STANDBY EQUITY DISTRIBUTION AGREEMENT
                      -------------------------------------

         THIS AGREEMENT  dated as of the 28 day of January 2005 (the
"Agreement")  between CORNELL  CAPITAL  PARTNERS,  LP, a Delaware limited
partnership (the "Investor"),  and KRONOS ADVANCED  TECHNOLOGIES,  INC., a
corporation organized and existing under the laws of the State of Nevada (the
"Company").

         WHEREAS,  the parties desire that, upon the terms and subject to the
conditions  contained herein, the Company shall issue and sell to the Investor,
from time to time as provided  herein,  and the Investor  shall  purchase from
the Company up to Twenty  Million U.S. Dollars ($20,000,000) of the Company's
common stock, par value $0.001 per share (the "Common Stock"); and

         WHEREAS,  such  investments  will be made in reliance upon the
provisions of Regulation D  ("Regulation  D") of the Securities Act of 1933, as
amended, and the regulations  promulgated  thereunder (the "Securities Act"),
and or upon such other exemption from the registration  requirements  of the
Securities Act as may be available with respect to any or all of the investments
to be made hereunder.

         WHEREAS, the Company has engaged Newbridge Securities  Corporation (the
"Placement Agent"), to act as the Company's exclusive placement agent in
connection with the sale of the Company's Common Stock to the Investor hereunder
pursuant to the Placement Agent Agreement dated the date hereof by and among the
Company, the Placement Agent and the Investor (the "Placement Agent Agreement").

         NOW, THEREFORE, the parties hereto agree as follows:


                                   ARTICLE I.
                               Certain Definitions

         Section 1.1.      "Advance" shall mean the portion of the Commitment
Amount requested by the Company in the Advance Notice.

         Section 1.2.      "Advance Date" shall mean the date the David Gonzalez
Attorney  Trust  Account is in receipt of the funds from the Investor and David
Gonzalez,  Esq., is in possession of free trading  shares from the Company and
therefore an Advance by the Investor to the Company can be made and David
Gonzalez,  Esq. can release the free trading  shares to the  Investor.  The
Advance Date shall be the first (1st) Trading Day after expiration of the
applicable Pricing Period for each Advance.

         Section 1.3.      "Advance  Notice" shall mean a written notice to the
Investor  setting  forth the Advance  amount that the Company requests from the
Investor and the Advance Date.

         Section 1.4.      "Advance Notice Date" shall mean each date the
Company  delivers to the Investor an Advance Notice requiring the Investor to
advance funds to the Company, subject to the terms of this Agreement. No Advance
Notice Date shall be less than five (5) Trading Days after the prior Advance
Notice Date.

<PAGE>

         Section 1.5.      "Bid Price" shall mean, on any date,  the closing bid
price (as  reported by Bloomberg  L.P.) of the Common Stock on the  Principal
Market or if the Common Stock is not traded on a Principal  Market, the highest
reported bid price for the Common Stock, as furnished by the National
Association of Securities Dealers, Inc.

         Section 1.6.      "Closing" shall mean one of the closings of a
purchase and sale of Common Stock pursuant to Section 2.3.

         Section 1.7.      "Commitment  Amount" shall mean the aggregate amount
of up to Twenty  Million U.S.  Dollars  ($20,000,000) which the  Investor  has
agreed to provide to the Company in order to purchase the  Company's  Common
Stock  pursuant to the terms and conditions of this Agreement.

         Section 1.8.      "Commitment Period" shall mean the period commencing
on the earlier to occur of (i) the Effective Date, or (ii) such earlier date as
the Company and the  Investor  may  mutually  agree in writing,  and expiring on
the earliest to occur of (x) the date on which the  Investor  shall have made
payment of Advances  pursuant to this  Agreement  in the  aggregate  amount of
Twenty Million U.S.  Dollars  ($20,000,000),  (y) the date this  Agreement is
terminated  pursuant to Section 2.4, or (z) the date  occurring twenty-four (24)
months after the Effective Date.

         Section 1.9.      "Common Stock" shall mean the Company's common stock,
par value $0.001 per share.

         Section 1.10.     "Condition Satisfaction Date" shall have the meaning
set forth in Section 7.2.

         Section 1.11.     "Damages" shall mean any loss, claim, damage,
liability, costs and expenses (including,  without limitation, reasonable
attorney's fees and disbursements and costs and expenses of expert witnesses and
investigation).

         Section 1.12.     "Effective Date" shall mean the date on which the SEC
first  declares  effective a  Registration  Statement registering the resale of
the Registrable Securities as set forth in Section 7.2(a).

         Section 1.13.     "Escrow Agreement" shall mean the escrow agreement
among the Company, the Investor, and David Gonzalez, Esq., dated the date
hereof.

         Section 1.14.     "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended,  and the rules and  regulations promulgated thereunder.

         Section 1.15.     "Material Adverse Effect" shall mean any condition,
circumstance,  or situation  that would  prohibit or otherwise  materially
interfere with the ability of the Company to enter into and perform any of its
obligations  under this Agreement or the Registration Rights Agreement in any
material respect.

         Section 1.16.     "Market Price" shall mean the lowest VWAP of the
Common Stock during the Pricing Period.

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         Section 1.17.     "Maximum Advance Amount" shall be One Million Five
Hundred Thousand U.S.  Dollars (US$1,500,000) per Advance Notice.

         Section 1.18.     "NASD" shall mean the National Association of
Securities Dealers, Inc.

         Section 1.19.     "Person" shall mean an individual, a corporation, a
partnership,  an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

         Section 1.20.     "Placement Agent" shall mean Newbridge Securities
Corporation, a registered broker-dealer.

         Section 1.21.     "Pricing Period" shall mean the five (5) consecutive
Trading Days after the Advance Notice Date.

         Section 1.22.     "Principal  Market" shall mean the Nasdaq National
Market,  the Nasdaq SmallCap  Market,  the American Stock Exchange,  the OTC
Bulletin Board or the New York Stock  Exchange,  whichever is at the time the
principal  trading  exchange or market for the Common Stock.

         Section 1.23.     "Purchase Price" shall be set at ninety eight percent
(98%) of the Market Price during the Pricing Period.

         Section 1.24.     "Registrable  Securities"  shall mean the shares of
Common  Stock to be issued  hereunder  (i) in respect of which the  Registration
Statement  has not been  declared  effective  by the SEC,  (ii) which  have not
been sold under  circumstances meeting all of the applicable  conditions of Rule
144 (or any similar  provision  then in force) under the Securities Act ("Rule
144") or (iii) which have not been  otherwise  transferred  to a holder who may
trade such shares  without  restriction  under the Securities Act, and the
Company has  delivered a new  certificate  or other  evidence of ownership for
such  securities  not bearing a restrictive legend.

         Section 1.25.     "Registration  Rights  Agreement"  shall  mean the
Registration  Rights  Agreement  dated the date  hereof, regarding the filing of
the Registration Statement for the resale of the Registrable  Securities,
entered into between the Company and the Investor.

         Section 1.26.     "Registration  Statement"  shall mean a  registration
statement on Form S-1 or SB-2 (if use of such form is then  available to the
Company  pursuant to the rules of the SEC and, if not, on such other form
promulgated  by the SEC for which the Company then  qualifies and which counsel
for the Company shall deem  appropriate,  and which form shall be available for
the resale of the  Registrable  Securities to be  registered  thereunder in
accordance  with the  provisions of this  Agreement and the  Registration Rights
Agreement,  and in accordance with the intended method of distribution of such
securities),  for the registration of the resale by the Investor of the
Registrable Securities under the Securities Act.

         Section 1.27.     "Regulation D" shall have the meaning set forth in
the recitals of this Agreement.

         Section 1.28.     "SEC" shall mean the Securities and Exchange
Commission.

                                       3

<PAGE>

         Section 1.29.     "Securities Act" shall have the meaning set forth in
the recitals of this Agreement.

         Section 1.30.     "SEC Documents" shall mean Annual Reports on Form
10-KSB,  Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K and Proxy
Statements  of the Company as  supplemented  to the date  hereof,  filed by the
Company for a period of at least twelve (12) months  immediately  preceding  the
date hereof or the Advance  Date, as the case may be, until such time as the
Company no longer has an obligation to maintain the effectiveness of a
Registration Statement as set forth in the Registration Rights Agreement.

         Section 1.31.     "Trading Day" shall mean any day during which the New
York Stock Exchange shall be open for business.

         Section 1.32.     "VWAP" shall mean the volume  weighted  average price
of the Company's  Common Stock as quoted by Bloomberg, LP.


                                   ARTICLE II.
                                    Advances

         Section 2.1.      Investments.

                  (a)      Advances. Upon the terms and conditions set forth
herein (including,  without limitation,  the provisions of Article VII  hereof),
on any Advance  Notice  Date the  Company may request an Advance by the Investor
by the delivery of an Advance Notice.  The number of shares of Common Stock that
the Investor  shall  receive for each Advance  shall be  determined  by dividing
the amount of the Advance by the Purchase  Price.  No fractional shares shall be
issued.  Fractional  shares shall be rounded to the next higher whole number of
shares. The aggregate maximum  amount of all Advances that the Investor shall be
obligated to make under this Agreement shall not exceed the Commitment Amount.

         Section 2.2.      Mechanics.

                  (a)      Advance Notice. At any time during the Commitment
Period, the Company may deliver an Advance Notice to the Investor, subject to
the conditions set forth in  Section 7.2; provided, however, the amount for
each Advance as designated by the Company in the applicable Advance Notice,
shall not be more than the Maximum Advance  Amount. The aggregate  amount of the
Advances pursuant to this  Agreement  shall not exceed the  Commitment  Amount.
There shall be a minimum of five (5) Trading  Days between each Advance Notice
Date.

                  (b)      Date of Delivery of Advance  Notice.  An Advance
Notice shall be deemed  delivered on (i) the Trading Day it is received by
facsimile  or  otherwise  by the  Investor if such notice is received  prior to
12:00 noon  Eastern  Time,  or (ii) the immediately  succeeding  Trading Day if
it is received by facsimile  or otherwise  after 12:00 noon Eastern Time on a
Trading Day or at any time on a day which is not a Trading Day.  No Advance
Notice may be deemed delivered on a day that is not a Trading Day.

                                       4

<PAGE>

         Section 2.3.      Closings. On each Advance Date, which shall be the
first  (1st)  Trading  Day after  expiration  of the applicable  Pricing Period
for each Advance,  (i) the Company shall deliver to David Gonzalez,  Esq. (the
"Escrow Agent") shares of the Company's Common Stock, representing the amount of
the Advance by the Investor pursuant to Section 2.1 herein, registered in the
name of the Investor which shall be delivered to the Investor,  or otherwise in
accordance with the Escrow Agreement and (ii) the Investor shall  deliver to
Escrow Agent the amount of the Advance  specified in the Advance  Notice by wire
transfer of  immediately  available funds which shall be delivered to the
Company, or otherwise in accordance with the Escrow Agreement. In addition, on
or prior to the Advance  Date,  each of the Company  and the  Investor  shall
deliver to the other  through the  Investor's  counsel,  all  documents,
instruments and writings required to be delivered by either of them pursuant to
this  Agreement in order to implement and effect the transactions  contemplated
herein.  Payment of funds to the Company and delivery of the Company's  Common
Stock to the Investor  shall occur in accordance with the conditions set forth
above and those contained in the Escrow  Agreement;  provided,  however, that to
the extent the Company has not paid the fees,  expenses,  and  disbursements  of
the Investor,  the  Investor's  counsel,  or the Company's counsel in accordance
with Section 12.4, the amount of such fees,  expenses,  and  disbursements  may
be deducted by the Investor (and shall be paid to the relevant  party) from the
amount of the Advance with no reduction in the amount of shares of the Company's
Common Stock to be delivered on such Advance Date.

         Section 2.4.      Termination  of  Investment.  The  obligation of the
Investor to make an Advance to the Company  pursuant to this Agreement  shall
terminate  permanently  (including  with respect to an Advance Date that has not
et occurred) in the event that (i) there shall occur any stop order or
suspension of the  effectiveness of the  Registration  Statement for an
aggregate of fifty (50) Trading Days,  other than due to the acts of the
Investor,  during the Commitment  Period,  and (ii) the Company shall at any
time fail materially  to comply with the  requirements  of Article VI and such
failure is not cured  within  thirty  (30) days after  receipt of written notice
from the Investor,  provided,  however,  that this termination  provision shall
not apply to any period  commencing upon the  filing of a  post-effective
amendment  to such  Registration  Statement  and ending  upon the date on which
such post  effectiveamendment is declared effective by the SEC.

         Section 2.5.      Agreement to Advance  Funds.  The Investor  agrees to
advance the amount  specified in the Advance Notice to the Company after the
completion of each of the following conditions and the other conditions set
forth in this Agreement:

                   (a)     the execution and delivery by the Company, and the
Investor, of this Agreement and the Exhibits hereto;

                   (b)     the Escrow  Agent shall have  received the shares of
Common Stock  applicable  to the Advance in  accordance with Section 2.3.  Such
shares shall be free of restrictive legends.

                   (c)     the Company's  Registration Statement with respect to
the resale of the Registrable Securities in accordance with the terms of the
Registration Rights Agreement shall have been declared effective by the SEC;

                                       5

<PAGE>

                   (d)     the Company shall have obtained all material  permits
and  qualifications  required by any applicable  state for the offer and sale of
the Registrable  Securities,  or shall have the availability of exemptions
therefrom.  The sale and issuance of the Registrable Securities shall be legally
permitted by all laws and regulations to which the Company is subject;

                   (e)     the Company shall have filed with the Commission in a
timely manner all reports,  notices and other documents required of a "reporting
company" under the Exchange Act and  applicable Commission regulations;

                   (f)     the fees as set forth in Section  12.4 below  shall
have been paid or can be withheld as provided in Section 2.3; and

                   (g)     the conditions set forth in Section 7.2 shall have
been satisfied.

                   (h)     the Company  shall have provided to the Investor an
acknowledgement,  from Sherb & Co. as to its ability to provide all consents
required in order to file a registration statement in connection with this
transaction;

                   (i)     The Company's transfer agent shall be DWAC eligible.

         Section 2.6.      Lock Up Period.

                           (i)      During the Commitment  Period, and except as
disclosed  in the  SEC  Documents  and  as set  forth  in the  loan  transaction
documents  by and among the  Company,  Kronos  Air  Technologies,  Inc.  and FKA
Distributing  Co. d/b/a  HoMedics,  Inc., a Michigan  corporation  ("HoMedics"),
including that certain Master Loan and Investment Agreement,  dated May 9, 2003,
that certain Secured Promissory Note in the principal amount of $2,400,000, that
certain  Secured  Promissory  Note in the principal  amount of $1,000,000,  that
certain Security Agreement,  dated May 9, 2003, that certain Registration Rights
Agreement,  dated May 9, 2003, that certain Warrant No. 1, dated May 9, 2003 and
that certain Warrant No. 2, dated May 9, 2003  (collectively  referred to as the
"HoMedics Transaction  Documents"),  the Company shall not issue or sell (i) any
Common Stock or Preferred Stock without consideration or for a consideration per
share less than the Bid Price on the date of  issuance or (ii) issue or sell any
warrant, option, right, contract, call, or other security or instrument granting
the holder  thereof the right to acquire Common Stock without  consideration  or
for a consideration per share less than the Bid Price on the date of issuance.

                           (ii)     On the date hereof, the Company shall obtain
from each officer and director a lock-up  agreement,  as defined  below,  in the
form annexed hereto as Schedule 2.6 agreeing to only sell in compliance with the
volume limitation of Rule 144.

         Section 2.7.      Hardship.  In the event the Investor sells shares of
the Company's  Common Stock after  receipt of an Advance  Notice and the Company
fails to perform its  obligations  as mandated in Section 2.3, and  specifically
the Company  fails to deliver to the Escrow Agent on the Advance Date the shares
of  Common  Stock   corresponding  to  the  applicable   Advance,   the  Company
acknowledges  that the Investor  shall suffer  financial  hardship and therefore
shall be liable for any and all losses, commissions, fees, or financial hardship
caused to the Investor.

                                       6

<PAGE>

                                  ARTICLE III.
                   Representations and Warranties of Investor

         Investor  hereby  represents  and  warrants to, and agrees with,  the
Company that the  following  are true and as of the date hereof and as of each
Advance Date:

         Section 3.1.      Organization and  Authorization. The Investor is duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation  or  organization  and has all  requisite  power and  authority to
purchase and hold the securities issuable hereunder.  The decision to invest and
the execution and delivery of this Agreement by such Investor,  the  performance
by such  Investor of its  obligations  hereunder  and the  consummation  by such
Investor of the transactions  contemplated  hereby have been duly authorized and
requires no other  proceedings on the part of the Investor.  The undersigned has
the right,  power and  authority to execute and deliver this  Agreement  and all
other  instruments  (including,  without  limitations,  the Registration  Rights
Agreement), on behalf of the Investor. This Agreement has been duly executed and
delivered by the Investor and,  assuming the  execution and delivery  hereof and
acceptance thereof by the Company,  will constitute the legal, valid and binding
obligations of the Investor, enforceable against the Investor in accordance with
its terms.

         Section 3.2.      Evaluation of Risks.  The Investor has such knowledge
and  experience  in  financial  tax and  business  matters  as to be  capable of
evaluating  the merits and risks of, and bearing the economic risks entailed by,
an investment in the Company and of protecting its interests in connection  with
this  transaction.  It recognizes that its investment in the Company  involves a
high degree of risk.

         Section 3.3.      No Legal  Advice From the Company.  The Investor
acknowledges  that it had the  opportunity  to  review  this  Agreement  and the
transactions  contemplated  by this  Agreement with his or its own legal counsel
and investment and tax advisors.  The Investor is relying solely on such counsel
and advisors and not on any statements or  representations of the Company or any
of its  representatives  or agents  for legal,  tax or  investment  advice  with
respect to this investment,  the transactions  contemplated by this Agreement or
the securities laws of any jurisdiction.

         Section 3.4.      Investment Purpose.  The securities are being
purchased by the Investor for its own account,  for  investment  and without any
view to the distribution, assignment or resale to others or fractionalization in
whole or in part.  The Investor  agrees not to assign or in any way transfer the
Investor's  rights to the  securities or any interest  therein and  acknowledges
that the Company will not recognize any purported  assignment or transfer except
in accordance with applicable Federal and state securities laws. No other person
has or will have a direct or indirect beneficial interest in the securities. The
Investor  agrees not to sell,  hypothecate or otherwise  transfer the Investor's
securities  unless the securities  are  registered  under Federal and applicable
state securities laws or unless,  in the opinion of counsel  satisfactory to the
Company, an exemption from such laws is available.

         Section 3.5.      Accredited Investor.  The Investor is an "Accredited
Investor" as that term is defined in Rule 501(a)(3) of Regulation D of the
Securities Act.

                                       7

<PAGE>

         Section 3.6.      Information.  The  Investor  and its  advisors  (and
its counsel),  if any, have been  furnished  with all materials  relating to the
business,  finances  and  operations  of the Company and  information  it deemed
material  to  making an  informed  investment  decision.  The  Investor  and its
advisors,  if any,  have been afforded the  opportunity  to ask questions of the
Company and its  management.  Neither such inquiries nor any other due diligence
investigations  conducted  by such  Investor  or its  advisors,  if any,  or its
representatives  shall modify,  amend or affect the Investor's  right to rely on
the Company's  representations and warranties  contained in this Agreement.  The
Investor  understands  that its  investment  involves a high degree of risk. The
Investor is in a position  regarding the Company,  which, based upon employment,
family  relationship  or economic  bargaining  power,  enabled and enables  such
Investor to obtain  information from the Company in order to evaluate the merits
and risks of this investment. The Investor has sought such accounting, legal and
tax  advice,  as it has  considered  necessary  to make an  informed  investment
decision with respect to this transaction.

         Section 3.7.      Receipt of  Documents.  The  Investor and its counsel
have received and read in their  entirety:  (i) this  Agreement and the Exhibits
annexed hereto; (ii) all due diligence and other information necessary to verify
the accuracy and completeness of such representations, warranties and covenants;
(iii) the Company's Form 10-KSB for the year ended June 30, 2003 and Form 10-QSB
for the period  ended March 31,  2004;  and (iv)  answers to all  questions  the
Investor  submitted to the Company  regarding an investment in the Company;  and
the Investor has relied on the  information  contained  therein and has not been
furnished any other documents, literature, memorandum or prospectus.

         Section 3.8.      Registration  Rights Agreement and Escrow Agreement.
The parties have entered into the  Registration  Rights Agreement and the Escrow
Agreement, each dated the date hereof.

         Section 3.9.      No General  Solicitation.  Neither the Company,  nor
any of its affiliates, nor any person acting on its or their behalf, has engaged
in any form of general  solicitation or general  advertising (within the meaning
of Regulation D under the Securities  Act) in connection  with the offer or sale
of the shares of Common Stock offered hereby.

         Section 3.10.     Not an  Affiliate.  The  Investor is not an  officer,
director  or  a  person  that  directly,  or  indirectly  through  one  or  more
intermediaries,  controls or is controlled  by, or is under common  control with
the Company or any  "Affiliate"  of the Company (as that term is defined in Rule
405 of the Securities Act).

         Section 3.11.     Trading  Activities.  The Investor's trading
activities  with respect to the  Company's  Common Stock shall be in  compliance
with all applicable federal and state securities laws, rules and regulations and
the rules and regulations of the Principal  Market on which the Company's Common
Stock is listed or traded.  Neither the Investor nor its  affiliates has an open
short position in the Common Stock of the Company,  the Investor  agrees that it
shall not,  and that it will cause its  affiliates  not to,  engage in any short
sales of or hedging transactions with respect to the Common Stock, provided that
the Company  acknowledges  and agrees that upon receipt of an Advance Notice the
Investor is permitted  to sell the shares to be issued to the Investor  pursuant
to the Advance Notice during the applicable Pricing Period.

                                       8

<PAGE>

                                   ARTICLE IV.
                  Representations and Warranties of the Company

         Except as stated below, on the disclosure  schedules attached hereto or
in the SEC Documents (as defined  herein),  the Company  hereby  represents  and
warrants to, and  covenants  with,  the Investor that the following are true and
correct as of the date hereof:

         Section 4.1.      Organization and  Qualification.  The Company is duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation  or  organization  and  has  all  requisite  power  and  authority
corporate  power to own its properties and to carry on its business as now being
conducted.  Each of the  Company and its  subsidiaries  is duly  qualified  as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the  business  conducted  by it makes such  qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in
good standing  would not have a Material  Adverse  Effect on the Company and its
subsidiaries taken as a whole.

         Section 4.2.      Authorization,  Enforcement,  Compliance with Other
Instruments.  (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement,  the Registration  Rights Agreement,  the
Escrow Agreement,  the Placement Agent Agreement and any related agreements,  in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement,  the Registration  Rights Agreement,  the Escrow Agreement,  the
Placement  Agent  Agreement  and any related  agreements  by the Company and the
consummation by it of the  transactions  contemplated  hereby and thereby,  have
been duly  authorized by the Company's Board of Directors and no further consent
or  authorization  is required by the  Company,  its Board of  Directors  or its
stockholders,  (iii) this Agreement,  the  Registration  Rights  Agreement,  the
Escrow Agreement,  the Placement Agent Agreement and any related agreements have
been duly  executed  and  delivered  by the Company,  (iv) this  Agreement,  the
Registration  Rights  Agreement,  the  Escrow  Agreement,  the  Placement  Agent
Agreement and assuming the execution and delivery  thereof and acceptance by the
Investor and any related agreements constitute the valid and binding obligations
of the Company  enforceable  against the Company in accordance with their terms,
except as such  enforceability may be limited by general principles of equity or
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting generally,  the enforcement of creditors'
rights and remedies.

         Section 4.3.      Capitalization.  As of the date hereof,  the
authorized capital stock of the Company consists of 500,000,000 shares of Common
Stock,  par value $0.001 per share and 50,000,000  shares of Preferred  Stock of
which  63,951,360  shares of Common Stock and 0 shares of  Preferred  Stock were
issued and outstanding.  All of such outstanding shares have been validly issued
and are fully paid and  nonassessable.  Except as disclosed in the SEC Documents
and preemptive rights granted in the HoMedics Transaction  Documents,  no shares
of Common Stock are subject to preemptive  rights or any other similar rights or
any liens or  encumbrances  suffered  or  permitted  by the  Company.  Except as
disclosed in the SEC Documents, the HoMedics Transaction Documents, and pursuant
to any  restructuring  of the  HoMedics  Transaction  Documents,  as of the date
hereof,  (i)  there  are no  outstanding  options,  warrants,  scrip,  rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or

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<PAGE>

securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company or any of its subsidiaries, or contracts, commitments, understandings or
arrangements  by which the Company or any of its  subsidiaries  is or may become
bound to issue  additional  shares of capital stock of the Company or any of its
subsidiaries  or options,  warrants,  scrip,  rights to  subscribe  to, calls or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
subsidiaries,  (ii) there are no outstanding  debt securities (iii) there are no
outstanding registration statements other than on Form S-8 and (iv) there are no
agreements or arrangements under which the Company or any of its subsidiaries is
obligated to register the sale of any of their  securities  under the Securities
Act  (except  pursuant to the  Registration  Rights  Agreement).  Except for the
preemptive rights granted in the HoMedics  Transaction  Documents,  there are no
securities or instruments  containing  anti-dilution or similar  provisions that
will be triggered by this Agreement or any related agreement or the consummation
of the  transactions  described  herein or therein.  As of the date hereof,  the
Company has granted  HoMedics  warrants to purchase  shares of Common  Stock and
following a  potential  restructuring  of the  HoMedics  transaction  Documents,
HoMedics  could be granted  additional  warrants  to  purchase  shares of Common
Stock.  The Company has furnished to the Investor true and correct copies of the
Company's Certificate of Incorporation,  as amended and as in effect on the date
hereof (the "Certificate of  Incorporation"),  and the Company's By-laws,  as in
effect on the date  hereof  (the  "By-laws"),  and the  terms of all  securities
convertible  into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto.

         Section 4.4.      No Conflict.  The execution, delivery and performance
of this  Agreement  by the  Company and the  consummation  by the Company of the
transactions  contemplated  hereby  will not (i)  result in a  violation  of the
Certificate of Incorporation, any certificate of designations of any outstanding
series of  preferred  stock of the Company or By-laws or (ii)  conflict  with or
constitute  a default  (or an event  which with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,   acceleration  or  cancellation  of,  any  agreement,  indenture  or
instrument to which the Company or any of its subsidiaries is a party, or result
in a  violation  of  any  law,  rule,  regulation,  order,  judgment  or  decree
(including  federal and state  securities laws and regulations and the rules and
regulations  of the  Principal  Market  on which  the  Common  Stock is  quoted)
applicable  to the Company or any of its  subsidiaries  or by which any material
property or asset of the Company or any of its subsidiaries is bound or affected
and which would cause a Material Adverse Effect.  Except as disclosed in the SEC
Documents,  neither the Company nor its subsidiaries is in violation of any term
of or in  default  under its  Articles  of  Incorporation  or  By-laws  or their
organizational  charter or  by-laws,  respectively,  or any  material  contract,
agreement, mortgage,  indebtedness,  indenture,  instrument, judgment, decree or
order or any  statute,  rule or  regulation  applicable  to the  Company  or its
subsidiaries.  The  business of the Company  and its  subsidiaries  is not being
conducted  in  violation  of any  material  law,  ordinance,  regulation  of any
governmental entity.  Except as specifically  contemplated by this Agreement and
as required under the Securities Act and any applicable  state  securities laws,
the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental  agency in order
for  it to  execute,  deliver  or  perform  any  of  its  obligations  under  or
contemplated  by  this  Agreement  or  the  Registration   Rights  Agreement  in
accordance  with the terms  hereof or  thereof.  All  consents,  authorizations,
orders,  filings  and  registrations  which the  Company is  required  to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
the date  hereof.  The Company and its  subsidiaries  are unaware of any fact or
circumstance which might give rise to any of the foregoing.

                                       10

<PAGE>

         Section 4.5.      SEC Documents;  Financial Statements.  Since January
1, 2002,  the Company has filed all reports,  schedules,  forms,  statements and
other  documents  required to be filed by it with the SEC under of the  Exchange
Act. The Company has delivered to the Investor or its  representatives,  or made
available  through the SEC's  website at  http://www.sec.gov,  true and complete
copies of the SEC Documents,  as well as the HoMedics Transaction Documents.  As
of their respective dates, the financial  statements of the Company disclosed in
the  SEC  Documents  (the  "Financial  Statements")  complied  as to form in all
material  respects with  applicable  accounting  requirements  and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting  principles,
consistently  applied,  during  the  periods  involved  (except  (i)  as  may be
otherwise  indicated in such financial  statements or the notes thereto, or (ii)
in the case of  unaudited  interim  statements,  to the extent  they may exclude
footnotes or may be condensed or summary  statements) and, fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  No other  information  provided by or on behalf of the Company to
the  Investor  which is not  included in the SEC  Documents  contains any untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make the statements  therein,  in the light of the circumstances  under
which they were made, not misleading.

         Section 4.6.      10b-5.  The SEC Documents do not include any untrue
statements  of  material  fact,  nor do they  omit to state  any  material  fact
required to be stated therein necessary to make the statements made, in light of
the circumstances under which they were made, not misleading.

         Section 4.7.      No Default. Except as disclosed in the SEC Documents,
the Company is not in default in the  performance  or observance of any material
obligation,  agreement,  covenant  or  condition  contained  in  any  indenture,
mortgage, deed of trust or other material instrument or agreement to which it is
a party or by which it is or its  property is bound and  neither the  execution,
nor the  delivery  by the  Company,  nor the  performance  by the Company of its
obligations  under this Agreement or any of the exhibits or  attachments  hereto
will  conflict  with or result in the breach or violation of any of the terms or
provisions  of, or  constitute a default or result in the creation or imposition
of any lien or  charge on any  assets or  properties  of the  Company  under its
Certificate of Incorporation, By-Laws, any material indenture, mortgage, deed of
trust or other  material  agreement  applicable  to the Company or instrument to
which the  Company is a party or by which it is bound,  or any  statute,  or any
decree, judgment, order, rules or regulation of any court or governmental agency
or body having  jurisdiction  over the Company or its  properties,  in each case
which  default,  lien or charge is likely to cause a Material  Adverse Effect on
the Company's business or financial condition.

         Section 4.8.      Absence of Events of Default.  Except for matters
described in the SEC Documents  and/or this Agreement,  no Event of Default,  as
defined in the  respective  agreement  to which the  Company is a party,  and no
event  which,  with the giving of notice or the  passage of time or both,  would
become an Event of Default (as so  defined),  has  occurred  and is  continuing,
which  would  have  a  Material  Adverse  Effect  on  the  Company's   business,
properties, prospects, financial condition or results of operations.

                                       11

<PAGE>

         Section 4.9.      Intellectual  Property  Rights.  The Company and its
subsidiaries  own or possess  adequate  rights or licenses  to use all  material
trademarks,  trade names,  service marks,  service mark  registrations,  service
names, patents,  patent rights,  copyrights,  inventions,  licenses,  approvals,
governmental authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted.  The Company and its subsidiaries do not
have any knowledge of any  infringement  by the Company or its  subsidiaries  of
trademark,  trade name rights, patents, patent rights,  copyrights,  inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other similar rights of others,  and, to the knowledge of the Company,  there
is no claim,  action or  proceeding  being  made or brought  against,  or to the
Company's  knowledge,  being threatened against, the Company or its subsidiaries
regarding trademark,  trade name, patents, patent rights, invention,  copyright,
license, service names, service marks, service mark registrations,  trade secret
or other  infringement;  and the Company and its subsidiaries are unaware of any
facts or  circumstances  which  might  give  rise to any of the  foregoing.  The
Company  has  informed  the  Investor of a license  granted to  HoMedics  and of
HoMedics' rights thereunder, as set forth in the SEC Documents.

         Section 4.10.     Employee  Relations.  Neither the Company nor any of
its  subsidiaries  is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries,  is any such dispute threatened. None of the
Company's or its subsidiaries'  employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

         Section 4.11.     Environmental Laws. The Company and its subsidiaries
are (i) in compliance  with any and all applicable  material  foreign,  federal,
state and local laws and regulations  relating to the protection of human health
and  safety,  the  environment  or  hazardous  or toxic  substances  or  wastes,
pollutants  or  contaminants  ("Environmental  Laws"),  (ii) have  received  all
permits,   licenses  or  other  approvals  required  of  them  under  applicable
Environmental  Laws to  conduct  their  respective  businesses  and (iii) are in
compliance  with all  terms  and  conditions  of any  such  permit,  license  or
approval.

         Section 4.12.     Title.  Except as set forth in the SEC Documents  and
the HoMedics Transaction Documents, the Company has good and marketable title to
its  properties  and material  assets owned by it, free and clear of any pledge,
lien,  security  interest,  encumbrance,  claim or equitable interest other than
such as are not material to the business of the Company.  Any real  property and
facilities held under lease by the Company and its subsidiaries are held by them
under valid,  subsisting and enforceable  leases with such exceptions as are not
material and do not interfere  with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.

         Section 4.13.     Insurance.  The Company and each of its  subsidiaries
are insured by insurers of  recognized  financial  responsibility  against  such
losses and risks and in such amounts as management of the Company believes to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
subsidiaries  are engaged.  Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such  subsidiary has any reason to believe that it will not be able to renew
its existing  insurance  coverage as and when such coverage expires or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its subsidiaries, taken as a whole.

                                       12

<PAGE>

         Section 4.14.     Regulatory Permits. The Company and its subsidiaries
possess all  material  certificates,  authorizations  and permits  issued by the
appropriate  federal,  state or  foreign  regulatory  authorities  necessary  to
conduct  their  respective  businesses,  and  neither  the  Company nor any such
subsidiary has received any notice of proceedings  relating to the revocation or
modification of any such certificate, authorization or permit.

         Section 4.15.     Internal  Accounting  Controls.  The  Company  and
each of its  subsidiaries  maintain  a system of  internal  accounting  controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance  with   management's   general  or  specific   authorizations,   (ii)
transactions  are  recorded as  necessary  to permit  preparation  of  financial
statements in conformity with generally  accepted  accounting  principles and to
maintain  asset  accountability,  (iii)  access to assets is  permitted  only in
accordance  with  management's  general or specific  authorization  and (iv) the
recorded  accountability  for assets is  compared  with the  existing  assets at
reasonable  intervals  and  appropriate  action  is taken  with  respect  to any
differences.

         Section 4.16.     No Material  Adverse  Breaches,  etc. Except as set
forth in the SEC Documents,  neither the Company nor any of its  subsidiaries is
subject to any charter,  corporate or other legal restriction,  or any judgment,
decree,  order,  rule or  regulation  which  in the  judgment  of the  Company's
officers has or is expected in the future to have a Material  Adverse  Effect on
the business, properties, operations, financial condition, results of operations
or prospects of the Company or its subsidiaries.  Except as set forth in the SEC
Documents,  neither the Company nor any of its  subsidiaries is in breach of any
contract or agreement which breach,  in the judgment of the Company's  officers,
has  or is  expected  to  have  a  Material  Adverse  Effect  on  the  business,
properties,  operations, financial condition, results of operations or prospects
of the Company or its subsidiaries.

         Section 4.17.     Absence of  Litigation.  Except as set forth in the
SEC Documents,  there is no action, suit,  proceeding,  inquiry or investigation
before  or by  any  court,  public  board,  government  agency,  self-regulatory
organization or body pending against or affecting the Company,  the Common Stock
or any of the Company's subsidiaries, wherein an unfavorable decision, ruling or
finding  would  (i)  have  a  Material   Adverse  Effect  on  the   transactions
contemplated  hereby (ii) adversely affect the validity or enforceability of, or
the authority or ability of the Company to perform its obligations  under,  this
Agreement  or any of the  documents  contemplated  herein,  or (iii)  except  as
expressly disclosed in the SEC Documents,  have a Material Adverse Effect on the
business, operations, properties, financial condition or results of operation of
the Company and its subsidiaries taken as a whole.

         Section 4.18.     Subsidiaries.  Except as disclosed in the SEC
Documents,  the  Company  does  not  presently  own  or  control,   directly  or
indirectly, any interest in any other corporation,  partnership,  association or
other business entity.

         Section 4.19.     Tax Status. Except as disclosed in the SEC Documents,
the Company and each of its subsidiaries has made or filed all federal and state
income and all other tax  returns,  reports  and  declarations  required  by any
jurisdiction  to which it is subject and (unless and only to the extent that the

                                       13

<PAGE>

Company  and each of its  subsidiaries  has set  aside on its  books  provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other  governmental  assessments  and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except  those  being  contested  in good  faith  and has set  aside on its books
provision  reasonably  adequate  for  the  payment  of  all  taxes  for  periods
subsequent to the periods to which such returns,  reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction,  and the officers of the Company know of no basis
for any such claim.

         Section 4.20.     Certain  Transactions.  Except  as set  forth  in the
SEC Documents  none of the officers,  directors,  or employees of the Company is
presently a party to any  transaction  with the Company (other than for services
as employees,  officers and  directors),  including  any contract,  agreement or
other  arrangement  providing for the furnishing of services to or by, providing
for rental of real or  personal  property  to or from,  or  otherwise  requiring
payments to or from any officer,  director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer,  director,  or any such  employee has a  substantial  interest or is an
officer, director, trustee or partner.

         Section 4.21.     Fees and  Rights of First  Refusal.  Except  as set
forth in the SEC Documents, the HoMedics Transaction Documents and pursuant to a
potential  restructuring of the HoMedics Transaction  Documents,  the Company is
not  obligated  to offer the  securities  offered  hereunder on a right of first
refusal basis or otherwise to any third parties  including,  but not limited to,
current or former shareholders of the Company, underwriters,  brokers, agents or
other third parties.

         Section 4.22.     Use of Proceeds.  The Company shall use the net
proceeds from this offering for general corporate purposes,  including,  without
limitation,  the payment of loan incurred by the Company.  However,  in no event
shall the Company use the net proceeds from this  offering,  for the payment (or
loaned to any such person for the payment) of any judgment,  or other liability,
incurred by any executive officer, officer, director or employee of the Company,
except for any liability  owed to such person for services  rendered,  or if any
judgment or other liability is incurred by such person originating from services
rendered  to the  Company,  or the  Company  has  indemnified  such  person from
liability.

         Section 4.23.     Further  Representation  and  Warranties of the
Company.  For so long as any securities  issuable hereunder held by the Investor
remain outstanding,  the Company acknowledges,  represents,  warrants and agrees
that it will maintain the listing of its Common Stock on the Principal Market.

         Section 4.24.     Opinion of  Counsel.  Investor  shall  receive an
opinion  letter  from  counsel to the  Company on the date hereof.

         Section 4.25.     Opinion of Counsel.  The  Company  will  obtain for
the Investor,  at the Company's  expense,  any and all opinions of counsel which
may be reasonably  required in order to sell the securities  issuable  hereunder
without restriction.

                                       14

<PAGE>

         Section 4.26.     Dilution.  The Company is aware and  acknowledges
that  issuance of shares of the Company's  Common Stock could cause  dilution to
existing shareholders and could significantly increase the outstanding number of
shares of Common  Stock.  The Company has informed the Investor of the potential
dilution  from  warrants  issued to HoMedics  in  connection  with the  HoMedics
Transaction  Documents  and pursuant to  additional  warrants  issued prior to a
potential restructuring of the HoMedics Transaction Documents.


                                   ARTICLE V.
                                 Indemnification

         The Investor and the Company represent to the other the following with
respect to itself:

         Section 5.1.      Indemnification.

                  (a)      In consideration of the Investor's  execution and
delivery  of this  Agreement,  and in  addition  to all of the  Company's  other
obligations under this Agreement,  the Company shall defend, protect,  indemnify
and hold harmless the Investor,  and all of its officers,  directors,  partners,
employees  and  agents  (including,   without  limitation,   those  retained  in
connection with the transactions  contemplated by this Agreement) (collectively,
the  "Investor  Indemnitees")  from and against any and all  actions,  causes of
action, suits, claims, losses, costs, penalties,  fees, liabilities and damages,
and expenses in connection therewith  (irrespective of whether any such Investor
Indemnitee  is a party to the  action  for which  indemnification  hereunder  is
sought),  and  including  reasonable  attorneys'  fees  and  disbursements  (the
"Indemnified Liabilities"),  incurred by the Investor Indemnitees or any of them
as a result of, or arising out of, or relating to (a) any  misrepresentation  or
breach of any  representation  or warranty made by the Company in this Agreement
or the  Registration  Rights Agreement or any other  certificate,  instrument or
document  contemplated  hereby  or  thereby,  (b) any  breach  of any  covenant,
agreement  or  obligation  of the Company  contained  in this  Agreement  or the
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby  or  thereby,  or (c) any  cause of  action,  suit or claim
brought or made against such Investor  Indemnitee  not arising out of any action
or inaction of an Investor Indemnitee,  and arising out of or resulting from the
execution,  delivery,  performance or enforcement of this Agreement or any other
instrument,  document  or  agreement  executed  pursuant  hereto  by  any of the
Investor  Indemnitees.  To the  extent  that the  foregoing  undertaking  by the
Company may be unenforceable for any reason,  the Company shall make the maximum
contribution  to the  payment  and  satisfaction  of  each  of  the  Indemnified
Liabilities, which is permissible under applicable law.

                  (b)      In  consideration of the Company's  execution and
delivery  of this  Agreement,  and in addition  to all of the  Investor's  other
obligations under this Agreement, the Investor shall defend, protect,  indemnify
and hold harmless the Company and all of its officers, directors,  shareholders,
employees  and  agents  (including,   without  limitation,   those  retained  in
connection with the transactions  contemplated by this Agreement) (collectively,
the "Company Indemnitees") from and against any and all Indemnified  Liabilities
incurred  by the Company  Indemnitees  or any of them as a result of, or arising
out of, or relating to (a) any misrepresentation or breach of any representation
or warranty  made by the Investor in this  Agreement,  the  Registration  Rights
Agreement, or any instrument or document contemplated hereby or thereby executed

                                       15

<PAGE>

by the Investor, (b) any breach of any covenant,  agreement or obligation of the
Investor(s)  contained in this Agreement,  the Registration  Rights Agreement or
any other  certificate,  instrument or document  contemplated  hereby or thereby
executed by the Investor,  or (c) any cause of action,  suit or claim brought or
made against such Company  Indemnitee  based on  misrepresentations  or due to a
breach by the  Investor  and arising  out of or  resulting  from the  execution,
delivery,  performance or enforcement of this Agreement or any other instrument,
document  or  agreement   executed   pursuant  hereto  by  any  of  the  Company
Indemnitees. To the extent that the foregoing undertaking by the Investor may be
unenforceable for any reason,  the Investor shall make the maximum  contribution
to the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.

                           (c)      The  obligations  of the parties to
indemnify or make contribution under this Section 5.1 shall survive termination.


                                   ARTICLE VI.
                            Covenants of the Company

         Section 6.1.      Registration  Rights. The Company shall cause the
Registration Rights Agreement to remain in full force and effect and the Company
shall comply in all material respects with the terms thereof.

         Section 6.2.      Listing of Common Stock.  The Company shall maintain
the Common Stock's  authorization  for quotation on the National  Association of
Securities Dealers Inc.'s Over the Counter Bulletin Board.

         Section 6.3.      Exchange  Act  Registration.  The Company  will cause
its  Common  Stock to  continue  to be  registered  under  Section  12(g) of the
Exchange  Act,  will file in a timely  manner all  reports  and other  documents
required of it as a reporting  company  under the Exchange Act and will not take
any action or file any document (whether or not permitted by Exchange Act or the
rules  thereunder) to terminate or suspend such  registration or to terminate or
suspend its reporting and filing obligations under said Exchange Act.

         Section 6.4.      Transfer Agent  Instructions.  Upon  effectiveness of
the  Registration  Statement  the  Company  shall  deliver  instructions  to its
transfer  agent  to  issue  shares  of  Common  Stock  to the  Investor  free of
restrictive legends on or before each Advance Date

         Section 6.5.      Corporate  Existence. The Company will take all steps
necessary to preserve and continue the corporate existence of the Company.

         Section 6.6.      Notice of Certain Events Affecting  Registration;
Suspension of Right to Make an Advance.  The Company will immediately notify the
Investor  upon its  becoming  aware of the  occurrence  of any of the  following
events in respect of a registration  statement or related prospectus relating to
an offering of Registrable Securities: (i) receipt of any request for additional
information  by the SEC or any other  Federal  or state  governmental  authority
during the period of effectiveness of the Registration  Statement for amendments
or supplements to the  registration  statement or related  prospectus;  (ii) the
issuance by the SEC or any other Federal or state governmental  authority of any
stop order suspending the  effectiveness  of the  Registration  Statement or the
initiation  of  any  proceedings   for  that  purpose;   (iii)  receipt  of  any

                                       16

<PAGE>

notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purpose;  (iv) the happening of any event that makes any  statement  made in the
Registration  Statement or related  prospectus of any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration  Statement,  related
prospectus or documents so that, in the case of the Registration  Statement,  it
will not contain any untrue  statement  of a material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  and that in the case of the related prospectus, it will
not  contain  any  untrue  statement  of a  material  fact or omit to state  any
material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the  Registration  Statement would be appropriate;  and the Company
will promptly make available to the Investor any such supplement or amendment to
the related  prospectus.  The  Company  shall not  deliver to the  Investor  any
Advance Notice during the continuation of any of the foregoing events.

         Section 6.7.      Restriction  on Sale of  Capital  Stock.  During  the

 Commitment  Period and except as set forth in the SEC
Documents,  the HoMedics Transaction  Documents and pursuant to a potential
restructuring of the HoMedics Transaction Documents, the Company shall not issue
or sell (i) any Common Stock or Preferred Stock without  consideration  or for a
consideration  per share less than the bid price of the Common Stock  determined
immediately  prior to its  issuance,  (ii)  issue or sell  any  Preferred  Stock
warrant, option, right, contract, call, or other security or instrument granting
the holder  thereof the right to acquire Common Stock without  consideration  or
for a consideration per share less than such Common Stock's Bid Price determined
immediately prior to its issuance,  or (iii) file any registration  statement on
Form S-8.

         Section 6.8.      Consolidation;  Merger.  The  Company  shall not,
at any time after the date  hereof,  effect any merger or  consolidation  of the
Company with or into,  or a transfer of all or  substantially  all the assets of
the Company to another  entity (a  "Consolidation  Event")  unless the resulting
successor or acquiring entity (if not the Company) assumes by written instrument
the obligation to deliver to the Investor such shares of stock and/or securities
as the Investor is entitled to receive pursuant to this Agreement.

         Section 6.9.      Issuance of the Company's  Common Stock.  The sale
of the shares of Common Stock shall be made in  accordance  with the  provisions
and requirements of Regulation D and any applicable state securities law.


                                  ARTICLE VII.
                Conditions for Advance and Conditions to Closing

         Section 7.1.      Conditions  Precedent to the  Obligations of the
Company. The obligation hereunder of the Company to issue and sell the shares of
Common  Stock  to the  Investor  incident  to each  Closing  is  subject  to the
satisfaction,  or waiver by the Company, at or before each such Closing, of each
of the conditions set forth below.

                                       17

<PAGE>

                  (a)      Accuracy of the  Investor's  Representations  and
Warranties. The representations and warranties of the Investor shall be true and
correct in all material respects.

                  (b)      Performance  by the  Investor.  The Investor  shall
have  performed,  satisfied  and  complied in all respects  with all  covenants,
agreements and conditions required by this Agreement and the Registration Rights
Agreement  to be  performed,  satisfied  or complied  with by the Investor at or
prior to such Closing.

         Section 7.2.      Conditions  Precedent to the Right of the Company to
Deliver an Advance Notice and the Obligation of the Investor to Purchase  Shares
of Common Stock.  The right of the Company to deliver an Advance  Notice and the
obligation  of the  Investor  hereunder  to  acquire  and pay for  shares of the
Company's  Common Stock  incident to a Closing is subject to the  fulfillment by
the  Company,  on (i) the date of delivery of such  Advance  Notice and (ii) the
applicable Advance Date (each a "Condition  Satisfaction  Date"), of each of the
following conditions:

                  (a)      Registration  of the Common  Stock with the SEC.  The
Company shall have filed with the SEC a  Registration  Statement with respect to
the resale of the  Registrable  Securities in  accordance  with the terms of the
Registration  Rights  Agreement.   As  set  forth  in  the  Registration  Rights
Agreement, the Registration Statement shall have previously become effective and
shall remain effective on each Condition  Satisfaction  Date and (i) neither the
Company nor the Investor  shall have received  notice that the SEC has issued or
intends to issue a stop order with respect to the Registration Statement or that
the  SEC  otherwise  has  suspended  or  withdrawn  the   effectiveness  of  the
Registration  Statement,  either  temporarily or permanently,  or intends or has
threatened  to do so (unless  the SEC's  concerns  have been  addressed  and the
Investor  is  reasonably  satisfied  that the SEC no  longer is  considering  or
intends  to take  such  action),  and  (ii) no  other  suspension  of the use or
withdrawal  of  the  effectiveness  of the  Registration  Statement  or  related
prospectus  shall exist.  The  Registration  Statement  must have been  declared
effective by the SEC prior to the first Advance Notice Date.

                  (b)      Authority.  The Company shall have obtained all
permits and  qualifications  required by any applicable state in accordance with
the Registration Rights Agreement for the offer and sale of the shares of Common
Stock,  or shall have the  availability  of exemptions  therefrom.  The sale and
issuance of the shares of Common  Stock shall be legally  permitted  by all laws
and regulations to which the Company is subject.

                  (c)      Fundamental  Changes.  There shall not exist any
fundamental  changes to the information set forth in the Registration  Statement
which  would  require  the  Company to file a  post-effective  amendment  to the
Registration Statement.

                  (d)      Performance  by the  Company.  The Company  shall
have  performed,  satisfied  and  complied  in all  material  respects  with all
covenants,  agreements  and conditions  required by this  Agreement  (including,
without  limitation,  the  conditions  specified  in Section 2.5 hereof) and the
Registration Rights Agreement to be performed, satisfied or complied with by the
Company at or prior to each Condition Satisfaction Date.

                                       18

<PAGE>

                  (e)      No Injunction.  No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,  entered,
promulgated  or endorsed by any court or  governmental  authority  of  competent
jurisdiction  that  prohibits  or  directly  and  adversely  affects  any of the
transactions  contemplated by this Agreement,  and no proceeding shall have been
commenced that may have the effect of prohibiting or adversely  affecting any of
the transactions contemplated by this Agreement.

                  (f)      No Suspension  of Trading in or Delisting of Common
Stock.  The  trading  of the  Common  Stock is not  suspended  by the SEC or the
Principal  Market (if the Common  Stock is traded on a  Principal  Market).  The
issuance of shares of Common Stock with respect to the  applicable  Closing,  if
any, shall not violate the  shareholder  approval  requirements of the Principal
Market (if the Common Stock is traded on a Principal Market).  The Company shall
not have received any notice  threatening  the  continued  listing of the Common
Stock on the  Principal  Market  (if the Common  Stock is traded on a  Principal
Market).

                  (g)      Maximum  Advance  Amount.  The amount of an Advance
requested  by the  Company  shall not  exceed the  Maximum  Advance  Amount.  In
addition,  in no event  shall  the  number of shares  issuable  to the  Investor
pursuant  to an Advance  cause the  aggregate  number of shares of Common  Stock
beneficially  owned by the Investor and its  affiliates  to exceed nine and 9/10
percent (9.9%) of the then outstanding Common Stock of the Company. For purposes
of this section,  beneficial  ownership  shall be calculated in accordance  with
Section 13(d) of the Exchange Act.

                  (h)      No  Knowledge.  The  Company has no  knowledge of any
event which  would be more  likely  than not to have the effect of causing  such
Registration Statement to be suspended or otherwise ineffective.

                  (i)      Other. On each Condition  Satisfaction  Date, the
Investor  shall have  received  the  certificate  executed  by an officer of the
Company in the form of Exhibit A attached hereto.


                                  ARTICLE VIII.
         Due Diligence Review; Non-Disclosure of Non-Public Information

         Section 8.1.      Due Diligence  Review.  Prior to the filing of the
Registration  Statement the Company  shall make  available  for  inspection  and
review by the Investor,  its advisors and  representatives,  and any underwriter
participating in any disposition of the Registrable  Securities on behalf of the
Investor pursuant to the Registration Statement, any such registration statement
or amendment or supplement  thereto or any blue sky,  NASD or other filing,  all
financial and other  records,  all SEC Documents and other filings with the SEC,
and all other  corporate  documents  and  properties  of the  Company  as may be
reasonably  necessary  for the purpose of such review,  and cause the  Company's
officers,  directors  and  employees to supply all such  information  reasonably
requested by the Investor or any such representative,  advisor or underwriter in
connection with such Registration Statement (including,  without limitation,  in
response to all questions and other  inquiries  reasonably  made or submitted by
any of them),  prior to and from time to time after the filing and effectiveness
of the Registration  Statement for the sole purpose of enabling the Investor and
such representatives, advisors and underwriters and their respective accountants
and attorneys to conduct  initial and ongoing due diligence  with respect to the
Company and the accuracy of the Registration Statement.

                                       19

<PAGE>

         Section 8.2.      Non-Disclosure of Non-Public Information.

                  (a)      The  Company  shall  not  disclose   non-public
information to the Investor, its advisors, or its representatives,  unless prior
to disclosure of such  information the Company  identifies  such  information as
being  non-public  information  and provides  the  Investor,  such  advisors and
representatives  with the  opportunity  to  accept  or  refuse  to  accept  such
non-public information for review. The Company may, as a condition to disclosing
any  non-public  information  hereunder,  require the  Investor's  advisors  and
representatives  to enter into a  confidentiality  agreement in form  reasonably
satisfactory to the Company and the Investor.

                  (b)      Nothing herein shall require the Company to disclose
non-public  information to the Investor or its advisors or representatives,  and
the Company  represents that it does not disseminate  non-public  information to
any investors who purchase stock in the Company in a public  offering,  to money
managers or to securities  analysts,  provided,  however,  that  notwithstanding
anything  herein to the contrary,  the Company will,  as  hereinabove  provided,
immediately notify the advisors and representatives of the Investor and, if any,
underwriters,  of any event or the  existence of any  circumstance  (without any
obligation to disclose the specific event or  circumstance)  of which it becomes
aware,  constituting  non-public  information  (whether or not  requested of the
Company  specifically  or generally  during the course of due  diligence by such
persons or entities),  which, if not disclosed in the prospectus included in the
Registration  Statement  would  cause  such  prospectus  to  include a  material
misstatement  or to omit a material fact required to be stated  therein in order
to make the statements,  therein,  in light of the  circumstances  in which they
were made,  not  misleading.  Nothing  contained  in this  Section  8.2 shall be
construed to mean that such persons or entities other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may
not obtain  non-public  information in the course of conducting due diligence in
accordance with the terms of this Agreement and nothing herein shall prevent any
such persons or entities from  notifying the Company of their opinion that based
on such due  diligence  by such  persons  or  entities,  that  the  Registration
Statement contains an untrue statement of material fact or omits a material fact
required to be stated in the  Registration  Statement  or  necessary to make the
statements  contained therein,  in light of the circumstances in which they were
made, not misleading.


                                   ARTICLE IX.
                           Choice of Law/Jurisdiction

         Section 9.1.      Governing  Law. This  Agreement  shall be governed by
and  interpreted  in  accordance  with the laws of the State of  Nevada  without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard in Hudson County,  New Jersey,  and expressly
consent  to the  jurisdiction  and venue of the  Superior  Court of New  Jersey,
sitting in Hudson County, New Jersey and the United States District Court of New
Jersey,  sitting in Newark, New Jersey, for the adjudication of any civil action
asserted pursuant to this paragraph.

                                       20

<PAGE>

                                   ARTICLE X.
                             Assignment; Termination

         Section 10.1.     Assignment.  Neither this  Agreement  nor any rights
of the Company  hereunder  may be assigned to any other Person.

         Section 10.2.     Termination.  The obligations of the Investor to make
Advances under Article II hereof shall  terminate twenty-four (24) months after
the Effective Date.


                                   ARTICLE XI.
                                     Notices

         Section 11.1.     Notices. Any notices,  consents,  waivers, or other
communications  required  or  permitted  to be  given  under  the  terms of this
Agreement  must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered  personally;  (ii) upon receipt, when sent by facsimile,
provided a copy is mailed by U.S.  certified  mail,  return  receipt  requested;
(iii) three (3) days after being sent by U.S.  certified  mail,  return  receipt
requested,  or (iv)  one (1) day  after  deposit  with a  nationally  recognized
overnight  delivery  service,  in each case  properly  addressed to the party to
receive the same.  The addresses and facsimile  numbers for such  communications
shall be:

If to the Company, to:             Kronos Advanced Technologies, Inc.
                                   464 Common Street, Suite 301
                                   Belmont, MA  02478
                                   Attention:        Daniel R. Dwight, President
                                   Telephone:        (617) 993-9980
                                   Facsimile:        (617) 364-5085

With a copy to:                    Kirkpatrick & Lockhart LLP
                                   201 South Biscayne Boulevard - Suite 2000
                                   Miami, FL  33131-2399
                                   Attention:        Clayton E. Parker, Esq.
                                   Telephone:        (305) 539-3300
                                   Facsimile:        (305) 358-7095

If to the Investor(s):             Cornell Capital Partners, LP
                                   101 Hudson Street -Suite 3700
                                   Jersey City, NJ 07302
                                   Attention:        Mark Angelo
                                                     Portfolio Manager
                                   Telephone:        (201) 985-8300
                                   Facsimile:        (201) 985-8266

                                       21

<PAGE>

With a Copy to:                    David Gonzalez, Esq.
                                   101 Hudson Street - Suite 3700
                                   Jersey City, NJ 07302
                                   Telephone:        (201) 985-8300
                                   Facsimile:        (201) 985-8266


Each party shall provide five (5) days' prior written notice to the other party
of any change in address or facsimile number.


                                  ARTICLE XII.
                                  Miscellaneous

         Section 12.1.     Counterparts.  This Agreement may be executed in two
or more  identical  counterparts,  all of which shall be considered  one and the
same agreement and shall become effective when  counterparts have been signed by
each party and delivered to the other party.  In the event any signature page is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall  cause  four  (4)  additional  original  executed  signature  pages  to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof,  though failure to deliver such copies shall not affect the
validity of this Agreement.

         Section 12.2.     Entire Agreement;  Amendments.  This Agreement
supersedes all other prior oral or written agreements between the Investor,  the
Company, their affiliates and persons acting on their behalf with respect to the
matters  discussed  herein,  and this Agreement and the  instruments  referenced
herein  contain  the entire  understanding  of the parties  with  respect to the
matters covered herein and therein and, except as specifically  set forth herein
or  therein,  neither the Company  nor the  Investor  makes any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

         Section 12.3.     Reporting  Entity for the Common  Stock.  The
reporting  entity  relied upon for the  determination  of the  trading  price or
trading  volume of the Common Stock on any given Trading Day for the purposes of
this Agreement shall be Bloomberg,  L.P. or any successor  thereto.  The written
mutual  consent of the Investor and the Company  shall be required to employ any
other reporting entity.

         Section 12.4.     Fees and Expenses.  The Company hereby agrees to pay
the following fees:

                  (a)      Structuring  Fees.  Each of the  parties  shall  pay
its own fees and expenses  (including  the fees of any  attorneys,  accountants,
appraisers or others  engaged by such party) in connection  with this  Agreement
and the  transactions  contemplated  hereby,  except that the Company will pay a
structuring  fee of Fifteen  Thousand  Dollars  ($15,000) to Yorkville  Advisors
Management,  LLC,  which shall be paid directly  from the gross  proceeds of the
closing  pursuant to the Securities  Purchase  Agreement  dated the date hereof.
Subsequently  on each  advance  date,  the Company will pay  Yorkville  Advisors
Management,  LLC a  structuring  fee of  Five  Hundred  Dollars  ($500)  and any
outstanding fees of Kirkpatrick & Lockhart, LLP directly out the proceeds of any
Advances hereunder.


                                       22

<PAGE>

                  (b)      Due Diligence Fee.  Company shall pay the Investor a
non-refundable  due diligence fee of Two Thousand Five Hundred Dollars  ($2,500)
upon submission of the due diligence documents to the Investor.

                  (c)      Commitment Fees.

                           (i)      On each Advance Date the Company shall pay
to the  Investor,  directly from the gross  proceeds  held in escrow,  an amount
equal to five percent  (5%) of the amount of each  Advance.  The Company  hereby
agrees that if such payment,  as is described  above, is not made by the Company
on the Advance Date,  such payment will be made at the direction of the Investor
as outlined and mandated by Section 2.3 of this Agreement.  (ii) Furthermore the
Company shall pay to the Investor One Hundred Forty Thousand Dollars  ($140,000)
upon the execution of this  Agreement and Sixty Thousand  Dollars  ($60,000) two
(2) business days from the date the Registration Statement filed pursuant to the
Registration  Rights  Agreement  dated the date  hereof is filed with the United
States Securities and Exchange Commission.

                           (ii)     Six (6) months from the date  hereof the
Company  shall issue to the Investor One Million Four Hundred  Seventy  Thousand
Five Hundred Eighty Seven  (1,470,587)  shares of the Company's Common Stock and
on the twelve (12) month  anniversary  of the  execution of this  Agreement  the
Company  shall issue to the Investor One Million Four Hundred  Seventy  Thousand
Five Hundred Eighty Eight (1,470,588)  shares of the Company's Common Stock (the
"Investor's  Shares").  In the event this  Agreement is terminated in accordance
with the terms of this  Agreement,  or the Company  does not forward any Advance
Notices  during the term of this  Agreement  (as defined  herein),  the Investor
shall  return Two Million  Five  Hundred  (2,500,000)  shares of the  Investor's
Shares to the Company.



                           (ii)     Fully Earned.  The Investor's Shares shall
be deemed fully earned as of the date hereof.

                           (iv)     Registration Rights.  The Investor's Shares
will have "piggy-back" registration rights.

                           (v)      Due Diligence Fee.        In addition,  the
Company  shall pay to the Investor a  non-refundable  due  diligence  fee of Two
Thousand Five Hundred Dollars ($2,500).

         Section 12.5.     Brokerage.  Each of the  parties  hereto  represents
that it has had no dealings in connection with this  transaction with any finder
or broker who will demand payment of any fee or commission from the other party.
The  Company on the one hand,  and the  Investor,  on the other  hand,  agree to
indemnify  the  other  against  and hold  the  other  harmless  from any and all
liabilities  to any person  claiming  brokerage  commissions or finder's fees on
account  of  services   purported  to  have  been  rendered  on  behalf  of  the
indemnifying  party  in  connection  with  this  Agreement  or the  transactions
contemplated hereby.

                                       23

<PAGE>

         Section 12.6.     Confidentiality.  If for any reason the  transactions
contemplated by this Agreement are not  consummated,  each of the parties hereto
shall keep  confidential  any information  obtained from any other party (except
information  publicly  available  or in such  party's  domain  prior to the date
hereof,  and except as required by court order) and shall promptly return to the
other  parties  all  schedules,  documents,  instruments,  work  papers or other
written information without retaining copies thereof, previously furnished by it
as a result of this Agreement or in connection herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       24

<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto  have  caused  this  Standby
Equity  Distribution  Agreement  to be executed by the undersigned, thereunto
duly authorized, as of the date first set forth above.

                                              COMPANY:
                                              KRONOS ADVANCED TECHNOLOGIES, INC.

                                              By: /s/Daniel R. Dwight
                                                  -----------------------
                                              Name:  Daniel R. Dwight
                                              Title: President


                                              INVESTOR:
                                              CORNELL CAPITAL PARTNERS, LP

                                              By:  Yorkville Advisors, LLC
                                              Its: General Partner

                                              By: /s/Mark A. Angelo
                                                  --------------------
                                              Name:  Mark A. Angelo
                                              Title: Portfolio Manager



                                       25

<PAGE>

                                    EXHIBIT A


                      ADVANCE NOTICE/COMPLIANCE CERTIFICATE


                       KRONOS ADVANCED TECHNOLOGIES, INC.


         The  undersigned,  _______________________  hereby  certifies,  with
respect to the sale of shares of Common  Stock of KRONOS ADVANCED  TECHNOLOGIES,
INC. (the  "Company"),  issuable in  connection  with this Advance  Notice and
Compliance  Certificate  dated ___________________ (the "Notice"), delivered
pursuant to the Standby Equity Distribution Agreement (the "Agreement"), as
follows:

         1.       The undersigned is the duly elected ______________ of the
Company.

         2.       There are no fundamental  changes to the information set forth
in the Registration  Statement which would require the Company to file a post
effective amendment to the Registration Statement.

         3.       The Company has performed in all material  respects all
covenants and agreements to be performed by the Company on or prior to the
Advance Date  related to the Notice and has complied in all material respects
with all  obligations  and  conditions contained in the Agreement.

         4.       The undersigned hereby represents, warrants and covenants that
it has made all filings ("SEC Filings") required to be made by it pursuant to
applicable  securities  laws  (including,  without  limitation,  all filings
required  under the  Securities Exchange Act of 1934,  which include Forms 10-Q,
10-K,  8-K, etc. All SEC Filings and other public disclosures made by the
Company, including,  without limitation, all press releases,  analysts meetings
and calls, etc. (collectively,  the "Public Disclosures"),  have been reviewed
and approved for release by the Company's attorneys and, if containing financial
information,  the Company's independent certified  public  accountants.  None of
the Company's  Public  Disclosures  contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements  therein,  in the light of the  circumstances
under which they were made, not misleading.

         5.       The Advance requested is _____________________.

         The undersigned has executed this Certificate this ____ day of_________
_________________.

                                              KRONOS ADVANCED TECHNOLOGIES, INC.


                                              By:_______________________________
                                              Name:
                                              Title:


                                       26

<PAGE>

                                  SCHEDULE 2.6
                                  ------------

                       KRONOS ADVANCED TECHNOLOGIES, INC.
                       ----------------------------------

         The  undersigned  hereby  agrees that for a period  commencing  on the
date  hereof and  expiring  on the  termination  of the Agreement dated _______,
2005 between Kronos Advanced  Technologies,  Inc., (the "Company"),  and Cornell
Capital Partners,  LP, (the "Investor") (the "Lock-up Period"), he, she or it
will not, directly or indirectly,  without the prior written consent of the
Investor, issue,  offer,  agree or offer to sell,  sell,  grant an option for
the purchase or sale of,  transfer,  pledge,  assign,  hypothecate, distribute
or otherwise  encumber or dispose of except pursuant to Rule 144 of the General
Rules and Regulations under the Securities Act of 1933, any securities of the
Company, including common stock or options, rights, warrants or other securities
underlying, convertible  into, exchangeable or exercisable for or evidencing any
right to purchase or subscribe for any common stock (whether or not beneficially
owned by the undersigned), or any beneficial interest therein (collectively, the
"Securities").

         In order to enable the aforesaid  covenants to be enforced,  the
undersigned  hereby consents to the placing of legends and/or stop-transfer
orders with the transfer agent of the Company's  securities with respect to any
of the Securities  registered in the name of the undersigned or beneficially
owned by the undersigned, and the undersigned hereby confirms the undersigned's
investment in the Company.

Dated: _______________, 2005

                                                     Signature



                                      Name: ____________________________________
                                      Address:
                                      City, State, Zip Code:


                                      __________________________________________
                                      Print Social Security Number
                                      or Taxpayer I.D. Number



                                       27