UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Kronos Advanced Technologies, Inc.
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(Name of Issuer)
Common Stock, $0.001 Par Value Per Share
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(Title of Class of Securities)
50105X106
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(CUSIP Number)
John Shin, Esq.
Silverman Sclar Shin & Byrne PLLC
381 Park Avenue South
New York, New York 10016
(212) 779-8600
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 8, 2007
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|_| .
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 50105X106
SCHEDULE 13D
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jack silver
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
------------------------- ---------- -------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 428,571,428(1)
OWNED BY ---------- -------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON ---------- -------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
428,571,428(1)
---------- -------------------------------------------
10 SHARED DISPOSITIVE POWER
------------ -------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
428,571,428(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |X|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
63.9%
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14 TYPE OF REPORTING PERSON
IN
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CUSIP No. 50105X106
SCHEDULE 13D
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
HILLTOP HOLDING COMPANY LP
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
------------ -------------------------------------------------------------------
3 SEC USE ONLY
------------ -------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
------------ -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
------------ -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
------------------------- ---------- -------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 428,571,428(1)
OWNED BY ---------- -------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON ---------- -------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
428,571,428(1)
---------- -------------------------------------------
10 SHARED DISPOSITIVE POWER
------------ -------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
428,571,428(1)
------------ -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |X|
------------ -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
63.9%
------------ -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
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CUSIP No. 50105X106
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(1) Includes 428,571,428 shares of Common Stock issuable upon conversion of the
$6,480,000 Secured Convertible Promissory Note due June 19, 2010 which was
issued to RS Properties I LLC on June 19, 2007 and assigned to Hilltop Holding
Company, LP on August 8, 2007, but excludes up to 1,885,714,285 shares of Common
Stock which may become issuable if such convertible note is funded in full.
This Schedule 13D has been prepared taking into account that, as described in
Items 3, 4 and 5 below, pursuant to the Lender Voting Agreement (as defined
below) and the Letter Agreement (as defined below), AirWorks Funding LLLP and
Hilltop Holding Company, LP have agreed to convert a sufficient principal amount
of their respective Notes (as defined below) to secure voting control of the
Issuer and will subsequently vote to approve an amendment to the Issuer's
articles of incorporation to increase the authorized share capital of the Issuer
to allow the Lenders (as defined below) to convert the entire principal amounts
advanced under the Notes into shares of Common Stock of the Issuer.
As described in Items 3, 4 and 5 below, Hilltop Holding Company, LP may be
deemed to be part of a group with AirWorks Funding LLLP and the Sands Entities
(as defined below) pursuant to the terms of the Lender Voting Agreement and the
Letter Agreement described below. The Reporting Persons expressly disclaim
beneficial ownership of shares of Common Stock issuable to AirWorks Funding LLLP
and the Sands Entities upon conversion of the Notes (as defined below). Such
shares of Common Stock are not included in the amounts specified by the
Reporting Persons above.
CUSIP No. 50105X106
Item 1. Security and Issuer.
The title of the class of equity securities to which this statement relates is
Common Stock, par value $0.001 each ("Common Stock") of Kronos Advanced
Technologies, Inc., a Nevada corporation (the "Issuer"). The principal executive
office of the Issuer is located at 494 Common Street, Suite 301, Belmont, MA
02478.
Item 2. Identity and Background.
(a) This Statement is being filed by as assigned to Hilltop Holding Company, LP
("Hilltop"), and Jack Silver (collectively, the "Reporting Persons"). Mr. Silver
is the sole general partner of Hilltop.
(b) The address of the Reporting Persons is c/o SIAR Capital LLC, 660 Madison
Avenue, New York, New York 10021.
(c) Hilltop is an independent investment fund making investments in securities.
Mr. Silver is the principal investor and manager of SIAR Capital, LLC, an
independent investment fund whose addess is 660 Madison Avenue, New York, New
York 10021.
(d) and (e) During the last five years, neither of the Reporting Persons has
been (a) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors), or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which he or it is
or was subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
(f) Hilltop is a Delaware limited partnership. Mr. Silver is a citizen of the
United States.
Item 3. Source and Amount of Funds or Other Consideration.
On August 8, 2007, the Hilltop entered into a Note Assignment Agreement (the
"Assignment Agreement") with RS Properties I LLC ("RS Properties"). Pursuant to
the terms of the Assignment Agreement, Hilltop acquired (a) the $6,480,000
Secured Convertible Promissory Note due June 19, 2010 (the "Note") made by the
Issuer in favor of RS Properties, together with all of RS Properties' rights and
obligations under (b) the Funding Agreement, dated June 19, 2010 (the "Funding
Agreement"), by and among the Issuer, AirWorks Funding LLLP ("AirWorks"), Sands
Brothers Venture Capital LLC ("Sands I"), Sands Brothers Venture Capital II LLC,
("Sands II"), Sands Brothers Venture Capital III LLC ("Sands III"), Sands
Brothers Venture Capital IV LLC ("Sands IV"), Critical Capital Growth Fund, L.P.
("CCGF", and together with Sands I, Sands II, Sands III and Sands IV, the "Sands
Entities") and RS Properties (AirWorks, Sands I, Sands II, Sands III, Sands IV,
CCGF and RS Properties are collectively referred to herein as, the "Lenders");
(c) the Security Agreement, dated June 19, 2007 (the "Security Agreement"), by
and among the Issuer, Kronos Air Technologies, Inc. (the "Subsidiary") and the
Lenders; (d) the Patent Security Agreement, dated June 19, 2007 (the "Patent
Security Agreement"), by and among the Issuer, the Subsidiary and the Lenders;
(e) the Voting and Support Agreement, dated June 19, 2007 (the "Voting
Agreement"), by and among the Issuer and the Lenders; (f) the Registration
Rights Agreement, dated June 19, 2007 (the "Registration Rights Agreement"), by
and among the Issuer and the Lenders; (g) the Intercreditor Agreement, dated
June 19, 2007 (the "Lenders Intercreditor Agreement"), by and among the Lenders;
(h) the Intercreditor Agreement, dated June 19, 2007 (the "Existing Creditors
Intercreditor Agreement"), by and among the Lenders and certain existing
creditors of the Lenders; and (i) the letter agreement, dated June 19, 2007 (the
"Letter Agreement"), by and between AirWorks and RS Properties. Each of the
agreements, instruments and documents listed in clauses (a) through (i) above
are collectively referred to herein as the "Transaction Documents"). The
purchase price of the Note and the other Transaction Documents paid by Hilltop
to the Reporting Person was $920,000.00, which amount represented the amount of
the outstanding principal balance of the Note as of the date of the assignment.
The source of funds used to purchase the Note was the investment capital of
Hilltop.
CUSIP No. 50105X106
Following the purchase of the Note, on August 9, 2007, Hilltop advanced to the
Issuer an additional $280,000 under the Note in accordance with the Transaction
Documents.
Item 4. Purpose of Transaction.
The Reporting Persons consider the Note and the Common Stock it is convertible
into that they beneficially own an investment made in the ordinary course of
Hilltop's business. The Reporting Persons intend to review on a continuing basis
their investment in the Issuer, including the Issuer's business, financial
condition and operating results, general market and industry conditions and
other investment opportunities and, based upon such review, may provide advances
under the Funding Agreement and the Note, acquire additional shares of Common
Stock or other securities of the Issuer, or dispose of the Note, shares of
Common Stock or other securities of the Issuer, in each case, in the open
market, in privately negotiated transactions or in any other lawful manner.
Reference is made to the disclosure set forth in Item 4 of the Schedule 13D
filed with the SEC by RS Properties on June 29, 2007 for the description of the
terms of the Funding Agreement, the Security Agreement, the Voting Agreement,
the Registration Rights Agreement, the Lender Intercreditor Agreement, the
Existing Creditors Intercreditor Agreement and the Letter Agreement, which
disclosure is incorporated by reference.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Persons may be deemed to beneficially own 428,571,428 shares
of Common Stock, representing 63.9% of the outstanding shares of Common Stock
(based upon 242,342,803 shares of Common Stock outstanding as of May 18, 2007,
as reported in the Issuer's quarterly report on Form 10-QSB for the quarter
ended March 31, 2007). Such shares of Common Stock beneficially owned by the
Reporting Persons include 428,571,428 shares of Common Stock currently issuable
upon conversion of $1,200,000 principal amount of the Note, but excludes up to
1,885,714,286 additional shares of Common Stock which may become issuable if the
Note is funded in full.
CUSIP No. 50105X106
In addition, by virtue of the Voting Agreement and the Letter Agreement, a
"group," within the meaning of Section 13(d)(3) of the Exchange Act, or Rule
13d-5(b)(1) thereunder, may have been formed that includes, AirWorks, the
Reporting Persons and the Sands Entities. Such a group including AirWorks, the
Reporting Persons and the Sands Entities would be deemed to beneficially own, in
the aggregate, 1,464,285,713 shares of Common Stock, representing 85.8% of the
Common Stock outstanding (based upon 242,342,803 shares of Common Stock
outstanding as of May 18, 2007). Such shares of Common Stock which would be
deemed beneficially owned by such a group includes (1) 428,571,428 shares of
Common Stock issuable upon conversion of the funded portion of the Note and (2)
1,035,714,285 shares of Common Stock issuable upon conversion of the funded
portion of the convertible notes held by AirWorks (which amount assumes that
AirWorks has funded $420,000 under the convertible notes held by it, as required
pursuant to the terms of the Letter Agreement, dated June 19, 2007, among the
Issuer, AirWorks and RS Properties), but excludes (1) 1,885,714,285 shares of
Common Stock which may become issuable if the Note is funded in full, (2)
2,828,571,428 shares of Common Stock which may become issuable if the
convertible note held by AirWorks is funded in full and (3) 306,785,714 shares
of Common Stock underlying the convertible note held by the Sands Entities which
is not presently convertible. The Reporting Persons expressly disclaim
beneficial ownership of Common Stock beneficially owned by AirWorks and the
Sands Entities.
Since the Issuer currently is only authorized to issue 500 million shares of
Common Stock and as of May 18, 2007, 242,342,803 shares of Common Stock were
issued and outstanding (according to filings made by the Issuer with the
Securities and Exchange Commission), Hilltop, AirWorks and the Sands Entities
will not be able to convert the entire current outstanding principal amount of
the notes held by them until such time as the Issuer increases its authorized
share capital to authorize additional shares of Common Stock. Pursuant to the
Voting Agreement and the Letter Agreement, AirWorks and Hilltop have agreed to
convert a sufficient principal amount of the their respective convertible notes
to secure voting control of the Issuer and will subsequently vote to approve an
amendment to the Issuer's articles of incorporation to increase the authorized
share capital of the Issuer to allow Hilltop, AirWorks and the Sands Entities to
convert the entire principal amounts advanced under such notes into shares of
Common Stock of the Issuer.
(b) The Reporting Persons have the sole power to vote or to direct the vote and
to dispose or direct the disposition of all of the securities beneficially owned
by them and reported herein.
Pursuant to, and to the extent set forth in, the Voting Agreement, it could be
alleged that the Reporting Persons share voting power with respect to the shares
of Common Stock beneficially owned by AirWorks or the Sands Entities. To the
knowledge of the Reporting Persons and based on documents publicly filed by
AirWorks and the Sands Entities, Exhibit 14 of the Schedule 13D filed with the
SEC by RS Properties on June 29, 2007 sets forth certain information with
respect to AirWorks and the Sands Entities, which is incorporated herein by
reference. To the knowledge of the Reporting Persons and based on documents
publicly filed by AirWorks and the Sands Entities, during the last five years,
neither AirWorks nor any of the Sands Entities has been: (i) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), or
(ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to Federal or State securities laws or finding
any violation with respect to such laws.
(c) Except as set forth in Items 3, no transactions in the Common Stock were
effected by the Reporting Persons in the last 60 days.
CUSIP No. 50105X106
(d) and (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of Issuer.
Reference is made to the disclosure set forth in Items 3 and 4 above, which
disclosure is incorporated by reference.
CUSIP No. 50105X106
Item 7. Materials to be Filed as Exhibits.
Exhibit No. Description
----------- -----------
1. Funding Agreement, dated June 19, 2007 between the Issuer,
AirWorks, the Sands Entities and RS Properties (incorporated
by reference to Exhibit 1 of the Schedule 13D filed June 29,
2007)
2. AirWorks Note, dated June 19, 2007 (incorporated by reference
to Exhibit 2 of the Schedule 13D filed June 29, 2007)
3. Sands Note, dated June 19, 2007 (incorporated by reference to
Exhibit 3 of the Schedule 13D filed June 29, 2007)
4. The Note, dated June 19, 2007 (incorporated by reference to
Exhibit 4 of the Schedule 13D filed June 29, 2007)
5. Security Agreement, dated June 19, 2007 among the Issuer,
AirWorks, the Sands Entities and RS Properties (incorporated
by reference to Exhibit 5 of the Schedule 13D filed June 29,
2007)
6. Intercreditor Agreement, dated June 19, 2007 among AirWorks,
the Sands Entities, RS Properties and certain existing
creditors of the Issuer (incorporated by reference to Exhibit
6 of the Schedule 13D filed June 29, 2007)
7. Intercreditor Agreement, dated June 19, 2007 among AirWorks,
the Sands Entities and RS Properties (incorporated by
reference to Exhibit 7 of the Schedule 13D filed June 29,
2007)
8. Lender Voting Agreement, dated June 19, 2007 among the Issuer,
AirWorks, the Sands Entities and RS Properties (incorporated
by reference to Exhibit 8 of the Schedule 13D filed June 29,
2007)
9. Securityholder Voting Agreement, dated June 19, 2007 between
the Issuer and the Securityholders specified therein
(incorporated by reference to Exhibit 9 of the Schedule 13D
filed June 29, 2007)
10. Securityholder Voting Agreement, dated June 19, 2007 between
the Issuer and the Securityholders specified therein
(incorporated by reference to Exhibit 10 of the Schedule 13D
filed June 29, 2007)
11. Proxy granted in favor of Mr. Perlman dated June 19, 2007
(incorporated by reference to Exhibit 11 of the Schedule 13D
filed June 29, 2007)
12. Letter Agreement, dated June 19, 2007 between AirWorks and RS
Properties (incorporated by reference to Exhibit 12 of the
Schedule 13D filed June 29, 2007)
13. Registration Rights Agreement, dated June 19, 2007 among the
Issuer, AirWorks, the Sands Entities and RS Properties
(incorporated by reference to Exhibit 13 of the Schedule 13D
filed June 29, 2007)
14. Information regarding AirWorks and the Sands Entities
(incorporated by reference to Exhibit 14 of the Schedule 13D
filed June 29, 2007)
15. Note Assignment Agreement, dated August 8, 2007 between RS
Properties and Hilltop
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: August 10, 2007
/s/ Jack Silver
------------------------------------
Jack Silver
HILLTOP HOLDING COMPANY, L.P.
By: /s/ Jack Silver
--------------------------------
Name: Jack Silver
Title: General Partner
Exhibit 15
NOTE ASSIGNMENT AGREEMENT
This Note Assignment Agreement (the "Agreement") is entered into as of
August 8, 2007, by and between, RS PROPERTIES I LLC, a Delaware limited
liability company (the "Assignor"), and HILLTOP HOLDING COMPANY, LP, a Delaware
limited partnership (the "Assignee").
RECITALS
WHEREAS, the Assignor desires to sell, transfer and assign to the Assignee
and Assignee desires to purchase and acquire from the Assignor (a) the
$6,480,000 Secured Convertible Promissory Note due June 19, 2010 (the "Note")
made by Kronos Advanced Technologies, Inc., a Nevada corporation (the
"Borrower"), in favor of the Assignor, together with (b) the Funding Agreement,
dated June 19, 2010 (the "Funding Agreement"), by and among the Borrower,
AirWorks Funding LLLP, a Georgia limited liability limited partnership
("AirWorks"), Sands Brothers Venture Capital LLC, a New York limited liability
company ("SBVC I"), Sands Brothers Venture Capital II LLC, a New York limited
liability company ("SBVC II"), Sands Brothers Venture Capital III LLC, a New
York limited liability company ("SBVC III"), Sands Brothers Venture Capital IV
LLC, a New York limited liability company ("SBVC IV"), Critical Capital Growth
Fund, L.P., a Delaware limited partnership ("CCGF", and together with SBVC I,
SBVC II, SBVC III and SBVC IV, the "SBVC Entities") and the Assignor (AirWorks,
SBVC I, SBVC II, SBVC III, SBVC IV, CCGF and the Assignor are individually
referred to herein as, a "Lender" and collectively as, the "Lenders"); (c) the
Security Agreement, dated June 19, 2007 (the "Security Agreement"), by and among
the Borrower, Kronos Air Technologies, Inc., a Nevada corporation (the
"Subsidiary") and the Lenders; (d) the Patent Security Agreement, dated June 19,
2007 (the "Patent Security Agreement"), by and among the Borrower, the
Subsidiary and the Lenders; (e) the Voting and Support Agreement, dated June 19,
2007 (the "Voting Agreement"), by and among the Borrower and the Lenders; (f)
the Registration Rights Agreement, dated June 19, 2007 (the "Registration Rights
Agreement"), by and among the Borrower and the Lenders; (g) the Intercreditor
Agreement, dated June 19, 2007 (the "Lenders Intercreditor Agreement"), by and
among the Lenders; (h) the Intercreditor Agreement, dated June 19, 2007 (the
"Existing Creditors Intercreditor Agreement"), by and among the Lenders and
certain existing creditors of the Borrower identified therein as the Second Lien
Creditors; and (i) the letter agreement, dated June 19, 2007 (the "Letter
Agreement"), by and between AirWorks and the Assignor. Each of the agreements,
instruments and documents listed in clauses (a) through (i) above are referred
to herein as a "Transaction Document" and collectively, as the "Transaction
Documents")
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained herein the parties agree as follows:
1. Assignment of Note and other Transaction Documents.
(a) Assignment. Assignor hereby sells, transfers, conveys and
assigns to the Assignee, and the Asignee hereby takes, accepts and assumes, all
of the Assignor's rights, obligations and interest in, to and under the Note and
each of the other Transaction Documents, together with the Assignor's rights,
title and interest, if any, in any collateral granted or purported to be granted
to Assignor to secure the obligations of the Company or the Subsidiary as and to
the extent provided in any of the Transaction Documents.
(b) Purchase Price. In consideration of the assignment of the Note
and the Transaction Documents, Assignee shall pay to the Assignors the purchase
price of Nine Hundred Twenty Thousand Dollars ($920,000.00), which amount
represents the presently outstanding principal amount of the Note.
(c) Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Assignee, on
such date as the parties may mutually determine. The Closing may be conducted by
mail, facsimile and delivery service.
2. Representations and Warranties of the Assignor. The Assignor hereby
warrants and represents to the Assignee, as follows:
(a) The Assignor has all the requisite power and authority to
execute, deliver and perform this Agreement. This Agreement constitutes the
legal, valid and binding obligations of the Assignor and is enforceable against
it in accordance with the terms hereof.
(b) The Assignor owns beneficially and of record, the Note free and
clear of all liens, claims and encumbrances. Upon delivery of and payment for
the Note at Closing, as provided for in this Agreement, the Assignee will
acquire good and valid title thereto.
(c) The Assignor has delivered to the Assignee complete and correct
copies of each of the Transaction Documents. Each of the Transaction Documents
is in full force and effect and enforceable against the Assignor and, to the
knowledge of the Assignor, the other parties thereto in accordance with its
respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights
generally or is subject to the availability of equitable remedies. The Assignor
has performed the obligations required to be performed by it to date and is not
in material default, or alleged to be in material default, under any of the
Transaction Documents.
3. Representations and Warranties of the Assignee. The Assignee hereby
represents and warrants to the Assignor, as follows:
(a) The Assignee has all the requisite power and authority to
execute, deliver and perform this Agreement. This Agreement constitutes the
legal, valid and binding obligations of the Assignee and is enforceable against
it in accordance with the terms hereof.
(b) The Assignee hereby acknowledges that in connection with the
assignment of the Transaction Documents, the Assignor has not made any
representations to it, and is not relying on any representations to it,
regarding the Borrower or the financial or business prospects of the Borrower.
(c) The Assignee understands that an investment in the Note is
extremely speculative with a high degree of risk of loss, and there are
substantial restrictions on the transferability of such note.
(d) The Assignee is able to (i) bear the economic risk of his
investment, (ii) hold the Note, and (iii) can presently afford a loss of this
investment.
(e) The Assignee confirms that it is acquiring the Note for its own
account and not with a view to distribution within the meaning of Section 2(11)
of the Securities Act of 1933, as amended (the "Securities Act"). The Assignee
hereby acknowledges and confirms that the Note has not been registered under the
Securities Act or any state securities or "blue sky" laws and may not be sold,
transferred or otherwise disposed of except in compliance with the provisions of
the Securities Act and the rules and regulations promulgated thereunder and such
state securities or "blue sky" laws.
(f) The Assignee is an "accredited investor" as such term is defined
in Rule 501 of Regulation D promulgated under the Securities Act.
4. Acknowledgement and Consent. This Agreement is subject to the
acknowledgement and consent of the Borrower, the Subsidiary, AirWorks and each
of the SBVC Entities to the terms contemplated hereby. Such acknowledgements and
consents are evidenced by respective signatures of the Borrower, the Subsidiary,
AirWorks and each of the SBVC Entities in the respective spaces provided at the
signature pages to this Agreement. To the extent any of the Transaction
Documents prohibit the assignment thereof, by the execution of this Agreement,
the Borrower, the Subsidiary, AirWorks, each of the SBVC Entities, the Assignor
and the Assignee hereby agree that such Transaction Document is hereby amended
to permit the assignment of such Transaction Document by the Assignor to the
Assignee as contemplated hereby.
5. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof. The
representations, warranties, covenants and agreements set forth in this
Agreement constitute all the representations, warranties, covenants and
agreements of the parties hereto and upon which the parties have relied and
except as may be specifically provided herein. No change, modification,
amendment, addition or termination of this Agreement or any part thereof shall
be valid unless it is in writing, and signed by or on behalf of the party to be
charged therewith.
(b) Notices. Any and all notices or other communications or
deliveries required or permitted to be given or made pursuant to any of the
provisions of this Agreement shall be deemed to have been duly given or made for
all purposes if sent by Federal Express delivery or by certified or registered
mail, return receipt requested and postage prepaid or hand delivered as follows:
If to Assignor:
RS Properties I LLC
40 Wall Street
23rd Floor
New York, NY 10005
Attention: John Lack
If to Assignee:
Hilltop Holding Company LP
c/o SIAR Capital LLC
660 Madison Avenue
New York, NY 10021
Attention: Jack Silver
Telephone: (212) 542-8201
Facsimile: (212) 542-8212
(c) Waiver. No waiver of the provisions hereof shall be effective
unless in writing and signed by the party to be charged with such waiver. No
waiver shall be deemed a continuing waiver or waiver in respect of any
subsequent breach or default, either of a similar or different nature, unless
expressly so stated in writing.
(d) Governing Law. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of New York applicable to
contracts to be performed entirely within that State. Any dispute in any way
related to the subject matter of this Agreement shall be litigated exclusively
within the State of New York and all parties hereto, consent to the jurisdiction
of the State and/or United States Federal District Courts of New York. Should
any clause, section or part of this Agreement be held or declared to be void or
illegal for any reason, all other clauses, sections or parts of this Agreement
which can be affected without such illegal clause, section or part shall
nevertheless continue in full force and effect.
(e) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns or heirs and personal representatives.
(f) Captions. The headings, captions or titles of paragraphs under
sections or subsections of this Agreement are for convenience and reference only
and do not in any way modify, interpret or construe the intent of the parties or
effect any of the provisions of this Agreement.
(g) Counterparts. This Agreement may be executed by fax transmission
and in one or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same Agreement.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on the date and year first above written.
ASSIGNOR:
RS PROPERTIES I LLC
By: /s/ John Lack
---------------------------
Name: John Lack
Title: Manager
ASSIGNEE:
HILLTOP HOLDING COMPANY, L.P.
By: /s/Jack Silver
---------------------------
Name: Jack Silver
Title: General Partner
Acknowledged and consented to:
KRONOS ADVANCED TECHNOLOGIES, INC.
By: /s/ Richard F. Tusing
----------------------------------
Name: Richard F. Tusing
Title: Chief Operating Officer
KRONOS AIR TECHNOLOGIES, INC.
By: /s/ Richard F. Tusing
----------------------------------
Name: Richard F. Tusing
Title: Chief Operating Officer
AIRWORKS FUNDING LLLP
By: /s/ Richard E. Perlman
----------------------------------
Name: Richard E. Perlman
Title: President
SANDS BROTHERS VENTURE CAPITAL LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
SANDS BROTHERS VENTURE CAPITAL II LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
SANDS BROTHERS VENTURE CAPITAL III LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
SANDS BROTHERS VENTURE CAPITAL IV LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
CRITICAL GROWTH FUND, L.P.
By: Critical Capital, L.P., its General Partner
By: Critical Capital Corporation, its General Partner
By: /s/ Charles L. Robinson
----------------------------------
Name: Charles L. Robinson
Title: President
By: /s/ Steven B. Sands
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Name: Steven B. Sands
Title: Chairman