Document:

Confirmation of Consent to Amend and Waive Certain Provisions of the Registration Rights Agreement

Confirmation of Consent to Amend and Waive Certain Provisions of the Registration Rights Agreement Between Dutchess Capital Growth Fund, LP and Kronos Advanced Technologies, Inc.

 

Dutchess Capital Growth Fund, LP (“Dutchess”) and Kronos Advanced Technologies, Inc. (“Kronos”) (the, “Agreement”) hereby confirm and amend the Registration Rights Agreement between them entered into to September 21, 2021 (“Registration Rights Agreement”). Kronos and Dutchess may be referred to as a “Party” or collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Kronos and Dutchess entered into a Registration Rights Agreement on September 21, 2021 (attached hereto and incorporated herein by reference). 

 

WHEREAS, Section 1(d) of the Registration Rights Agreement defined Registerable Securities to mean an aggregate of up to 93,900,000 Drawdown Notice Shares, and (b) any shares of common stock issued to the Investor as a result of any stock split, stock dividend, recapitalization, exchange, or similar event or otherwise with respect thereto.

 

WHEREAS, Section 2 of the Registration Rights Agreement provided Kronos with forty-five days to file a registration statement covering registerable securities with the Securities and Exchange Commission. Section 2 also required Kronos to use its reasonable best efforts to have the Registration Statement and any amendment declared effective by the SEC at the earliest possible date. Section 2 also refers to Dutchess’ rights under Rule 144 to sell shares.

 

WHEREAS, Kronos filed a Form S-1 registration statement on January 14, 2022 and disclosed that it had a total of sixty days to file the registration statement covering a total of 80,526,056 Registerable Securities. 

 

WHEREAS, the Parties agreed that questions concerning the construction, validity, enforcement, and interpretation of Registration Rights Agreement shall be governed by the internal laws of the State of Delaware.

 

WHEREAS, in order to clarify and correct the noted portions of the Registration Rights Agreement, the Parties met and conferred.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1. The Parties acknowledge that all of the representations set forth in the Recitals clauses of this Agreement are incorporated herein by reference and made a material part of this Amendment with the same force and effect as if more fully set forth here at. The Parties agree to waive any rule of contract construction or legal presumption that would prohibit any court of competent jurisdiction or arbitrator from construing or enforcing this Agreement based upon the contents of the Recitals above.

 

2. Pursuant to Wimbledon Fund LP-Absolute Return Fund Series v. SV Special Situations Fund LP, 2010 WL 2368637, at *4 (Del. Ch. June 14, 2010), the Parties mutually voluntarily, intentionally and unequivocally relinquish, with knowledge of all material facts, any and all rights associated with any restrictions on the Parties ability to amend the Registration Rights Agreement, and consistent with James J. Gory Mechanical Contracting Inc v. BPG Residential Partners V LLC, et al., Del. Ch., C.A. No. 6999-VCG (Dec. 30, 2011), hereby amend the Registration Rights Agreement as follows:

 

Section 1(d), which defines “Registerable Securities to mean an aggregate of up to 93,900,000 Drawdown Notice Shares” is deleted and replaced with Registerable Securities to mean an aggregate of up to 80,526,056 Drawdown Notice Shares.” 

 

Section 2(a), which states: “The Company shall, within forty-five (45) Business Days from the date hereof, file with the SEC an initial Registration Statement covering the maximum number of Registrable Securities...” be deleted and be replaced with “The Company shall use its best efforts from the date hereof, file with the SEC an initial Registration Statement covering the maximum number of Registrable Securities...” 

 

Section 2(a), which states: “The Company shall use reasonable best efforts to keep the Registration Statement effective, including but not limited to pursuant to Rule 415 promulgated under the Securities Act and available for the resale by the Investor of all of the Registrable Securities covered thereby at all times until the earlier of (i) the date as of which the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the Securities and (ii) the date on which the Investor shall have sold all the Registrable Securities covered thereby and no Available Amount remains under the Purchase Agreement (the “Registration Period”)” be deleted and replaced with “The Company shall use reasonable best efforts to keep the Registration Statement effective, including but not limited to pursuant to Rule 415 promulgated under the Securities Act and available for the resale by the Investor of all of the Registrable Securities covered thereby at all times until the earlier of (i) the date as of which the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the Securities and (ii) the date on which the Investor shall have sold all the Registrable Securities covered thereby and no Available Amount remains under the Purchase Agreement (the “Registration Period”). 

 

The undersigned confirm that the remainder of the Registration Rights Agreement remains in full force and effect.

 

Dated:

 

 

KRONOS ADVANCED TECHNOLOGIES, INC.

 

 

By: /s/ Michael Rubinov

Michael Rubinov, CEO 

 

 

DUTCHESS CAPITAL GROWTH FUND, LP

 

 

By: /s/ Michael Novielli

 

Michael Novielli 

Managing MemberCERTIFICATE OF COMPLETION, EQUITY INJECTION AND SOURCES AND USE OF FUNDS

CERTIFICATE OF COMPLETION, EQUITY INJECTION

AND SOURCES AND USE OF FUNDS

 

I, Joseph L. Florence, the duly authorized officer of KRONOS ADVANCED TECHNOLOGIES, INC., a Nevada corporation, and KRONOS ADVANCED TECHNOLOGIES WV, INC., a West Virginia corporation (collectively, the “Borrowers”), hereby certifies on this 7th day of April, 2022, to the West Virginia Economic Development Authority, a West Virginia public corporation (“WVEDA”), in connection with WVEDA’s loans to the Borrowers in the aggregate principal amount of $2,610,000 (the “WVEDA Loans”), the proceeds of which are to be used to permanently finance a portion of the costs of (i) acquiring the former facility at 2501 Garfield Avenue, Parkersburg, West Virginia, consisting of approximately 9 acres of land and three existing buildings situated thereon (the “Facility”) and making certain upgrades and renovations thereto, and (ii) acquiring certain machinery, equipment, furniture and fixtures at the facility (the “Project Equipment” and together with the Facility, the “Project”) : 

1.The total cost of the Project was at least $5,800,000, which has been permanently financed by: 

a.The WVEDA Loans in the aggregate principal amount of $2,610,000, and 

b.An equity contribution from the Borrowers of at least $3,190,000. 

2.Based upon the report of Anthony L. Baumgard, P.E., of Balsa Limited LLC, a copy of which is attached hereto as Exhibit A, the Project Equipment is in place and the Facility is structurally sound and fully operational. 

WITNESS my signature effective as of the day and year first above written.

 

KRONOS ADVANCED TECHNOLOGIES, INC., 

a West Virginia corporation 

 

 

By:____________________________________ 

Name:Joseph L. Florence 

Its: Chief Operating Officer 

 

 

KRONOS ADVANCED TECHNOLOGIES WV,  

INC., 

a West Virginia corporation 

 

 

By:____________________________________ 

Name:Joseph L. Florence 

Its: Chief Operating Officer 

 

 

 

 

 

 

 

 

 

Signature Page to Certificate of Completion

14773950 (1916.0939)

2

EXHIBIT AWEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY DOCUMENT LIST

WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY

DOCUMENT LIST

 

Loans:$1,845,000 Real Estate Term Loan 

$   765,000 Equipment Term Loan

 

Lender:West Virginia Economic Development Authority (“WVEDA”) 

 

Borrowers:Kronos Advanced Technologies, Inc. (“Kronos”) 

Kronos Advanced Technologies WV, Inc. (“Kronos WV”) 

 

Closing Date:April 7, 2022 

_____________________________________________________________________________________

 

LOAN DOCUMENTS

1.Loan Agreement between WVEDA and Borrowers 

 

2.Promissory Notes: 

a.     Promissory Note (Real Estate Loan) made by Borrowers and payable to WVEDA

b.     Promissory Note (Equipment Loan) made by Borrowers and payable to WVEDA

 

3.Credit Line Deed of Trust and Fixture Filing granted by Kronos WV to Joyce F. Ofsa, as Trustee, for the benefit of WVEDA 

 

4.Security Agreement between Kronos WV and WVEDA 

 

5.UCC Financing Statements filed with West Virginia Secretary of State: 

a.     Real Estate Loan

b.     Equipment Loan

 

6.Certificate of Completion, Equity Injection and Sources and Uses of Funds 

 

7.Legal Opinion of Counsel to Borrowers 

 

8.Secretary’s and Incumbency Certificate of Kronos, certifying as to: 

a.     Articles of Incorporation, with all amendments

b.     Bylaws

c.     Authorizing Resolutions

 

9.Secretary’s and Incumbency Certificate of Kronos WV, certifying as to: 

a.     Articles of Incorporation

b.     Bylaws

c.     Authorizing Resolutions

10.Insurance Certificates: 

 

a.     Certificate of General Liability Coverage

b.     Certificate of Property Insurance Coverage

c.     Certificate of Flood Insurance Coverage or Evidence that Property is outside

        100-Year Flood Plain

 

11.Evidence of Workers’ Compensation Insurance for Kronos WV 

 

12.Certificate of Compliance for Unemployment Coverage from Workforce West Virginia for 

Kronos WV

 

13.Certificate of Existence/Good Standing issued by Nevada Secretary of State (Kronos) 

 

14.Certificate of Authorization issued by West Virginia Secretary of State (Kronos) 

 

15.Certificate of Existence issued by West Virginia Secretary of State (Kronos WV) 

 

16.Title Insurance Commitment 

 

17.Title Insurance Policy 

 

18.Survey 

 

19.   Certificate of Independent Engineer or Architect 

 

20.UCC Lien Searches: 

a.Nevada Secretary of State (Kronos) 

b.West Virginia Secretary of State (GX7 Limited Partnership and Kronos WV) 

 

21.Project Invoices 

 

22.Copy of Vesting Deed 

 

23.Memorandum of Sale and Loan Disbursement Statement 

14663509

(1916.0939)

2

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