Exhibit 10.03

 

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 months from the date of issue
and shall provide for adjustments in the case of stock splits, stock dividends
and the like, but shall not provide for any adjustments in exercise price or
number of shares in the case of issuances below the exercise price of the
Warrant or other anti-dilution adjustments. The number of shares and the per
share exercise price of the Warrant shall be established on the date of first
exercise of the Warrant.

 

TI hereby knowingly and voluntarily forever releases, acquits and discharges the
Company, its officers, directors, creditors, stockholders and affiliates, and
the officers, directors, members, managers and employees of each of them (the
“Released Persons”), from and of any and all claims that any of the Released
Persons is in any way responsible for the past or current condition or
deterioration of the business operations and/or financial condition of the
Company or TI, and from and of any and all claims that any of

 

--------------------------------------------------------------------------------

Exhibit 10.03

 

the Released Persons breached any duty owed to TI or its affiliates as a
stockholder or creditor of the Company, any agreement to loan money or make
other financial accommodations available to the Company or to fund any
operations of the Company at any time. TI also hereby knowingly and voluntarily
forever releases, acquits and discharges the Released Persons from and of any
and all other claims, damages, losses, actions, counterclaims, suits, judgments,
obligations, liabilities, defenses, affirmative defenses, setoffs, and demands
of any kind or nature whatsoever, in law or in equity, whether presently known
or unknown, which TI or its affiliates may have had, now have, or which it can,
shall or may have for, upon, or by reason of any matter, course or thing
whatsoever relating to, arising out of, based upon, or in any manner connected
with, any transaction, event, circumstance, action, failure to act, or
occurrence of any sort or type, whether known or unknown, which occurred,
existed, was taken, permitted, begun, or otherwise related or connected to or
with any or all of the obligations, this agreement, any or all of the loan
documents, and/or any direct or indirect action or omission of the Released
Persons.

 

Very Truly Yours,

 

TECHNOLOGY INNOVATIONS, LLC

 

By: /s/ Michael Weiner

Name: Michael Weiner

Title: President

 

Accepted and agreed to this

1st day of August, 2008 by:

 

NATURALNANO, INC.

 

By: /s/Cathy A. Fleischer

Name: Cathy A. Fleischer

Title: President