LONGVIEW SPECIAL FINANCE INC. Trident Chambers Road Town, Tortola, British Virgin Islands
Exhibit
10.7
LONGVIEW
SPECIAL FINANCE INC.
Trident
▇▇▇▇▇▇▇▇
▇.▇.▇▇▇
146
Road
Town, Tortola,
British
Virgin Islands
Via
Facsimile and First Class Mail
Effective
November 30, 2009
Ladies
and Gentlemen:
Reference
is made to the $500,000 8% Senior Secured Promissory Note due March 6, 2009,
issued on or about March 6, 2007, the $20,000 8% Senior Secured Promissory Note
due March 6, 2009, issued on or about August 4, 2008, the $30,000 Senior Secured
Promissory Note due January 31, 2010, issued on or about September 29, 2008, the
$25,500 Senior Secured Promissory Note due January 31, 2010, issued on or about
October 31, 2008, the $34,750 16% Senior Secured Promissory Note due January 31,
2010 and the $40,000 16% Senior Secured Promissory Note due November 1, 2009
issued to Lender (together the “Notes”) from NaturalNano, Inc. and NaturalNano
Research, Inc. (jointly and severally, the “Borrower”) to Longview Special
Finance Inc. (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”).
Effective
November 30, 2009
Page
2
By its
execution, the Borrower represents, warrants and covenants as
follows:
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.
Effective
November 30, 2009
Page 3
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.
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,
LONGVIEW SPECIAL FINANCE
INC.
| By: | /s/ ▇▇▇▇▇▇▇▇ [illegible] | |
| Name: | ▇▇▇▇▇▇▇▇ [illegible] | |
| Title: | Director | |
Accepted
and Agreed as of this 30th day
of November, 2009
NATURALNANO,
INC.
By: /s/
▇▇▇▇▇
▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇▇▇
Title:
Acting CEO
NATURALNANO
RESEARCH, INC.
By: /s/
▇▇▇▇▇
▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇▇▇
Title:
Acting CEO
Effective
November 30, 2009
Page 6
Schedule
A
|
Note
|
Principal
Outstanding
|
Interest
Outstanding
|
|
$500,000
8% Senior Secured Promissory Note due March 6, 2009 issued to
Lender
|
$ 395,000
|
All
accrued interest
|
|
$20,000
8% Senior Secured Promissory Note due March 6, 2009 issued to
Lender
|
$ 20,000
|
All
accrued interest
|
|
$30,000
8% Senior Secured Promissory Note due January 31, 2009 issued to
Lender
|
$ 30,000
|
All
accrued interest
|
|
$25,500
8% Senior Secured Promissory Note due January 31, 2010 issued to
Lender
|
$ 25,500
|
All
accrued interest
|
|
$34,750
16% Senior Secured Promissory Note due January 31, 2010 issued to
Lender
|
$ 34,750
|
All
accrued interest
|
|
$40,000
16% Senior Secured Promissory Note due November 1, 2009 issued to
Lender
|
$ 40,000
|
All
accrued interest
|