Exhibit 10.1
AMENDMENT NO. 2 TO
KRONOS ADVANCED TECHNOLOGIES, INC.
SECURED CONVERTIBLE PROMISSORY NOTE
This Amendment No. 2 to the Kronos Advanced Technologies, Inc. (the
"Maker") Secured Convertible Promissory Note is entered into on March 13, 2008
and effective as of February 29, 2008 ("Amendment No. 1") by and between the
Maker and Sands Brothers 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") and Critical Capital
Growth Fund, L.P., a Delaware limited partnership and a debenture licensed U.S.
Small Business Investment Company ("CCGF") (Sands I, Sands II, Sands III, Sands
IV, and CCGF, together with their respective successors, representatives, and
permitted assigns, are collectively referred to as, the "Holder").
RECITALS
A. Maker issued the Holder a Secured Convertible Promissory Note dated
June 19, 2007 in the principal amount of up to Eight Hundred Fifty-Nine Thousand
Dollars ($859,000.00) with an initial Maturity Date of December 31, 2007, as
amended by Amendment No. 1 to the Note dated December 31, 2007 (collectively,
the "Note"). Capitalized terms used herein but not otherwise defined shall have
the meanings given them in the Note.
B. Pursuant to Amendment No. 1 to the Note ("Amendment No. 1"), among
other things, Maker and Holder agreed to extend the Maturity Date to February
29, 2007.
C. Maker and Holder desire to further amend the terms of the Note to
further extend the Maturity Date to April 30, 2008.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Extension of Maturity Date. The Maturity Date of the Note is hereby
further extended to April 30, 2008 (the "Extended Maturity Date"). All
references in the Note to December 31, 2007 (or February 29, 2008) or Maturity
Date shall be deemed to be a reference to the Extended Maturity Date.
2. Amendment No. 2 Fee. In addition to any fees or other amounts
payable by Maker to the Holder under the terms of the Note, Maker agrees to pay
to the Holder an amendment fee comprised of (a)(i) at the option of the Holder,
pursuant to written notice delivered to Maker at least three business days prior
to the Extended Maturity Date, (1) a $12,500 cash payment or (2) the issuance to
the Holder of 818,112 shares of the Maker's common stock, par value $0.001 per
share (the "Common Stock") and (ii) the issuance to the Holder of 818,113 shares
of the Maker's Common Stock, in each case, due and payable on the Extended
Maturity Date and (b) if all outstanding amounts under the Note have not been
repaid in full on or prior to March 31, 2008, in addition to the amounts set
forth in (a) above, (i) at the option of the Holder, pursuant to written notice
delivered to Maker at least three business days prior to the Extended Maturity
Date, (1) a $12,500 cash payment or (2) the issuance to the Holder of 818,112
shares of the Maker's Common Stock and (ii) the issuance to the Holder of
818,113 shares of the Maker's Common Stock, in each case, due and payable on the
Extended Maturity Date.
3. Amendment No. 1 Amendment Fee. Maker and Holder agree that Maker's
obligation to pay an amendment fee pursuant to Section 3 (Amendment Fee) of
Amendment No. 1 is hereby amended as follows.
a. With respect to the portion of the amendment fee due
pursuant to Section 3(a) of Amendment No. 1, Maker and Holder agree that at the
option of the Holder, pursuant to written notice delivered to Maker at least
three business days prior to the Extended Maturity Date, Maker shall (i) pay
Holder a $25,000 cash payment or (ii) issue Holder 1,470,588 shares of Maker's
Common Stock, in each case, due and payable on the Extended Maturity Date, in
full satisfaction of that portion of the amendment fee due pursuant to Section
3(a) of Amendment No. 1.
b. With respect to the portion of the amendment fee due
pursuant to Section 3(b) of Amendment No. 1, as promptly as practicable
following the date hereof, Maker agrees to issue to Holder 1,470,588 shares of
the Maker's Common Stock in full satisfaction of that portion of the amendment
fee due pursuant to Section 3(b) of Amendment No. 1.
4. Miscellaneous. Except as specifically set forth in this Amendment
No. 2, all of the terms and conditions of the Note, as amended, shall remain in
full force and effect. This Amendment No. 2 shall be governed by and construed
in accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Amendment No. 2
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[Signatures on following page]
IN WITNESS WHEREOF, Maker and Holder have each executed and delivered
this Amendment No. 2 as of the day and year first above written.
MAKER:
Kronos Advanced Technologies, Inc.
By: /s/ Daniel R. Dwight
--------------------
Name: Daniel R. Dwight
Title: Chief Executive Officer and President
HOLDER:
Sands Brothers Venture Capital LLC
By:/s/ Scott Baily
---------------
Name: Scott Baily
Title: Chief Administration Officer
Sands Brothers Venture Capital II LLC
By: /s/ Scott Baily
---------------
Name: Scott Baily
Title: Chief Administration Officer
Sands Brothers Venture Capital III LLC
By: /s/ Scott Baily
---------------
Name: Scott Baily
Title: Chief Administration Officer
Sands Brothers Venture Capital IV LLC
By: /s/ Scott Baily
---------------
Name: Scott Baily
Title: Chief Administration Officer
Critical Capital Growth Fund, L.P.
By: Critical Capital, L.P., its general
partner
By: Critical Capital Corporation, its general
partner
By: /s/ Charles Robinson
--------------------
Name: Charles Robinson
Title: President
By: /s/ Steven Sands
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Name: Steven Sands
Title: Chairman