date on which the Registrant next files a registration statement on Form S-1, S-3, or SB-2, to enable the resale of the Shares by the Firm from time to time in the open market without restriction or in privately-negotiated transactions; (b) Use its best efforts, subject to receipt of necessary information from the Firm, to cause the Registration Statement to become effective as soon as practicable, but in any event no later than ninety (90) days after the Registration Statement is filed by the Registrant; without limiting the foregoing, the Registrant agrees that if the SEC issues comments with respect to the Registration Statement, it will file an amendment to the Registration Statement and provide any supplemental information to the SEC that is responsive to such comments as soon as reasonably practicable following the date of issuance of the SEC's comments and will promptly request the acceleration of effectiveness of the Registration Statement (or any post-effective amendment thereto) once all SEC comments have been addressed to the satisfaction of the SEC; (c) maintain the effectiveness of the Registration Statement and otherwise prepare and file with the SEC such amendments and supplements to the Registration Statement and 2 the Prospectus used in connection therewith as may be necessary to keep the Registration Statement current and effective for a period through at least, with respect to the Shares of such Registrant purchased hereunder, the earlier of (i) the first anniversary of the date of the signing of this Agreement, (ii) the date on which the Firm may sell all Shares of such Registrant then held by the Firm without restriction by the volume limitations of Rule 144(e) of the Securities Act or (iii) such time as all Shares of such Registrant obtained by such Firm pursuant to this Agreement have been sold; (d) furnish to the Firm with respect to the Shares registered under the Registration Statement up to ten (10) copies of the Registration Statement, Prospectuses (including supplemental prospectuses) and preliminary versions of the Prospectus filed with the Securities Exchange Commission ("Preliminary Prospectuses") in conformity with the requirements of the Securities Act and such other documents as the Firm may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Shares by the Firm, provided, however, that unless waived by the Registrant in writing, the obligation of the Registrant to deliver copies of Prospectuses or Preliminary Prospectuses to the Firm shall be subject to the receipt by the Registrant of reasonable assurances from the Firm that the Firm will comply with the applicable provisions of the Securities Act and of such other securities or blue sky laws as may be applicable in connection with any use of such Prospectuses or Preliminary Prospectuses; (e) file documents required of the Registrant for normal blue sky clearance in states reasonably specified in writing by the Firm prior to the effectiveness of the Registration Statement, provided, however, that the Registrant shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; (f) bear all expenses (but not professional fees, brokerage costs and fees or expenses incurred by the Firm in connection with the registration statement or the sale of the Shares and underwriting discounts and commissions, if any) in connection with the procedures in paragraphs (a) through (e) of this Section 6.1 and the registration of the Shares pursuant to the Registration Statement; and (g) advise the Firm, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration Statement or of the initiation of any proceeding for that purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued. (h) With a view to making available to the Firm the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Firm to sell Shares to the public without registration, the Registrant covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) such date as all of the Firm's Shares of such Registrant may be resold pursuant to Rule 144 or any other rule of similar effect or (B) such date as all of the Firm's Shares of such Registrant shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Registrant under the Securities Act and under the Exchange Act; and (iii) furnish to the Firm upon request, as long as the Firm owns any Shares of such Registrant, (A) a written statement by the Registrant that it has complied with the reporting requirements of the Securities Act and the Exchange Act, (B) a copy of the Registrant's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail the Firm of any rule or regulation of the SEC that permits the selling of any such Shares without registration. 3 It shall be a condition precedent to the obligations of the Registrant to take any action pursuant to this Section 6.1 that the Firm shall furnish to the Registrant such information regarding itself, the Shares to be sold by the Firm, and the intended method of disposition of such securities as shall be required to effect the registration of the Shares of such Registrant. The Registrant understands that the Firm disclaims being an underwriter, but the Firm being deemed an underwriter by the SEC shall not relieve the Registrant of any obligations it has hereunder. 6.2 Transfer of Shares After Registration; Suspension. (a) The Firm agrees that it will promptly notify the Registrant of any changes in the information set forth in the Registration Statement regarding the Firm or its plan of distribution. (b) Except in the event that paragraph (c) below applies, the Registrant shall: (i) if deemed necessary by the Registrant, prepare and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Shares being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) provide the Firm copies of any documents filed pursuant to Section 6.2(b)(i); and (iii) upon request, inform the Firm upon its request that the Registrant has complied with its obligations in Section 6.2(b)(i) (or that, if the Registrant has filed a post-effective amendment to the Registration Statement which has not yet been declared effective, the Registrant will notify the Firm to that effect, will use its reasonable efforts to secure the effectiveness of such post-effective amendment as promptly as possible and will promptly notify the Firm pursuant to Section 6.2(b)(i) hereof when the amendment has become effective). (c) Subject to paragraph (d) below, in the event: (i) of any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information; (ii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Registrant of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation of any proceeding for such purpose; or (iv) of any event or circumstance which the Registrant believes necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Registrant shall promptly deliver a certificate in writing to the Firm (the "Suspension Notice") to the effect of the foregoing and, upon receipt of such Suspension Notice, the Firm will refrain from selling any Shares pursuant to the Registration Statement (a "Suspension") until the Firm's receipt of copies of a supplemented or amended Prospectus prepared and filed by the Registrant, or until it is advised in writing by the Registrant that the current Prospectus may be used, and has received copies of any additional or 4 supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus. In the event of any Suspension, the Registrant will use its reasonable efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable within 60 days after delivery of a Suspension Notice to the Firm. In addition to and without limiting any other remedies (including, without limitation, at law or at equity) available to the Firm, the Firm shall be entitled to specific performance in the event that the Registrant fails to comply with the provisions of this Section 6.2(c). (d) Notwithstanding the foregoing paragraphs of this Section 6.2, the Firm shall not be prohibited from selling Shares under the Registration Statement as a result of Suspensions on more than two occasions of not more than 90 days each in any twelve month period, and any such Suspension must be separated by a period of at least thirty (30) days from a prior Suspension. (e) Provided that a Suspension is not then in effect the Firm may sell Shares under the Registration Statement, provided that it arranges for delivery of a current Prospectus to the transferee of such Shares. Upon receipt of a request therefor, the Registrant will provide an adequate number of current Prospectuses to the Firm and to any other parties requiring such Prospectuses. 6.3 Indemnification. For the purpose of this Section 6.3: (a) The term "Selling Stockholder" shall mean the Firm; (b) The term "Registration Statement" shall include any final Prospectus, exhibit, supplement or amendment included in or relating to, and any document incorporated by reference in, the Registration Statement (or deemed to be a part thereof) referred to in Section 6.1; and (c) The term "untrue statement" shall include any untrue statement or alleged untrue statement, or any omission or alleged omission to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) Registrant agrees to indemnify and hold harmless the Selling Stockholder from and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) any untrue statement of a material fact contained in the Registration Statement filed by Registrant, or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not materially misleading, (ii) any material inaccuracy in the representations and warranties of the Registrant contained in the Agreement or the failure of the Registrant to perform its obligations hereunder, or (iii) any material failure by the Registrant to fulfill any material undertaking included in the Registration Statement, and the Registrant will reimburse such Selling Stockholder for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim, provided, however, that the Registrant shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement in reliance upon and in conformity with written information furnished to the Registrant by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration Statement or the failure of such Selling Stockholder to comply with its covenants and agreements contained herein or any statement or omission in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the Selling Stockholder prior to the pertinent sale or sales by the Selling Stockholder. 5 (ii) The Selling Stockholder agrees to indemnify and hold harmless the Registrant (and each person, if any, who controls the Registrant within the meaning of Section 15 of the Securities Act, each officer of the Registrant who signs the Registration Statement and each director of the Registrant) from and against any losses, claims, damages or liabilities to which the Registrant (or any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, (i) any failure to comply with the covenants and agreements contained herein, or (ii) any untrue statement of a material fact contained in the Registration Statement if such untrue statement was made in reliance upon and in conformity with written information furnished by or on behalf of the Selling Stockholder specifically for use in preparation of the Registration Statement, and the Selling Stockholder will reimburse the Registrant (or such officer, director or controlling person), as the case may be, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. The obligation to indemnify shall be limited to the net amount of the proceeds received by the Selling Stockholder from the sale of the Shares pursuant to the Registration Statement. (iii) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 6.3, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 6.3 (except to the extent that such omission materially and adversely affects the indemnifying party's ability to defend such action) or from any liability otherwise than under this Section 6.3. Subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof (unless it has failed to assume the defense thereof and appoint counsel reasonably satisfactory to the indemnified party), such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof, provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the reasonable opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person; provided, however, that no indemnifying person shall be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for all indemnified parties. In no event shall any indemnifying person be liable in respect of any amounts paid in settlement of any action unless the indemnifying person shall have approved the terms of such settlement; provided that such consent shall not be unreasonably withheld. No indemnifying person shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could reasonably have been a party and indemnification could have been sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. (iv) If the indemnification provided for in this Section 6.3 is unavailable to or insufficient to hold harmless an indemnified party under subsection (i) or (ii) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in 6 such proportion as is appropriate to reflect the relative fault of the Registrant on the one hand and the Selling Stockholder on the other in connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case of an untrue statement, whether the untrue statement relates to information supplied by the Registrant on the one hand or the Selling Stockholder on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement. The Registrant and the Selling Stockholder agree that it would not be just and equitable if contribution pursuant to this subsection (iv) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (iv). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (iv) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (iv), the Selling Stockholder shall not be required to contribute any amount in excess of the amount by which the gross amount received by the Selling Stockholder from the sale of the Shares to which such loss relates exceeds the amount of any damages which such Selling Stockholder has otherwise been required to pay by reason of such untrue statement. (v) The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 6.3, and are fully informed regarding said provisions. They further acknowledge that the provisions of this Section 6.3 fairly allocate the risks in light of the ability of the parties to investigate the Registrant and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the Securities Act and the Exchange Act. 7. No Representations or Warranties on Future Price. The Firm understands and acknowledges that Ramp makes no representations or warranties regarding the future price of the Shares. 8. No Future Costs or Expenses Incurred. The Firm agrees, from and the after the execution of this Agreement by the parties, that it will not incur additional costs or expenses in connection with the provision of legal services to the Company Parties unless requested by either of the Company Parties in writing. 9. Cooperation. The parties hereto agree to cooperate and execute such other and further documents and agreements and to perform such other acts as may be reasonably requested to effectuate the intent and terms of the Agreement. 10. Warranty of Authority. By execution of this Agreement, each person signing on behalf of an entity warrants that this Agreement is executed on behalf of a valid legal entity; that such entity has the full right and authority to undertake any action contemplated by this Agreement; that the execution of this Agreement and the performance of the obligations hereunder (including, without limitation, in the case of Ramp and/or LifeRamp, the issuance and registration for resale of the Shares) by the signatory has been duly and properly authorized by the party on whose behalf said Agreement is executed in accordance with all applicable laws, regulations, agreements and procedures governing the authority of such person or entity to execute this Agreement on behalf of such party; and that the consent of all persons or entities whatsoever necessary to the due execution of this Agreement has been obtained. 7 Further, Ramp and Life Ramp represent and warrant to the Firm that subject to the registration requirements of Section 4.1 hereof, the Firm's resale of the Shares is not subject to any legal, contractual, regulatory or other impediment. 11. No Prior Assignment. Each of the parties hereto represents and warrants that it has not heretofore assigned, transferred or hypothecated, or purported to assign, transfer or hypothecate to any person or entity any claim or cause of action herein released, or any interest therein. 12. No Admission of Liability. This Agreement, and the actions taken pursuant thereto, are a result of a compromise among the parties hereto and shall never, at any time or for any purpose, be considered as an admission of liability and/or responsibility on the part of any of the parties, each of which continues to deny such liability and disclaim such responsibility. 13. Attorneys' Fees. The parties hereto acknowledge and agree that each of them will bear their own costs, expenses and attorneys' fees arising out of and/or connected with the negotiation, drafting and execution of this Agreement, and all matters arising out of or connected therewith (except as otherwise provided in Section 6.1 hereof). 14. Interpretation of This Agreement. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. The Agreement is the product of negotiation and preparation by and among the parties and their respective attorneys. The Agreement shall be interpreted and constructed neutrally as to all parties, without any party deemed to be the drafter of the Agreement. 15. Successors and Assigns. This Agreement and the terms and conditions hereof shall bind and inure to the benefit of the respective executors, administrators, heirs, predecessors, successors, assigns, employees, servants, principals, partners, partnerships, insurers, agents, representatives, attorneys, consultants, heirs, executors, administrators, trustors, trustees and beneficiaries. 16. Voluntary Agreement; Advice of Counsel. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the parties hereto with the full intent of releasing all claims. The parties acknowledge that they have been represented in the preparation, negotiation and execution of this Agreement by legal counsel of their own choice (which the Company Parties specifically acknowledge is legal counsel other than the Firm); that they understand the terms and consequences of this Agreement and of the releases it contains; and that they are fully aware of the legal and binding effect of this Agreement. 17. Entire Agreement. This Agreement contains the entire agreement of the parties pertaining to the subject matter contained in it and supersedes any and all prior and\or contemporaneous negotiations, correspondence, understandings, representations, letters of intent and agreements. The parties, and each of them, understand and agree that this Agreement is not made with reliance upon any inducement, statement, promise or representation other than those contained within this Agreement. 18. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 19. Amendments. This Agreement may not be amended except by written amendment executed by all parties. 20. Titles. The titles to the sections of this Agreement are solely for the convenience of the parties and shall not be used as an aid in the interpretation or construction of this Agreement. 8 IN WITNESS WHEREOF, this Agreement has been duly executed by or on behalf of the parties hereto as of the 19th day of August 2004. RAMP CORPORATION LOCKE LIDDELL & SAPP LLP By: ___________________________ Andrew Brown, CEO By: _________________________________ Name: _______________________________ Title: ______________________________ LIFERAMP FAMILY FINANCIAL, INC. By:____________________________ Andrew Brown, CEO 9 EX-4 28 exhb4-27.txt 4.27 Exhibit 4.27 SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release ("Agreement") is entered into by and among Ramp Corporation, a Delaware corporation ("Ramp"), LifeRamp Family Financial, Inc. ("LifeRamp") (Ramp and LifeRamp are hereinafter referred to collectively as the "Company Parties") and Buckley Kolar LLP, a District of Columbia limited liability partnership (the "Firm"). RECITALS A. In February through May 2004, the Firm provided legal services to LifeRamp and invoiced LifeRamp $54,302.01 in April, May and June, 2004 for such services. B. The business of LifeRamp and Ramp have both benefited from the Firm's provision of legal services to LifeRamp. C. The Firm has agreed to accept 529,259 shares of registered Ramp Common Stock, $0.01 par value (the "Shares") in lieu of payment of its fees for legal services, and the Company Parties have agreed to issue such Shares to the Firm in lieu of such payment, subject to the terms and conditions set forth herein. D. The Company Parties and the Firm desire to settle all outstanding claims and potential claims between the Company Parties and the Firm. NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, and for good and valuable consideration, the adequacy and receipt of which is hereby acknowledged by all parties, the parties agree as follows: AGREEMENT 1. Payment of Account. The total unpaid balance of the account owed by the Company Parties to the Firm through the date hereof, including, but not limited to, all outstanding fees for services and expenses provided by the Firm to LifeRamp from April 2004 through the date hereof, is for all purposes agreed by the parties to be $54,302.01 (the "Total Due Balance"). The Firm hereby agrees to accept and receive as full payment and settlement for the Total Due Balance an aggregate of 529,259 "restricted" shares of common stock, par value $.01 per share, of Ramp to be issued by Ramp promptly after the execution of this Agreement. 2. Firm Representations. The firm represents and warrants to the Company Parties that (a) it is an "accredited investor," which is defined under Rule 501(a)(3) of the Securities Act of 1933, as amended (the "Act"), due to its being a partnership, not formed for the specific purpose of acquiring the securities offered, in which each equity owner is an accredited investor, (b) it is acquiring the Shares for its own account and for investment purposes only; and (c) it has no present intention to distribute any of such Shares publicly and has no present agreement, understanding or arrangement to subdivide, sell, assign, transfer or otherwise dispose of all or any part of such Shares subscribed for to any other person or entity. Notwithstanding the above, it is acknowledged that the Firm may publicly sell the Shares in the open market without restriction through its broker if a registration statement covering the Shares is declared effective (and remains effective at the time of sale) by the Securities and Exchange Commission. The Firm acknowledges that the Company Parties will be relying on the representations and warranties of the Firm set forth in this Section 2 in issuing the shares to the Firm under and exemption from registration under the Act. 3. Release by the Company Parties: The Company Parties and their respective officers, directors, partners and affiliates (the "Company Releasing Parties") do knowingly, voluntarily, and intentionally agree to, and do settle, RELEASE, waive, and discharge the Firm and/or the Firm's predecessors, successors, affiliates, partners, officers, administrators, employees, former employees, insurers, agents, and representatives (together, the "Firm Related Persons"), jointly and severally, from any and all claims, causes of action, arbitrations, rights, suits, judgments, and demands whatsoever, whether legal, equitable, or administrative, whether currently known or not known to the Company Releasing Parties, which the Company Releasing Parties may have now or in the future against the Firm and/or the Firm Related Persons, concerning any and all matters arising up through the date that the Company Parties sign this Agreement (but excluding any matters arising under the terms of this Agreement). 4. Release by the Firm: The Firm does knowingly, voluntarily, and intentionally agree to, and does, settle, release, waive, and discharge the Company Parties and their respective predecessors, successors, affiliates, partners, officers, administrators, employees, former employees, insurers, agents, attorneys, and representatives (collectively, the "Company Related Persons"), jointly and severally, from any and all claims, causes of action, suits, rights, arbitrations, judgments and demands, whether legal, equitable, or administrative, whether currently known or not known to the Firm which the Firm may have now or in the future against the Company Parties or the Company Related Persons, concerning any and all matters arising up through the date that the Firm signs this Agreement (but excluding any matters arising under the terms of this Agreement), including without limitation any nonpayment of legal fees and associated expenses in connection with the rendition of legal services. 5. Delivery of Shares; Release of Corporate Records: Upon execution of this Agreement by the parties, Ramp will promptly deliver to the Firm certificates representing the "unregistered" Shares with an appropriate restrictive legend thereon. Such certificates representing the Shares shall be delivered to the Firm no later than five (5) days after the execution of this Agreement by both parties. Upon receipt of the certificates representing the Shares, the Firm shall promptly deliver to the Company Parties corporate records of the Company Parties held by the Firm. 6. Registration of the Shares; Compliance with the Securities Act: 6.1 Registration Procedures and Expenses. Ramp ("Registrant") shall: (a) Subject to receipt of necessary information from the Firm, prepare and file with the SEC a registration statement (the "Registration Statement") as soon as practicable, but in no event later than the earlier of (i) August 30, 2004 or (ii) the date on which the Registrant next files a registration statement on Form S-1, S-3, or SB-2, to enable the resale of the Shares by the Firm from time to time in the open market without restriction or in privately-negotiated transactions; (b) Use its best efforts, subject to receipt of necessary information from the Firm, to cause the Registration Statement to become effective as soon as practicable, but in any event no later than ninety (90) days after the Registration Statement is filed by the Registrant; without limiting the foregoing, the Registrant agrees that if the SEC issues comments with respect to the Registration Statement, it will file an amendment to the Registration Statement and provide any supplemental information to the SEC that is responsive to such comments as soon as reasonably practicable following the date of issuance of the SEC's comments and will promptly request the acceleration of effectiveness of the Registration Statement (or any post-effective amendment thereto) once all SEC comments have been addressed to the satisfaction of the SEC; (c) maintain the effectiveness of the Registration Statement and otherwise prepare and file with the SEC such amendments and supplements to the Registration Statement and the 2 Prospectus used in connection therewith as may be necessary to keep the Registration Statement current and effective for a period through at least, with respect to the Shares of such Registrant purchased hereunder, the earlier of (i) the first anniversary of the date of the signing of this Agreement, (ii) the date on which the Firm may sell all Shares of such Registrant then held by the Firm without restriction by the volume limitations of Rule 144(e) of the Securities Act or (iii) such time as all Shares of such Registrant obtained by such Firm pursuant to this Agreement have been sold; (d) furnish to the Firm with respect to the Shares registered under the Registration Statement up to ten (10) copies of the Registration Statement, Prospectuses (including supplemental prospectuses) and preliminary versions of the Prospectus filed with the Securities Exchange Commission ("Preliminary Prospectuses") in conformity with the requirements of the Securities Act and such other documents as the Firm may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Shares by the Firm, provided, however, that unless waived by the Registrant in writing, the obligation of the Registrant to deliver copies of Prospectuses or Preliminary Prospectuses to the Firm shall be subject to the receipt by the Registrant of reasonable assurances from the Firm that the Firm will comply with the applicable provisions of the Securities Act and of such other securities or blue sky laws as may be applicable in connection with any use of such Prospectuses or Preliminary Prospectuses; (e) file documents required of the Registrant for normal blue sky clearance in states reasonably specified in writing by the Firm prior to the effectiveness of the Registration Statement, provided, however, that the Registrant shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; (f) bear all expenses (but not professional fees, brokerage costs and fees or expenses incurred by the Firm in connection with the registration statement or the sale of the Shares and underwriting discounts and commissions, if any) in connection with the procedures in paragraphs (a) through (e) of this Section 6.1 and the registration of the Shares pursuant to the Registration Statement; and (g) advise the Firm, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration Statement or of the initiation of any proceeding for that purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued. (h) With a view to making available to the Firm the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Firm to sell Shares to the public without registration, the Registrant covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) such date as all of the Firm's Shares of such Registrant may be resold pursuant to Rule 144 or any other rule of similar effect or (B) such date as all of the Firm's Shares of such Registrant shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Registrant under the Securities Act and under the Exchange Act; and (iii) furnish to the Firm upon request, as long as the Firm owns any Shares of such Registrant, (A) a written statement by the Registrant that it has complied with the reporting requirements of the Securities Act and the Exchange Act, (B) a copy of the Registrant's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail the Firm of any rule or regulation of the SEC that permits the selling of any such Shares without registration. 3 It shall be a condition precedent to the obligations of the Registrant to take any action pursuant to this Section 6.1 that the Firm shall furnish to the Registrant such information regarding itself, the Shares to be sold by the Firm, and the intended method of disposition of such securities as shall be required to effect the registration of the Shares of such Registrant. The Registrant understands that the Firm disclaims being an underwriter, but the Firm being deemed an underwriter by the SEC shall not relieve the Registrant of any obligations it has hereunder. 6.2 Transfer of Shares After Registration; Suspension. (a) The Firm agrees that it will promptly notify the Registrant of any changes in the information set forth in the Registration Statement regarding the Firm or its plan of distribution. (b) Except in the event that paragraph (c) below applies, the Registrant shall: (i) if deemed necessary by the Registrant, prepare and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Shares being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) provide the Firm copies of any documents filed pursuant to Section 6.2(b)(i); and (iii) upon request, inform the Firm upon its request that the Registrant has complied with its obligations in Section 6.2(b)(i) (or that, if the Registrant has filed a post-effective amendment to the Registration Statement which has not yet been declared effective, the Registrant will notify the Firm to that effect, will use its reasonable efforts to secure the effectiveness of such post-effective amendment as promptly as possible and will promptly notify the Firm pursuant to Section 6.2(b)(i) hereof when the amendment has become effective). (c) Subject to paragraph (d) below, in the event: (i) of any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information; (ii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Registrant of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation of any proceeding for such purpose; or (iv) of any event or circumstance which the Registrant believes necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Registrant shall promptly deliver a certificate in writing to the Firm (the "Suspension Notice") to the effect of the foregoing and, upon receipt of such Suspension Notice, the Firm will refrain from selling any Shares pursuant to the Registration Statement (a "Suspension") until the Firm's receipt of copies of a supplemented or amended Prospectus prepared and filed by the Registrant, or until it is advised in writing by the Registrant that the current Prospectus may be used, and has received copies of any additional or 4 supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus. In the event of any Suspension, the Registrant will use its reasonable efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable within 60 days after delivery of a Suspension Notice to the Firm. In addition to and without limiting any other remedies (including, without limitation, at law or at equity) available to the Firm, the Firm shall be entitled to specific performance in the event that the Registrant fails to comply with the provisions of this Section 6.2(c). (d) Notwithstanding the foregoing paragraphs of this Section 6.2, the Firm shall not be prohibited from selling Shares under the Registration Statement as a result of Suspensions on more than two occasions of not more than 90 days each in any twelve month period, and any such Suspension must be separated by a period of at least thirty (30) days from a prior Suspension. (e) Provided that a Suspension is not then in effect the Firm may sell Shares under the Registration Statement, provided that it arranges for delivery of a current Prospectus to the transferee of such Shares. Upon receipt of a request therefor, the Registrant will provide an adequate number of current Prospectuses to the Firm and to any other parties requiring such Prospectuses. 6.3 Indemnification. For the purpose of this Section 6.3: (a) The term "Selling Stockholder" shall mean the Firm; (b) The term "Registration Statement" shall include any final Prospectus, exhibit, supplement or amendment included in or relating to, and any document incorporated by reference in, the Registration Statement (or deemed to be a part thereof) referred to in Section 6.1; and (c) The term "untrue statement" shall include any untrue statement or alleged untrue statement, or any omission or alleged omission to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) Registrant agrees to indemnify and hold harmless the Selling Stockholder from and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) any untrue statement of a material fact contained in the Registration Statement filed by Registrant, or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not materially misleading, (ii) any material inaccuracy in the representations and warranties of the Registrant contained in the Agreement or the failure of the Registrant to perform its obligations hereunder, or (iii) any material failure by the Registrant to fulfill any material undertaking included in the Registration Statement, and the Registrant will reimburse such Selling Stockholder for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim, provided, however, that the Registrant shall not beliable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement in reliance upon and in conformity with written information furnished to the Registrant by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration Statement or the failure of such Selling Stockholder to comply with its covenants and agreements contained herein or any statement or omission in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the Selling Stockholder prior to the pertinent sale or sales by the Selling Stockholder. 5 (ii) The Selling Stockholder agrees to indemnify and hold harmless the Registrant (and each person, if any, who controls the Registrant within the meaning of Section 15 of the Securities Act, each officer of the Registrant who signs the Registration Statement and each director of the Registrant) from and against any losses, claims, damages or liabilities to which the Registrant (or any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, (i) any failure to comply with the covenants and agreements contained herein, or (ii) any untrue statement of a material fact contained in the Registration Statement if such untrue statement was made in reliance upon and in conformity with written information furnished by or on behalf of the Selling Stockholder specifically for use in preparation of the Registration Statement, and the Selling Stockholder will reimburse the Registrant (or such officer, director or controlling person), as the case may be, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. The obligation to indemnify shall be limited to the net amount of the proceeds received by the Selling Stockholder from the sale of the Shares pursuant to the Registration Statement. (iii) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 6.3, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 6.3 (except to the extent that such omission materially and adversely affects the indemnifying party's ability to defend such action) or from any liability otherwise than under this Section 6.3. Subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof (unless it has failed to assume the defense thereof and appoint counsel reasonably satisfactory to the indemnified party), such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof, provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the reasonable opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person; provided, however, that no indemnifying person shall be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for all indemnified parties. In no event shall any indemnifying person be liable in respect of any amounts paid in settlement of any action unless the indemnifying person shall have approved the terms of such settlement; provided that such consent shall not be unreasonably withheld. No indemnifying person shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could reasonably have been a party and indemnification could have been sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. (iv) If the indemnification provided for in this Section 6.3 is unavailable to or insufficient to hold harmless an indemnified party under subsection (i) or (ii) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in 6 such proportion as is appropriate to reflect the relative fault of the Registrant on the one hand and the Selling Stockholder on the other in connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case of an untrue statement, whether the untrue statement relates to information supplied by the Registrant on the one hand or the Selling Stockholder on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement. The Registrant and the Selling Stockholder agree that it would not be just and equitable if contribution pursuant to this subsection (iv) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (iv). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (iv) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (iv), the Selling Stockholder shall not be required to contribute any amount in excess of the amount by which the gross amount received by the Selling Stockholder from the sale of the Shares to which such loss relates exceeds the amount of any damages which such Selling Stockholder has otherwise been required to pay by reason of such untrue statement. (v) The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 6.3, and are fully informed regarding said provisions. They further acknowledge that the provisions of this Section 6.3 fairly allocate the risks in light of the ability of the parties to investigate the Registrant and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the Securities Act and the Exchange Act. 7. No Representations or Warranties on Future Price. The Firm understands and acknowledges that Ramp makes no representations or warranties regarding the future price of the Shares. 8. No Future Costs or Expenses Incurred. The Firm agrees, from and the after the execution of this Agreement by the parties, that it will not incur additional costs or expenses in connection with the provision of legal services to the Company Parties unless requested by either of the Company Parties in writing. 9. Cooperation. The parties hereto agree to cooperate and execute such other and further documents and agreements and to perform such other acts as may be reasonably requested to effectuate the intent and terms of the Agreement. 10. Warranty of Authority. By execution of this Agreement, each person signing on behalf of an entity warrants that this Agreement is executed on behalf of a valid legal entity; that such entity has the full right and authority to undertake any action contemplated by this Agreement; that the execution of this Agreement and the performance of the obligations hereunder (including, without limitation, in the case of Ramp and/or LifeRamp, the issuance and registration for resale of the Shares) by the signatory has been duly and properly authorized by the party on whose behalf said Agreement is executed in accordance with all applicable laws, regulations, agreements and procedures governing the authority of such person or entity to execute this Agreement on behalf of such party; and that the consent of all persons or entities whatsoever necessary to the due execution of this Agreement has been obtained. 7 Further, Ramp and Life Ramp represent and warrant to the Firm that subject to the registration requirements of Section 4.1 hereof, the Firm's resale of the Shares is not subject to any legal, contractual, regulatory or other impediment. 11. No Prior Assignment. Each of the parties hereto represents and warrants that it has not heretofore assigned, transferred or hypothecated, or purported to assign, transfer or hypothecate to any person or entity any claim or cause of action herein released, or any interest therein. 12. No Admission of Liability. This Agreement, and the actions taken pursuant thereto, are a result of a compromise among the parties hereto and shall never, at any time or for any purpose, be considered as an admission of liability and/or responsibility on the part of any of the parties, each of which continues to deny such liability and disclaim such responsibility. 13. Attorneys' Fees. The parties hereto acknowledge and agree that each of them will bear their own costs, expenses and attorneys' fees arising out of and/or connected with the negotiation, drafting and execution of this Agreement, and all matters arising out of or connected therewith (except as otherwise provided in Section 6.1 hereof). 14. Interpretation of This Agreement. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. The Agreement is the product of negotiation and preparation by and among the parties and their respective attorneys. The Agreement shall be interpreted and constructed neutrally as to all parties, without any party deemed to be the drafter of the Agreement. 15. Successors and Assigns. This Agreement and the terms and conditions hereof shall bind and inure to the benefit of the respective executors, administrators, heirs, predecessors, successors, assigns, employees, servants, principals, partners, partnerships, insurers, agents, representatives, attorneys, consultants, heirs, executors, administrators, trustors, trustees and beneficiaries. 16. Voluntary Agreement; Advice of Counsel. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the parties hereto with the full intent of releasing all claims. The parties acknowledge that they have been represented in the preparation, negotiation and execution of this Agreement by legal counsel of their own choice (which the Company Parties specifically acknowledge is legal counsel other than the Firm); that they understand the terms and consequences of this Agreement and of the releases it contains; and that they are fully aware of the legal and binding effect of this Agreement. 17. Entire Agreement. This Agreement contains the entire agreement of the parties pertaining to the subject matter contained in it and supersedes any and all prior and\or contemporaneous negotiations, correspondence, understandings, representations, letters of intent and agreements. The parties, and each of them, understand and agree that this Agreement is not made with reliance upon any inducement, statement, promise or representation other than those contained within this Agreement. 18. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 19. Amendments. This Agreement may not be amended except by written amendment executed by all parties. 20. Titles. The titles to the sections of this Agreement are solely for the convenience of the parties and shall not be used as an aid in the interpretation or construction of this Agreement. 8 IN WITNESS WHEREOF, this Agreement has been duly executed by or on behalf of the parties hereto as of the 19th day of August 2004. RAMP CORPORATION BUCKLEY KOLAR LLP By:__________________________________ Andrew Brown, CEO By: _____________________________ Name: ___________________________ Title: __________________________ LIFERAMP FAMILY FINANCIAL, INC. By:__________________________________ Andrew Brown, CEO 9 EX-5 29 exhb5-1.txt 5.1 J&GPC LETTER Exhibit 5.1 Jenkens & Gilchrist Parker Chapin LLP AUSTIN, TEXAS (512) 499-3800 THE CHRYSLER BUILDING CHICAGO, ILLINOIS 405 LEXINGTON AVENUE (312) 425-3900 NEW YORK, NEW YORK 10174 DALLAS, TEXAS (214) 855-4500 (212) 704-6000 HOUSTON, TEXAS FACSIMILE (212) 704-6288 (713) 951-3300 LOS ANGELES, CALIFORNIA www.jenkens.com (310) 820-8800 PASADENA, CALIFORNIA (626) 578-7400 SAN ANTONIO, TEXAS (210) 246-5000 WASHINGTON, D.C. (202) 326-1500 August 20, 2004 Ramp Corporation 33 Maiden Lane New York, New York 10038 Re: Ramp Corporation Ladies and Gentlemen: We have acted as counsel to Ramp Corporation, a Delaware corporation (the "Company"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") being filed with the Securities and Exchange Commission under the Securities Act of 1933 (the "Act"), for the registration for resale by the selling stockholders listed therein (the "Selling Stockholders") of: (i) up to 32,341,046 shares of the Company's common stock ("Common Shares"), par value $.001 per share ("Common Stock"), (ii) an aggregate of 20,400,000 shares of Common Stock ("Promissory Note Shares") issuable upon the conversion of promissory notes issued to certain entities ("Promissory Notes") with an initial conversion price of $0.30 cents per share, and (iii) an aggregate of 58,000,000 shares of Common Stock ("Warrant Shares") issuable upon the exercise of warrants issued to certain individuals and entities ("Warrants") with an exercise price of $0.11 cents per share with respect to 14,000,000 Warrant Shares, $0.15 cents per share with respect to 14,000,000 Warrant Shares, $0.18 cents per share with respect to 2,000,000 Warrant Shares, $0.35 cents per share with respect to 14,000,000 Warrant Shares and $0.40 cents per share with respect to 14,000,000 Warrant Shares (the Warrant Shares, together with the Common Shares and the Promissory Note Shares, the "Shares"). In connection with the foregoing, we have examined originals or copies, satisfactory to us, of the Company's (i) Restated Certificate of Incorporation, (ii) Bylaws and (iii) resolutions adopted by the Company's Board of Directors authorizing the issuance of the Common Stock, Warrants, Promissory Notes and the Shares. We have also reviewed such other matters of law and examined and relied upon all such corporate records, agreements, certificates and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies or facsimiles. As to any facts material to such opinion, we have, to the extent that relevant facts were not independently established by us, relied on certificates of public officials and certificates of officers or other representatives of the Company. Jenkens & Gilchrist Parker Chapin LLP Ramp Corporation August 20, 2004 Page 2 Based upon and subject to the foregoing, we are of the opinion that (a) the Common Shares have been validly issued and are fully paid and non-assessable, (b) the Promissory Note Shares, upon issuance and payment of the conversion price to the Company in accordance with the terms of the Promissory Notes, will be validly issued, fully paid and non-assessable and (c) the Warrant Shares, upon issuance and payment of the exercise price to the Company in accordance with the terms of the Warrants, will be validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference made to us under the caption "Legal Matters" in the prospectus constituting part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act, the rules and regulations of the Securities and Exchange Commission promulgated thereunder or Item 509 of Regulation S-K promulgated under the Act. Very truly yours, JENKENS & GILCHRIST PARKER CHAPIN LLP EX-23 30 exhb23-1.txt 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of Ramp Corporation on Form S-3 of our report dated February 14, 2003, on the December 31, 2002 and 2001 consolidated financial statements of Medix Resources, Inc. appearing in the Annual Report on Form 10-K of Ramp Corporation (formerly Medix Resources, Inc.) for the year ended December 31, 2003 and to the reference to us under the heading "Experts" in the Prospectus. /s/ Ehrhardt Keefe Steiner & Hottman PC Ehrhardt Keefe Steiner & Hottman PC August 18, 2004 Denver, Colorado EX-23 31 exhb23-2.txt 23.2 Exhibit 23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ramp Corporation New York, New York We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form S-3 filed on August 20, 2004 ("the Registration Statement"), of our report dated April 8, 2004, which contained an explanatory paragraph indicating that substantial doubt exists as to the Company's ability to continue as a going concern, relating to the consolidated financial statements as of and for the year ended December 31, 2003, of Ramp Corporation, formerly Medix Resources, Inc., ("the Company") appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2003. We also consent to the incorporation by reference in the Registration Statement of our report dated September 12, 2003 relating to the financial statements as of and for the years ended December 31, 2002 and 2001 of The Duncan Group, Inc. d/b/a Frontline Physicians Exchange appearing in the Company's Current Report on Form 8-K/A filed on June 9, 2004. We also consent to the references to us under the caption "Experts" in the Prospectus. /s/ BDO Seidman, LLP New York, New York August 20, 2004 -----END PRIVACY-ENHANCED MESSAGE-----