OMNIBUS AMENDMENT NO. 3
This Omnibus Amendment No. 3 (this "AMENDMENT"), dated as of March 21,
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") and LAURUS MASTER FUND, LTD., a Cayman Islands company
("LAURUS"), for the purpose of amending the terms of (i) the Overadvance Side
Letter, dated June 30, 2006 by and among each Company and Laurus (as amended,
modified or supplemented from time to time, the "OVERADVANCE SIDE LETTER"), (ii)
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 (as amended, modified or supplemented
from time to time, the "REVOLVING NOTE"), and (iii) the Security Agreement,
dated as of June 30, 2006, by and among each Company and Laurus, pursuant to the
terms of which the Revolving Note and Term Note were issued (as amended,
modified or supplemented from time to time, the "SECURITY AGREEMENT" and
together with the Overadvance Side Letter, the Revolving Note, the Security
Agreement 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.
WHEREAS, each Company and Laurus 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:
AMENDMENT TO REVOLVING NOTE
1. The stated amount of the Revolving Note is hereby increased to US$4,000,000
and the Revolving Note is hereby amended by deleting the amount "THREE MILLION
SIX HUNDRED FIFTY THOUSAND DOLLARS (US$3,650,000)" appearing in the preamble
thereto and inserting the amount "FOUR MILLION DOLLARS (US$4,000,000)" in lieu
thereof.
2. Section 1.1 of the Revolving Note is hereby deleted in its entirety and the
following new Section 1.1 in inserted in lieu thereof:
"1.1 CONTRACT RATE. Subject to Sections 2.2 and 3.9, interest payable
on the outstanding principal amount of this Note (the "PRINCIPAL
AMOUNT") shall accrue (i) in respect of the first US$3,650,000 of
principal indebtedness outstanding under this Note from time to time,
at a rate per annum equal to the "prime rate" published in The Wall
Street Journal from time to time (the "Prime Rate"), plus three percent
(3.0%) and (ii) in respect of all principal indebtedness outstanding
under this Note in excess of US$3,650,000 from time to time, at a rate
per annum equal to the Prime Rate, plus twenty three percent (23.0%)
(clause (i) and (ii), as applicable, the "CONTRACT RATE"). The Contract
Rate shall be increased or decreased as the case may be for each
increase or decrease in the Prime Rate in an amount equal to such
increase or decrease in the Prime Rate; each change to be effective as
of the day of the change in the Prime Rate. Subject to Section 1.2, the
Contract Rate shall not at any time be less than eight percent (8.0%).
Interest shall be (i) calculated on the basis of a 360 day year, and
(ii) payable monthly, in arrears, commencing on July 3, 2006 on the
first business day of each consecutive calendar month thereafter
through and including the Maturity Date, and on the Maturity Date,
whether by acceleration or otherwise; provided that interest payable in
respect such portion of the Contract Rate as may from time to time be
in excess of the Prime Rate plus thirteen percent (13%) shall instead
accrue monthly, in arrears, and be payable in full on the Maturity
Date."
AMENDMENT TO SECURITY AGREEMENT
3. The definition of "Capital Availability Amount" appearing in Annex A to the
Security Agreement is hereby amended by deleting the amount "US$3,650,000"
appearing therein and inserting the amount "US$4,000,000" in lieu thereof.
4. The definition of "Secured Revolving Note" appearing in Annex A to the
Security Agreement is hereby amended by deleting the amount "US$3,650,000"
appearing therein and inserting the amount "US$4,000,000" in lieu thereof.
AMENDMENT TO OVERADVANCE SIDE LETTER
5. The Overadvance Side Letter is hereby amended by (i) deleting the amount
"US$3,650,000" appearing in the last sentence of the first paragraph of the
Overadvance Side Letter and inserting the amount "US$4,000,000" in lieu thereof
and (ii) clause (ii) of the second paragraph of the Overadvance Side Letter is
hereby deleted in its entirety and the following new clause (ii) of the second
paragraph of the Overadvance Side Letter is hereby inserted in lieu thereof:
"(ii) notwithstanding anything set forth to the contrary in Section
5(b)(ii) of the Security Agreement, subject to Sections 2.2 and 3.9 of
the Revolving Note (as defined in the Security Agreement), the rate of
interest (the "OVERADVANCE RATE") applicable to Overadvances shall be
the greater of (I) such rate of interest as is otherwise applicable
pursuant to the terms of the Revolving Note and (II) two percent (2.0%)
per month (i.e. 24.0% per annum); PROVIDED THAT, to the extent that (x)
the Overadvance is not repaid in full on or prior to the 60th day
following the date hereof and (y) no other Event of Default shall have
occurred and be continuing, the Overadvance Rate otherwise applicable
to such Overadvances shall be increased by an additional one percent
(1.0%) per month (12.0% per annum)"
LCM FEE
6. Upon execution of this Agreement by each Company and Laurus, the Companies
jointly and severally agree to pay to Laurus Capital Management, LLC, the
investment advisor of Laurus ("LCM"), on or prior to April 1, 2007, a
non-refundable payment in an amount equal to $12,250. The foregoing payment is
referred to herein as the "ADDITIONAL LCM PAYMENT."
MISCELLANEOUS
7. 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 (ii) each of the
Companies and Laurus shall have duly executed and each of the Companies shall
have delivered to Laurus their respective counterparts to the Reaffirmation and
Ratification Agreement in the form attached hereto as EXHIBIT A.
8. 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.
9. The Parent and, to the extent applicable, each of the other Companies hereby
represent and warrant to Laurus that (i) no Event of Default exists on the date
hereof, (ii) on the date hereof, 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, all of the Parent's, the other Companies' and their respective
Subsidiaries' covenant requirements have been met.
10. 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.
11. 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.
* * * *
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
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Name: Declan French
Title: CEO
THINKPATH INC., AN OHIO CORPORATION
By: /S/ DECLAN FRENCH
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Name: Declan French
Title: CEO
THINKPATH OF MICHIGAN INC., A MICHIGAN CORPORATION
By: /S/ DECLAN FRENCH
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Name: Declan French
Title: CEO
THINKPATH TECHNICAL SERVICES INC., AN OHIO
CORPORATION
By: /S/ DECLAN FRENCH
--------------------------------------------------
Name: Declan French
Title: CEO
LAURUS MASTER FUND, LTD.
By: /S/ XXXXXX GRIN
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Name: Xxxxxx Grin
Title: Director
EXHIBIT A
FORM OF REAFFIRMATION AND RATIFICATION AGREEMENT
