**NON-QUALIFIED      STOCK OPTION AGREEMENT**

|   | 1. | Grant                of Option.                The Company hereby grants to the Option Holder, subject to and pursuant                to                the terms and conditions of this Agreement, the option to purchase                from                the Company an aggregate of 50,000 shares of common stock of the                Company                (the “Shares”) at an exercise price of $0.10 per Share. The parties intend                this Option to be treated as a non-qualified stock option under the                Code. |
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|   | 2. | Expiration                Date.                This Option shall expire on December 7, 2011 (the “Expiration Date”)                unless this Option expires earlier as provided in Sections 5, 6 or                7 of                this Agreement. |
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|   | 3. | Exercisability.                No Shares may be purchased under this Option and this Option shall                not be                exercisable until the Option has vested pursuant to the vesting schedule.                Under the vesting schedule, all shares issued in this grant are vested                as                of the grant date, December 7, 2006. If the Option Holder’s services are                terminated, Section 5 shall govern the Option Holder’s rights under                this Option. Notwithstanding the foregoing or any other provision                of the                Plan or this Agreement, this Option may not be exercised after the                Expiration Date. |
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|   | 4. | Method                of Exercising Options.                The Option may be exercised from time to time by written or electronic                notice (in the form prescribed by the Company) delivered to and received                by the Company, which notice shall be signed or electronically confirmed                by the Option Holder and shall state the election to exercise the                Option                and the number of whole Shares with respect to which the Option is                being                exercised. Such notice must be accompanied by a check payable to                the                Company or, subject to the Committee’s approval, such other consideration                as the Committee may determine in payment of the full Option Price                for the                number of Shares purchased. As soon as practicable after it receives                such                notice and payment, as applicable, and following receipt from the                Option                Holder of payment for any taxes which the Company is required by                law to                withhold by reason of such exercise, the Company will deliver to                the                Option Holder a certificate or certificates for the Shares so purchased. |
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|   | 5. | Cancellation                of Options. |
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|   | (a) | Expiration                of Term.                On the Expiration Date, the unexercised Options shall be cancelled                automatically. |
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|   | (b) | Termination                of Consulting Services.                Except as provided in Sections 6 and 7 below, any unvested portion                of the                Option shall automatically be cancelled in the event the Option Holder’s                consulting services with the Company or any of its Subsidiaries is                terminated for any reason. Any portion of the Option vested at the                time of                termination may be exercised by the Option Holder at any time on                or prior                to the earlier of the Expiration Date or the expiration of three                (3)                months after the date of termination. Any vested portion of the Option                that is not exercised within such time period shall be automatically                cancelled. A “termination” includes any event which would causes the                Option Holder to lose his or her eligibility to participate in the                Plan                (e.g., the consultant ceases to provide the prescribed services to                the                Company). |
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|   | 6. | Death                of Option Holder.                Upon the death of the Option Holder while the Option Holder is an                employee                of the Company or a Subsidiary, any unvested portion of the Option                shall                fully vest. The Option may be exercised by the Option Holder’s estate, or                by a person who acquires the right to exercise the Option by bequest                or                inheritance or by reason of the death of the Option Holder, provided                that                such exercise occurs both before the Expiration Date and within three                (3)                months after the date of the Option Holder’s death. Any portion of the                Option not exercised within such time period will be                cancelled. |
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|   | 7. | Disability.                Upon termination of the Option Holder’s agreement by reason of the Option                Holder’s Disability, any unvested portion of the Option shall fully vest.                The Option may be exercised by the Option Holder, provided that such                exercise occurs both before the Expiration Date and within 90 days                after                the Option Holder’s termination due to a Disability. Any portion of the                Option not exercised within such time period will be cancelled.                “Disability” shall mean a condition whereby the Option Holder is unable to                perform the services required by the Holder’s consulting agreement for a                period of 30 days as determined by the Company in its reasonable                discretion. |
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|   | 8. | Non-Assignability.                The Option shall not be assignable or transferable by the Option                Holder,                except by will or by the laws of descent and distribution. During                the life                of the Option Holder, the Option shall be exercisable only by the                Option                Holder. |
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|   | 9. | Rights                as a Shareholder.                The Option Holder shall have no rights as a shareholder by reason                of the                Option unless and until certificates for shares of Common Stock are                issued                to her. |
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|   | 10. | Employment.                This Agreement shall not create in the Option Holder a right to employment                with the Company or any Subsidiary and shall not interfere with the                ability of the Company to terminate the Option Holder’s employment                relationship at any time with or without cause; the Option is not                part of                normal and expected compensation for purposes of calculating any                severance, resignation, redundancy, end of service payment, bonuses,                long-service awards, pension or retirement benefits, or similar                payments. |
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|   | 11. | Notice.                Notices hereunder shall be in writing and if to the Company shall                be                addressed to the Secretary of the Company at NaturalNano, Inc., 150                Lucius                Gordon Drive, Suite 115, West Henrietta, New York 14586 and if to                the                Option Holder shall be addressed to the Option Holder at her address                as it                appears on the Company’s records. |
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|   | 12. | Successors                and Assigns.                This Agreement shall be binding upon and inure to the benefit of                the                successors and assigns of the Company and, to the extent provided                in                Section 6 hereof, to the heirs or legatees of the Option                Holder. |
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|   | 13. | Applicable                Laws and Consent to Jurisdiction.                The validity, construction, interpretation and enforceability of                this                Agreement shall be determined and governed by the laws of the New                York                without giving effect to the principles of conflicts of law. For                the                purpose of litigating any dispute that arises under this Agreement,                the                parties hereby consent to exclusive jurisdiction in New York and                agree                that such litigation shall be conducted in the federal or state courts                located in Rochester, New York. |
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**IN      WITNESS WHEREOF**

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|                                                       | **NaturalNano,                Inc.**                        |
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| Date:    December              7, 2006 | By:                                               | /s/ Kathleen              A. Browne     |
|                                                       | Kathleen              A.              Browne  CFO |

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|                                                             | **Option                Holder**                  |
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| Date:     December              7, 2006 |                                              | /s/ Harold              Kroto     |
|                                                             | Harold              Kroto     |

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