Exhibit 10.1

WARRANT PURCHASE AGREEMENT

 
This Warrant Purchase Agreement (the “Agreement”), dated as of August 9, 2006,
is by and between NaturalNano, Inc., a corporation, with a mailing address at
150 Lucius Gordon Drive, Suite 115, West Henrietta, New York 14586  (the
“Seller”) and CRESTVIEW CAPITAL MASTER, LLC, with mailing address at 95 Revere
Drive, Suite A, Northbrook, Illinois 60062 (“Buyer”).
 
WITNESSETH:

 
WHEREAS, Seller holds a warrant for 750,000 shares of Common Stock (the
“Warrant”) of Atlas Mining Company, an Idaho corporation (the “Company”);
 
WHEREAS, the warrant is represented by Warrant certificate #022 dated January
28, 2005, registered in the name of Seller on the books of the Company (the
“Original Warrant”); and
 
WHEREAS, the parties hereto desire that Seller sells, transfers, conveys and
assigns to Buyer, and Buyer purchases and acquires from Seller, the Warrant and
any and all rights and benefits incident to the ownership thereof.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
 
SECTION 1. Sale and Purchase of Warrant; Closing.
 
1.1 Sale and Purchase. Subject to the terms and conditions of this Agreement,
Seller shall sell, convey, assign and deliver to Buyer, and Buyer shall purchase
from Seller, the Warrant and any and all rights and benefits incident to the
ownership thereof for and in consideration of the sum of $562,500 (the “Purchase
Amount”), payable as set forth in Section 1.2 hereof.
 
1.2 Closing: Escrow Arrangement. The parties and Melissa A. Mahler, Esq. as
escrow agent (the “Escrow Agent”), are today entering into an escrow agreement
(the “Escrow Agreement”) under which Buyer will deposit the Purchase Amount with
the Escrow Agent for delivery to Seller against receipt by the Escrow Agent of a
Warrant containing the same terms as the Original Warrant, in the name of the
Buyer (the “New Warrant”). Buyer agrees to deliver the Purchase Amount to the
Escrow Agent within two business days after the date hereof, and Seller agrees,
within two business days after receipt of notification from the Escrow Agent of
the Escrow Agent’s receipt of the Purchase Amount, to deliver, via overnight
courier, to the Company (i) the Original Warrant, (ii) a duly executed
instrument of transfer (with signature medallion guaranteed, if required), (iii)
copies of all corporate or other applicable resolutions as to authority, if
applicable, (iv) all other documents necessary to ensure the proper transfer of
the Original Warrant, and (v) instructions that the New Warrant be delivered to
the Escrow Agent.
 
1.3 The parties agree that if required by the Company, they will arrange for
counsel to deliver, on or as soon as practicable after the date the Original
Warrant is delivered by Seller, to the Company its opinion, addressed to the
Company, that the transfer of the Original Warrant hereunder is exempt from the
registration requirements of the Securities Act of 1933, as amended (the “Act”).
Seller and Buyer each hereby acknowledges and agrees that said counsel will be
relying upon the representations and warranties made by it herein as if made
directly to said counsel.
 
1.4 If delivery of the New Warrant is not made to the Escrow Agent within 45
days from the date hereof, Buyer shall have the right to terminate this
Agreement as provided in the Escrow Agreement.
 
 

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1.5 Additional Covenants. Buyer and Seller each agrees to take promptly such
steps, and execute and deliver such instruments, corporate resolutions and other
documents, as may be reasonably requested by the Company, or the transfer agent
of the Company (the “Transfer Agent”) to cause the Company to deliver the New
Warrant to the Escrow Agent. In addition, the Seller will use its reasonable
best efforts to cooperate with the Buyer in the Buyer’s efforts to have the
Company extend the expiration date of the New Warrant.
 
SECTION 2. Representations and Warranties of Buyer. For purposes of this Section
2, the term Warrant refers to both the Original Warrant and New Warrant. Buyer
represents and warrants to Seller, as of the date hereof, as follows:
 
2.1 Organization; Authority. Buyer, is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, with full
right, power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
hereunder, and the execution, delivery and performance by Buyer of the documents
and transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or similar action on the part of Buyer. This Agreement, when
executed and delivered by Buyer, will constitute a valid and legally binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and any other laws of general application
affecting enforcement of creditors’ rights generally, (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, or (c) to the extent the indemnification provisions
contained herein may be limited by federal or state securities laws.
 
2.2 Investment Intent. Buyer is acquiring the Warrant for investment and for its
own account and not as a nominee or agent, and not with a view to or for sale in
connection with any distribution, resale or public offering of such Warrant or
any part thereof in violation of the Act. Buyer does not presently have any
contract, undertaking, agreement or arrangement with any entity, organization or
individual (each a “Person”) to sell, transfer or grant participations to any
Person with respect to the Warrant.
 
2.3 Investment Experience; Access to Information. Buyer (a) has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment in the Warrant and to make an informed
decision to so invest, has so evaluated and understands said risks and merits,
and can afford a complete loss of such investment, (b) understands the terms of,
and risks associated with, the acquisition of the Warrant, and (c) has had the
opportunity to review such disclosure regarding the Company, its business, its
financial condition and its prospects as Buyer has determined to be necessary in
connection with the purchase of the Warrant, including all of the Company’s
filings with the Securities and Exchange Commission.
 
2.4 Buyer Status. At the time Buyer was offered the Warrant it was, and at the
date hereof it is, an “accredited investor” as that term is defined in Rule
501(a) under the Act. Buyer is not, and is not required to be, registered as a
broker-dealer under Section 15 of the Securities Exchange Act of 1934 (the
“Exchange Act”).
 
2.5 Restrictions on Transfer. Buyer understands that (a) the Warrant has not
been registered under the Act or the laws of any state, (b) the Warrant and the
Warrant Shares (as defined in the Warrant) will be “restricted securities” as
said term is defined in Rule 144 of the Rules and Regulations promulgated under
the Act, (c) neither the Warrant nor the Warrant Shares may be sold, pledged or
otherwise transferred unless a registration statement for such transaction is
effective under the Act and any applicable state laws, or unless an exemption
from such registration provisions are available with respect to such
transaction, and (d) the New Warrant and, unless registered, certificates for
Warrant Shares will bear a legend to the effect that the transfer of the Warrant
or the Warrant Shares is subject to the aforestated and a transfer request must,
if required by the Company, be accompanied by an opinion of legal counsel
satisfactory to the Company that such transfer is exempt from registration under
the Act, and (e) “stop transfer” instructions will be placed against the New
Warrant and the Warrant Shares.
 
2.6 General Solicitation. Buyer is not purchasing the Warrant as a result of any
advertisement, article, notice or other communication regarding the Warrant
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement (each, a “General Solicitation”).
 
 

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2.7 No Conflicts or Violations. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, does or
will violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency, or court to which Buyer is subject or any provision of its
organizational documents or other similar governing instruments, or conflict
with, violate or constitute a default under, any agreement, credit facility,
debt or other instrument or understanding to which Buyer is a party or by which
it is bound.
 
2.8 No Litigation. There is no action, suit, proceeding, judgment, claim or
investigation pending, or to the knowledge of Buyer, threatened against Buyer
which could reasonably be expected in any manner to challenge or seek to
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement.
 
2.9 Consents. No authorization, consent, approval or other order of, or
declaration to or filing with, any governmental agency or body or other Person
is required for the valid authorization, execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions contemplated
hereby.
 
2.10 Non-Public Information. Buyer is not purchasing the Warrant “on the basis
of” (as defined in Rule 10b5-1 of the Exchange Act) any material, non-public
information about the Company or the Warrant.
 
 
SECTION 3. Representations and Warranties of Seller. Seller represents and
warrants to Buyer, as of the date hereof, as follows:
 
3.1 Authorization of Agreement. Seller is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization with
full right, power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
hereunder, and the execution, delivery and performance by Seller of the
documents and transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of Seller.
This Agreement, when executed and delivered by Seller, will constitute a valid
and legally binding obligation of Seller, enforceable against Seller in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and any other laws
of general application affecting enforcement of creditors’ rights generally, (b)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, or (c) to the extent the
indemnification provisions contained herein may be limited by federal or state
securities laws.
 
3.2 Title to the Warrant. Seller is the lawful owner of the Warrant with good
and marketable title thereto, and Seller has the absolute right to sell, assign,
convey, transfer and deliver the Warrant and any and all rights and benefits
incident to the ownership thereof, all of which rights and benefits are being
transferred by Seller to Buyer free and clear of all the following (collectively
called “Claims”) of any nature whatsoever: security interests, liens, pledges,
claims (pending or threatened), charges, escrows, encumbrances, lock-up
arrangements, options, rights of first offer or refusal, community property
rights, mortgages, indentures, security agreements or other agreements,
arrangements, contracts, commitments, understandings or obligations, whether
written or oral and whether or not relating in any way to credit or the
borrowing of money. Delivery to Buyer of the Warrant will (i) pass good and
marketable title to the Warrant to Buyer, free and clear of all Claims (assuming
that Buyer is a bona fide purchaser within the meaning of the Illinois Uniform
Commercial Code), and (ii) convey, free and clear of all Claims, any and all
rights and benefits incident to the ownership of such Warrant.
 
3.3 Original Acquisition; No General Solicitation. The Warrant was originally
acquired by Seller on or about January 28, 2005 for investment and for its own
account and not with a view to, or for sale in connection with, any
distribution, resale or public offering of such Warrant or any part thereof in
violation of the Act. At the time Seller acquired the Warrant, it was an
accredited investor, competent to evaluate the merits and risks of acquiring the
Warrant. Seller did not offer nor is it selling the Warrant to Buyer by any form
of General Solicitation.
 

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3.4 No Conflicts or Violations. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, does or
will violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency, or court to which Seller is subject or any provision of its
organizational documents or other similar governing instruments, or conflict
with, violate or constitute a default under any agreement, credit facility, debt
or other instrument or understanding to which Seller is a party or by which it
is bound.
 
3.5 No Litigation. There is no action, suit, proceeding, judgment, claim or
investigation pending or, to the knowledge of Seller, threatened against Seller
which could reasonably be expected in any manner to challenge or seek to
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement.
 
3.6 Consents. No authorization, consent, approval or other order of, or
declaration to or filing with, any governmental agency or body or other Person
is required for the valid authorization, execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions contemplated
hereby.
 
3.7 Bankruptcy. Seller is not under the jurisdiction of a United States
bankruptcy court or involved in any comparable bankruptcy proceeding in any
jurisdiction in the world or in any insolvency proceeding, conservatorship or
reorganization in any jurisdiction in the world.
 
3.8 Non-Employee and Non-Affiliate Status. Seller is not, as of the date of this
representation, and has never been, an employee, officer, director or direct or
indirect beneficial owner of ten percent (10%) or more of any class of equity
security of the Company, or of any entity, directly or indirectly, controlling,
controlled by or under common control with the Company, or otherwise been an
“affiliate” as that term is used under Rule 144 promulgated under the Act
(“Rule 144”). For purposes of this paragraph, “Seller” includes any person that
would be included with Seller for purposes of Rule 144(a)(2).
 
3.9 Non-Public Information. Seller is not selling the Warrant “on the basis of”
(as defined in Rule 10b5-1 of the Exchange Act) any material, non-public
information about the Company or the Warrant.
 
3.10 Delivery. Seller has delivered to Buyer true copies of the Warrant and all
amendments thereto, if any.
 
SECTION 4. Survival of Representations and Warranties; Etc. All representations
and warranties of Buyer and Seller shall survive the closing hereunder. Seller
may rely upon this Agreement for the purpose of assuring its compliance with
federal securities law.
 
SECTION 5. Indemnification. Each party hereto shall indemnify and hold harmless
the other party (and its respective affiliates, directors, officers, employees,
successors and assigns) from and against any and all losses, claims, damages,
liabilities and expenses based upon, arising out of or otherwise in respect of,
any inaccuracy in, or any breach of, the representations or warranties of such
party or the covenants or agreements made by such party in this Agreement or the
Escrow Agreement. Notwithstanding the foregoing, Seller’s obligation to
indemnify Buyer shall not exceed the Purchase Amount actually received by
Seller.
 
SECTION 6. Notices. Any notice required or permitted by this Agreement shall be
in writing and shall be deemed sufficient upon delivery, when delivered
personally or to the recipient’s offices by a recognized overnight courier
service or sent by facsimile (upon confirmation of receipt) addressed to the
party to be notified at such party’s mailing address or facsimile number as set
forth below.
 

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Seller
Natural Nano, Inc.
150 Lucius Gordon Drive
Suite 115
W. Henrietta, New York 14586
Attn: Kathleen A. Browne
Facsimile: (585) 214-8183
 
 
with a copy to:
 
Todd Tidgewell
Nixon Peabody LLP
Omni Plaza
30 South Pearl Street
Albany, New York 12207
Facsimile: (866) 890-4699
 
Buyer
Crestview Capital Master, LLC
95 Revere Drive
Suite A
Northbrook, Illinois 60062
Attn: Daniel Warsh
Facsimile: (847) 539-3807
 
 
with a copy to:
 
Ferber Chan Essner & Coller, LLP
530 Fifth Avenue
23rd Floor
New York, New York 10036
Attn: Edmond M. Coller, Esq.
Facsimile: (212) 944-7630
 

SECTION 7. Successors and Assigns. This Agreement shall be binding on and inure
to the benefit of each of the parties hereto and any successors to the
respective businesses of Buyer or Seller. Neither Buyer nor Seller may assign
its or his rights or obligations hereunder except to persons described in the
preceding sentence.
 
SECTION 8. Expenses. Each party hereto shall pay the fees and expenses of any
broker engaged by such party and of such party’s advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement, and shall hold the other party hereto harmless against any
liability, loss or expense (including, without limitation, reasonable attorneys’
fees and out-of-pocket expenses) arising in connection with any claim for such
fees and expenses; provided, however, that Seller shall pay any transfer, stamp
or similar taxes, if any, that are payable in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
 
SECTION 9. Execution Counterparts. This Agreement may be executed and delivered
via facsimile in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
 
SECTION 10. Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired hereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
 

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SECTION 11. Entire Agreement. This Agreement represents the entire agreement of
the parties hereto with respect to the matters contemplated hereby, and there
are no written or oral representations, warranties, understandings or agreements
with respect hereto except as expressly set forth herein.
 
SECTION 12. Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
each party or, in the case of a waiver, by the party against whom enforcement of
any such waiver is sought.
 
SECTION 13. Confidentiality. Each of Buyer and Seller hereby agrees, without the
prior written consent of the other, to not disclose, and to otherwise keep
confidential, the sale of the Warrant contemplated hereby, except to the extent
that disclosure thereof is required to effectuate the transfer as contemplated
herein or by law, rule or regulation; provided, however, that Buyer and Seller
may disclose information regarding such sale to their respective employees,
accountants, attorneys and equity holders. 
 
SECTION 14. Governing Law; Consent to Jurisdiction and Service of Process. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Illinois, without regard to the conflicts of laws
principles thereof. The parties hereto hereby irrevocably agree that any suit or
proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in the
City of Chicago, State of Illinois. By their execution hereof, the parties
hereby covenant and irrevocably submit to the in personam jurisdiction of any
such court and agree that any process in any such action may be served upon any
of them personally, or by registered mail, return receipt requested, or by
nationally recognized overnight courier service, with the same force and effect
as if personally served upon them in Chicago. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense of lack of in personam jurisdiction with respect
thereto.
 

 
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above-written.
 
 

  NATURALNANO, INC.           By: /s/ Kathleen A. Browne   Name: Kathleen A.
Browne   Title: Chief Financial Officer   Facsimile: (585) 214-8183      
CRESTVIEW CAPITAL MASTER, LLC   By: Crestview Capital Partners, LLC   (sole
member)          
By: /s/ Daniel I. Wash
  Daniel I. Wash   Title: Manager   Facsimile: (847)-557-5807

 
 
 

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