-----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, FwWOQ7+ZPcPK5mDOXhQNAPgn06y5epkGL99y6IEqPX1YLkI6QwHWqDMYZwd3eKXv sMXVD8uPavWi2sg7tyF8iw== 0000909012-07-000514.txt : 20070308 0000909012-07-000514.hdr.sgml : 20070308 20070308164553 ACCESSION NUMBER: 0000909012-07-000514 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070308 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070308 DATE AS OF CHANGE: 20070308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THINKPATH INC CENTRAL INDEX KEY: 0001070630 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 52209027 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14813 FILM NUMBER: 07681417 BUSINESS ADDRESS: STREET 1: 55 UNIVERSITY AVE STE 505 STREET 2: TORONTO, ONTARIO, CANADA CITY: M5J 2H7 BUSINESS PHONE: 4163648800 MAIL ADDRESS: STREET 1: 55 UNIVERSITY AVE STE 505 STREET 2: TORONTO, ONTARIO, CANADA CITY: MCJ 2H7 FORMER COMPANY: FORMER CONFORMED NAME: THINKPATH COM INC DATE OF NAME CHANGE: 20000414 FORMER COMPANY: FORMER CONFORMED NAME: IT STAFFING LTD DATE OF NAME CHANGE: 19980917 8-K 1 t303271.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) March 8, 2007 (February 28, 2007) THINKPATH INC. (Exact name of registrant as specified in its charter) ONTARIO 001-14813 52-209027 - ---------------------------- ----------------------- ------------------ (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 201 WESTCREEK BOULEVARD, BRAMPTON, ONTARIO, CANADA L6T 5S6 ---------------------------------------------------------- (Address of principal executive offices, including zip code) (905) 460-3040 -------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT As previously disclosed, on June 29, 2005, Thinkpath, Inc. (the "Company) entered into a security agreement with Laurus Master Fund, Ltd. ("Laurus" and, together with the Company, the "Parties"), which established a $3.5 million convertible financing facility based on eligible accounts receivables (the "Original Agreement"). On June 30, 2006, the Company entered into a revised security agreement pursuant to which Laurus issued to the Company an additional promissory note in the principal amount of $1,400,000. The proceeds of the promissory note were used to fund the acquisition of all of the capital stock of The Multi-Tech Group. On February 28, 2007, the Parties entered into an agreement which further amended the Original Agreement (the "Omnibus Amendment"). Under the Omnibus Amendment, the Parties agreed that the Company shall not be required to pay to Laurus the principal portion of the monthly amounts due on the first business day of March, April, May, June, July and August of 2007 under the term note issued to Laurus by the Company pursuant to the Original Agreement (the "Term Note"). Instead, under the Omnibus Amendment, such amounts shall be amortized equally over the final 22 months of the term of the Term Note, commencing on the first business day of September 2007 until the first business day of July 2009. The Omnibus Amendment also revised the revolving note (the "Revolving Note") issued under the Original Agreement by increasing the amount of the Revolving Note to $3,650,000 from $3,500,000. Further, in connection with the transaction, the Parties agreed to redefine the exercise price of the June 2005 options and June 2006 warrants issued in favor of Laurus from $.0001 per share to $.01 per share. On February 28, 2007, the Company also issued to Laurus a warrant to purchase up to 2,426,870 shares of the Company's common stock at $0.01 per share, with such warrant being immediately exercisable. Such warrant also provides for cashless exercise. The Omnibus Amendment also provided that a registration statement relative to the shares of common stock to be issued upon the exercise of the warrants described above will be filed within 90 days from the date of the Omnibus Amendment. On February 28, 2007, the Company also executed a Reaffirmation and Ratification Agreement wherein it acknowledged, ratified and confirmed all indebtedness and obligations incurred by the Company pursuant to the Original Agreement and all notes executed pursuant to such Original Agreement or any and all amendments thereto. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (a) None. (b) None. (c) None. (d) EXHIBIT NUMBER DESCRIPTION 4.1 Omnibus Amendment No. 2 4.2 Common Stock Purchase Warrant 4.3 Reaffirmation and Ratification Agreement SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: March 8, 2007 THINKPATH INC. By: /S/ KELLY HANKINSON -------------------- Name: Kelly Hankinson Title: Chief Financial Officer EX-4.1 2 exh4-1.txt OMNIBUS OMNIBUS AMENDMENT NO. 2 This Omnibus Amendment No. 2 (this "AMENDMENT"), dated as of February 28, 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 $3,500,000 (as amended, modified or supplemented from time to time, the "REVOLVING NOTE"), (iii) the Secured Term Note issued by the Companies as of June 30, 2006 to Laurus in the initial face amount of $1,400,000 (as amended, modified or supplemented from time to time, the "TERM NOTE"), (iv) 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"), (v) 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"), (vi) the Common Stock Purchase Warrant issued by the Parent to Laurus on January 26, 2006 and exercisable into up to 500,000 shares of Common Stock of the Parent (as amended, modified or supplemented from time to time, the "JAN 2006 WARRANT"), (vii) the Common Stock Purchase Warrant issued by the Parent to Laurus on June 30, 2006 and exercisable into up to 1,810,674 shares of Common Stock of the Parent (as amended, modified or supplemented from time to time, the "JUNE 2006 WARRANT"), (viii) 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"and together with the Overadvance Side Letter, the Revolving Note, the Term Note, the Security Agreement, the June 2005 Warrant, the June 2005 Option, the Jan 2006 Warrant, the June 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. 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: PRINCIPAL POSTPONEMENT; AMENDMENT TO TERM NOTE 1. Laurus and each Company hereby agree that the Companies shall not be required to pay the principal portion of any Monthly Amount (as defined in the Term Note) due on the first business day of March 2007, April 2007, May 2007, June 2007, July 2007 and August 2007 on such dates (collectively, the "POSTPONED PRINCIPAL"); PROVIDED THAT, the Postponed Principal (i.e. $254,545.44) shall be amortized equally over the final 22 months of term of the Term Loan prior to maturity commencing on the first business day of September 2007 (i.e. the principal portion of the Monthly Amount due on the first business day of each month beginning with September 2007 through and including June 2009 shall be increased to $53,994.49). All amounts that remain outstanding under the Loan Documents on the Maturity Date shall be due and payable on the Maturity Date. AMENDMENT TO REVOLVING NOTE 2. The stated amount of the Revolving Note is hereby increased to $3,650,000 and the Revolving Note is hereby amended by deleting the amount "THREE MILLION FIVE HUNDRED THOUSAND DOLLARS (US$3,500,000)" appearing in the preamble thereto and inserting the amount "THREE MILLION SIX HUNDRED FIFTY THOUSAND DOLLARS (US$3,650,000)" in lieu thereof. AMENDMENT TO SECURITY AGREEMENT 3. Section 13 of the Security Agreement is hereby amended by inserting the following new clause 13(bb) at the end thereof: "(bb) MINIMUM CONSOLIDATED CASH FLOW. The Parent and its Subsidiaries shall have Consolidated Cash Flow of no less than $1,000.00 for each monthly period as determined on the last day of each such month. 4. The definition of "Capital Availability Amount" appearing in Annex A to the Security Agreement is hereby amended by deleting the amount "US$3,500,000" appearing therein and inserting the amount "US$3,650,000" in lieu thereof. 5. Annex A of the Security Agreement is hereby amended by inserting the following new definitions of "Capital Expenditures", "Capital Lease Obligations", "Consolidated Cash Flow", "Consoldiated EBIT", "Consolidated EBITDA" and "Consolidated Net Income" in appropriate alphabetical order: "Capital Expenditures" shall mean, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with generally accepted accounting principles and, without duplication, the amount of Capitalized Lease Obligations incurred by such Person. "Capitalized Lease Obligations" shall mean, with respect to any Person, all rental obligations of such Person which, under generally accepted accounting principles, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles. "Consolidated Cash Flow" for any period shall mean the remainder of (1) Consolidated EBITDA LESS (2) the sum of, without duplication, of (i) all interest expense of the Parent and its Subsidiaries for such period, (ii) the amount of all rent expense of, and lease payments expensed by, the Parent and its Subsidiaries with respect to real property (including land, buildings, improvements and fixtures, -2- including leaseholds) and vehicles, determined on a consolidated basis for such period, (iii) the amount of all Capital Expenditures made by the Parent and its Subsidiaries determined on a consolidated basis for such period, (iv) all dividends actually paid by the Parent during such period, (v) the scheduled principal amount of all amortization payments with respect to indebtedness of the Parent and its Subsidiaries for such period (as determined on the first day of the respective period) and (vi) accrued taxes of the Parent and its Subsidiaries based on income that were included and arriving at Consolidated Net Income. "Consolidated EBIT" shall mean, for any period, the remainder of Consolidated Net Income for such period, before interest expense and provision for taxes based on income that were included and arriving at Consolidated Net Income for such period and without giving effect to (x) any extraordinary gains or losses, and (y) any gains or losses from sales of assets other than inventory sold in the ordinary course of business. "Consolidated EBITDA" shall mean, for any period, Consolidated EBIT, adjusted by adding thereto the amount of all amortization of intangibles and depreciation, in each case that were deducted in arriving at Consolidated EBIT for such period. "Consolidated Net Income" shall mean, for any period, the net income (or loss) of the Parent and its Subsidiaries for such period, determined on a consolidated basis (after any deduction for minority interests), PROVIDED that (i) in determining Consolidated Net Income, the net income of any other Person which is not a Subsidiary of the Parent or is accounted for by the Parent by the equity method of accounting shall be included only to the extent of the payment of cash dividends or cash distributions by such other Person to the Parent or a Subsidiary thereof during such period, (ii) the net income of any Subsidiary of the Parent shall be excluded to the extent that the declaration or payment of cash dividends or similar cash distributions by that Subsidiary of that net income is not at the date of determination permitted by operation of its charter or any agreement, instrument or law applicable to such Subsidiary and (iii) the net income (or loss) of any other Person acquired by the Parent or a Subsidiary of the Parent in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded. 6. The definition of "Secured Revolving Note" appearing in Annex A to the Security Agreement is hereby amended by deleting the amount "US$3,500,000" appearing therein and inserting the amount "US$3,650,000" in lieu thereof. AMENDMENT TO OVERADVANCE SIDE LETTER 7. The Overadvance Side Letter is hereby amended by (i) deleting Schedule A in its entirety and inserting the following new Schedule A in lieu thereof: -3- "SCHEDULE A - --------------------------------- ----------------------- MAXIMUM PERIODIC OVERADVANCE AMOUNT PERIOD - --------------------------------- ----------------------- - --------------------------------- ----------------------- March 1, 2007 through and $1,692,424.24 including August 31, 2007 - --------------------------------- ----------------------- - --------------------------------- ----------------------- September 1, 2007 through and $1,592,424.24 including September 30, 2007 - --------------------------------- ----------------------- - --------------------------------- ----------------------- October 1, 2007 through and $1,492,424.24 including October 31, 2007 - --------------------------------- ----------------------- - --------------------------------- ----------------------- November 1, 2007 through and $1,392,424.24 including November 30, 2007 - --------------------------------- ----------------------- - --------------------------------- ----------------------- December 1, 2007 through and $1,292,424.24" including December 30, 2007 - --------------------------------- ----------------------- - --------------------------------- ----------------------- December 31, 2007 $ 0 - --------------------------------- ----------------------- and (ii) deleting the amount "$3,500,000" appearing in the last sentence of the first paragraph of the Overadvance Side Letter and inserting the amount "$3,650,000" in lieu thereof. AMENDMENTS TO THE JUNE 2005 WARRANT, THE JUNE 2005 OPTION, THE JAN 2006 WARRANT, THE JUNE 2006 WARRANT AND THE NOV 2006 WARRANT 8. Effective upon the Waiver Effective Date (as defined below), each of the June 2005 Warrant, the Jan 2006 Warrant, the June 2006 Warrant and the Nov 2006 Warrant are each hereby amended by deleting Section 10 appearing therein in its entirety and inserting the following new Section 10 in lieu thereof each case: -4- "10. MAXIMUM EXERCISE. Notwithstanding anything herein to the contrary, in no event shall the Holder be entitled to exercise any portion of this Warrant in excess of that portion of this Warrant upon exercise of which the sum of (1) the number of shares of Common Stock beneficially 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 the Warrant or the unexercised or unconverted portion of any other security of the Holder subject to a limitation on conversion analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the exercise of the portion of this Warrant with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its Affiliates of any amount greater than 9.99% of the then outstanding shares of Common Stock (whether or not, at the time of such exercise, the Holder and its Affiliates beneficially own more than 9.99% of the then outstanding shares of Common Stock). As used herein, the term "Affiliate" means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. For purposes of the second preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such sentence. For any reason at any time, upon written or oral request of the Holder, the Company shall within one (1) business day confirm orally and in writing to the Holder the number of shares of Common Stock outstanding as of any given date. The limitations set forth herein (x) may be waived by the Holder upon provision of no less than sixty-one (61) days prior written notice to the Company and (y) shall automatically become null and void following notice to the Company upon the occurrence and during the continuance of an Event of Default (as defined in the Security Agreement dated as of the date hereof among the Holder, the Company and various subsidiaries of the Company)." 9. Effective upon the Waiver Effective Date (as defined below), the June 2005 Option is hereby amended by deleting Section 1.1 appearing therein in its entirety and inserting the following new Section 1.1 in lieu thereof: "1.1. NUMBER OF SHARES ISSUABLE UPON EXERCISE. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Option in whole or in part, by delivery of an original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the "Exercise Notice"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. Notwithstanding anything herein to the contrary, in no event shall the Holder be entitled to exercise any portion of this Option in excess of that portion of this Option upon exercise of which the sum of (1) the number of shares of Common Stock beneficially 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 the Option or the unexercised or unconverted portion of any other security of the Holder subject to a limitation on conversion analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the exercise of the portion of this Option with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its Affiliates of any amount greater than 9.99% of the then outstanding shares of Common Stock (whether or not, at the time of such exercise, the Holder and its Affiliates beneficially own more than 9.99% of the then outstanding shares of Common Stock). As used herein, -5- the term "Affiliate" means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. For purposes of the second preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such sentence. For any reason at any time, upon written or oral request of the Holder, the Company shall within one (1) business day confirm orally and in writing to the Holder the number of shares of Common Stock outstanding as of any given date. The limitations set forth herein (x) may be waived by the Holder upon provision of no less than sixty-one (61) days prior written notice to the Company and (y) shall automatically become null and void following notice to the Company upon the occurrence and during the continuance of an Event of Default (as defined in the Security Agreement dated as of the date hereof among the Holder, the Company and various subsidiaries of the Company)." 10. The June 2005 Option and the June 2006 Warrant are each hereby amended by, deleting the amount "$0.0001" appearing in the definition of "Exercise Price" appearing therein and, in each case, inserting the amount "$0.01" in lieu thereof. 11. The Parent and Laurus agree that, upon execution of this Amendment by the Parent and Laurus, the Parent will be deemed to have received notice from Laurus of Laurus' waiver of the 4.99% conversion limitation set forth in (i) Section 10 of each of the June 2005 Warrant, the Jan 2006 Warrant, the June 2006 Warrant and the Nov 2006 Warrant and (ii) Section 1.1 of the June 2005 Option, which waiver shall become effective on the 75th day following the date hereof (the "WAIVER EFFECTIVE DATE"). ADDITIONAL WARRANT 12. The Parent will, on the date hereof, issue a common stock purchase warrant (the "ADDITIONAL WARRANT") to Laurus to purchase 2,426,870 shares of the Common Stock of the Parent with an exercise price of $0.01 per share, such Additional Warrant to be in the form attached hereto as EXHIBIT A. The Parent further agrees to file a Registration Statement (as defined in the Registration Rights Agreement), to register the shares of Common Stock that may be issued upon exercise of the Additional Warrant on or prior to the 90th day following the date hereof (the "FILING DATE"). For the avoidance of doubt, the "Filing Date" shall be deemed a Filing Date as defined in the Registration Rights Agreement. -6- LCM FEE 13. Upon execution of this Agreement by each Company and Laurus, the Companies shall jointly and severally pay to Laurus Capital Management, LLC, the investment advisor of Laurus ("LCM"), a non-refundable payment in an amount equal to $5,250. The foregoing payment is referred to herein as the "ADDITIONAL LCM PAYMENT." MISCELLANEOUS 14. 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, (ii) the Parent shall have duly executed and delivered to Laurus the Additional Warrant, and (iii) 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 B. 15. 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. 16. 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. 17. 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. 18. 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. * * * * -7- 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: --------------------------------------- By: /s/ AUTHORIZED SIGNATORY ------------------------ Name: Authorized Signatory THINKPATH INC., AN OHIO CORPORATION By: --------------------------------------- By: /s/ AUTHORIZED SIGNATORY ------------------------ Name: Authorized Signatory THINKPATH OF MICHIGAN INC., A MICHIGAN CORPORATION By: --------------------------------------- By: /s/ AUTHORIZED SIGNATORY ------------------------ Name: Authorized Signatory THINKPATH TECHNICAL SERVICES INC., AN OHIO CORPORATION By: --------------------------------------- By: /s/ AUTHORIZED SIGNATORY ------------------------ Name: Authorized Signatory LAURUS MASTER FUND, LTD. By: --------------------------------------- Name: /S/ EUGENE GRIN Title: Director -8- EXHIBIT A FORM OF ADDITIONAL WARRANT -9- EXHIBIT B FORM OF REAFFIRMATION AND RATIFICATION AGREEMENT -10- EX-4.2 3 exh4-2.txt WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THINKPATH INC. THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 2,426,870 Shares of Common Stock of Thinkpath Inc. (subject to adjustment as provided herein) COMMON STOCK PURCHASE WARRANT No. _________________ Issue Date: February 28, 2007 THINKPATH INC., an Ontario corporation (the "Company"), hereby certifies that, for value received, LAURUS MASTER FUND, LTD., or assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company (as defined herein) from and after the Issue Date of this Warrant and at any time thereafter, up to 2,426,870 fully paid and nonassessable shares of Common Stock (as hereinafter defined), no par value per share, at the applicable Exercise Price per share (as defined below). The number and character of such shares of Common Stock and the applicable Exercise Price per share are subject to adjustment as provided herein. As used herein the following terms, unless the context otherwise requires, have the following respective meanings: (a) The term "Company" shall include Thinkpath Inc. and any person or entity which shall succeed, or assume the obligations of, Thinkpath Inc. hereunder. (b) The term "Common Stock" includes (i) the Company's Common Stock, no par value per share; and (ii) any other securities into which or for which any of the securities described in the preceding clause (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise. (c) The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise. (d) The "Exercise Price" applicable under this Warrant shall be a price of $0.01 per share. 1. EXERCISE OF WARRANT. 1.1 NUMBER OF SHARES ISSUABLE UPON EXERCISE. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the "Exercise Notice"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 1.2 FAIR MARKET VALUE. For purposes hereof, the "Fair Market Value" of a share of Common Stock as of a particular date (the "Determination Date") shall mean: (a) If the Company's Common Stock is traded on the American Stock Exchange or another national exchange or is quoted on the National or Capital Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), then the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date. (b) If the Company's Common Stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is traded on the NASD Over The Counter Bulletin Board, then the mean of the average of the closing bid and asked prices reported for the last business day immediately preceding the Determination Date. (c) Except as provided in clause (d) below, if the Company's Common Stock is not publicly traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided. (d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company's charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are outstanding at the Determination Date. 1.3 COMPANY ACKNOWLEDGMENT. The Company will, at the time of the exercise of this Warrant, upon the request of the holder hereof acknowledge in writing its continuing obligation to afford to such holder any rights to which such holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such holder any such rights. -2- 1.4 TRUSTEE FOR WARRANT HOLDERS. In the event that a bank or trust company shall have been appointed as trustee for the holders of this Warrant pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1. 2. PROCEDURE FOR EXERCISE. 2.1 DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. The Company agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise. 2.2 EXERCISE. (a) Payment may be made either (i) in cash by wire transfer of immediately available funds or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of this Warrant in accordance with the formula set forth in subsection (b) below, or (iii) by a combination of any of the foregoing methods, for the number of Common Shares specified in such Exercise Notice (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the Holder per the terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein. (b) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: -3- X= _Y(A-B)_ ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under this Warrant or, if only a portion of this Warrant is being exercised, the portion of this Warrant being exercised (at the date of such calculation) A = the Fair Market Value of one share of the Company's Common Stock (at the date of such calculation) B = the Exercise Price per share (as adjusted to the date of such calculation) 3. EFFECT OF REORGANIZATION, ETC.; ADJUSTMENT OF EXERCISE PRICE. 3.1 REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder, on the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4. 3.2 DISSOLUTION. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, concurrently with any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be delivered to the Holder the stock and other securities and property (including cash, where applicable) receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to a bank or trust company specified by the Holder and having its principal office in New York, NY as trustee for the Holder. 3.3 CONTINUATION OF TERMS. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transactions described in this Section 3, then the Company's securities and property (including cash, where applicable) receivable by the Holder will be delivered to the Holder or the Trustee as contemplated by Section 3.2. -4- 4. EXTRAORDINARY EVENTS REGARDING COMMON STOCK. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock or any preferred stock issued by the Company, (b) subdivide its outstanding shares of Common Stock, (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Exercise Price in effect on the date of such exercise (taking into account the provisions of this Section 4). Notwithstanding the foregoing, in no event shall the Exercise Price be less than the par value of the Common Stock. 5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of this Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the holder and any Warrant agent of the Company (appointed pursuant to Section 11 hereof). 6. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANT. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this Warrant. -5- 7. ASSIGNMENT; EXCHANGE OF WARRANT. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a "Transferor") in whole or in part. On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the "Transferor Endorsement Form") and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, a legal opinion from the Transferor's counsel (at the Company's expense) that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense (but with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor. 8. REPLACEMENT OF WARRANT. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 9. REGISTRATION RIGHTS. The Holder has been granted certain registration rights by the Company. These registration rights are set forth in a Registration Rights Agreement entered into by the Company and Holder dated as of the date hereof, as the same may be amended, modified and/or supplemented from time to time. 10. MAXIMUM EXERCISE. Notwithstanding anything herein to the contrary, in no event shall the Holder be entitled to exercise any portion of this Warrant in excess of that portion of this Warrant upon exercise of which the sum of (1) the number of shares of Common Stock beneficially 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 the Warrant or the unexercised or unconverted portion of any other security of the Holder subject to a limitation on conversion analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the exercise of the portion of this Warrant with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its Affiliates of any amount greater than 9.99% of the then outstanding shares of Common Stock (whether or not, at the time of such exercise, the Holder and its Affiliates beneficially own more than 9.99% of the then outstanding shares of Common Stock). As used herein, the term "Affiliate" means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. For purposes of the proviso to the second preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided -6- in clause (1) of such proviso. The limitations set forth herein (x) may be waived by the Holder upon provision of no less than sixty-one (61) days prior notice to the Company and (y) shall automatically become null and void following notice to the Company upon the occurrence and during the continuance of an Event of Default (as defined in the Security Agreement dated as of June 30, 2006 among the Holder, the Company and various subsidiaries of the Company (as amended, modified, restated and/or supplemented from time to time, the "Security Agreement")). 11. WARRANT AGENT. The Company may, by written notice to the each Holder of the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 12. TRANSFER ON THE COMPANY'S BOOKS. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 13. NOTICES, ETC. All notices and other communications from the Company to the Holder shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder who has so furnished an address to the Company. 14. MISCELLANEOUS. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The individuals executing this Warrant on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorneys' fees and costs. In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof. The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party. -7- 15. JUDGMENT CURRENCY. 15.1 If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 15 referred to as the "Judgment Currency") an amount due in US dollars under this Warrant, the conversion shall be made at the Exchange Rate prevailing on the business day immediately preceding: (a) the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction that will give effect to such conversion being made on such date: or (b) the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 15.1(b) being hereinafter referred to as the "Judgment Conversion Date") 15.2 If in the case of any proceeding in the court of any jurisdiction referred to in Section 15.1 above, there is a change in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date. 15.3 Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Warrant. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] -8- IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above. THINKPATH INC. WITNESS: By: /s/ AUTHORIZED SIGNATORY ------------------------ Name: Authorized Signatory Title: -9- EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Warrant) TO: Thinkpath Inc. 201 Westcreek Boulevard Brampton, Ontario, Canada L6T 5S6 Attention: Chief Financial Officer The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box): ________ ________ shares of the common stock covered by such warrant; or ________ the maximum number of shares of common stock covered by such warrant pursuant to the cashless exercise procedure set forth in Section 2. The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Warrant, which is $___________. Such payment takes the form of (check applicable box or boxes): ________ $__________ in lawful money of the United States; and/or ________ the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or ________ the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2.2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2. The undersigned requests that the certificates for such shares be issued in the name of, and delivered to________________________________________ whose address is - ---------------------------------------------------------------------------. The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the "Securities Act") or pursuant to an exemption from registration under the Securities Act. Dated: --------------- ---------------------- (Signature must conform to name of holder as specified on the face of the Warrant) Address: --------------------------------- --------------------------------- -10- EXHIBIT B FORM OF TRANSFEROR ENDORSEMENT (To Be Signed Only On Transfer Of Warrant) For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading "Transferees" the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of Thinkpath Inc. into which the within Warrant relates specified under the headings "Percentage Transferred" and "Number Transferred," respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of Thinkpath Inc. with full power of substitution in the premises. PERCENTAGE NUMBER TRANSFEREES ADDRESS TRANSFERRED TRANSFERRED Dated: ------------------- ------------------------------------ (Signature must conform to name of holder as specified on the face of the Warrant) Address: --------------------------- --------------------------- SIGNED IN THE PRESENCE OF: --------------------------------------- (Name) ACCEPTED AND AGREED: [TRANSFEREE] - ------------------------------ (Name) -11- EX-4.3 4 exh4-3.txt REAFFIRMATION REAFFIRMATION AND RATIFICATION AGREEMENT February 28, 2007 Laurus Master Fund, Ltd. c/o Laurus Capital Management, LLC 825 Third Avenue New York, New York 10022 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). WHEREAS, Thinkpath, Thinkpath (OH), Thinkpath (MI), Technical Services (collectively, the "BORROWERS") and Laurus have agreed to increase the stated amount 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) from $3,500,000 to $3,650,000 (the "INCREASED REVOLVING NOTE"); 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 increase of the stated amount set forth in the Increased Revolving Note, 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 Increased Revolving Note 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 Increased Revolving Note 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 Increased Revolving Note is (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 Increased Revolving Note; (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 Increased Revolving Note 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 Increased Revolving Note; and -2- (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. 5. 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. [The remainder of this page is intentionally left blank] -3- Very truly yours, THINKPATH INC., AN ONTARIO CORPORATION BY: NAME: TITLE: ADDRESS: THINKPATH INC., AN OHIO CORPORATION BY: NAME: TITLE: ADDRESS: THINKPATH OF MICHIGAN INC., A MICHIGAN CORPORATION BY: NAME: TITLE: ADDRESS: THINKPATH TECHNICAL SERVICES INC., AN OHIO CORPORATION BY: NAME: TITLE: ADDRESS: -4- SYSTEMSEARCH CONSULTING SERVICES INC., AN ONTARIO CORPORATION BY: NAME: TITLE: ADDRESS: THINKPATH TRAINING INC., AN ONTARIO CORPORATION BY: NAME: TITLE: ADDRESS: TIDALBEACH INC., AN ONTARIO CORPORATION BY: NAME: TITLE: ADDRESS: THINKPATH TRAINING (US) INC., A NEW YORK CORPORATION BY: NAME: TITLE: ADDRESS: -5- INTERNATIONAL CAREER SPECIALISTS INC., AN ONTARIO CORPORATION BY: NAME: TITLE: ADDRESS: TBM TECHNOLOGIES INC., AN ONTARIO CORPORATION BY: NAME: TITLE: ADDRESS: -6- ACKNOWLEDGED AND AGREED TO BY: LAURUS MASTER FUND, LTD. BY: /s/ EUGENE GRIN -------------------- NAME: Eugene Grin TITLE: Director -7- -----END PRIVACY-ENHANCED MESSAGE-----