PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Patent Security
Agreement") is made this 19th day of June, 2007, by and among Kronos Advanced
Technologies, Inc., a Nevada corporation with its chief executive office and
principal place of business located at 000 Xxxxxx Xxxxxx, Xxx 000, Xxxxxxx,
Xxxxxxxxxxxxx 00000 (the "Debtor") and Kronos Air Technologies, Inc. a Nevada
corporation with its chief executive office and principal place of business
located at 00000 XX 00xx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the "Subsidiary" and
collectively with the Debtor, the "Pledgors"), and AirWorks Funding LLLP, a
Georgia limited liability limited partnership, ("AirWorks"), Sands Brother
Venture Capital LLC, a New York limited liability company ("Sands I"), Sands
Brothers Venture Capital II LLC, a New York limited liability company ("Sands
II"), Sands Brothers Venture Capital III LLC, a New York limited liability
company ("Sands III"), Sands Brothers Venture Capital IV LLC, a New York limited
liability company ("Sands IV"), Critical Capital Growth Fund, L.P., a Delaware
limited partnership and a debenture licensed U.S. Small Business Investment
Company ("CCGF") and RS Properties I LLC, a Delaware limited liability company
("RS Properties"). AirWorks, Sands I, Sands II, Sands III, Sands IV, CCGF and RS
Properties are collectively referred to herein as the "Secured Parties".
W I T N E S S E T H:
WHEREAS, pursuant to that certain Funding Agreement dated as
of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the "Funding Agreement") by and among the Debtor and the
Secured Parties, the Secured Parties are willing to make certain financial
accommodations available to Debtor pursuant to the terms and conditions thereof;
and
WHEREAS, the Subsidiary is a direct subsidiary of the Debtor
and has determined that its execution, delivery and performance of this Patent
Security Agreement directly or indirectly benefits, and is within the corporate
purposes and in the best interest of, it; and
WHEREAS, the Secured Parties are willing to make the financial
accommodations to Borrower as provided for in the Funding Agreement, but only
upon the condition, among others, that the Pledgors shall have executed and
delivered to the Secured Parties this Patent Security Agreement (including all
annexes, exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Patent Security Agreement") and that
certain other Security Agreement of even date herewith by and among the Pledgors
and the Secured Parties (the "Security Agreement");
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgors hereby
agree as follows:
1. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Security Agreement and Funding
Agreement.
2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Pledgor hereby
grants to the Secured Parties a continuing first priority security interest in
all of such Pledgor's right, title and interest in, to and under the following,
whether presently existing or hereafter created or acquired (collectively, the
"Patent Collateral"):
(a) all of such Pledgor's patents, license agreements for the commercialization
of patents and patent applications to which it is a party, including, in each
case, those referred to on Schedule I hereto;
(b) all reissues, continuations or extensions of the foregoing; and
(c) all products and proceeds of the foregoing, including any claim by such
Pledgor against third parties for past, present or future infringement or
dilution of any Patent Collateral.
3. SECURITY FOR OBLIGATIONS. This Patent Security Agreement and the
security interest evidenced hereby secures the payment and performance of all
the Obligations, whether now existing or arising hereafter. Without limiting the
generality of the foregoing, this Patent Security Agreement secures the payment
of all amounts which constitute part of the Obligations and would be owed by the
Pledgors, or any of them, to the Secured Parties or any of them, whether or not
they are unenforceable or not allowable due to the existence of an insolvency
proceeding involving a Pledgor. The Pledgors hereby authorize the Secured
Parties to file this Patent Security Agreement with the United States Patent and
Trademark Office.
4. SECURITY AGREEMENT. The security interests granted pursuant to this
Patent Security Agreement are granted in conjunction with the security interests
granted to the Secured Parties pursuant to the Security Agreement. Each Pledgor
hereby acknowledges and affirms that the rights and remedies of the Secured
Parties with respect to the security interest in the Patent Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
5. AUTHORIZATION TO SUPPLEMENT. The Pledgors shall give the Secured
Parties prompt notice in writing of any additional United States patent
registrations or applications therefor after the date hereof. The Pledgors
hereby authorize the Secured Parties unilaterally to modify this Agreement by
amending Schedule I to include any future United States registered patents or
applications therefor of the Pledgors. Notwithstanding the foregoing, no failure
to so modify this Patent Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Agent's continuing security interest in all
the Patent Collateral, whether or not listed on Schedule I.
2. COUNTERPARTS. This Patent Security Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Any signatures delivered by a party by facsimile transmission or by e-mail
transmission shall be deemed an original signature hereto.
3. CONSTRUCTION. Unless the context of this Patent Security Agreement or any
other Transaction Document clearly requires otherwise, references to the plural
include the singular, references to the singular include the plural, the terms
"includes" and "including" are not limiting, and the term "or" has, except where
otherwise indicated, the inclusive meaning represented by the phrase "and/or."
The words "hereof," "herein," "hereby," "hereunder," and similar terms in this
Patent Security Agreement or any other Transaction Document refer to this Patent
Security Agreement or such other Transaction Document, as the case may be, as a
whole and not to any particular provision of this Patent Security Agreement or
such other Transaction Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Patent Security
Agreement unless otherwise specified. Any reference in this Patent Security
Agreement or in any other Transaction Document to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to any Person shall be construed to include such Person's
successors and assigns.
[SIGNATURE PAGE FOLLOWS]
Patent Security Agreement
Patent Security Agreement
IN WITNESS WHEREOF, each Pledgor has caused this Patent
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.
KRONOS ADVANCED TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: COO
KRONOS AIR TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: COO
AIRWORKS FUNDING LLLP
By: Compass Partners, LLC, its general
partner
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
SANDS BROTHERS VENTURE CAPITAL LLC
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: COO
SANDS BROTHERS VENTURE CAPITAL II LLC
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: COO
SANDS BROTHERS VENTURE CAPITAL III LLC
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: COO
SANDS BROTHERS VENTURE CAPITAL IV LLC
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: COO
CRITICAL CAPITAL GROWTH FUND, L.P.
By: Critical Capital, L.P., its General
Partner
By: Critical Capital Corporation, its
General Partner
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
RS PROPERTIES I LLC
By: /s/ Xxxx Xxxx
--------------------------------
Name: Xxxx Xxxx
Title: Manager
SCHEDULE I
TO
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS
Case Ref. Title Case Status Application No. Registration No. Country
ELECTROSTATIC FLUID
WO-432001AU ACCELERATOR Exam requested 10847/01 773626 Australia
ELECTROSTATIC FLUID
WO-432001AU2 ACCELERATOR Pending 2004205310 Australia
ELECTROSTATIC FLUID
WO-432001CA ACCELERATOR Pending 2,355,659 Canada
ELECTROSTATIC FLUID Application
WO-432001EP ACCELERATOR Filed 00972147.3 European Patent Office
ELECTROSTATIC FLUID
WO-432001HK ACCELERATOR Published 02103656.7 Hong Kong
ELECTROSTATIC FLUID Application
WO-432001JP ACCELERATOR Filed 2001-530889 Japan
ELECTROSTATIC FLUID
WO-432001MX ACCELERATOR Issued PA/a/2001/006037 000000 Xxxxxx
ELECTROSTATIC FLUID
WO-432002 ACCELERATOR Issued 09/419,720 6,504,308 United States of America
Electrostatic Fluid Application
WO-432002RE Accelerator Filed 90/007,276 United States of America
SPARK MANAGEMENT METHOD
WO-432003 AND DEVICE Issued 10/187,983 6,937,455 United States of America
An Electrostatic Fluid
Accelerator for and
Method of Controlling a Application
WO-432003AU Fluid Flow Filed 0000000000 Australia
An Electrostatic Fluid
Accelerator for and
Method of Controlling a
WO-432003CA Fluid Flow Issued 2,489,983 2,489,983 Canada
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND
METHOD OF CONTROL LING A
WO-432003CN FLUID FLOW Published 03819690.5 China
SPARK MANAGEMENT METHOD
WO-432003CON AND DEVICE Published 11/214,066 United States of America
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND
METHOD OF CONTROL LING A Application
WO-432003EP FLUID FLOW Filed 03812413.7 European Patent Office
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND
METHOD OF CONTROL LING A Application
WO-432003HK FLUID FLOW Filed 05111239.3 Hong Kong
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND
METHOD OF CONTROL LING A
WO-432003JP FLUID FLOW Exam requested 570752/2004 Japan
An Electrostatic Fluid
Accelerator for and
Method of Controlling a
WO-432003MX Fluid Flow Published PA/a/2004/012882 Mexico
An Electrostatic Fluid
Accelerator for and
Method of Controlling a Examination
WO-432003NZ Fluid Flow report received 537254 New Zealand
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND
METHOD OF CONTROL LING A Entered
WO-432003PCT FLUID FLOW National Phase PCT/US03/19651 Patent Cooperation Treaty
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A
WO-432004 FLUID FLOW Issued 10/175,947 6,664,741 United States of America
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A
WO-432004CIP FLUID FLOW Issued 10/735,302 6,963,479 United States of America
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP AU FLUID FLOW Filed 2004305030 Australia
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP CA FLUID FLOW Filed 2,550,582 Canada
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP CN FLUID FLOW Filed 200480041683.X China
METHOD OF ELECTROSTATIC Application
WO-432004CIP CON ACCELERATION OF A FLUID Filed 11/549,845 United States of America
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP EP FLUID FLOW Filed 04813494.4 European Patent Office
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP HK FLUID FLOW Filed 06114151.0 Hong Kong
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP JP FLUID FLOW Filed To Be Assigned Japan
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP MX FLUID FLOW Filed PA/a/2006/006757 Mexico
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A Application
WO-432004CIP NZ FLUID FLOW Filed 547900 New Zealand
Method of and apparatus
for electrostatic fluid
acceleration control of a
WO-432004CIPDIV fluid flow Issued 11/210,773 7,122,070 United States of America
METHOD OF AND APPARATUS
FOR ELECTROSTATIC FLUID
ACCELERATION CONTROL OF A
WO-432004CIPPCT FLUID FLOW Published PCT/US2004/041181 Patent Cooperation Treaty
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTR OLLING
WO-432005 FLUID FLOW Issued 10/188,069 6,727,657 United States of America
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING
WO-432005CIP FLUID FLOW Issued 10/847,438 7,053,565 United States of America
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432005 AU FLUID FLOW Filed Australia
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432005 CA FLUID FLOW Filed Canada
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432005 CN FLUID FLOW Filed China
Application
AN ELECTROSTATIC FLUID Filed -
ACCELERATOR FOR AND A Awaiting
METHOD OF CONTROLLING Confirmation
WO-432005 EA FLUID FLOW from FA Eurasian Patent Office
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432005 EP FLUID FLOW Filed 05 750 980.4 European Patent Office
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432005 JP FLUID FLOW Filed PCT/US2005/017276 Japan
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432005 MX FLUID FLOW Filed PCT/US2005/017276 Mexico
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432005 NZ FLUID FLOW Filed New Zealand
Application
AN ELECTROSTATIC FLUID Filed -
ACCELERATOR FOR AND A Awaiting
METHOD OF CONTROLLING Confirmation
WO-432005 UA FLUID FLOW from FA Ukraine
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTR OLLING Examination
WO-432005CIPPCT FLUID FLOW report received PCT/US05/017276 Patent Cooperation Treaty
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTR OLLING
WO-432005CON FLUID FLOW Allowed 10/806,473 United States of America
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND
METHOD OF CONTROL LING A
WO-432006 FLUID FLOW Issued 10/352,193 6,919,698 United States of America
An Electrostatic Fluid
Accelerator for and
Method of Controlling a
WO-432006CON Fluid Flow Allowed 11/046,711 United States of America
ELECTROSTATIC FLUID
WO-432007 ACCELERATOR Issued 10/295,869 6,888,314 United States of America
Electrostatic Fluid
WO-432007CON Accelerator Published 11/119,748 United States of America
CORONA DISCHARGE
ELECTRODE AND METHOD OF
WO-432010 OPERATING THE SAME Allowed 10/724,707 United States of America
CORONA DISCHARGE
ELECTRODE AND METHOD OF Application
WO-432010-AU OPERATING THE SAME Filed 2004296485 Australia
CORONA DISCHARGE
ELECTRODE AND METHOD OF Application
WO-432010-CA OPERATING THE SAME Filed 2,547,951 Canada
CORONA DISCHARGE
ELECTRODE AND METHOD OF Application
WO-432010-CN OPERATING THE SAME Filed 200480041207.8 China
CORONA DISCHARGE
ELECTRODE AND METHOD OF
WO-432010-EP OPERATING THE SAME Exam requested 04816999.9 European Patent Office
CORONA DISCHARGE
ELECTRODE AND METHOD OF Application
WO-432010-JP OPERATING THE SAME Filed 100064746 Japan
CORONA DISCHARGE
ELECTRODE AND METHOD OF
WO-432010-MX OPERATING THE SAME Published PA/A/2006/006296 Mexico
CORONA DISCHARGE
ELECTRODE AND METHOD OF Application
WO-432010NZ OPERATING THE SAME Filed 547475 New Zealand
CORONA DISCHARGE
ELECTRODE AND METHOD OF
WO-432010PCT OPERATING THE SAME Exam requested PCT/US04/39783 Patent Cooperation Treaty
ELECTROSTATIC AIR
WO-432011 CLEANING DEVICE Issued 10/752,530 7,150,780 United States of America
ELECTROSTATIC AIR Application
WO-432011CON CLEANING DEVICE Filed 11/612,270 United States of America
An Electrostatic Fluid
Accelerator for and
Method of Controlling a Application
WO-432012PCT Fluid Flow Filed PCT/US06/003915 Patent Cooperation Treaty
An Electrostatic Fluid
Accelerator for and
Method of Controlling a
WO-432012PROV Fluid Flow Expired 60/649,560 United States of America
An Electrostatic Fluid
Accelerator for and
Method of Controlling a Application
WO-432012US Fluid Flow Filed 11/347,565 United States of America
ELECTROSTATIC AIR Application
WO-432014PCT CLEANING DEVICE Filed PCT/US05/14934 Patent Cooperation Treaty
IONIC LOUDSPEAKER AND Application
WO-432018PROV PATENT APPLICATION Filed 60/794,510 United States of America
AN IONIC WIND LOUDSPEAKER
AND METHOD OF GENERATION
WO-432018US SOUND United States of America
ELECTROSTATIC FLUID
ACCELERATOR FOR AND A
METHOD OF CONTROLLING Application
WO-432019CON FLUID FLOW Filed 11/437,828 United States of America
FIREPLACE WITH
ELECTROSTATICALLY
ASSISTED HEAT TRANSFER
AND METHOD OF ASSISTING
HEAT TRANSFER IN
COMBUSTION POWERED Application
WO-432021PROV HEATING DEVICES Filed 60/862,760 United States of America
RANGE HOOD WITH
ELECTROSTATICALLY
ASSISTED AIR FLOW AND Application
WO-432022PROV FILTERING Filed 60/863,087 United States of America
SPACE HEATER WITH
ELECTROSTATICALLY
ASSISTED HEAT TRANSFER
AND METHOD OF ASSISTING
HEAT TRANSFER IN HEATING Application
WO-432023PROV DEVICES Filed 60/863,946 United States of America
DESALINATION METHOD AND Application
WO-432024PROV DEVICE Filed 60/864,591 United States of America
METHOD OF AND APPARATUS
FOR CLEANING AND Application
WO-432025PROV DISINFECTION OF AIR Filed 60/865,130 United States of America
AN ELECTROSTATIC FLUID
ACCELERATOR FOR AND
METHOD OF CONTROLLING A Application
WO-432026PROV FLUID FLOW Filed 60/866,171 United States of America
