Patent Security Agreement among Kronos Advanced Technologies, Inc., Kronos Air Technologies, Inc., and Secured Parties
Contract Categories:
Business Finance
›
Security Agreements
Summary
This agreement, dated June 19, 2007, is between Kronos Advanced Technologies, Inc., its subsidiary Kronos Air Technologies, Inc., and several secured parties including AirWorks Funding LLLP and various Sands Brothers entities. The agreement grants the secured parties a first priority security interest in all patents and related rights owned by the Kronos companies as collateral for financial accommodations provided under a related funding agreement. The agreement outlines the parties’ obligations to notify secured parties of new patents and allows the secured parties to update the collateral list as needed.
EX-10.4 8 patentagreement.txt PATENT SECURITY AGREEMENT PATENT SECURITY AGREEMENT This PATENT SECURITY AGREEMENT (this "Patent Security Agreement") is made this 19th day of June, 2007, by and among Kronos Advanced Technologies, Inc., a Nevada corporation with its chief executive office and principal place of business located at 464 Common Street, Box 301, Belmont, Massachusetts 02478 (the "Debtor") and Kronos Air Technologies, Inc. a Nevada corporation with its chief executive office and principal place of business located at 15241 NE 90th Street, Redmond, Washington 98052 (the "Subsidiary" and collectively with the Debtor, the "Pledgors"), and AirWorks Funding LLLP, a Georgia limited liability limited partnership, ("AirWorks"), Sands Brother Venture Capital LLC, a New York limited liability company ("Sands I"), Sands Brothers Venture Capital II LLC, a New York limited liability company ("Sands II"), Sands Brothers Venture Capital III LLC, a New York limited liability company ("Sands III"), Sands Brothers Venture Capital IV LLC, a New York limited liability company ("Sands IV"), Critical Capital Growth Fund, L.P., a Delaware limited partnership and a debenture licensed U.S. Small Business Investment Company ("CCGF") and RS Properties I LLC, a Delaware limited liability company ("RS Properties"). AirWorks, Sands I, Sands II, Sands III, Sands IV, CCGF and RS Properties are collectively referred to herein as the "Secured Parties". W I T N E S S E T H: WHEREAS, pursuant to that certain Funding Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the "Funding Agreement") by and among the Debtor and the Secured Parties, the Secured Parties are willing to make certain financial accommodations available to Debtor pursuant to the terms and conditions thereof; and WHEREAS, the Subsidiary is a direct subsidiary of the Debtor and has determined that its execution, delivery and performance of this Patent Security Agreement directly or indirectly benefits, and is within the corporate purposes and in the best interest of, it; and WHEREAS, the Secured Parties are willing to make the financial accommodations to Borrower as provided for in the Funding Agreement, but only upon the condition, among others, that the Pledgors shall have executed and delivered to the Secured Parties this Patent Security Agreement (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the "Patent Security Agreement") and that certain other Security Agreement of even date herewith by and among the Pledgors and the Secured Parties (the "Security Agreement"); NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Pledgors hereby agree as follows: 1. DEFINED TERMS. All capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement and Funding Agreement. 2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Pledgor hereby grants to the Secured Parties a continuing first priority security interest in all of such Pledgor's right, title and interest in, to and under the following, whether presently existing or hereafter created or acquired (collectively, the "Patent Collateral"): (a) all of such Pledgor's patents, license agreements for the commercialization of patents and patent applications to which it is a party, including, in each case, those referred to on Schedule I hereto; (b) all reissues, continuations or extensions of the foregoing; and (c) all products and proceeds of the foregoing, including any claim by such Pledgor against third parties for past, present or future infringement or dilution of any Patent Collateral. 3. SECURITY FOR OBLIGATIONS. This Patent Security Agreement and the security interest evidenced hereby secures the payment and performance of all the Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Patent Security Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by the Pledgors, or any of them, to the Secured Parties or any of them, whether or not they are unenforceable or not allowable due to the existence of an insolvency proceeding involving a Pledgor. The Pledgors hereby authorize the Secured Parties to file this Patent Security Agreement with the United States Patent and Trademark Office. 4. SECURITY AGREEMENT. The security interests granted pursuant to this Patent Security Agreement are granted in conjunction with the security interests granted to the Secured Parties pursuant to the Security Agreement. Each Pledgor hereby acknowledges and affirms that the rights and remedies of the Secured Parties with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. 5. AUTHORIZATION TO SUPPLEMENT. The Pledgors shall give the Secured Parties prompt notice in writing of any additional United States patent registrations or applications therefor after the date hereof. The Pledgors hereby authorize the Secured Parties unilaterally to modify this Agreement by amending Schedule I to include any future United States registered patents or applications therefor of the Pledgors. Notwithstanding the foregoing, no failure to so modify this Patent Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent's continuing security interest in all the Patent Collateral, whether or not listed on Schedule I. 2. COUNTERPARTS. This Patent Security Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. Any signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed an original signature hereto. 3. CONSTRUCTION. Unless the context of this Patent Security Agreement or any other Transaction Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms "includes" and "including" are not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Patent Security Agreement or any other Transaction Document refer to this Patent Security Agreement or such other Transaction Document, as the case may be, as a whole and not to any particular provision of this Patent Security Agreement or such other Transaction Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Patent Security Agreement unless otherwise specified. Any reference in this Patent Security Agreement or in any other Transaction Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person's successors and assigns. [SIGNATURE PAGE FOLLOWS] Patent Security Agreement Patent Security Agreement IN WITNESS WHEREOF, each Pledgor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above. KRONOS ADVANCED TECHNOLOGIES, INC. By: /s/ Richard F. Tusing -------------------------------- Name: Richard F. Tusing Title: COO KRONOS AIR TECHNOLOGIES, INC. By: /s/ Richard F. Tusing -------------------------------- Name: Richard F. Tusing Title: COO AIRWORKS FUNDING LLLP By: Compass Partners, LLC, its general partner By: /s/ Richard E. Perlman -------------------------------- Name: Richard E. Perlman Title: President SANDS BROTHERS VENTURE CAPITAL LLC By: /s/ Scott A. Baily -------------------------------- Name: Scott A. Baily Title: COO SANDS BROTHERS VENTURE CAPITAL II LLC By: /s/ Scott A. Baily -------------------------------- Name: Scott A. Baily Title: COO SANDS BROTHERS VENTURE CAPITAL III LLC By: /s/ Scott A. Baily -------------------------------- Name: Scott A. Baily Title: COO SANDS BROTHERS VENTURE CAPITAL IV LLC By: /s/ Scott A. Baily -------------------------------- Name: Scott A. Baily Title: COO CRITICAL CAPITAL GROWTH FUND, L.P. By: Critical Capital, L.P., its General Partner By: Critical Capital Corporation, its General Partner By: /s/ Steven B. Sands -------------------------------- Name: Steven B. Sands Title: Chairman By: /s/ Charles L. Robinson -------------------------------- Name: Charles L. Robinson Title: President RS PROPERTIES I LLC By: /s/ John Lack -------------------------------- Name: John Lack Title: Manager SCHEDULE I TO PATENT SECURITY AGREEMENT PATENT REGISTRATIONS