f8k120409ex10v_naturalnano.htm


    Exhibit 10.5

     

    
      PLATINUM
LONG TERM GROWTH IV, LLC

      152
West 57th
Street, 54th
Floor

      New
York, New York 10019

      


      


      Via
Facsimile and First Class Mail

      


      Effective November 30,
2009

      


      


      Re:  FORBEARANCE
AGREEMENT

      


      Ladies
and Gentlemen:

      


      Reference
is made to the $2,750,000 8% Senior Secured Promissory Note due March 6, 2009,
issued on or about March 6, 2007, the $150,000 8% Senior Secured Promissory Note
due March 6, 2009, issued on or about August 4, 2008, the $190,000 Senior
Secured Promissory Note due January 31, 2010, issued on or about September 29,
2008, the $59,500 Senior Secured Promissory Note due January 31, 2010, issued on
or about October 31, 2008 and one or more secured bridge notes in the current
principal amount of $70,961.12 (together the “Notes”) from NaturalNano, Inc. and
NaturalNano Research, Inc. (jointly and severally, the “Borrower”) to Platinum
Long Term Growth IV, LLC (the “Lender”).  Capitalized terms used
herein and not otherwise defined shall have the respective meanings given in the
Notes.

      


      The
Borrower has requested that the Lender forbear from exercising its various
rights and remedies under the Notes and other related documents (collectively,
the “Loan Documents”) that may otherwise be exercised by the Lender on the date
hereof, in order to provide the Borrower with additional time during which it
may resolve its current financial problems.

      


      The
Lender is prepared to forbear from demanding payment of principal on the Notes
on the Maturity Date of the Notes, or taking any other action to collect the
principal amount of the Notes until the earlier of June 1, 2010 (unless extended
by the Lender in its discretion) or the termination of the Forbearance Period
pursuant to the terms of this Letter Agreement (such period, the “Forbearance
Period”), provided the Borrower accepts and agrees to the terms, conditions and
covenants set forth herein, and communicates such acceptance (by delivering a
signed copy of this Letter Agreement) to the Lender no later than 5:00 p.m. on
November 30, 2009; provided further it is understood that Borrower is obligated
to make all interest payments required under the Notes during the Forbearance
Period and the Lender shall be permitted to convert any Note pursuant to its
terms.

      


      Upon
execution by the Borrower, this letter shall be a binding agreement among the
respective parties hereto (referred to as the “Letter Agreement”).

      


      By its
execution, the Borrower represents, warrants and covenants as
follows:

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        Effective
November 30, 2009

        Page
2

        
 

      

      1.           No
Duress.         The Borrower
has freely and voluntarily entered into this Letter Agreement after an adequate
opportunity to review and discuss the terms and conditions and all factual and
legal matters relevant hereto with counsel freely and independently chosen by it
and this Letter Agreement is being executed without fraud, duress, undue
influence or coercion of any kind or nature whatsoever having been exerted by or
imposed upon any party.

       

      2.           Amount
Due.      The Borrower does not contest the
amounts outstanding under the Notes as set forth on Schedule A hereto
(the “Outstanding Amount”).  The Borrower shall also be responsible
for reimbursing the Lender for all costs and expenses, including the fees and
expenses of legal counsel that may be incurred in connection with the
enforcement of this Letter Agreement, which, if incurred, shall be added to the
Outstanding Amount.  The Borrower acknowledges and agrees that the
Outstanding Amount, plus interest accrued thereon, shall be due and owing upon
termination of the Forbearance Period.

       

      3.           No
Defenses.      The Borrower has no defenses,
affirmative or otherwise, rights of setoff, rights of recoupment, claims,
counterclaims, or causes of action of any kind or nature whatsoever against the
Lender, its officers, directors, employees, attorneys, legal representatives or
affiliates (collectively, the “Lender Group”), directly or indirectly, 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, or began prior
to the execution of this Letter Agreement and accrued, existed, was taken,
permitted or begun in accordance with, pursuant to, or by virtue of the Notes or
any of the terms or conditions of the Loan Documents, or which directly or
indirectly relate to or arise out of or in any manner are connected with the
Notes or any of the Loan Documents; TO THE EXTENT ANY SUCH DEFENSES, AFFIRMATIVE
OR OTHERWISE, RIGHTS OF SETOFF, RIGHTS OF RECOUPMENT, CLAIMS, COUNTERCLAIMS, OR
CAUSES OF ACTION EXIST, SUCH DEFENSES, RIGHTS, CLAIMS, COUNTERCLAIMS, AND CAUSES
OF ACTION ARE HEREBY FOREVER WAIVED, DISCHARGED AND RELEASED.

       

      4.           Interest Continues to
Accrue.      During the Forbearance Period, the
Outstanding Amount shall bear interest at the interest rate set forth under the
Notes (8% or 16% as the case may be); it being understood that the default rate
shall apply upon the occurrence of any Event of Default (other than Existing
Defaults) thereunder or upon termination of the Forbearance Period.

       

      5.           Other
Notes.      The Borrower agrees that it shall
not provide any holder of the Notes issued on or about March 6, 2007, August 5,
2008, September 29, 2008 or October 31, 2008 or the Subordinated Secured
Convertible Promissory Note issued on or about the date hereof (the
“Subordinated Note” and, collectively, the “Other Notes”) any concession or
payment with respect to such Other Notes without first offering the Lender the
opportunity to receive such payment or concession with respect to the
Notes.

       

      6.           Forbearance.     
During the Forbearance Period, the Lender agrees that it will not take any
further action against the Borrower or exercise or move to enforce any other
rights or remedies provided for in the Loan Documents or otherwise available to
it, at law or in equity, by virtue of the occurrence and/or continuation of any
default or Event of Default under the Notes existing on the date hereof,
including any default relating to the Borrower’s failure to maintain the
effectiveness of any registration statement (the “Existing Defaults”), or take
any action against any property in which the Borrower has any
interest.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        
           

          Effective
November 30, 2009

          Page
3

           

        

      

       

      7.           Lender to Retain all
Rights.      It is understood and agreed that
this Letter Agreement does not waive or evidence consent to any default or Event
of Default (including the Existing Defaults) under the Notes or the Loan
Documents.  The parties hereto acknowledge and agree that the Lender
(i) shall retain all rights and remedies it may now have with respect to the
Notes and the Borrower’s obligations under the Loan Documents (“Default
Rights”), and (ii) shall have the right to exercise and enforce such Default
Rights upon termination of the Forbearance Period. The parties further agree
that the exercise of any Default Rights by the Lender upon termination of the
Forbearance Period shall not be affected by reason of this Letter Agreement, and
the parties hereto shall not assert as a defense thereto the passage of time,
estoppel, laches or any statute of limitations to the extent that the exercise
of any Default Rights was precluded by this Letter Agreement.

       

      8.           Termination of Forbearance
Period.       The Forbearance Period shall
terminate upon the earlier to occur of: (1) 5:00 pm (New York City Time) on June
1, 2010; (2) the Borrower shall fail to observe, perform, or comply with any of
the terms, conditions or provisions of this Letter Agreement as and when
required and/or any other Event of Default (other than the Existing Defaults
occurring prior to the date hereof) shall occur under the Notes or any of the
Loan Documents or any other agreement between the Borrower and the Lender (or
its affiliates) or any other indebtedness issued by the Borrower to the Lender
or its affiliates;  (3) any representation or warranty made herein, in
any document executed and delivered in connection herewith, or in any report,
certificate, financial statement or other instrument or document now or
hereafter furnished by or on behalf of the Borrower in connection with this
Letter Agreement, shall prove to have been false, incomplete or misleading in
any material respect on the date as of which it was made; (4) any suit preceding
or other action is commenced by any other creditor against the Company; (5) any
default or event of default shall occur under the Subordinated Note or the
“Transaction Documents” referred to therein; or (6) a court of competent
jurisdiction shall enter an order for relief or take any similar action in
respect of the Borrower in an involuntary case under any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law now or hereafter in effect
or a petition for relief under any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar law shall be filed by or against the
Borrower.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Effective
November 30, 2009

      
        
          Page
4

        

      

       

      Upon termination of the Forbearance
Period, should the Notes or any of the Borrower’s obligations under the Loan
Documents not be satisfied in full, the Lender shall be entitled to pursue
immediately its various rights and remedies, including its Default Rights,
against the Borrower, all collateral given by  the
Borrower to secure the Loan and the obligations under the Loan Documents,
without regard to notice and cure periods, all of which are hereby waived by the
Borrower.   Without limiting the generality of the foregoing,
upon termination of the Forbearance Period, the Lender shall be permitted to
immediately exercise its rights to demand and collect on the Outstanding
Amount.

       

      This Letter Agreement shall be deemed
to replace and terminate any existing agreement to forbear collection or other
rights with respect to the Notes that may currently in effect between the
Borrower and the Lender.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        Effective
November 30, 2009

        Page
5

        
 

      

      If the
foregoing is acceptable to you, please sign in the space provided
below.

      


      Sincerely,

      


      PLATINUM LONG TERM GROWTH IV,LLC

      


      


      By:       
/s/ Mark Nordlicht                                              

      Name:
Mark Nordlicht

      Title:
G.M.

      


      


      


      Accepted
and Agreed as of this 30th day
of November, 2009

      


      


      NATURALNANO,
INC.

      


      


       

      
        By:         /s/
James
Wemett                                        
                                 

        Name:  James
Wemett

        Title:
Acting CEO


      

      


      NATURALNANO
RESEARCH, INC.

      


      


       

      
        By:         /s/
James
Wemett                                        
                                 

        Name:  James
Wemett

        Title:
Acting CEO

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        Effective
November 30, 2009

        Page
6



      

      Schedule
A

      


      
        	
                Note

              	
                Principal
      Outstanding

              	
                Interest
      Outstanding

              
	
                $2,750,000
      8% Senior Secured Promissory Note due March 6, 2009 issued to
      Lender

              	
                $  2,750,000

              	
                $  333,666.67

              
	
                $150,000
      8% Senior Secured Promissory Note due March 6, 2009 issued to
      Lender

              	
                $  150,000

              	
                $  16,100

              
	
                $190,000
      8% Senior Secured Promissory Note due January 31, 2009 issued to
      Lender

              	
                $  190,000

              	
                $  18,028.89

              
	
                $59,500
      8% Senior Secured Promissory Note due January 31, 2010 issued to
      Lender

              	
                $  59,500

              	
                $  5,222.78

              
	
                Short
      Term Bridge Notes

              	
                $  70,961.12

              	
                $  3,088.18