WARP TECHNOLOGY
HOLDINGS, INC.
PROMISSORY
NOTE
$1,000,000.00 July 6, 2005
WARP TECHNOLOGY HOLDINGS, INC., a
Nevada corporation, (“Maker”), for value received,
hereby executes and delivers this non-interest bearing (subject to
Section 6 hereof) promissory note (“Note”) in
favor of Bristol Technology, Inc., a Delaware corporation
(“Holder”), and hereby promises to pay to Holder the
aggregate principal amount of One Million Dollars ($1,000,000.00)
(the “Principal Amount”) in accordance with the terms
and conditions hereof.
This Note is issued in connection
with the transactions described in that certain Stock Purchase
Agreement (the “Purchase Agreement”), dated as of
June 10, 2005, by and among Maker, Holder and Kenosia
Corporation (the “Company”), and is subject to the
terms and conditions of the Purchase Agreement, including, without
limitation, Section 2.2 of the Purchase Agreement
(relating to purchase price adjustment), which Purchase Agreement
is incorporated by reference herein and made a part hereof.
Notwithstanding anything to the contrary contained herein and
without limiting the generality of the foregoing, the Principal
Amount , the September Payment (as defined hereinafter) and
the January Payment (as defined hereinafter) are subject to
adjustment as provided for in the Purchase Agreement.
This Note shall be binding upon
Maker, its successors and permitted assigns, and shall inure to the
benefit of Holder, its successors and permitted assigns.
Capitalized terms used herein without definition of any such term
shall have the respective meaning given to such term in the
Purchase Agreement.
1. Payment Dates . Maker
shall pay to Holder the Principal Amount in two payments as
follows: (i) $500,000.00 (as such amount may be adjusted in
accordance with the Purchase Agreement), on September 1, 2005
(the “September Payment”), and (ii) $500,000 (as such
amount may be adjusted in accordance with the Purchase Agreement)
on January 31, 2006 (the “January Payment”).
2. Prepayment . Holder
may, at any time and from time to time, prepay all or any portion
of the outstanding balance under this Note, without premium or
penalty. Any partial prepayment shall not affect the obligation to
continue to pay in full the amount outstanding hereunder until the
entire unpaid principal balance hereof, along with all accrued
interest, if any, and any other charges and fees, have been paid in
full.
3. Method and Application of
Payment . Maker shall pay all amounts payable under this Note
in cash by wire transfer of immediately available United States
funds to an account designated by Holder or, if no account has been
designated, by bank check delivered to Holder at the address set
forth for Holder in Section 7 hereof. All payments hereunder
shall be applied first, to any outstanding expenses or other
charges, if any; second, to accrued but unpaid interest, if any;
and, then, to unpaid principal.
4. Security Interest .
Payment of this Note is secured by a first priority lien on the
Company’s capital stock, as evidenced by that certain pledge
and security agreement dated as of July 6, 2005 between Maker,
Company and Holder (the “Pledge Agreement”).
5. Events of Default .
The occurrence of any one or more of the following events shall
constitute an event of default hereunder (each such event, an
“Event of Default”):
(a) the failure by Maker to make
any payment hereunder when due and such failure to pay continues
for five (5) business days after such payment was due;
(b) Maker or the Company has
entered against it an order for relief under the United States
bankruptcy code (or any successor statute) or any other order,
judgment or decree by any court of competent jurisdiction on the
application of a creditor adjudicating Maker or the Company
insolvent or approving a petition seeking reorganization or
appointing a receiver, trustee, custodian or liquidator of all or a
substantial part of Maker’s or the Company’s assets,
and such order, judgment or decree continues unstayed and in effect
for a period of sixty (60) days;
(c) Either Maker or Company
(i) shall generally not pay or shall be unable to pay its
debts as such debts become due, or (ii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or other similar law
or statute of any jurisdiction, whether now or hereafter in
effect;
(d) an assignment is made for
the benefit of Maker’s or the Company’s creditors of
all or any substantial part of its assets, or Maker or the Company
consents to the appointment of a receiver, liquidator, custodian or
trustee in bankruptcy for all or any su
