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 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx;
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
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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
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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
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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,
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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.
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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.
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(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
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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
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxx Xxxxxxxx, Esq.
If to Clinton:
Clinton Group, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxx
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with a copy to:
Xxxxxxx Xxxxxxx Xxxxxx & Xxxxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, 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.
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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.
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(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.
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IN WITNESS WHEREOF each of the parties has duly executed this
Settlement Agreement as of the date first above written.
RAMP CORPORATION
By: /s/ Xxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxx Xxxxx
Title: Chief Financial Officer
CLINTON GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Director
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