OMNIBUS AMENDMENT NO. 5 AND WAIVER
This Omnibus Amendment No. 5 and Waiver (this "AMENDMENT"), dated as of
October 30, 2007, is entered into by and between THINKPATH INC., an Ontario
corporation (the "PARENT"), THINKPATH, INC., an Ohio corporation
("THINKPATH-OH"), THINKPATH OF MICHIGAN, INC., a Michigan corporation (the
"THINKPATH-MI"), THINKPATH TECHNICAL SERVICES, INC., an Ohio corporation
("THINKPATH TECHNICAL" and together with the Parent, Thinkpath-OH and
Thinkpath-MI, the "COMPANIES" and each, a "COMPANY"), LAURUS MASTER FUND, LTD.,
a Cayman Islands company ("Laurus"), VALENS OFFSHORE SPV II, CORP., a Delaware
corporation ("VOFSPVII") and VALENS U.S. SPV I, LLC, a Delaware limited
liability company ("VUSSPVI" and together with Laurus and VOFSPVII, the
"HOLDERS" and each, a "HOLDER") for the purpose of (i) amending and restated the
Overadvance Side Letter, dated June 30, 2006 by and among each Company and
Laurus (as amended and restated, further amended, modified or supplemented from
time to time, the "OVERADVANCE SIDE LETTER"), (ii) amending the Security
Agreement, dated as of June 30, 2006, by and among each Company and Laurus (as
amended, modified or supplemented from time to time, the "SECURITY AGREEMENT"),
(iii) the Secured Revolving Note issued by the Companies as of June 30, 2006 to
Laurus in the initial face amount of US$3,500,000 and subsequently amended to
$4,000,000 (as amended, modified or supplemented from time to time, the
"REVOLVING NOTE"), (iv) amending the Common Stock Purchase Warrant issued by the
Parent to Laurus on June 27, 2005 and exercisable into up to 2,100,000 shares of
Common Stock of the Parent (as amended, modified or supplemented from time to
time, the "JUNE 2005 WARRANT"), (v) the Common Stock Purchase Warrant issued by
the Parent to Laurus on January 26, 2006 (and subsequently assigned in part to
each of VOFSPV2 and VUSSPVI) and exercisable into up to 500,000 shares of Common
Stock of the Parent (as amended, modified or supplemented from time to time, ▇▇▇
"▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇"), (▇▇) the Common Stock Purchase Warrant issued by the Parent
to Laurus on February 28, 2007 (and subsequently assigned in part to each of
VOFSPV2 and VUSSPVI) and exercisable into up to 2,426,870 shares of Common Stock
of the Parent (as amended, modified or supplemented from time to time, the "FEB
2007 WARRANT" and together with the Overadvance Side Letter, the Security
Agreement, the Revolving Note, the June 2005 Warrant, the Jan 2006 Warrant, and
each other Ancillary Agreement as defined in the Security Agreement, THE "LOAN
DOCUMENTS"). Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Security Agreement.
W I T N E S S E T H
WHEREAS, the Parent has failed to cause the filing and effectiveness of
the registration statement (the "REGISTRATION STATEMENT") required to be filed
and declared effective and to be maintained pursuant to Sections 2(a)(i) and
(ii) of the Minimum Borrowing Note Registration Rights Agreement, dated as of
June 27, 2005 by and between the Parent and Laurus (as amended, modified or
supplemented from time to time, the "REGISTRATION RIGHTS AGREEMENT") and, as a
result the Companies owe the Holders pursuant to Section 2(a) of the
Registration Rights Agreement, certain liquidated damages (the "LIQUIDATED
DAMAGES") as a result thereof; and
WHEREAS, the Companies have failed to pay to the Holders when due the
Liquidated Damages; and
1
WHEREAS, the Companies have failed to maintain positive Consolidated Cash
Flow for each monthly period commencing on March 1, 2007 through the date
hereof; and
WHEREAS, the Holders have agreed to waive on the terms and conditions set
forth herein, the Events of Default that may have occurred and are continuing as
a result of the failure by the Parent to pay to the Holders the Liquidated
Damages when due, as well as the breaches to the Consolidated Cash Flow covenant
through the date hereof, on the terms and conditions set forth herein; and
WHEREAS, each Company and each Holder have agreed to make certain changes
and/or modifications to certain of the Loan Documents as set forth herein.
NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
WAIVER OF EVENTS OF DEFAULT
1. Each Holder hereby waives each Event of Default that may have arisen
under Sections 19(a) and 19(c) of the Security Agreement solely as a result of
(i) the failure by the Companies to maintain positive Consolidated Cash Flow for
the each monthly period commencing on March 1, 2007 through the date hereof as
otherwise required by Section 13(bb) of the Security Agreement and (ii) the
failure by the Companies to pay to the Holders the Liquidated Damages as
otherwise required under the terms of the Registration Rights Agreement. Each
Holder hereby further waives the payment of the Liquidated Damages currently due
and payable to Holders by the Companies and further hereby agrees not to access
further Liquidated Damages through March 30, 2008.
2. Each Holder and each Company hereby agree that:
AMENDMENT TO SECURITY AGREEMENT
a. Section 13(bb) of the Security Agreement is hereby deleted in
its entirety and the following new Section 13(bb) is inserted
in lieu thereof:
"Minimum Consolidated Cash Flow. The Parent and its
Subsidiaries will not permit the Consolidated Cash Flow for
any monthly period ending on the last day each such month to
be less than the amount set forth below opposite the period
within such month occurs:
Peiod Amount
----- ------
October 30, 2007 through and including
June 30, 2008 ($50,000)
July 1, 2008 through and including
August 31, 2008 ($35,000)
September 1, 2008 through and including
December 31, 2008 ($20,000)
January 1, 2009 through and including the Maturity
Date (as defined in the Term Secured Note) $1,000
2
AMENDMENT TO REVOLVING NOTE
b. The Maturity Date under and as defined in the Revolving Note
is hereby extended to October 31, 2008.
AMENDMENT TO OVERADVANCE SIDE LETTER
c. The Overadvance Side Letter is hereby amended and restated in
its entirety in the form attached hereto as EXHIBIT A (the
"AMENDED AND RESTATED OVERADVANCE SIDE LETTER").
AMENDMENT TO JUNE ▇▇▇▇ ▇▇▇▇▇▇▇
d. The June 2005 Warrant is hereby amended by deleting the
definition of "Exercise Price" appearing therein in its
entirety and inserting the following new definition of
"Exercise Price" in lieu thereof:
"The 'Exercise Price' applicable under this Warrant
shall be $0.01 for each share acquired hereunder."
REAFFIRMATION OF REGISTRATION RIGHTS AGREEMENT
3. The Parent hereby ratifies and reaffirms its obligation pursuant to the
terms of the Registration Rights Agreement to file and have declared effective a
Registration Statement which shall register the shares of Common Stock of the
Company which are not otherwise freely tradeable and that are (i) held by each
of Laurus, VOFSPVII and VUSSPVI and (ii) that may be issued upon exercise of
issuable upon exercise of the Common Stock Purchase Warrant issued by the Parent
to Laurus on November 15, 2006 and exercisable into up to 940,750 shares of
Common Stock of the Parent (as amended, modified or supplemented from time to
time, the "NOV 2006 WARRANT"), on or prior to March 31, 2008 (the "EFFECTIVENESS
DATE"). For the avoidance of doubt, the "Effectiveness Date" shall be deemed a
Filing Date as defined in the Registration Rights Agreement.
ADDITIONAL COVENANTS
4. Mandatory Repayments of the Obligations.
a. On each date following each date on or after the date hereof
upon which the Parent or any of its Subsidiaries receives any
cash proceeds from any capital contribution or any sale or
issuance of its equity, an amount equal to 60% of the Net
Equity Proceeds of such capital contribution or sale or
issuance of equity shall be applied on such date as a
mandatory repayment of the Obligations in accordance with the
requirements of Sections 4(c) below. Nothing set forth herein
shall be deemed to be the implied or actual consent of any
Holder to the issuance by the Parent or its Subsidiaries of
equity.
3
b. On each date on or after the date hereof upon which the Parent
or any of its Subsidiaries receives any cash proceeds from any
Asset Sale, an amount equal to 100% of the Net Sale Proceeds
therefrom shall be applied on such date as a mandatory
repayment of the Obligations in accordance with the
requirements of Sections 4(c) below. Nothing set forth herein
shall be deemed to be the implied or actual consent of any
Holder to the consummation of any Asset Sale by the Parent or
its Subsidiaries.
c. Each amount required to be applied pursuant to Sections 4(a)
and (b) in accordance with this Section 4(c) shall be applied
(i) first, to any fees due and payable to Holder pursuant to
the Overadvance and the Notes, the Security Agreement and the
Ancillary Agreements, (ii) second. to accrued and unpaid
interest due on the Overadvance and the Notes, (iii) third, to
the outstanding principal balance of the Overadvance, (iv)
fourth, to the outstanding principal balance of the Secured
Term Note and (v) fifth, to the outstanding principal balance
of the Secured Revolving Note.
d. For purposes hereof, the following terms shall have the
meanings ascribed such terms herein:
"ASSET SALE" shall mean any sale, transfer or other disposition by
the Parent or any of its Subsidiaries to any Person (including by
way of redemption by such Person) of any asset (including, without
limitation, any capital stock or other securities of, or equity
interests in, another Person).
"NET EQUITY PROCEEDS" shall mean, with respect to each issuance or
sale of any equity by any Person or any capital contribution to such
Person, an amount in cash equal to the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs
associated therewith) received by such Person from the respective
sale or issuance of its equity or from the respective capital
contribution.
"NET SALE PROCEEDS" shall mean, for any Asset Sale, an amount in
cash equal to the gross cash proceeds (including any cash received
by way of deferred payment pursuant to a promissory note, receivable
or otherwise, but only as and when received) received from such sale
of assets, net of the reasonable costs of such sale (including fees
and commissions, payments of unassumed liabilities relating to the
assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Agreement) which is
secured by the respective assets which were sold), and the
incremental taxes paid or payable as a result of such Asset Sale.
4
MISCELLANEOUS
5. This Amendment shall be effective as of the date first above written
(the "AMENDMENT EFFECTIVE DATE") on the date when (i) each of the Companies and
Laurus shall have duly executed and each of the Companies shall have delivered
to Laurus their respective counterparts to this Amendment and the Amended and
Restated Overadvance Side Letter, and (ii) each of the Companies and Laurus
shall have duly executed and each of the Companies shall have delivered to the
Holders their respective counterparts to the Reaffirmation and Ratification
Agreement in the form attached hereto as EXHIBIT B.
6. Except as specifically set forth in this Amendment, there are no other
amendments, modifications or waivers to the Loan Documents, and all of the other
forms, terms and provisions of the Loan Documents remain in full force and
effect.
7. The Parent and, to the extent applicable, each of the other Companies
hereby represent and warrant to Laurus that (i) after giving effect to the
Amendment Effective Date, no Event of Default exists on the date hereof, (ii) on
the date hereof, after giving effect to the Amendment Effective Date, all
representations, warranties and covenants made by the Parent and/or such other
Companies, as applicable, in connection with the Loan Documents are true,
correct and complete and (iii) on the date hereof, after giving effect to the
Amendment Effective Date, all of the Parent's, the other Companies' and their
respective Subsidiaries' covenant requirements have been met.
8. From and after the Amendment Effective Date, all references in the Loan
Documents, the other Ancillary Agreements to any Loan Document shall be deemed
to be a reference to such Loan Document as modified hereby.
9. This Amendment shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument.
* * * *
5
IN WITNESS WHEREOF, each of the Companies and Laurus have caused this
Amendment to be effective and signed in its name effective as of the date set
forth above.
THINKPATH INC., AN ONTARIO CORPORATION
By: /s/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title:CEO
THINKPATH INC., AN OHIO CORPORATION
By: /s/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title:CEO
THINKPATH OF MICHIGAN INC., A
MICHIGAN CORPORATION
By: /s/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title:CEO
THINKPATH TECHNICAL SERVICES INC., AN
OHIO CORPORATION
By: /s/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title:CEO
6
LAURUS MASTER FUND, LTD.
By: Laurus Capital Management, LLC,
its investment manager
By: /S/ ▇▇▇▇▇▇ GRIN
-----------------------------------------
Name: ▇▇▇▇▇▇ Grin
Title: Principal
VALENS OFFSHORE SPV II, CORP.
By: Valens Capital Management, LLC,
its investment manager
By: /S/ ▇▇▇▇▇▇ GRIN
-----------------------------------------
Name: ▇▇▇▇▇▇ Grin
Title: Authorized Signatory
VALENS ONSHORE SPV I, LLC
By: Valens Capital Management, LLC,
its investment manager
By: /S/ ▇▇▇▇▇▇ GRIN
-----------------------------------------
Name: ▇▇▇▇▇▇ Grin
Title: Authorized Signatory
7
EXHIBIT A
AMENDED AND RESTATED OVERADVANCE SIDE LETTER
[SEE ATTACHED]
8
October 30, 2007
Thinkpath Inc. and its Subsidiaries
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Chief Financial Officer
Re: Amended and Restated Overadvance Side Letter
This Amended and Restated Overadvance Side Letter (this "OVERADVANCE SIDE
LETTER") amends and restates in its entirety (and is given in substitution for
and not in satisfaction of the obligations arising under) the Overadvance Side
Letter, dated June 30, 2006 by and among each Thinkpath Inc., an Ontario
corporation ("Thinkpath") and such other subsidiaries of Thinkpath party thereto
(collectively, together with Thinkpath, the "COMPANIES" and each, a "COMPANY")
and Laurus Master Fund, Ltd. ("LAURUS") (as amended, modified or supplemented
from time to time through the date hereof, the "JUNE 2006 OVERADVANCE SIDE
LETTER").
Reference is hereby made to that certain Security Agreement dated as of
June 30, 2006 by and among Thinkpath and such other Companies named in that
certain Security Agreement or which hereafter become a party thereto and Laurus
(as amended, modified or supplemented from time to time, the "SECURITY
AGREEMENT"). Capitalized terms used but not defined herein shall have the
meanings ascribed them in the Security Agreement. Subject to satisfaction of the
Overadvance Conditions (as defined below), Laurus is hereby notifying the
Companies of its decision to exercise the discretion granted to it pursuant to
Section 2(a)(ii) of the Security Agreement to make Loans to the Companies during
the Period (as defined below) in excess of the Formula Amount on the date hereof
(the "OVERADVANCE"). The Companies hereby acknowledge that the aggregate
principal amount of the Overadvance outstanding as of the date hereof is
$1,477,054 (the "OUTSTANDING OVERADVANCE AMOUNT"). The outstanding Overadvance
shall at no time exceed the lesser of (x) Applicable Maximum Overadvance Amount
(as defined below) and (y) the remainder of the Capital Availability Amount less
the Formula Amount as of the date of determination (the "TOTAL MAXIMUM
OVERADVANCE AMOUNT"). The "APPLICABLE MAXIMUM OVERADVANCE AMOUNT" shall mean on
any date of determination such amount set forth on ANNEX A hereto under the
heading "Applicable Maximum Overadvance Amount" and opposite the period during
which such determination is made.
In connection with making the Overadvance, for a period commencing on the
date hereof through and including June 30, 2008 (the "PERIOD"), Laurus hereby
waives compliance with Section 3 of the Security Agreement, but solely as such
provision relates to the immediate repayment requirement for Overadvances.
Laurus further agrees that solely for such Period (but not thereafter), (i) the
incurrence and existence of the Overadvance shall not trigger an Event of
Default under Section 19(a) of the Security Agreement and (ii) notwithstanding
anything set forth to the contrary in Section 5(b)(ii) of the Security
Agreement, the rate of interest (the "OVERADVANCE RATE") applicable to
Overadvances shall be 29.0% per annum; provided that, the Overadvance Rate shall
be increased by an additional one percent (1.0%) per each 30 day period
9
following the date hereof until the Overadvance shall be indefeasibly repaid in
full; provided further, that, notwithstanding the foregoing, the Overadvance
Rate shall at no time be in excess of 35% per annum. Interest shall be (i)
calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears,
commencing on November 1, 2007 on the first business day of each consecutive
calendar month thereafter through and including the expiration of the Period,
whether by acceleration or otherwise. All other terms and provisions of the
Security Agreement and the Ancillary Agreements shall remain in full force and
effect. For the avoidance of doubt, all proceeds applied by any Company in
repayment of its obligations to Laurus hereunder and under the Security
Agreement and the Ancillary Agreements shall be first applied as a repayment of
the Overadvance unless otherwise agreed by Laurus. Once repaid, the Overadvance
may be reborrowed during the Period provided that the maximum amount of the
Overadvance outstanding shall not at any time exceed the lesser of the
Applicable Maximum Overadvance Amount at such time and the Total Maximum
Overadvance Amount.
Each Company hereby acknowledges and agrees that Laurus' obligation to
fund the Initial Overadvance Amount on the date hereof and each permitted
reborrowing thereof after the date hereof up to the Maximum Overadvance Amount
shall, at the time of such making of such Overadvance or reborrowing, and
immediately after giving effect thereto, be subject to the satisfaction of the
following conditions (the "OVERADVANCE CONDITIONS"): (i) no Event of Default
shall exist and be continuing as of such date; (ii) all representations,
warranties and covenants made by each Company in connection with the Security
Agreement and the Ancillary Agreements shall be true, correct and complete as of
such date; (iii) each Company and its Subsidiaries shall have taken all action
necessary to grant Laurus "control" over all of such Company's and its
respective Subsidiaries' Deposit Accounts (the "CONTROL ACCOUNTS"), with any
agreements establishing "control" to be in form and substance satisfactory to
Laurus and (iv) the Companies shall have provided to Laurus on the 1st and 15th
of each month during the Period a borrowing base certificate (each, a
"CERTIFICATE") in the form attached hereto as ANNEX B, which Certificate shall
be properly completed and executed as determined by Laurus in its reasonable
discretion. "Control" over such Control Accounts shall be released upon the
indefeasible repayment in full and termination of the Overadvance (together with
all accrued interest and fees which remain unpaid in respect thereof).
Each Company hereby acknowledges and agrees that all amounts outstanding
under the Overadvance (together with accrued interest and fees which remain
unpaid in respect thereof) on the date of expiration of the Period shall,
jointly and severally, be repaid in full by the Companies on such date of
expiration. Each Company hereby further acknowledges and agrees that all amounts
outstanding under the Overadvance (together with accrued interest and fees which
remain unpaid in respect thereof) in excess of the lesser of the Applicable
Maximum Overadvance Amount and the Total Maximum Overadvance Amount (each, an
"EXCESS") at any time shall, jointly and severally, be repaid in full by the
Companies within 3 business days of the first date of each such Excess. The
failure to make any required repayment hereunder of an Overadvance shall give
rise to an immediate Event of Default.
10
The Parent understands that it has an affirmative obligation to make
prompt public disclosure of material agreements and material amendments to such
agreements. It is the Parent's determination that this Overadvance Side Letter
and the related amendment dated as of the date hereof are material. The Parent
agrees to file an 8-K within four (4) business days of the date hereof and in
the form otherwise prescribed by the Securities and Exchange Commission.
This Overadvance Side Letter may not be amended or waived except by an
instrument in writing signed by each of the Companies and Laurus. This
Overadvance Side Letter may be executed in any number of counterparts, each of
which shall be an original and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Overadvance Side Letter by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof or thereof, as the case may be. THIS
OVERADVANCE SIDE LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. This Overadvance Side Letter sets forth the
entire agreement between the parties hereto as to the matters set forth herein
and supersede all prior communications, written or oral, with respect to the
matters herein.
This Overadvance Side Letter shall for all purposes be deemed to be an
"Ancillary Agreement" under and as defined in the Security Agreement.
If the foregoing meets with the Companies' approval please signify the
Companies' acceptance of the terms hereof by signing below.
LAURUS MASTER FUND, LTD.
By: Laurus Capital Management, LLC,
its investment manager
By: /S/ ▇▇▇▇▇▇ GRIN
-----------------------------------------
Name: ▇▇▇▇▇▇ Grin
Title: Principal
11
AGREED AND ACCEPTED ON THE DATE HEREOF:
THINKPATH INC., AN ONTARIO CORPORATION
By: /s/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title: CEO
THINKPATH, INC., AN OHIO CORPORATION
By: /s/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title: CEO
THINKPATH OF MICHIGAN, INC., A MICHIGAN CORPORATION
By: /s/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title: CEO
THINKPATH TECHNICAL SERVICES, INC., AN OHIO CORPORATION
By:
-----------------------------------------
Name:
Title:
12
ANNEX A TO OVERADVANCE SIDE LETTER
PERIOD APPLICABLE MAXIMUM OVERADVANCE AMOUNT
------ -------------------------------------
October 30, 2007 through and $1,500,000
including March 31, 2008
April 1, 2008 through and including $1,200,000
April 30, 2008
May 1, 2008 through and including $1,150,000
May 31, 2008
June 1, 2008 through and including $1,100,000
June 30, 2008
July 1, 2008 through and including $1,050,000
July 31, 2008
August 1, 2008 through and $1,000,000
including August 31, 2008
September 1, 2008 through and $950,000
including September 30, 2008
October 1, 2008 through and $900,000
including October 30, 2008
October 31, 2008 and thereafter $0
13
ANNEX B
[OBJECT OMITTED]
14
EXHIBIT B
FORM OF REAFFIRMATION AND RATIFICATION AGREEMENT
[SEE ATTACHED]
15
REAFFIRMATION AND RATIFICATION AGREEMENT
October 30, 2007
Laurus Master Fund, Ltd.
c/o Laurus Capital Management, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to (a) the Security Agreement dated as of June 27, 2005
by and among Thinkpath, Inc., an Ontario corporation ("THINKPATH"), Thinkpath,
Inc., an Ohio corporation ("THINKPATH (OH)"), Thinkpath of Michigan Inc., a
Michigan corporation ("THINKPATH (MI)"), and Thinkpath Technical Services Inc.,
a Ohio corporation ("TECHNICAL SERVICES") and Laurus Master Fund, Ltd., a Cayman
Islands company ("LAURUS") (as amended, modified and/or supplemented from time
to time, the "JUNE 2005 SECURITY AGREEMENT"), (b) the Ontario Subsidiary
Guaranty, dated as of June 27, 2005 made by Systemsearch Consulting Services
Inc., an Ontario corporation ("SYSTEMSEARCH"), Thinkpath Training Inc., an
Ontario corporation ("THINKPATH TRAINING (ON)"), Tidalbeach Inc., an Ontario
corporation ("TIDALBEACH"), International Career Specialists Inc., an Ontario
corporation ("ICS") and TBM Technologies Inc., an Ontario Corporation ("TBM") in
favor of Laurus (as amended, modified or supplemented from time to time, the
"ONTARIO SUBSIDIARY GUARANTY"), (c) the Ontario Master Security Agreement dated
as of June 27, 2005 made by Thinkpath Training (ON), Tidalbeach, ICS and TBM in
favor of Laurus (as amended, modified or supplemented from time to time, the
"ONTARIO MASTER SECURITY AGREEMENT"), (d) the US Subsidiary Guaranty, dated as
of June 27, 2005 made by Thinkpath Training (US) Inc., a New York corporation
("THINKPATH TRAINING (NY)"), Microtech Professional Inc., a Massachusetts
corporation ("MICROTECH") and E-wink, Inc., a New York corporation ("EWINK") in
favor of Laurus (as amended, modified or supplemented from time to time, the "US
SUBSIDIARY GUARANTY"), (e) the US Master Security Agreement dated as of June 27,
2005 made by Thinkpath Training (NY), Microtech and Ewink in favor of Laurus (as
amended, modified or supplemented from time to time, the "US MASTER SECURITY
AGREEMENT"), (f) the Stock Pledge Agreement dated as of June 27, 2005 made by
Thinkpath, Thinkpath (OH), Thinkpath (MI), Technical Services, Systemsearch,
Thinkpath Training (ON), Tidalbeach, ICS, TBM, Thinkpath Training (NY),
Microtech and Ewink in favor of Laurus (as amended, modified or supplemented
from time to time, the "STOCK PLEDGE AGREEMENT") and (g) the Security Agreement
dated as of June 30, 2006 by and among Thinkpath, Thinkpath (OH), Thinkpath
(MI), Technical Services and such other subsidiaries of Thinkpath which
hereafter become a party thereto (together with Thinkpath, Thinkpath (OH),
Thinkpath (MI) and Technical Services, the "COMPANIES" and, each a "COMPANY"),
and Laurus (as amended, modified and/or supplemented from time to time, the
"JUNE 2006 SECURITY AGREEMENT") (the June 2005 Security Agreement, the Ontario
Subsidiary Guaranty, the Ontario Master Security Agreement, the US Subsidiary
Guaranty, the US Master Security Agreement, the Stock Pledge Agreement and the
June 2006 Security Agreement, collectively, the "EXISTING SECURITY AND GUARANTY
AGREEMENTS"). For purposes hereof, the defined term "CREDIT PARTY" shall mean
individually and collectively, each of Thinkpath, Thinkpath (OH), Thinkpath
(MI), Technical Services, Systemsearch, Thinkpath Training (ON), Tidalbeach,
ICS, TBM and Thinkpath Training (NY).
16
WHEREAS, Thinkpath, Thinkpath (OH), Thinkpath (MI), Technical Services
(collectively, the "BORROWERS") and Laurus and certain other parties have agreed
to enter into that certain Omnibus Amendment No. 5 and Waiver, dated as of the
date hereof for the purpose, in part, of (i) extending the Maturity Date of that
certain Secured Revolving Note, made by the Borrowers as of June 30, 2006,
jointly and severally, in favor of Laurus (as amended, modified or supplemented
from time to time, the "REVOLVING NOTE") and (ii) amending and restating in its
entirety that certain Overadvance Side Letter, dated as of June 30, 2006 by and
among each Company and Laurus (as amended and restated, further amended,
modified or supplemented from time to time, the "OVERADVANCE SIDE LETTER" and
together with the Revolving Note and the Omnibus Amendment No. 5 and Waiver, the
"AMENDED LAURUS DOCUMENTS"); and
NOW THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration , the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Reaffirmation and Ratification. To induce Laurus to agree to the
Amended Laurus Documents, each Credit Party hereby jointly and severally:
a. represents and warrants to Laurus that it has reviewed and
approved the terms and provisions of the Amended Laurus Document and the
documents, instruments and agreements entered into in connection
therewith;
b. acknowledges, ratifies and confirms that all indebtedness
incurred by, and all other obligations and liabilities of, each Company
under the Amended Laurus Documents are (i) "Obligations" under, and as
defined in the June 2005 Security Agreement, (ii) "Obligations" under, and
as defined in the Ontario Subsidiary Guaranty, (iii) "Obligations" under,
and as defined in, the Ontario Master Security Agreement, (iv)
"Obligations" under, and as defined in the US Subsidiary Guaranty, (v)
"Obligations" under, and as defined in, the US Master Security Agreement,
(vi) "Obligations" under, and as defined in, the Stock Pledge Agreement
and (vii) "Obligations" under, and as defined in the June 2006 Security
Agreement;
c. acknowledges, ratifies and confirms that Amended Laurus Documents
are eacn (x) an "Ancillary Agreement" under, and as defined in, each of
the June 2005 Security Agreement and June 2006 Security Agreement and (y)
a "Document" under, and as defined in, each of the Ontario Subsidiary
Guaranty, the Ontario Master Security Agreement, the US Subsidiary
Guaranty, the US Master Security Agreement and the Stock Pledge Agreement;
d. acknowledges, ratifies and confirms that all of the terms,
conditions, representations and covenants contained in the Existing
Security and Guaranty Agreements are in full force and effect and shall
remain in full force and effect after giving effect to the execution and
effectiveness of the Amended Laurus Documents;
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e. represents and warrants that no offsets, counterclaims or
defenses exist as of the date hereof with respect to any of the
undersigned's obligations under any Existing Security and Guaranty
Agreement or the Amended Laurus Documents and the Existing Security and
Guaranty Agreements shall continue to constitute valid security for the
obligations of each Credit Party to Laurus under and pursuant to the
Existing Security and Guaranty Agreements and the Amended Laurus
Documents; and
f. acknowledges, ratifies and confirms the grant by such Credit
Party to Laurus of a security interest in the assets of (including the
equity interests owned by) such Credit Party, as more specifically set
forth in the Existing Security and Guaranty Agreements and that each
Existing Security and Guaranty Agreement constitutes legal, valid and
binding obligations of each Credit Party party thereto, enforceable
against each such Credit Party in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization and other laws of
general application limiting the enforceability of creditors' rights.
2. Miscellaneous. This Reaffirmation shall be binding upon the parties
hereto and their respective successors and permitted assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and permitted assigns. THIS REAFFIRMATION SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
This Reaffirmation may be executed in any number of counterparts, each of which
shall be an original, but all of which shall constitute one instrument. In the
event that any provision of this Reaffirmation shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Reaffirmation which shall remain binding on all parties
hereto.
3. Ancillary Agreements. From and after the execution and delivery hereof
by the parties hereto, this Reaffirmation shall constitute an "ANCILLARY
AGREEMENT" for all purposes of the Loan Documents.
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Very truly yours,
THINKPATH INC., an Ontario corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name: Declan French
Title: CEO
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
THINKPATH INC., an Ohio corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
THINKPATH OF MICHIGAN INC., a
Michigan corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
THINKPATH TECHNICAL SERVICES INC., an Ohio
corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
SYSTEMSEARCH CONSULTING SERVICES INC., an
Ontario corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
THINKPATH TRAINING INC., an
Ontario corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
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TIDALBEACH INC., an Ontario corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
THINKPATH TRAINING (US) INC., a
New York corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
INTERNATIONAL CAREER SPECIALISTS INC., an
Ontario corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
TBM TECHNOLOGIES INC., an Ontario
corporation
By: /S/ DECLAN FRENCH
-----------------------------------------
Name:
Title:
Address:
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ACKNOWLEDGED AND AGREED TO BY:
LAURUS MASTER FUND, LTD.
By: Laurus Capital Management, LLC,
its investment manager
BY: /S/ ▇▇▇▇▇▇ GRIN
--------------------------------
NAME: ▇▇▇▇▇▇ Grin
TITLE: Principal
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