NON-NEGOTIABLE PROMISSORY NOTE
$190,315 June 29, 2006
THINKPATH, INC.
PROMISSORY NOTE
FOR VALUE RECEIVED, THINKPATH, INC., an Ohio company (the "Company"),
hereby promises to pay to John Kennedy, the registered holder of this Note (the
"Holder") the principal sum of $190,315 (the "Principal Amount"), together with
any and all interest accrued thereon as provided in this Note, on or before the
sooner of June 29, 2008 or the occurrence of an Event of Default (as defined in
Section 3 below) (the "Maturity Date"). All payments by the Company pursuant to
this Note shall be made without set-off or counterclaim.
This Note is subject to the following additional provisions to
which the Holder, by acceptance of this Note, agrees:
1. Prepayment. The Company may prepay this Note, in whole or in part,
at any time and from time to time without prepayment premium or penalty. Any
prepayment shall be credited first to accrued and unpaid Interest (as defined
below) and then to the outstanding Principal Amount.
2. Computation of Interest.
(a) Base Interest Rate. Subject to subsections 2(b) and 2(c)
below, the outstanding Principal Amount shall bear interest at the Wall Street
Journal Large Bank prime rate, adjusted quarterly, commencing on the date hereof
(the "Interest"). Interest shall be due and payable on a quarterly basis with
the first quarterly payment due on September 30, 2006. All computations of
Interest hereunder shall be made based on the actual number of days elapsed in a
year of 365 days (including the first day but excluding the last day during
which any such Principal Amount is outstanding). The Principal Amount of this
Note, together with any accrued and unpaid Interest, shall be due and payable in
full on the Maturity Date.
(b) Default Interest. If any Event of Default (as defined in
Section 3 below) has occurred and is continuing, the outstanding Principal
Amount of this Note, together with any accrued and unpaid Interest, and all
other amounts provided for herein (collectively, the "Note Amount") shall bear
interest from and after such Event of Default at a rate equal to the Wall Street
Journal Large Bank prime rate plus 2.0% (the "Default Rate"), adjusted
quarterly; provided, that in no event shall the interest rate exceed the Maximum
Rate provided in Section 2(c) below.
(c) Maximum Rate. In the event that it is determined that,
under the laws relating to usury applicable to the Company or the indebtedness
evidenced by this Note ("Applicable Usury Laws"), the interest charges and fees
payable by the Company in connection herewith or in connection with any other
document or instrument executed and delivered in connection herewith cause the
effective interest rate applicable to the indebtedness evidenced by this Note to
exceed the maximum rate allowed by law (the "Maximum Rate"), then such interest
shall be recalculated for the period in question and any excess over the Maximum
Rate paid to the Holder with respect to such period shall be credited, without
further agreement or notice, to the outstanding Principal Amount to reduce the
outstanding Principal Amount by such credited amount with the same force and
effect as though the Company had specifically designated such extra sums to be
so applied to the Principal Amount and the Holder had agreed to accept such
extra payment(s) as a premium-free prepayment. All such deemed prepayments shall
be applied to the principal balance payable on the Maturity Date. In no event
shall any agreed-to or actual exaction as consideration for this Note exceed the
limits imposed or provided by Applicable Usury Laws to the use or detention of
money or to forbearance in seeking its collection.
3. Event of Default; Acceleration. The Note Amount shall become
immediately due and payable upon the occurrence of any of the following events
(each an "Event of Default"): (a) the dissolution of the Company or Thinkpath,
Inc., an Ontario corporation (the "Guarantor"); (b) the admission in writing of
the Company's or the Guarantor's inability to pay its debts as they become due;
(c) any assignment by the Company or the Guarantor for the benefit of creditors;
(d) any application by the Company or the Guarantor for appointment of a
receiver; (e) the commencement by the Company or the Guarantor of a voluntary
case under any provision of the Federal Bankruptcy Code (the "Code") or
amendments thereto or any other federal or state law or Canadian law affording
relief to debtors; (f) there shall be commenced against the Company or the
Guarantor any such proceeding, application or an involuntary case under the Code
or Canadian law, which proceeding, application or case is not dismissed or
withdrawn within ninety (90) days of commencement or filing, as the case may be;
(g) failure of the Company to pay an installment of Interest or the Principal
Amount when due; or (h) upon a Change of Control (as defined immediately below)
of the Company or the Guarantor. For purposes hereof, "Change of Control" means
the occurrence of any of the following events:
(i) Ownership. After the date of this Note, any "Person" (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) who is not an owner of the Company's (or, if applicable,
Guarantor's) outstanding voting securities as of the date of this Note becomes
the "Beneficial Owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, in a single transaction or series of related transactions, of
securities of the Company (or, if applicable, Guarantor) representing more than
50% of the total voting power represented by the Company's (or, if applicable,
Guarantor's) then outstanding voting securities or more than 50% of the value of
all outstanding securities of the Company (or, if applicable, Guarantor),
excluding for this purpose the Company, the Guarantor, their Affiliates (as that
term is defined under Rule 405 of the Securities Act of 1933, as amended,
including, without limitation, executive officers and directors of the Company
or the Guarantor), senior management of the Company or the Guarantor as of the
date of this Note, or any employee benefit plan of the Company or the Guarantor
(including, without limitation, an Employee Stock Ownership Plan as defined in
Section 4975 of the Internal Revenue Code of 1986, as amended); or
(ii) Merger/Sale of Assets. A merger or consolidation of the
Company or the Guarantor, other than a merger or consolidation that would result
in the voting securities of the Company or the Guarantor outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or the parent of
such corporation) at least 50% of the total voting power represented by the
voting securities of the Company or the Guarantor or such surviving entity or
parent of such corporation outstanding immediately after such merger or
consolidation, or the stockholders of the Company or the Guarantor approve an
agreement for the sale or disposition by the Company or the Guarantor of all or
substantially all of the Company's or the Guarantor's assets.
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4. Restrictions on Transfer. This Note is non-negotiable and it may not
be sold, transferred, pledged, assigned or hypothecated without the prior
written consent of the Company.
5. Late Charges; Other Charges; No Waiver. In the event of a default in
the payment of Interest, the Company shall pay a late charge equal to ten
percent (10%) of the Interest payment due. If an Event of Default occurs, the
Company will pay to the Holder the reasonable costs and expenses of collection,
including but not limited to reasonable attorneys' fees and any court costs
incurred in connection with such collection efforts. No course of dealing and no
delay on the part of the Holder in exercising any rights shall operate as a
waiver thereof or otherwise prejudice the Holder's rights and no consent or
waiver shall extend beyond the particular circumstance involved.
5. Miscellaneous.
(a) No recourse shall be had for the payment of the Principal
Amount or the Interest on this Note, or for any claim based hereon or otherwise
in respect hereof, against any incorporator, shareholder, officer, director,
representative or agent as such, past, present or future, of the Company or any
successor or assign of such a person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released by the Holder
(and the Holder's successors and assigns). The foregoing shall not, however,
exculpate a director or shareholder from liability, if any, for approving (in
the case of a director) or receiving (in the case of a shareholder) a dividend
or distribution of money or assets that is not permitted by law.
(b) All payments contemplated hereby to be made "in cash"
shall be made by valid check in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments of cash shall be made to the Holder at the address
set forth above or as designated in writing to the Company by the Holder from
time to time. The Holder can designate, by delivering at least 10 calendar days'
advance written notice to the Company, a different delivery address for any one
or more specific payments.
(c) This Note shall be governed by and construed in accordance
with the laws of the State of New Jersey without regard to its conflicts of law
principles. Each of the parties hereto consents to the jurisdiction of the state
and federal courts sitting in New Jersey in connection with any dispute arising
under this Note and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non coveniens, to the bringing
of any such proceeding in such jurisdictions.
(d) This Note constitutes the full and entire understanding
and agreement between the parties with respect to the subject matter hereof, and
any other written or oral agreements relating to the subject matter hereof
existing between the parties are expressly canceled.
(e) If any part of this Note is found to be void, its
remaining provisions shall nevertheless be binding with the same effect as
though the void parts were deleted.
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(f) The invalidity of unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
THINKPATH, INC.
By: _____________________________
Declan French
President
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