AIRWORKS FUNDING LLLP 23rd Floor New York, N.Y. 10021
Exhibit
12
AIRWORKS
FUNDING LLLP
000
Xxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
X.X. 00000
June
19,
2007
c/o
Mr.
Xxxx Xxxx
000
Xxxxxxxx, 0xx Xxxxx
Xxx
Xxxx,
XX 00000
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Re:
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Funding
Agreement dated June 19, 2007 by and among Kronos Advanced Technologies,
Inc. (“Kronos”), AirWorks Funding LLLP (“AirWorks”), RS Properties I, LLC
(“RS Properties”) and several other lenders (collectively, the “Lenders”)
(the “Funding Agreement”)
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Dear
Mr.
Lack:
The
purpose of this letter is to memorialize certain mutual agreements we have
reached regarding our obligations under the Funding Agreement as
follows:
1. We
agree
that all advances made at Subsequent Closings (as defined in the Funding
Agreement) will be made sixty percent (60%) by AirWorks and forty percent (40%)
by RS Properties. If either AirWorks or RS Properties refuses or is unable
to
make its share of any such advance (the “Defaulting Party”), the other (the
“Non-Defaulting Party”) shall be entitled to advance itself the Defaulting
Party’s share of the advance (the “Defaulted Amount”), and the amount that the
Defaulting Party is entitled to advance pursuant to Section 2.1(b) shall be
automatically decreased, and the amount that the Non-Defaulting Party is
entitled to advance shall be automatically increased, by the Defaulted Amount.
The Defaulting Party hereby agrees to execute such additional assignments and
other documentation as may be requested by the Non-Defaulting Party or as may
be
necessary to properly reflect the foregoing, including proper amendments to
or
assignments of its Note (as defined in the Funding Agreement).
2. RS
Properties and AirWorks will, immediately after the First Closing (as defined
in
the Funding Agreement) convert a sufficient principal amount of Notes (as
defined in the Funding Agreement) to secure more than fifty percent (50%) voting
control of Kronos. AirWorks will convert sixty percent (60%) and RS Properties
forty percent (40%) of the amount necessary to secure such controlling position.
If at any time prior to the increase in the authorized capital stock of Kronos,
it is necessary for RS Properties and AirWorks to convert additional amounts
to
continue to have control, they will do so in the same proportion. In furtherance
of the foregoing, we also agree to enter into a voting agreement providing
that
we will vote our respective Kronos shares:
(i) in
favor
of a slate of directors of the Kronos’ board of directors as proposed by
AirWorks and RS Properties, it being understood that subject to regulatory
requirements and each party’s ability to waive this requirement, such slate will
have sixty percent (60%) of the directors designated by AirWorks and forty
percent (40%) designated by RS Properties;
(ii) in
favor
of adjusting the size of the Kronos’ board of directors such that upon the
election of the slate of directors proposed as provided above, such directors
hold at least a majority of the seats on the Kronos’ board of directors;
(iii) in
favor
of approving an amendment to the Kronos’ articles of incorporation to increase
Kronos’ authorized common stock to a number of shares necessary to allow the
Lenders to convert the entire amount of the amounts advanced under the Funding
Agreement into shares Kronos common stock as provided in the Notes and the
Funding Agreement;
(iv) in
favor
of reincorporating Kronos in Delaware;
(v) in
favor
of any reverse stock split proposed by AirWorks or the Company’s board of
directors; and
(vi) against
any action or transaction that may reasonably be expected to impede, interfere
with, delay, postpone or attempt to discourage the consummation of any of the
foregoing.
3. We
agree
that if a combination of Xxxxx Xxxxxxx and Xxxxx Xxxxxx, Inc. or any of its
subsidiaries, affiliates or joint ventures decides to become a limited partner
in AirWorks, the amount which RS Properties is entitled to advance in Subsequent
Closings shall be decreased, and the amount AirWorks is entitled to advance
shall be increased, by forty percent (40%) of the amount contributed by
Xxxxxxx/Schein to AirWorks. RS Properties agrees to execute such additional,
consents, assignments or other documents as may be requested by AirWorks or
may
be necessary to properly reflect the foregoing, including proper amendments
or
assignments of the parties respective Notes.
Our
signatures below evidence our agreement as set forth above. This Letter
Agreement may be executed in two counterparts, each of which shall be an
original, but both of which together shall constitute one and the same
instrument.
[Signatures
Appear on Next Page)
| RS PROPERTIES I LLC |
AIRWORKS
FUNDING LLLP
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| By: /s/ Xxxx Xxxx |
By:
/s/
Xxxxxxx X. Xxxxxxx
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Name:
Xxxx Xxxx
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Name:
Xxxxxxx X. Xxxxxxx
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Title:
Manager
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Title:
President
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