in its capacity as a lender hereunder ("Lender")
and SBI ADVISORS, LLC, a California limited liability company, in its capacity
as agent for Lender ("Agent"), with reference to the following:
WITNESSETH:
WHEREAS, LENDER, AGENT, AND BORROWER ARE PARTIES TO THE TERM CREDIT AGREEMENT
DATED OCTOBER 27, 2004 (THE "INITIAL TERM CREDIT AGREEMENT") PURSUANT TO WHICH
LENDER AGREED TO MAKE TERM LOANS TO BORROWER IN AN AGGREGATE AMOUNT NOT TO
EXCEED $10 MILLION, OF WHICH THE AGGREGATE PRINCIPAL AMOUNT OF $5,000,000 IS
OUTSTANDING; AND
WHEREAS, PURSUANT TO THE TERMS OF AN EXCHANGE AGREEMENT DATED THE DATE HEREOF
(THE "EXCHANGE AGREEMENT") BY AND AMONG LENDER, AGENT, BORROWER AND STONEPATH
GROUP, INC. ("GROUP") HAVE AGREED TO (I) EXCHANGE $3,000,000 OF THE PRINCIPAL
AMOUNT OUTSTANDING UNDER THE INITIAL TERM CREDIT AGREEMENT FOR NEWLY ISSUED
PREFERRED SHARES OF BORROWER WHICH ARE EXCHANGEABLE FOR SHARES OF COMMON STOCK
OF GROUP, (II) EXTEND THE DATE FOR THE REPAYMENT OF $1,000,000 OF THE REMAINING
$2,000,000 PRINCIPAL AMOUNT OUTSTANDING UNDER THE INITIAL TERM CREDIT AGREEMENT,
(III) TERMINATE THE SECURITY AGREEMENTS AND THE SECURITY INTERESTS CREATED
THEREBY, AND (IV) HAVE GROUP ISSUE TO LENDER A WARRANT TO PURCHASE SHARES OF
GROUP'S COMMON STOCK; AND
WHEREAS, the parties have agreed to amend the Initial Term Credit Agreement to
give effect to these transactions.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS
CONTAINED HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE DELIVERY,
RECEIPT, AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HEREBY
AGREE TO AMEND THE INITIAL TERM CREDIT AGREEMENT AS FOLLOWS:
1.
Defined Terms. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Initial Term Credit Agreement.
2.
Amendments.
(a)
Definitions. The definitions "Advance
Request," "Collateral," "Lien," "Permitted Lien," and "Secured Obligations" are
hereby deleted from Section 1 of the Initial Term Credit Agreement. The
definition of "Maturity Date" is hereby replaced with the following definition:
"'Maturity Dates' has the meaning set forth in SECTION 2(B)."
(b)
Term Loan Advances. Section 2(a) of the
Initial Term Credit Agreement is revised to read in its entirety as follows:
"Term Loan Advances. Lender has made term loans to Borrower in the aggregate
principal amount of Five Million Dollars ($5,000,000) (the "Term Loans").
Contemporaneously with the execution and delivery of the Amendment to Term
Credit Agreement, Lender has exchanged Three Million Dollars ($3,000,000) of the
outstanding principal amount of the Term Loans for preferred shares of Borrower,
thereby reducing the remaining principal amount of the Term Loans to Two Million
Dollars ($2,000,000). The Term Loans may be repaid at any time prior to the
Maturity Dates without premium or penalty, but may not be reborrowed once
repaid. No further Term Loans shall be advanced by Lender. "
(c)
Term.
Section 2(b) of the
Initial Term Credit Agreement is revised to read in its entirety as follows:
"Term. One Million Dollars ($1,000,000) in outstanding principal amount of the
Term Loans, and accrued but unpaid interest on such principal amount shall,
subject