AMENDMENT NO. 3 TO THE SECURITIES PURCHASE
AGREEMENT TRANSACTION DOCUMENTS BETWEEN RAMP
CORPORATION, DKR SOUNDSHORE OASIS HOLDING FUND LTD.,
HARBORVIEW MASTER FUND LP AND PLATINUM PARTNERS VALUE
ARBITRAGE FUND FOR THE PURCHASE OF THE CONVERTIBLE
DEBENTURES, DUE DECEMBER 1, 2005, COMMON STOCK PURCHASE
WARRANTS AND ADDITIONAL INVESTMENT RIGHTS
This Amendment No. 3 ("Amendment") is made to: (i) that certain
Securities Purchase Agreement ("Purchase Agreement") dated as of January 12,
2005 among Ramp Corporation (the "Company"), DKR Soundshore Oasis Holding Fund
Ltd. ("DKR"), Harborview Master Fund LP ("Harborview") and Platinum Partners
Value Arbitrage Fund ("Platinum", and collectively, DKR, Harborview and Platinum
shall be referred to herein as, a "Purchaser" and collectively as, the
"Purchasers"), along with the other agreements entered into in connection
therewith, for the purchase of the 8% Convertible Debentures, due December 1,
2005 issued to the Purchasers (the "Debentures"), the Common Stock Purchase
Warrants issued to the Purchasers (the "Warrants") and Additional Investment
Rights (the "AIR") granted to the Purchasers, (ii) that certain Amendment No. 1
to the Securities Purchase Agreement, dated March 30, 2005, by and among the
Company and the Purchasers ("Amendment No. 1"), and (iii) that certain Amendment
No. 2 to the Securities Purchase Agreement, dated April 12, 2005, by and among
the Company and the Purchasers ("Amendment No. 2", and collectively with the
Amendment and Amendment No.1, the "Amendments"). Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Purchase
Agreement.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Termination of AIR. Effective immediately, the Company and each
Purchaser, severally and not jointly with the other Purchasers, hereby agrees to
terminate each outstanding AIR held by such Purchaser. Following such
termination, each outstanding AIR shall be null and void, and shall be of no
further force and effect whatsoever, and the Company shall have no liability or
obligation with respect to such AIR.
2. Issuance of New Warrant. The Company hereby agrees to issue to each
Purchaser, severally and not jointly with the other Purchasers, a warrant (the
"New Warrant") to purchase up to a number of shares of Common Stock of the
Company equal to the sum of (a) such Purchaser's Subscription Amount at the
First Closing and (b) such Purchaser's Subscription Amount funded pursuant to
this Amendment, divided by $1.25, which warrant shall have an exercise price
equal to $1.25, subject to adjustment therein, and be otherwise in the form of
the Warrants. The term "Warrant" as used under the Transaction Documents is
hereby amended to include the New Warrant.
3. Replacement Provision in the New Warrant. Solely with respect to the
New Warrant, Section 3(b) of the New Warrant is hereby amended and replaced with
the following provision:
"Subsequent Equity Sales. If the Company or any Subsidiary thereof, as
applicable, at any time while this Warrant is outstanding, shall offer,
sell, grant any option to purchase or offer, sell or grant any right to
reprice its securities, or otherwise dispose of or issue (or announce
any offer, sale, grant or any option to purchase or other disposition)
any Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock, at an effective price per share less
than the then Exercise Price (such lower price, the "Base Share Price"
and such issuances collectively, a "Dilutive Issuance"), as adjusted
hereunder (if the holder of the Common Stock or Common Stock
Equivalents so issued shall at any time, whether by operation of
purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options
or rights per share which is issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per
share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance), then, the Exercise Price shall be reduced
and only reduced to equal the Base Share Price and the number of
Warrant Shares issuable hereunder shall be increased such that the
aggregate Exercise Price payable hereunder, after taking into account
the decrease in the Exercise Price, shall be equal to the aggregate
Exercise Price prior to such adjustment. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are issued.
Notwithstanding the foregoing, no adjustments shall be made, paid or
issued under this Section 3(b) in respect of an Exempt Issuance. The
Company shall notify the Holder in writing, no later than the Trading
Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, indicating therein the applicable
issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms (such notice the "Dilutive
Issuance Notice"). For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section
3(b), upon the occurrence of any Dilutive Issuance, after the date of
such Dilutive Issuance the Holder is entitled to receive a number of
Warrant Shares based upon the Base Share Price regardless of whether
the Holder accurately refers to the Base Share Price in the Notice of
Exercise."
4. Waiver of Conditions Precedent and Receipt of 50% of Additional
Subscription Amounts at Second Closing. Simultaneously upon receipt of the New
Warrant by a Purchaser and receipt by such Purchaser of a Debenture with a
principal amount equal to 50% of the Purchaser's Subscription Amount as to the
Second Closing, such Purchaser, severally and not jointly with the other
Purchasers, shall agree to waive Section 2.3(c) to the Second Closing as it
relates to such principal amount of Debentures and shall wire the amount of 50%
of such Purchaser's Subscription Amount as to the Second Closing (the
"Additional Subscription Amount") to the account as specified in writing by the
Company. Upon the Company's receipt of such Additional Subscription Amount, such
Purchaser shall thereafter have no other obligations to fund the remaining
balance of the Subscription Amount as to the Second Closing, which obligations
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shall be deemed terminated and of no further force or effect, and the Purchaser
shall have no other obligations to the Company to purchase any securities of the
Company. Notwithstanding anything herein to the contrary, DKR is hereby
authorized to pay directly to FW the amount of $7,500 of its Additional
Subscription Amount for legal fees and expenses incurred in connection with this
Amendment.
5. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Purchaser that, except as set forth on the
Disclosure Schedules or a schedule attached hereto provided by the Company, that
all representations and warranties of the Company made pursuant to the
Transaction Documents are accurate in all material respects as of the date
hereof, except as otherwise disclosed under the Amendments, and all obligations,
covenants and agreements of the Company required to be performed under the
Transaction Documents prior to the date hereof have been performed.
6. Representations and Warranties of each Purchaser. Each Purchaser,
severally and not jointly with the other Purchasers, represents and warrants to
the Company that all representations and warranties of such Purchaser made
pursuant to the Transaction Documents are accurate in all material respects as
of the date hereof and all obligations, covenants and agreements of such
Purchaser required to be performed under the Transaction Documents prior to the
date hereof have been performed.
7. Registration Obligations. The definition of "Filing Date" in the
Registration Rights Agreement is hereby amended to be not later than 10:00 p.m.
on Wednesday, May 18, 2005 and the definition of "Effectiveness Date" is hereby
amended to be August 11, 2005. All liquidated damages, late fees and other
Events that have occurred under the Registration Rights Agreement are hereby
waived by each Purchaser through and including the date of this Agreement;
provided, however, that if an Event occurs after the date hereof under the
Registration Rights Agreement, such waiver shall be deemed null and void and
each Purchaser shall be entitled to receive, in addition to any other liquidated
damages and fees that have accrued at such time, all liquidated damages and fees
that have accrued pursuant to the Registration Rights Agreement but have not
been paid prior to the date hereof.
8. Commencement of Monthly Redemptions. The definition of "Monthly
Redemption Date" in the Debentures is hereby amended and replaced with the
following:
""Monthly Redemption Date" means the 1st of each month, commencing on the
earlier of (a) July 15, 2005 and (b) the first such date following the 20th
day after the Effective Date and ending upon the full redemption of this
Debenture"
9. Extension of Maturity Date. The definition of the "Maturity Date" in
the Debentures shall be, in no event, later than February 1, 2006.
10. Shareholder Approval. Unless (a) the Trading Market notifies the
Company that Shareholder Approval is not required for the issuance in full of
all of the Underlying Shares (including the New Warrant) and (b) the Company
provides the Purchasers with a written representation to such effect and that
the Purchasers are not limited from converting the Debentures pursuant to
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Section 4(c)(i) of the Debentures or exercising the Warrants pursuant to Section
2(d)(ii) of the Warrants, the Company shall use reasonable best efforts to
obtain Shareholder Approval for such issuance at its next annual meeting of the
stockholders to be held not later than August 31, 2005 (the "2005 Annual
Meeting"). If the Company does not obtain such Shareholder Approval at the
Annual Meeting, the Company shall call a special meeting of stockholders every
four months thereafter to seek such Shareholder Approval until the earlier of
the date such Shareholder Approval is obtained or the Debentures are no longer
outstanding. Additionally, until the earlier of (a) the date such Shareholder
Approval is obtained or (b) the date that (i) the Trading Market notifies the
Company that Shareholder Approval is not required for the issuance in full of
all of the Underlying Shares (including the New Warrant) and (ii) the Company
provides the Purchasers with a written representation to such effect and that
the Purchasers are not limited from converting the Debentures pursuant to
Section 4(c)(i) of the Debentures in full or exercising the Warrants pursuant to
Section 2(d)(ii) of the Warrants in full, the Company shall not be permitted to
issue any Common Stock or Common Stock Equivalents with an effective per share
purchase price (whether at the time of such issuance or by virtue thereof at a
later time) for less than $1.25, subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.
11. Waivers and Consents. Each Purchaser, independently of any other
Purchaser: (a) acknowledges and consents to the issuance by the Company of up to
an additional $750,000 of 8% convertible debentures and warrants pursuant to a
Second Closing under that certain Securities Purchase Agreement, dated as of
March 31, 2005, by and among the Company and the purchasers which are a party
thereto, as amended by that certain Amendment No. 1, dated as of the date
hereof, by and among the Company and the purchasers which are a party thereto
(the "May Amendment") on the same terms and conditions as the issuance of the
Debentures and Warrants to the Purchasers under the Purchase Agreement, as
amended, and to the New Warrant (as defined in the May Amendment) (such
additional issuance, "Additional Issuance"); (b) consents and agrees that the
shares of Common Stock underlying the Additional Issuance (as required under the
registration rights agreement, dated as of March 31, 2005, by and among the
Company and the purchasers which are a party thereto entered into in connection
with the Additional Issuance) may be included for registration on the initial
registration statement to be filed by the Company under the Registration Rights
Agreement; (c) waives any of its rights under Section 4.13 of the Purchase
Agreement with respect to the Additional Issuance; and (d) waives any
anti-dilution rights under the Warrant with respect to the Additional Issuance.
Additionally, such that the terms and conditions of the May Amendment shall be
on the same terms and conditions of the Transaction Documents, Section
2.2(a)(iii) of the Purchase Agreement is hereby amended and restated as follows:
"(iii) a Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to 100% of such
Purchaser's Subscription Amounts divided by $1.25, with an exercise
price equal to $1.25, subject to adjustment as set forth therein;"
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and, in addition to the Warrant to be issued to the Purchasers pursuant to
Section 2.2(a)(iii) in connection with the Additional Subscription Amount, the
Company shall issue each Purchaser a make whole Warrant to purchase up to a
number of Warrant Shares that the Purchaser would otherwise have received
pursuant to Section 2.2(a)(iii), as amended, at the First Closing, less the
Warrant Shares issuable pursuant to the Warrant actually issued at the First
Closing. The Company acknowledges and confirms that the term Warrant as used in
the Transaction Documents includes the Warrants issued hereunder.
12. Filing of Form 8-K. Within 2 Trading Days of the date hereof, the
Company shall file a Current Report on Form 8-K disclosing the material terms of
this Amendment and attaching this Amendment as an exhibit thereto.
13. Effect on Purchase Agreement. Except as expressly set forth herein,
all of the terms and conditions of the Purchase Agreement, the Debentures, the
Warrants and Amendment No. 1 and Amendment No. 2 shall continue in full force
and effect after the execution of this Amendment, and shall not be in any way
changed, modified or superseded by the terms set forth herein and the provisions
of this Amendment, Amendment No. 1 and Amendment No. 2, if not expressly set
forth herein, shall otherwise be subject to the provisions of the Purchase
Agreement.
14. Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under the Amendments are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under the Amendments. Nothing contained herein or in this Amendments,
and no action taken by any Purchaser pursuant thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Amendments. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of the Amendments, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Amendments. For reasons of administrative
convenience only, Purchasers and their respective counsel have chosen to
communicate with the Company through FW. FW does not represent all of the
Purchasers but only DKR. The Company has elected to provide all Purchasers with
the same terms under the Amendments for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.
15. Definitions. Capitalized terms not otherwise defined herein have
the meanings given to such terms in the Purchase Agreement, the Debentures and
the Warrants.
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Executed as of May 13, 2005 by the undersigned duly authorized
representatives of the Company and Purchasers:
RAMP CORPORATION DKR SOUNDSHORE OASIS HOLDING FUND LTD.
By: ____________________________ By: ____________________________
Name: Name:
Title: Title:
HARBORVIEW MASTER FUND LP PLATINUM PARTNERS VALUE ARBITRAGE FUND
By: ____________________________ By: ____________________________
Name: Name:
Title: Title:
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