VOTING AND SUPPORT AGREEMENT
Exhibit
9
THIS
VOTING AND SUPPORT AGREEMENT (this “Agreement”),
dated
as of June 19, 2007, is made and entered into by and among Kronos Advanced
Technologies, Inc., a Nevada corporation (“Company”),
and
each of the undersigned holders of securities of the Company who are signatories
hereto (each, a “Security
Holder”).
WHEREAS,
contemporaneously with the execution of this Agreement, the Company and each
Security Holder have entered into letter agreements pursuant to which each
Security Holder has agreed to take, or refrain from taking, certain actions
to
allow the Company to obtain secured convertible debt financing from AirWorks
Funding LLLP (“AirWorks”)
and
other individuals and entities (AirWorks
and such other individuals and entities are collectively referred to herein
as,
the “Lenders”)
in an
amount up to $18,159,000 (the “Financing”);
WHEREAS,
the Financing was made pursuant to, among other documents, the Funding Agreement
and the Security Agreement of even date herewith by and among the Company and
the Lenders (the “Funding
Agreement”
and
the
“Security
Agreement”)
and
the Secured Convertible Promissory Notes of even date herewith made by the
Company in favor of AirWorks and the Lenders (the “Notes”);
and
WHEREAS,
each Security Holder owns securities of the Company and desires to enter into
this Agreement pursuant to which he, she or it agrees, among other things,
to
vote all of the Subject Shares (as defined in Section 1(c)) held by such
Security Holder in favor of the actions contemplated hereby.
NOW,
THEREFORE, in consideration of the foregoing and of the promises,
representations, warranties and agreements contained herein, and intending
to be
legally bound hereby, the parties agree as follows:
1. Representations
and Warranties of Security Holder.
Each
Security Holder hereby represents and warrants to the Company as of the date
hereof, as follows:
(a) Organization.
Such
Security Holder (to the extent such Security Holder is not a natural person)
is
duly organized, validly existing and in good standing under the laws of the
state of its organization.
(b) Authority.
Such
Security Holder has all requisite power and authority (if not a natural person)
or capacity (if a natural person) to enter into this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly executed
and
delivered by such
Security
Holder and constitutes a valid and binding obligation of such Security Holder
in
accordance with its terms. The execution and delivery of this Agreement does
not
and compliance with the terms hereof will not (i) conflict with, result in
any
violation of, or constitute (with or without notice or lapse of time or both)
a
default under, any provision of any trust agreement, loan or credit agreement,
bond, note, mortgage, indenture, lease or other contract or agreement to which
such Security Holder is a party or applicable to the Subject Shares held by
such
Security Holder, (ii) require any filing with, or permit, authorization, consent
or approval of, any federal, state or local government or any court, tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency, domestic or foreign, or (iii) violate any judgment, order,
writ, injunction, decree, law, statute, rule or regulation applicable to such
Security Holder or the Subject Shares held by such Security Holder.
(c) The
Subject Shares.
Such
Security Holder is the record and beneficial owner (as such term is defined
in
Rule 13d-3 of the Securities Exchange Act of 1934) of, and has good and
marketable title to, the number of shares of the Company’s common stock, $0.001
par value per share (the “Company
Stock”),
set
forth opposite his, her or its name on the signature page hereto (such shares
of
the Company’s common stock, together with any other shares of capital stock of
the Company acquired by such Security Holder after the date hereof and during
the term of this Agreement, by conversion of the Notes, purchase, exercise
of
stock options or otherwise, collectively referred to herein as the “Subject
Shares”),
free
and clear of any liens or other encumbrances whatsoever. Such Security Holder
does not own, of record or beneficially, any shares of the Company’s capital
stock other than the Subject Shares held by such Security Holder; and, such
Security Holder does not have any voting rights with respect to any shares
of
the Company’s capital stock other than the Subject Shares held
by
such Security Holder,
pursuant to any voting agreement or otherwise. As of the date hereof and for
so
long as this Agreement remains in effect, except for this Agreement or as
otherwise permitted by this Agreement, such Security Holder has full legal
power, authority and right to vote all of the Subject Shares held by such
Security Holder in favor of the approval and authorization of the actions
contemplated hereby (collectively, the “Proposed
Actions”)
without the consent or approval of, or any other action on the part of, any
other person or entity. Without limiting the generality of the foregoing, such
Security Holder has not entered into any voting agreement (other than this
Agreement) with any person or entity with respect to any of the Subject Shares
held by such Security Holder, granted any person or entity any proxy (revocable
or irrevocable) or other power of attorney with respect to any of the Subject
Shares held by such Security Holder, deposited any of the Subject Shares held
by
such Security Holder in a voting trust or entered into any arrangement or
agreement with any person or entity limiting or affecting his, her or its legal
power, authority or right to vote the Subject Shares held by such Security
Holder on any matter.
2. Voting
of Shares.
(a) Subject
to the provisions of Section 9, and without in any way limiting any Security
Holder’s right to vote the Subject Shares held by such Security Holder in his,
her or its sole discretion on any other matters that may be submitted to a
shareholder vote, consent or other approval (including by written consent)
in a
manner that is not inconsistent with such Security Holder’s obligations under
this Agreement, each Security Holder hereby irrevocably and unconditionally
agrees that, during the period beginning on the date hereof and ending on the
earlier to occur of (Y) the date on which all of the matters set forth in
Sections 2(a)(1)-(5) below have been approved by the stockholders of the Company
or (Z) August 1, 2008 (the “Expiration
Date”),
at
any meeting of the stockholders of the Company called to vote upon (1) a slate
of directors of the Company’s board of directors as proposed by AirWorks,
subject to the composition of such slate’s compliance with all applicable laws
and regulations, (2) adjusting the size of the Company’s board of directors such
that upon the election of the slate of directors proposed by AirWorks, such
directors hold a majority of the seats on the Company’s board of
directors,
(3) approving an amendment to the Company’s articles of incorporation to
increase the Company’s authorized common stock to a number of shares necessary
to allow the Lenders to convert the entire amount of the Financing into shares
of the common stock of the Company as provided in the Notes and in the Funding
Agreement, (4) reincorporating the Company in Delaware, subject to the Company’s
board of director’s recommendation of such action and/or (5) a reverse stock
split proposed by AirWorks or the Company’s board of directors, the approval of
any of the foregoing or any rescission or withdrawal of such approval, or at
any
adjournment thereof, or in any other circumstances upon which a vote, consent
or
other approval (including written consent) with respect to such actions, each
Security Holder shall vote (or cause to be voted) the Subject Shares held by
such Security Holder:
(i) in
favor
of a slate of directors of the Company’s board of directors as proposed by
AirWorks, subject to the composition of such slate’s compliance with all
applicable laws and regulations;
(ii) in
favor
of adjusting the size of the Company’s board of directors such that upon the
election of the slate of directors proposed by AirWorks, such directors hold
a
majority of the seats on the Company’s board of directors;
(iii) in
favor
of approving an amendment to the Company’s articles of incorporation to increase
the Company’s authorized common stock to a number of shares necessary to allow
the Lenders to convert the entire amount of the Financing into shares of common
stock of the Company as provided in the Notes and the Funding Agreement;
(iv) in
favor
of reincorporating the Company in Delaware, subject to the Company’s board of
director’s recommendation of such action;
(v) in
favor
of a 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. Covenants
of the Security Holder.
Each
Security Holder covenants and agrees that, until the Expiration Date, he, she
or
it will:
(a) subject
to the provisions of Section 5, not sell, transfer (including by
testamentary succession or otherwise by operation of law), pledge, hypothecate,
encumber, assign, tender or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to the sale, transfer,
pledge, hypothecation, encumbrance, assignment, tender or other disposition
of,
any of the securities of the Company or Subject Shares held by such Security
Holder or any right, title or interest therein; and
(b) other
than as expressly contemplated by this Agreement, not grant any powers of
attorney or proxies or consents in respect of any of the securities of the
Company or Subject Shares held by such Security Holder, deposit any of the
securities of the Company or Subject Shares held by such Security Holder into
a
voting trust, enter into a voting agreement with respect to any of the
securities of the Company or the Subject Shares held by such Security Holder
or
otherwise restrict his, her or its ability freely to exercise all voting rights
with respect to the securities of the Company or Subject Shares held by such
Security Holder, or commit any other act that could restrict or otherwise affect
his, her or its legal power, authority and right to vote the securities of
the
Company or Subject Shares held by such Security Holder.
4. Certain
Events.
In the
event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of the Company
affecting the Company Stock, or the acquisition of additional shares of Company
Stock or securities of the Company by each Security Holder, the number of
securities of the Company or Subject
Shares held by such Security Holder shall be adjusted appropriately and this
Agreement and the obligations hereunder shall attach to any additional
securities of the Company or shares of Company Stock of the Company issued
to or
acquired by such Security Holder.
5. Assignment.
Each
Security Holder agrees that this Agreement and the obligations hereunder shall
attach to the securities of the Company and Subject Shares held by such Security
Holder and shall be binding upon any person or entity to which legal or
beneficial ownership of or the right and ability to vote the securities of
the
Company or Subject Shares held by such Security Holder shall pass, whether
by
operation of law or otherwise, including such Security Holder’s successors.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any Security Holder, on the one hand, without the prior
written consent of the Company nor by the Company, on the other hand, without
the prior written consent of such Security Holder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and
be
enforceable by the parties and their respective successors and assigns.
6. General
Provisions.
(a) Amendments.
This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.
(b) Notice.
All
notices, requests, claims, demands and other communications hereunder shall
be
in writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to each party hereto at his,
her
or its address set forth below such party’s name on the signature page hereto
(or at such address for a party as shall be specified by like
notice).
(c) Interpretation.
When a
reference is made in this Agreement to a Section, such reference shall be to
a
Section of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Wherever the words
“include, or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation.”
(d) Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one
or
more of the counterparts have been signed by each of the parties and delivered
to the other party.
(e)\ Entire
Agreement; No Third Party Beneficiaries.
This
Agreement (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon
any
person other than the parties hereto any rights or remedies
hereunder.
(f) Governing
Law.
This
Agreement shall be governed by, and construed in accordance with the laws of
the
State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.
7. Enforcement.
The
parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement (including the provisions of Section 2) were not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties shall be entitled to specific performance
and injunctive relief to prevent any threatened breach of this
Agreement.
8. Severability.
In the
event that any provisions of this Agreement or the application thereof becomes
or is declared by a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Agreement shall continue in full force
and
effect and the application of such provision to other persons or circumstances
will be interpreted so as to effect the intent of the parties hereto. The
parties further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
fullest extent possible, the original intent of the parties.
9. Fiduciary
Duties.
Each
Security Holder is signing this Agreement solely in such Security Holder’s
capacity as an owner of his, her or its respective securities of the Company
and/or Subject Shares, and nothing in this Agreement shall prohibit, prevent
or
preclude such Security Holder from taking or not taking any action in his,
her
or its capacity as an officer of director of the Company, to the extent any
such
action is not in conflict with provisions hereof.
***************
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the date first written above.
|
COMPANY:
Kronos
Advanced Technologies, Inc.
By:
/s/ Xxxxxx
Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
President and CEO
Address:
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
|
STOCKHOLDERS:
|
Security
Holder
|
Subject
Shares
|
|
|
Shares
of Stock Held
by
Security Holder
|
Options
to Purchase
Shares
of Stock Held
by
Security Holder
|
|
|
/s/
Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx
Address:
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
1,201,926
|
7,191,206
|
|
/s/
Xxxxx XxXxxxxxx
Xxxxx
XxXxxxxxx
Address:
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
294,118
|
638,459
|
|
/s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx
Address:
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
-
|
573,500
|
|
/s/
Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxx
Address:
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
852,752
|
3,391,756
|
|
/s/
Igor Krichtafovitch
Igor
Krichtafovitch
Address:
00000
XX 00xx
Xxxxxx
Xxxxxxx,
XX 00000
|
1,053,000
|
4,955,726
|
