Technology Innovations, LLC
15 Schoen Place
Pittsford, NY 14534
August 1, 2008
Naturalnano, Inc.
15 Schoen Place
Pittsford, NY 14534
Ladies and Gentlemen:
Technology Innovations, LLC
(“TI”) and Naturalnano, Inc. (the
“Company”) are parties to a Line of Credit Agreement
(the “Credit Agreement”), dated as of June 28, 2006,
pursuant to which the Company has issued to TI a Promissory Note,
dated as of June 26, 2006, in the aggregate principal amount of up
to $1,000,000 (the “Note”).
For and in consideration of the
agreement of the Company to issue to TI (or, as directed by TI, its
affiliates) the Warrant described below, TI hereby agrees to (i)
cancel and forgive all principal, interest, fees and expenses due
pursuant to the Credit Agreement and the Note (the “TI
Debt”)
TI hereby represents that, other
than the TI Debt, the Company has no outstanding indebtedness or
other obligations for borrowed money due and owing to TI or its
affiliates, and that, on and after the date hereof, all such
obligations will be deemed paid and satisfied in full.
For and in consideration of the
cancellation of the TI Debt, the Company hereby agrees to issue to
TI, within 10 days of the date hereof, a common stock purchase
warrant (the “Warrant”) to purchase 5% of the common
stock (calculated on a fully diluted basis as of the date of first
exercise of the Warrant) at a Company valuation of (i) $25,000,000,
for the first six months of the term of the Warrant and (ii)
$40,000,000 for the remainder of the term of the Warrant. The
Warrant shall have a term of 2 years and six m
