f8k4202010ex1073_natnano.htm


    Exhibit
10.73

     

    
      AMENDED
AND RESTATED OPERATING AGREEMENT

      For

      COMBOTEXS,
LLC

      


      This Amended and Restated Operating
Agreement of COMBOTEXS, LLC, dated April 20, 2010, amends and restates in its
entirety the Operating Agreement made effective October 28, 2009, executed by
Innovation Group Enterprises, LLC, its sole member, and further amended by an
amendment dated March 31, 2010, executed by WorldWide Medical Solutions, LLC,
which acquired 100% of the ownership interest in and to COMBOTEXS, LLC from the
original Member thereof.

      W
I T N E S S E T H:

      


      WHEREAS, NATURALNANO, Inc. (“NN”) has
acquired 51% of the ownership interest in and to COMBOTEXS, LLC (the “Company”),
from WorldWide Medical Solutions, LLC (“WWM”), pursuant to the terms of a
purchase agreement dated the date hereof; and

      


      WHEREAS, following such transaction, NN
and WWM are the sole members of the Company (collectively, the “Members” and
each individually a “Member”), and the Members desire to establish their
respective rights and obligations pursuant to the New York Limited Liability
Company Law (the “Act”) by executing and delivering this Amended and Restated
Operating Agreement, which amends and restates the original Operating Agreement
of the Company, as amended, and any other agreements relating to the management,
control and ownership of the Company in their entirety.

      


      NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Members signing this Amended and Restated Operating Agreement agree as
follows:

      


      ARTICLE
I

      Definitions

      


      Definitions.                      The
following terms, as used in this Operating Agreement shall have the meanings set
forth below (unless otherwise expressly provided herein):

      


      1.1           "Act"
or “New York Act” shall have the meaning set forth in the preamble of this
Agreement.

      


      1.2           “Affiliate”
of a Person or Member shall mean any relative of such Person or Member, or any
Person or Member that controls, is controlled by or is under common control with
such Person or Member (including any officer, director, partner or trustee (or
relative of any thereof)), or any Person in which a Member owns any interest or
any Person that wholly or partially owns any Member.  For purposes of
this definition, (a) “control” shall mean the right or ability to elect the
majority of the directors of a corporation or otherwise direct the management of
a Person or Member, and (b) “relative” shall mean any other individual to whom
the individual in question is related by blood, marriage or adoption, not more
remotely than as a first cousin.

      


      1.3           "Agreement"
or “Operating Agreement” shall mean this Amended and Restated Operating
Agreement, as originally executed and as amended from time to time hereafter in
accordance herewith and with the Act.

      


      1.4           "Articles
of Organization" shall mean the Articles of Organization of the Company, as
filed with the New York Secretary of State, as they may from time to time be
amended.

      


      1.5           "Bankruptcy"
of a Member shall mean (a) the entry of an order for relief with respect to that
Member in a proceeding under the United States Bankruptcy Code, as amended from
time to time, or (b) the Member's initiation, whether by filing a petition,
beginning a proceeding or in answer to a proceeding commenced by another Person,
of any action for liquidation, dissolution, receivership or other similar
relief, or the Member's application for, or consent to the appointment of, a
trustee, receiver or custodian for its assets.  For purposes of this
definition, a Member's consent shall be deemed to have been given if an order
appointing a trustee, receiver or custodian is entered by a court of competent
jurisdiction and is not dismissed within ninety (90) days after its
entry.

       

       

      
        
          
          

        

        
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      1.6           "Book
Value" shall have the meaning set forth in Section 6.4(c).

      


      1.7           “Capital
Account" as of any date, shall mean the Capital Contribution to the Company by a
Member or the amount assigned to a Transferee, adjusted as of such date pursuant
to this Operating Agreement.

       

                 1.8           “Capital
Call Dilution Value” means the sum of any and all previous Capital
Contributions.

      


      1.9           "Capital
Contribution" shall mean any contribution by a Member to the capital of the
Company in cash, property or services rendered or a promissory note or other
obligation to contribute cash or property or to render services.

      


      1.10           "Capital
Transaction" shall mean any transaction not in the ordinary course of the
Company's business, in respect of which the Company receives cash or other
consideration (but not Capital Contributions), including, without limitation,
proceeds from sales or exchanges not in the ordinary course, financings and
refinancings, condemnations or insurance policies.

      


      1.11           "Cash
Available for Distribution," as of any date, shall mean the excess of (a) all
revenues received by the Company from its operations and investments over (b)
total current operating expenses and reasonable reserves for future such
expenses, including payments in respect of indebtedness of the Company, capital
improvements and contingencies, as determined from time to time by the
Managers.  Cash Available for Distribution shall not be reduced by
non-cash charges, including, without limitation, depreciation and amortization,
and shall not include proceeds from Capital Transactions.

      


      1.12           "Code"
shall mean the Internal Revenue Code of 1986, as amended, in effect as of the
date hereof and as amended from time to time hereafter.

      


      1.13           "Company"
shall have the meaning set forth in the preamble to this Agreement.

      


      1.14           “Company
Minimum Gain" shall mean the amount determined under Treas. Reg. Sections
1.704-2(i)(3) and 1.704-2(d), and shall be computed separately for each Member a
manner consistent with Code Section 704(b) and the Treasury Regulations
thereunder.

      


      1.15           “Company
Nonrecourse Deductions" shall mean the deductions of the Company determined
under Treas. Reg. Section 1.704-2(c).

      


      1.16           "Fiscal
Year" shall mean the Company's accounting, tax and fiscal year, which shall be
determined by the Managers.

      


      1.17           "Initial
Capital Contribution" of a Member shall mean his, her or its Initial Capital
Contribution to the Capital of the Company pursuant to this
Agreement.

      


      1.18           "Interest"
also called “Member Interest” or “Membership Interest” herein, shall mean a
Member’s entire interest in the Company and shall also mean the right to share
in the allocation of one or more of the Company’s allocable items, including,
without limitation, Net Profits and Net Losses, and/or in distributions of the
Company’s assets, in each case pursuant to this Agreement or the
Act.

      


      1.19           “Interest
Holder” shall mean the holder of an Interest who has not been admitted as a
Member in accordance with the provisions of this Agreement.

       

                 1.20           "Involuntary
Withdrawal" of a Member shall mean his, her or its withdrawal as a Member as a
result of the occurrence of a Withdrawal Event.

      


      1.21           "Majority
in Interest" shall mean the Members holding more than fifty percent (50%) of the
aggregate Interests held by all Members.

       

       

      
        
          
          

        

        
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      1.22           "Manager"
or "Managers" shall mean those charged with the management of the Company and
shall be the Person(s) listed in Exhibit A to this Agreement as Managers of the
Company, or any other Person that succeeds him, her or it as a Manager pursuant
to this Agreement.

      


      1.23           
"Member" shall mean each Person who or which executes a counterpart of this
Agreement as a Member and each Person who or which may hereafter become a party
to this Operating Agreement.

      


      1.24           "Negative
Capital Account" shall mean a Capital Account with a balance less than zero and,
where the context requires, the negative balance thereof, in each case as of the
end of a Fiscal Year, after giving effect to the following:

      


                 (a)  a
credit for any amount required to be restored under Treas. Reg. Section
1.704-1(b)(2)(ii)(c), as well as any amounts in addition thereto pursuant to
Treas. Reg. Sections 1.704-2(g)(1) and (i)(5), after taking into account any
changes during such Fiscal Year in Company Minimum Gain and Member Nonrecourse
Debt Minimum Gain; and

      


                            (b)  a
debit of the items described in Treas. Reg. Sections 1.704-l(b)(2)(ii)(d)(4),
(5) and (6).

      


      1.25           "Net
Profits" and "Net Losses" shall mean, for each Fiscal Year (or other period for
which they are determined), the income and gain, and the losses, deductions and
credits of the Company, respectively, in the aggregate or separately stated, as
appropriate, determined in accordance with generally accepted accounting
principles consistently applied, but not including any items that are specially
allocated.

       

                
1.26           [Intentionally
left blank]

      


      1.27           “Officer"
shall mean any of the officers of the Company elected or designated pursuant to
Section 4.10.

      


      1.28           [Intentionally
left blank]

      


      1.29           "Person"
shall mean any individual, partnership, limited liability company, corporation,
joint venture, trust, association or any other entity, domestic or foreign, and
its respective heirs, executors, administrators, legal representatives,
successors and assigns where the context of this Operating Agreement so
permits.

      


      1.30           Real
Property” shall mean any real
property owned by the Company.

      


      1.31           "Regulatory
Allocations" shall have the meaning set forth in Section 7.9.

      


      1.32           "Transfer"
shall mean any sale, assignment, encumbrance, pledge, hypothecation, transfer,
gift, exchange, bequest or other disposition of an Interest, in any manner,
voluntary or involuntary, by operation of law or otherwise.

      


      1.33           “Transferee”
or “Assignee” shall mean the recipient of an Interest pursuant to a
Transfer.

      


      1.34           "Transferor"
shall mean any Member which Transfers, or proposes to Transfer, an
Interest.

      


      1.35           "Treasury
Regulations" or "Treas. Reg." shall mean regulations promulgated under the Code
in effect as of the date hereof or hereafter amended or adopted.

      


      
        
          
          

        

        
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      ARTICLE
II

      Formation

      


      2.1           Formation.   The
Company was organized on October 28, 2009 in accordance with and pursuant to the
Act.  This Amended and Restated Operating Agreement amends and
restates in its entirety the operating agreement dated October 28, 2009 and
subsequently amended by an amendment dated March 31, 2010, and any other
agreements relating to the management, control and ownership of the Company in
their entirety.

      


      2.2           Name.           
The name of the Company is COMBOTEXS, LLC.  The
Company may do business under that name, and, as permitted by applicable law,
under any other name determined from time to time by the Managers.

      


      2.3           Purpose
of the Company.  The purpose of the Company shall be to engage in the
business of developing, purchasing, distributing, selling and marketing a
variety of nano-technology products and to do any and all other things
necessary, customary, related or incidental to the foregoing.  The
Company shall not engage in any other business or activity without the unanimous
consent of the Members.

       

      2.4           Principal
Office.    The Company’s principal place of business shall
be located at 17 Schoen Place, Pittsford, New York 14534, or at such other place
determined from time to time by the Managers.  The Company may have
such other business offices within or without the State of New York as
determined from time to time by the Managers.

      


      2.5           Registered
Agent. The address for service of process for any process served upon the
Secretary of State shall be COMBOTEXS, LLC, 17 Schoen Place,
Pittsford, New York 14534.

      


      2.6           Term.  The
term of the Company shall commence on the organization date set forth in Section
2.1 and shall exist in perpetuity, unless the Company is dissolved sooner
pursuant to this Operating Agreement or the New York Act.

       

      ARTICLE
III

      Members

      


      3.1           Names
and Addresses. The names and addresses of the Members are set forth in
Exhibit B to this Agreement.

      


      3.2           Additional
Members. A person may only be admitted as a Member after the date of this
Operating Agreement in accordance with the terms of Sections 9.5 and 9.6. The
Members hereby agree and acknowledge that NN has been duly and lawfully admitted
as a Member of the Company, notwithstanding the provisions of Section 9.5 and
9.6 of the original operating agreement of the Company, as amended.

      


      3.3           Books
and Records. The Company shall keep books and records of accounts and
minutes of all meetings of the Members.  Such books and records shall
be maintained on a cash basis in accordance with this Agreement.

      


      3.4           Information. Each
Member may inspect during ordinary business hours and at the principal place of
business of the Company the Articles of Organization, the Operating Agreement,
the minutes of any meeting of the Members, any tax returns of the Company and
all other books and records of the Company, financial and
otherwise.

      


      3.5           Limitation
of Liability.  Each Member's liability shall be limited as set forth
in this Operating Agreement, the New York Act and other applicable
law.  A Member shall not be personally liable for any indebtedness,
liability or obligation of the Company, except as specifically agreed to and
except that such Member shall remain personally liable for the payment of his,
her or its Capital Contribution of such Member and as otherwise set forth in
this Operating Agreement, the New York Act and any other applicable
law.

       

       

      
        
          
          

        

        
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      3.6           Consent.                      (a)           Notwithstanding
anything contained in this Agreement to the contrary, the following actions may
not be taken by the Company, the Managers or a Member without the unanimous vote
or the Consent of  the Members: 

       

                         (i)           The
sale of all or substantially all of the assets of the Company, subject to any
prohibition of such sale in any Agreement to which the Company is a
party

         

                         (ii)           Any
merger or consolidation of the Company with or into another entity, including a
domestic or foreign limited liability company.

       

                         (iii)           Consenting
to a voluntary petition in bankruptcy on behalf of the Company.

       

                         (iv)           Amending
this Operating Agreement.

       

                         (v)           Exercising
the Company’s right to purchase a Membership Interest under Article
IX.

       

                         (vi)           The
dissolution of the Company.

       

                         (vii)           The
financing, refinancing, mortgaging or the creation of any lien, encumbrance or
security interest against any property interest of the Company or otherwise
incurring an indebtedness or the signing of any checks on behalf of the Company
in excess of $5,000.

       

                         (xi)   Causing
the Company to enter into any contract, agreement or loan or engage in any
transaction with any Member, with any Affiliate of or related party to any
Member.


                         (xii)           Guaranteeing
the debts or obligations of any other party

      


      3.7           Priority
and Return of Capital.  No Member shall have priority over any other
Member, whether for the return of a Capital Contribution or for Net Profits, Net
Losses or a Distribution; provided, however, that this Section shall not apply
to loan or other indebtedness, as distinguished from a Capital Contribution,
made by a Member to the Company.

      


      3.8           Liability
of a Member to the Company.  A Member who or which rightfully receives
the return of any portion of a Capital Contribution is liable to the Company
only to the extent now or hereafter provided by the New York Act.  A
Member who or which receives a Distribution made by the Company in violation of
this Operating Agreement or made when the Company's liabilities exceed its
assets (after giving effect to such Distribution) shall be liable to the Company
for the amount of such Distribution.

      


      3.9           Financial
Adjustments.  No Members admitted after the date of this Agreement
shall be entitled to any retroactive allocation of losses, income or expense
deductions incurred by the Company.  The Managers may, at the
discretion of the Managers, at the time a Member is admitted, close the books
and records of the Company (as though the Fiscal Year had ended) or make pro
rata allocations of loss, income and expense deductions to such Member for that
portion of the Fiscal Year in which such Member was admitted in accordance with
the Code.

      


      3.10           Rights
of Approval.  The Members shall elect the Managers in accordance with this
Agreement and hereby agree to and confirm the election of the initial Managers
as set forth in Exhibit A hereto.

       

      ARTICLE
IV

      Management

       

       

      
        
          
          

        

        
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      4.1           Management.   James
Wemett and Richard M. Popovic are hereby elected as the Managers of the
Company.  The Managers shall provide the management of the Company and
shall serve until their respective successors have been elected.

      


      4.2           Powers
of Manager.  Except as set forth in this Agreement, the Managers shall
have power and authority, on behalf of the Company to (a) manage and carry on
the day to day business of the company, (b) open bank accounts and sign and
endorse checks and drafts and deposit checks, draft and other monies in the name
of the Company, (c) purchase insurance on the business and assets of the
Company, (d) retain accountants, attorneys or other agents, and (e) take any
other lawful action that the Managers reasonably and prudently considers
necessary, convenient or advisable in connection with any business of the
Company.  In carrying out these powers and the other powers granted
under this Amended and Restated Operating Agreement or the Act, the Managers
shall be required to act unanimously.  In the event the Managers can
not agree, except as to actions taken by the Managers under Sections 3.2, 3.6,
4.8, 4.10, 6.2, 6.8, 6.9, 9.6,  and as otherwise stated in this
Agreement, any single Manager may exercise such power in the event that a
majority in interest of the Members vote at a meeting of Members duly called or
act by written consent under Section 5.4, subject to the provisions of Section
5.8 hereof. Notwithstanding the foregoing, the parties agree that Jim Wemett
will manage the day to day business of the Company, subject to the provisions of
this Agreement that limit the right of any Manager to take action without the
approval of the other Manager, and further provided that any substantial change
to quality control of checklist boards sold by the Company must be approved by
both Managers.  Either Manager shall have the authority to sign checks
and drafts not to exceed $5,000 in amount.

      


      4.3           Binding
Authority.  Unless authorized to do so by this Agreement or by the
unanimous approval of the Managers, no Person shall have any power or authority
to bind the Company.

      


      4.4           Liability
for Certain Acts.  Each Manager shall perform his, her or its duties
in good faith and in such a manner and with such care as an ordinarily prudent
person in a similar position would use under similar circumstances.  A
Manager who so performs such duties shall not have any liability by any reason
of being or having been a Manager.  The Manager shall not be liable to
the Company or any Member for any loss or damage sustained by the Company or any
Member, unless the loss or damage shall have been the result of the gross
negligence or willful misconduct of such Manager.  Without limiting
the generality of the preceding sentence, a Manager does not in any way guaranty
the return of any Capital Contribution of a Member or a profit for the Members
from the operations of the Company.

      


      4.5           No
Exclusive Duty to Company.   The Managers shall not be required
to manage the Company as his, her or its sole and exclusive function and he, she
or it may have other business interests and may engage in other activities in
addition to those relating to the Company.  Neither the Company nor
any Member shall have any right pursuant to this Agreement to share or
participate in such other business interests or activities or to the income or
proceeds derived therefrom.  The Managers shall incur no liability to
the Company or any Member solely as a result of engaging in any other business
interests or activities.

      


      4.6           Indemnification.  The
Company shall indemnify and hold harmless the Managers from and against all
claims and demands to the maximum extent permitted under the New York
Act.

      


      4.7           Resignation. A
Manager may resign at any time by giving written notice to the
Company.  The Resignation of any Manager shall take effect upon
receipt of such notice or at any later time specified in such
notice.  Unless otherwise specified in such notice, the acceptance of
the resignation shall not be necessary to make it effective.

      


      4.8           Removal.  Any
Manager may be removed or replaced with or without cause by the vote or written
consent of at least a Majority in Interest of the Members, provided that the
parties hereto agree that neither Jim Wemett nor Richard Popovic may be removed
as a Manager without their consent.  The number of Managers may be
increased or decreased by the Managers with the unanimous approval of the
Members.

      


      4.9           Compensation.   The
Managers shall receive an annual fee in U.S. Dollars of  $1.00 and
shall be reimbursed for actual, reasonable and necessary expenses.

       

      
        
          
          

        

        
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      4.10           Officers.  The
Managers may designate one or more individuals as officers of the Company, who
shall have such titles and exercise and perform such powers and duties as shall
be assigned to them from time to time by the Managers.  Any officer
may be removed by the Managers at any time, with or without cause, with the
unanimous approval of the Members.  Each officer shall hold office
until his or her successor is elected and qualified.  Any number of
offices may be held by the same individual.  The salaries and other
compensation of the Officers, if any shall be fixed by the
Managers.

      


      4.11           The
Company shall pay or cause to be paid (or reimbursed), all reasonable costs and
expenses of the Company incurred by the Company or Managers in conducting or
otherwise related to the business of the Company.

      


      ARTICLE
V

      Meetings
of Members

      


      5.1           Meetings.    Meetings
of the Members may be called by the Managers for any purpose.  The
Managers shall call a meeting of the Members upon receipt of a request in
writing signed by at least 25% of the aggregate membership
Interests.  Such request shall state the purpose or purposes of the
proposed meeting and the business to be transacted.  Such meetings
shall be held at the principal office of the Company, or at such other place as
may be designated by the Manager.  Notice of any such meeting shall be
delivered to all Members within ten days after receipt of such requests and not
fewer than 15 days nor more than 60 days before the date of such
meeting.  The notice shall state the date, the place, hour, and
purpose or purposes of the meeting.  At each meeting of the Members,
the Members present or represented by proxy shall adopt such rules for the
conduct of such meeting, as they deem appropriate.  The expenses of
any such meeting, including the cost of providing notice thereof, shall be borne
by the Company.  The Company shall not be required to hold an annual
meeting of Members.

      


      5.2           Record
Date.  For the purpose of determining the Members entitled to notice
of or to vote at any meeting of Members or any adjournment of such meeting, of
Members entitled to receive payment of any Distribution, or to make a
determination of Members for any other purpose, the date on which notice of the
meeting is mailed or the date on which the resolution declaring Distribution is
adopted, as the case may be, shall be the record date for making such a
determination.  When a determination of Members entitled to vote at
any meeting of Members has been made pursuant to this Section, the determination
shall apply to any adjournment of the meeting.

       

      5.3           Proxies.

      


      (a)           A
Member may vote in person or by proxy executed in writing by the Member or by a
duly authorized Attorney-in Fact.

      


      (b)           Every
proxy must be signed by the Member or his or her Attorney-in Fact.  No
proxy shall be valid after the expiration of eleven months from the date thereof
unless otherwise provided in the proxy.  Every proxy shall be
revocable at the pleasure of the Member executing it, except as other wise
provided in this Section.

      


      (c)           The
authority of the holder of a proxy to act shall not be revoked by the
incompetence or bankruptcy of the Member who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such bankruptcy is received by any Manager.

      


      (d)      A proxy
which is entitled “irrevocable proxy” and which states that it is irrevocable,
is irrevocable when it is held by (i) ) a Person who has purchased the Interests
in accordance with the terms of this Agreement or (ii) a Person who has
contracted to perform services as an officer of the Corporation, if a proxy is
required by the contract of employment, if the proxy states that it was given in
consideration of such contract of employment, the name of the employee and the
period of employment contracted for, or (v) a nominee of any of the Persons
described in clauses (i) – (ii) of this sentence.

       

       

      
        
          
          

        

        
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      (f)           Notwithstanding
a provision in a proxy, stating that it is irrevocable, the proxy becomes
revocable after the the period of employment provided for in the contract of
employment has terminated or at the end of the period, if any, specified
therein, whichever period is less, unless the period of irrevocability is
renewed from time to time by the execution of a new irrevocable proxy as
provided in this Section.  This paragraph does not affect the duration
of a proxy under paragraph (b) of this Section.

      


      (g)           A
proxy may be revoked, notwithstanding a provision making it irrevocable, by a
purchaser of a Membership Interest without knowledge of the existence of such
proxy.

      


      5.4           Action
by Members Without a Meeting

      


      (a)           Whenever
the Members of the Company are required or permitted to take any action by vote,
such action may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken
shall be signed by the Members who hold the voting interests having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all of the Members entitled to vote therein
were present and voted and shall be delivered to the office of the Company, its
principal place of business or a Manager, employee or agent of the
Company.  Delivery made to the office of the Company shall be by hand
or by certified or registered mail, return receipt requested.

      


      (b)           Every
written consent shall bear the date of signature of each Member who signs the
consent, and no written consent shall be effective to the action referred to
therein unless, within sixty days of the earliest dated consent delivered in the
manner required by this Section to the Company, written consents signed by a
sufficient number of Members to take the action are delivered to the office of
the Company, its principal place of business or a Manager, employee or agent of
the company having custody of the records of the Company.  Delivery
made to such office, principal place of business or Manager, employee or agent
shall be by hand or by certified or registered mail, return receipt
requested.

      


      (c)           Prompt
notice of the taking of the action without a meeting by less than unanimous
written consent shall be given to each Member who have not consented in writing
but who would have been entitled to vote thereon had such action been taken at a
meeting.

      


      5.5           Manner
of Acting. At any meeting, the vote or written consent of Members holding
not less than a Majority in Interest shall be the act of the Members, unless the
vote of a greater or lesser proportion or number is otherwise required by the
New York Act, the Articles of Organization, or this Agreement.

       

      5.6           Waiver
of Notice.  Notice of a meeting need not be given to any Member who
submits a signed waiver of notice, in person or by proxy, whether before or
after the meeting.  The attendance of any Member at a meeting in
person or by proxy, without protesting prior to the conclusion of the meeting
the lack of notice of such meeting, shall constitute a waiver of notice by him
or her.

      


      5.7           Voting
Agreements. An agreement between two or more Members, if in writing and
signed by the parties thereto, may provide that in exercising any voting rights,
the Membership Interest held by them shall be voted as therein provided, or as
they may agree, or as determined in accordance with a procedure agreed upon by
them.

      


      5.8           Disagreement
between Members.   As to any matter requiring a Membership vote,
if the Members are unable to agree on such matter, either Member shall have the
right to submit the matter to mediation  and thereafter by arbitration
as provided in Sections 11.11 and 11.12 below.

       

      ARTICLE
VI

      Capital
Contributions and Capital Accounts

       

      
        
          
          

        

        
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      6.1           Initial
Capital Contributions. On the date hereof, each Member shall contribute to
the Company as its Initial Capital Contribution, cash equal to the amount set
forth in Exhibit B to this Operating Agreement , or an equivalent amount in
other assets, approved as to value and type of asset by the Managers, and when
so accepted by the Managers,  the Members agree that such Capital
Contribution has the value set forth on Exhibit B.

      


      6.2           Additional
Contributions.  Any additionally required contributions shall be in
accordance with Section 6.8 of this Agreement.

      


      6.3           Capital
Accounts.  The Company shall establish and maintain a Capital Account
for each Member.  Each Member's Capital Account shall be in amounts
equal to the Member’s Initial Capital Contributions.  Each Members
Capital Account shall be increased by the value of each Capital Contribution
made by the Member, allocations to such Member of the Net Profits and any other
allocations to such Member of income pursuant to the Code.  Each
Member's Capital Account will be decreased by the value of each Distribution
made to the Member by the Company, allocations to such Member of Net Losses and
other allocations to such Member pursuant to the Code.

      


      6.4           Adjustments
to Capital Accounts.

      


      (a)           Except
as otherwise provided in this Agreement, the Managers, may, in his, her or their
discretion, adjust the Capital Accounts to reflect a revaluation of the
Company's assets upon the occurrence of any of the following
events:

      


      (i)           a
Capital Contribution by a new or existing Member as consideration for the
issuance of an Interest;

      (ii)           the
distribution of cash or other property by the Company to a retiring or
continuing Member as consideration for the repurchase or redemption of an
Interest; or

      


      (iii)           events
described in Treas. Reg. Section 1.704-1(b)(2)(iv)(f).

      


      (b)           Any
adjustment pursuant to Section 6.4 (a) shall be based on the fair market value
of Company property on the date of adjustment, and shall reflect the manner in
which the unrealized income, gain, loss or deduction inherent in the property,
not previously reflected in Capital Accounts, would be allocated among the
Members’ Interests if there were a taxable disposition of the property for fair
market value on that date.

      


      (c)           If
the Book Value of a Company asset differs from the adjusted tax basis of that
asset, the Capital Accounts shall be adjusted in accordance with Treas. Reg.
Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion,
amortization and gain or loss computed for book purposes rather than tax
purposes.

       

      (d)           If
there is any basis adjustment pursuant to an election under Code Section 754,
the Capital Accounts shall be adjusted to the extent required by Treas. Reg.
Section 1.704-1(b)(2)(iv)(m).

      


      6.5           Withdrawal
or Reduction of Capital Contributions.   A Member shall not
receive from the Company any portion of a Capital Contribution until all
indebtedness and liabilities of the Company, (except any indebtedness,
liabilities and obligations to Members on account of their Capital
Contributions), have been paid or there remains property of the Company, in the
sole discretion of the Managers, sufficient to pay them. A Member, irrespective
of the nature of the Capital Contribution of such Member, has only the right to
demand and receive cash in return for such Capital Contribution.

      


      6.6           Transfer
of Interest.  If a Member’s Interest is Transferred as permitted by
this Agreement, the Transferee shall succeed to the Capital Account of the
Transferor to the extent the Capital Account relates to the Transferred Interest
in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv)(l).

       

       

      
        
          
          

        

        
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      6.7           Modifications.  The
manner in which Capital Accounts are to be maintained pursuant to this Section
is intended to comply with the requirements of Section 704(b) of the
Code.  If in the opinion of the Managers the manner in which Capital
Accounts are to be maintained pursuant to this Agreement should be modified to
comply with Section 704(b) of the Code, then the method in which Capital
Accounts are maintained shall be so modified; provided, however, that any change
in the manner of maintaining Capital Accounts shall not materially alter the
economic agreement between or among the Members.

      


      6.8           Calls
for Additional Capital Contribution.

       

                 It
is possible that the Company may require additional Capital Contributions from
each Member from time to time.  In the event that the Managers deem
that an additional Capital Contribution by the Members is necessary, the
following procedure shall be followed:

      


      (a)           The
Company shall mail, by certified U.S. mail, return receipt requested, a notice
to each Member requiring that Member to participate in the Call for Additional
Capital Contribution.

      


      (b)           Each
Member shall be given the time specified in the notice, each Member must tender
his/her/its required funds to the Company by either personally tendering said
funds to the Managers, or by mailing to the Company said funds, by bank or
certified check only, by certified U.S. mail, return receipt requested, by the
expiration of said time period.

      


      (c)           In
the event that a Member shall not participate in said Call for Additional
Capital Contribution, the Manager shall give the non-participating member (the
“Delinquent Member”) a notice of failure to perform the applicable commitment to
participate (the “Commitment”).  If the Delinquent Member fails to
perform the Commitment (including the payment of any costs associated with the
failure and interest at the prime rate published in the Wall Street Journal on
the last day that the Delinquent Member is required to perform the Commitment if
a business day, or the next business day if the last day was not a business day,
plus 3%, but not to exceed the maximum legal interest rate in the State of New
York) within ten (10) days of the giving of such notice, the other Member may
take such action as they deem appropriate, including but not limited to the
following:

      


                 (i)           Enforcing
the Commitment in any State or Federal Court having jurisdiction of the subject
matter located in Monroe County, State of New York. Each Member expressly agrees
to the jurisdiction of such Courts but only for purposes of such
enforcement.

      


      (ii)           The
non-Delinquent Member may make an Additional Capital Contribution to the Company
in an amount up to such non-Delinquent Member's Interest (in proportion to the
relative Interests of the non-Delinquent Members, or such other proportion as
may be agreed upon by such non-Delinquent Members) of the defaulted amount of
the Commitment, in which event (a) the Interest of such non-Delinquent Members
shall be increased to the Interest which equals such non-Delinquent Member's
total Capital Contributions divided by the Capital Contributions of all Members
to date, and (b) the Interest of the Defaulting Member shall be correspondingly
decreased.

      


      (d)           The
Company may borrow monies, from itself or any other party or parties, in lieu of
requiring Additional Capital Contributions from the Members, in such amount as
the Managers deem necessary and upon such terms and conditions that the Managers
deem appropriate.

      


      6.9           Loans.           Any
Member may, but is not obligated to, loan or cause to be loaned to the Company
such additional sums as the Managers deem appropriate and necessary for the
conduct of the Company’s business.  Loans made to the Company shall be
upon such terms and for such maturities, as the Managers deem
appropriate.  Any loans and interest thereon may be payable from
borrowing, cash revenues and reserves, and shall immediately become due and
payable upon the sale, exchange or other disposition of all or substantially all
of the Company’s property or any voluntary or involuntary conversion of the
Company’s property or a casualty or taking in condemnation affecting the
Company’s property, prior to any distributions of Capital Items to the
Members.

       

      
        
          
          

        

        
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      ARTICLE
VII

      Allocations
and Distributions

      


      7.1           Allocations
of Profits and Losses.  The Net Profits and the Net Losses for each
Fiscal Year shall be allocated to each Member in proportion to their respective
Membership Interests.  Special allocations of Net Profit or Net Loss
may be made to one or more Members if approved by a Majority in Interest of the
Members.

      


      7.2           Distributions.

      


      (a)           The
Managers may from time to time, but not less than annually, make Distributions
to the Members.  All Distributions shall be made to the Members pro
rata in proportion to their Membership Interests and the time the Interest was
held during the fiscal year of distribution as of the record date set for such
Distribution. Cash Available for Distribution shall be determined in accordance
with the provisions of Section 1.11 above. Notwithstanding the foregoing, for
every sale of a checklist board by the Company, there shall be a Sixty Dollar
($60.00) distribution made to each to Member, which shall be made no later than
the tenth day of each month.

      


      (b)           From
time to time, the Managers, may cause the Company to make special Distributions
of Cash Available for Distribution to be made to one or more Members, provided
such special Distribution has been approved in advance by the unanimous vote or
consent of the Members.

      


      (c)           Notwithstanding
anything to the contrary contained herein, Distributions made in connection with the dissolution
of the Company, including Distributions of Proceeds of Capital
Transactions made in connection with the dissolution of the Company shall be
made in accordance with Section 11.2 of this Agreement.

      


      7.3           Proceeds.  Proceeds
from Capital Transactions shall be applied as follows: first, to the payment of
costs and expenses incurred in connection with the Capital Transaction, then to
the payment of debts of the Company then due and outstanding, then to the
Members in proportion to their Membership Interests as of the record date of
such Capital Transaction.

      


      7.4           Limitation
on Distributions.  No distribution shall be declared and paid (a)
unless, after giving effect thereto, the assets of the Company exceed the
Company's liabilities and (b) do not violate the provisions of any Agreement to
which the Company is a party.

      


      7.5           Interest
on and Return of Capital Contributions.  No Member shall be entitled
to interest on his, her or its Capital Contribution or to a return of his, her
or its Capital Contribution, except as specifically set forth in this
Agreement.

      


      7.6           Accounting
Period.  The accounting period of the Company shall be the Fiscal
Year.

      


      7.7           Offset.  The
Company may offset all amounts owing to the Company by a Member against any
Distribution to be made to such Member.

      


      7.8           Minimum
Gain.

      


      (a)           Nonrecourse
Deductions.  Company Nonrecourse Deductions shall be allocated to the
Capital Accounts as set forth in Section 6.3.  Member Nonrecourse
Deductions shall be allocated to the Member that bears the economic risk of loss
with respect to the debt to which such Member Nonrecourse Deduction is
attributable.

      


      (b)           Distributions
of Nonrecourse Financing Proceeds.  If the Company makes a
distribution to the Members that is allocable to the proceeds of any nonrecourse
liability of the Company, or of any other entity in which the Company has an
interest, such distribution shall be allocable to an increase in Company Minimum
Gain as provided in Treas. Reg. Sections  1.704-2(h) and
(i)(6).

      


      
        
          
          

        

        
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      (c)           Company
Minimum Gain.  Each Member's share of Company Minimum Gain shall be
determined as provided in Treas. Reg. Sections 1.704-2(g) and
(i)(5).

      


      (d)           Minimum
Gain Chargeback.  If there is a net decrease in Company Minimum Gain
for a Fiscal Year, items of Company income and gain shall be allocated to the
Capital Accounts as provided in Treas. Reg. Section
1.704-2(f).  Notwithstanding the foregoing, to the extent such net
decrease is attributable to a Member Nonrecourse Debt, then any Member with a
share of the minimum gain attributable to such debt shall be allocated items of
income and gain as provided in Treas. Reg. Section 1.704-2(i)(4).

      


      7.9           Regulatory
Allocations.  The allocations set forth in Sections 7.6 and
7.7  (the "Regulatory Allocations") are intended to comply with
certain requirements of Treas. Reg. Sections 1.704-1(b) and
1.704-2.  The Regulatory Allocations might not be consistent with the
manner in which the Members intend to divide Company
distributions.  Accordingly, the Managers are hereby authorized to
allocate other items of income, gain, loss, and deduction among the Members so
as, to the extent possible, to prevent the Regulatory Allocations from causing
the manner in which Company distributions will be divided between the Members
pursuant to this Operating Agreement to be different from the division intended
by the Members.  In general, the Members anticipate that this will be
accomplished by specially allocating other items of Company income, gain, loss
and deduction among the Members so that, to the extent possible, the net amount
of the Regulatory Allocations and such other items to each Member shall be equal
to the net amount that would have been allocated to each such Member if the
Regulatory Allocations had not been required.

      


      7.10           Allocation
of Nonrecourse Liabilities.  For purposes of Treas. Reg. Section
1.752-3(a), the Members' interests in Net Profits shall be their respective
Interests.

      


      7.11           Distributions
In Kind.  All distributions of Company property in kind shall be
valued at their fair market value as of the date of distribution, and the amount
of any gain or loss that would be realized by the Company if it were to sell
such property at such fair market value shall be allocated to the Members in
accordance with Section 7.1.

      


      


      ARTICLE
VIII

      Taxes

      


      8.1           Tax
Returns.  The Managers shall cause to be prepared and filed all
necessary federal and state income tax returns for the Company.  Each
Member shall furnish to the Managers all pertinent information in its possession
relating to Company operations that is necessary to enable the Company's income
tax returns to be prepared and filed.

      


      8.2           Tax
Elections.  The Company shall make the following elections on the
appropriate tax returns:(a)To adopt the calendar year as the
Fiscal Year;

      


      (b)           To
adopt the cash method of accounting and keep the Company's books and records on
the income tax method;

      


      (c)           
If a Distribution as described in Section 734 of the Code occurs or if a
Transfer of a Membership Interest described in Section 743 of the Code occurs,
upon the written request of any Member, to elect to adjust the basis of the
property of the Company pursuant to Section 754 of the Code;

      


      (d)           To
elect to amortize the organizational expenses of the Company and the start-up
expenditures of the Company under Section 195 of the Code ratably over a period
of sixty (60) months as permitted by Section 709(b) of the Code;
and

       

       

      
        
          
          

        

        
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      (e)           Any
other election that the Managers may deem appropriate and in the best interests
of the Members.

      


      Neither
the Company nor any Member may make an election for the Company to be excluded
from the application of Subchapter K of Chapter 1 of subtitle A of the Code or
any similar provisions of applicable state law, and no provisions of this
Operating Agreement shall be interpreted to authorize any such
election.

      


      8.3           Tax
Matters Partner.  NaturalNano, Inc, is designated to be the "tax
matters partner" of the Company pursuant to Section 6231 (a)(7) of the Code. The
tax matters partner shall take any action as may be necessary to cause each
other Member to become a "notice partner" within the meaning of Section 6223 of
the Code.

      


      ARTICLE
IX

      Transferability

      


      9.1           General Prohibition on
Transfers.  Except as set forth in this Article IX, or
otherwise expressly provided in this Agreement, no Member shall withdraw from
membership in the Company, and no person shall give, sell, assign, pledge,
hypothecate, exchange or otherwise Transfer to another Person any Membership
Interest or any part thereof or make any other direct or indirect
Transfer.  Any Transfer or attempt to Transfer any Membership Interest
or any part thereof in violation of the terms of this Article IX shall be void
and of no force or effect.

      


      9.2           Expulsion.  A
Member may be expelled from Membership upon the unanimous vote of the other
Members, but only if the Member or its officers, directors of shareholders has
been convicted of a crime involving fraudulent or illegal actions relating to
the business of the Company.

      


      9.3           Intentionally
Omitted

      


      


      9.4           Permitted
Transfers.  A Person may only Transfer their Membership
Interest if (a) such Transfer is approved by the unanimous vote or consent of
the remaining Members; (b) such Transfer is in the form of a sale in accordance
with the terms of Sections 9.7, 9.8 and 9.9 below and such disposition occurs
after the second anniversary date of the date hereof; or (c) such Transfer is
made to an Affiliate but is not a pledge, hypothecation or other Transfer
intended as security.  Except for the case of a permitted Transfer to
an Affiliate of a Member or a purchase by a Member, pursuant to Section 9.7, 9.8
and 9.9 below, a Transferee of any Membership Interests shall not have any right
to be admitted as a Member of the Company unless and until admitted in
accordance with Section 9.6 of this Agreement, and for the purposes of any votes
of the Members, such Membership Interests shall be deemed not outstanding unless
and until the Transferee is so admitted.  In the case of a Transfer to
a Member pursuant to Section 9.7, 9.8 and 9.9 below or a Transfer to an
Affiliate of a Member, the Transferee shall be admitted as a Member upon
compliance with Sections 9.6 (a)(b)(c) and (e) of this Agreement, without the
necessity of Member approval.

      


      9.5           Additional
Requirements for Transfer.   In addition to Section 9.2 above, a
Transfer of Membership Interest shall only be effective if all of the following
requirements are met:

      


      (a)           The
Transferee is a resident of the United States and otherwise not a tax-exempt
entity under §168(h) of the Code;

      


      (b)           The
Transferee executes a statement that he or she is acquiring such Interest or
such part thereof for his own account for investment and not with a view to
distribution, fractionalization or resale thereof and any other representations
reasonably requested by counsel to the Company; and

      (c)           Such
Transfer would not result in the termination of the Company (within the meaning
of §708(b) of the Code) or termination of its status as a partnership under the
Code.

      


      9.6           Requirements
for Admission. No Transferee of the whole or a portion of a Member’s
Interest or other Interest Holder shall have the right to become a Member unless
and until all of the following conditions are satisfied:

      


      (a)           
A duly executed and acknowledged written instrument of transfer approved by the
Managers has been filed with the Company setting forth:

       

      
        
          
          

        

        
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      (i)           The
intention of the Transferee to be admitted as a Member;

      


      (ii)           The
notice address of the Transferee; and

      


      (iii)           The
amount of Interest transferred by the Transferor to the Transferee.

      


      (b)           The
Transferee executes and acknowledges, and causes such other Persons to execute
and acknowledge, such other instruments and provide such other evidence as the
Managers may reasonably deem necessary or desirable to effect such admission,
including without limitation, the written acceptance and adoption by the
Transferee of the provisions of this Operating Agreement including a
representation and warranty that the representations and warranties in Section
9.5 are true and correct with respect to the Transferee.

      


      (c)           The
admission is approved by the vote or consent of a Majority in Interest of the
Members other than the Transferor.

       

      9.7           Offer
to Acquire.  If after the second anniversary of the date hereof,a
Member desires to sell a Membership Interest to another Person which is not
affiliated with such Member such Member shall obtain from such Person a bona
fide written offer to purchase such Membership Interest, stating the terms and
conditions upon which the purchase is to be made.  Such Member shall
give written notification to the other Members ofits intention to sell such
Membership Interest and a copy of such bona fide written offer.  No
Member shall have the right to offer /its Membership Interest pursuant to this
Section 9.7 until after a date two (2) years from the date hereof.

      


      9.8           Right
of First Refusal.  Each Member other than the Selling Member, on a
basis pro rata to the Membership Interests of each Member exercising his, her or
its right of first refusal, shall have the right to exercise a right of first
refusal to purchase all (but not less than all) of the Membership Interest
proposed to be sold by the Selling Member under Section 9.7 hereof upon the same
terms and conditions as stated in the bona fide written offer by giving written
notification to the Selling Member of his, her or its intention to do so within
thirty (30) days after receiving written notice from the Selling
Member.  The failure of any Member to so notify the Selling Member of
a desire to exercise such right of first refusal, or of its desire to have the
Company exercise such right, within such thirty (30) day period shall result in
the termination of such right of first refusal and the Selling Member shall be
entitled to consummate the sale of his, her or its Membership Interest with
respect to which such right of first refusal has not been exercised to the
Person offering to do so pursuant to the bona fide written offer.  If
the Selling Member does not sell his, her or its Membership Interest within
thirty (30) days after receiving the right to do so, his, her or its right to do
so terminates and the terms and conditions of this Section shall again be in
effect.

      


      9.9           Closing.  If
any Member gives written notice to the Selling Member of his, her or its desire,
or the desire of the Company, to exercise such right of first refusal under
Section 9.8 hereof and to purchase all of the Selling Member's Interest upon the
same terms and conditions as are stated in the written offer, such Member shall
have the right to designate the time, date and place of closing within ninety
(90) days after receipt of written notification from the Selling Member of the
bona fide offer.  If the Member who gives notice of such intent to
purchase fails to close within such ninety (90) day period, or if no Member
gives notice under Section 9.8 of his/her/its intent to purchase, then the
Selling Member may sell its interest, upon the terms and conditions set forth in
such offer, for a period of ninety (90) days, free of the right of first
refusal.  If Selling Member fails to close such purchase and sale
within the ninety (90) day period, the provisions of Section 9.7 shall again
apply to such Selling Member’s Interest.

      


      9.10           Effective
Date.  Any sale of a Membership Interest or admission of a Member
pursuant to this Section shall be deemed effective as of the last day of the
calendar month in which such sale or admission occurs.

      


      
        
          
          

        

        
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      ARTICLE
X

      Dissolution

      


      10.1           Dissolution.  The
Company shall be dissolved and its affairs shall be wound up on the
following:

      (a)           The
latest date on which the Company is to dissolve, if any, as set forth in the
Articles of Organization;

      


      (b)           The
unanimous vote or written consent of all of the Members; or

      


      (c)           The
bankruptcy, death, dissolution, expulsion, incapacity or suffering a withdrawal
event or the withdrawal of any Member or the occurrence of any other event that
terminates the continued membership of any Member, unless within one hundred
eighty (180) days after such event the Company is continued by the vote or
written consent of a majority of Interest of all of the remaining
Members.

      


      10.2           Winding
Up.  Upon the dissolution of the Company, the Managers may, in the
name of and for and on behalf of the Company, prosecute and defend suits,
whether civil, criminal or administrative, sell and close the Company's
business, dispose of and convey the Company's property, discharge the Company's
liabilities and distribute to the Members any remaining assets of the Company,
all without affecting the liability of the Members.  Upon winding up
of the Company, the assets shall be distributed as follows:

      


      (a)           First
to creditors, including any Member who is a creditor, to the extent permitted by
law, in satisfaction of liabilities of the Company, whether by payment or by
establishment of adequate reserves, other than liabilities for distributions to
Members under Section 507 or Section 509 of the New York Act;

      (b)           Second
to Members and former Members in satisfaction of liabilities for Distributions
under Section 507 or Section 509 of the New York Act; and

      


      (c)           Third
to Members having positive Capital Account balances in proportion to such
balances until their respective Capital Account balances are reduced to zero;
and

      


      (d)           Fourth
to Members in proportion to their respective Membership Interests.

      


      10.3           Articles
of Dissolution.  Within ninety (90) days following the dissolution and
the commencement of winding up of the Company, or at any time there are no
Members, Articles of Dissolution shall be filed with the New York Secretary of
State pursuant to the New York Act.

      


      10.4           Deficit
Capital Account.  Upon a liquidation of the Company within the meaning
of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations, if any Member has a
Negative Capital Account (after giving effect to all contributions,
distributions, allocations and other adjustments for all Fiscal Years, including
the Fiscal Year in which such liquidation occurs), the Member shall have no
obligation to make any Capital Contribution, and the negative balance of any
Capital Account shall not be considered a debt owed by the Member to the Company
or to any other Person for any purpose.

      


      10.5           Nonrecourse
to Other Members.  Except as provided by applicable law or as
expressly provided in this Agreement, upon dissolution, each Member shall
receive a return of his, her or its Capital Contribution solely from the assets
of the Company.  If the assets of the Company remaining after the
payment or discharge of the debts and liabilities of the Company are
insufficient to return any Capital Contribution of any Member, such Member shall
have no recourse against any other Member.

      


      10.6           Termination.   Upon
completion of the dissolution, winding up, liquidation, and distribution of the
assets of the Company, the Company shall be deemed terminated.

       

      
        
          
          

        

        
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      ARTICLE
XI

      General
Provisions

      


      11.1           Notices.  Any
notice, demand or other communication required or permitted to be given pursuant
to this Operating Agreement shall have been sufficiently given for all purposes
if (a) delivered personally to the party or to an executive officer of the party
to whom such notice, demand or other communication is directed, or (b) sent by
registered or certified mail, postage prepaid, addressed to the Member of the
Company at his, her or its address set forth in this
Agreement.  Except as otherwise provided in this Operating Agreement,
any such notice shall be deemed to be given three business days after the date
on which it was deposited in a regularly maintained receptacle for the deposit
of United States mail, addressed and sent as set forth in this
Section.  In the event that a Member shall change his address, the
Member shall be solely responsible to notify the Company of the change in
address, and in the event that the member fails to notify the Company of said
change, the Company shall not be liable to any Member for lack of reception of a
Notice of any Company action, meeting or other event.

      


      11.2           Amendments.  This
Operating Agreement contains the entire agreement among the Members with respect
to the subject matter of this Agreement, and supersedes each course of conduct
previously pursued or acquiesced in, and each oral agreement and representation
previously made, by the Members with respect thereto, whether or not relied or
acted upon.  No course of performance or other conduct subsequently
pursued or acquiesced in, and no oral agreement or representation subsequently
made, by the Members, whether or not relied or acted upon, shall amend this
Operating Agreement or impair or otherwise affect any Member's obligations
pursuant to this Operating Agreement or any rights and remedies of a Member
pursuant to this Operating Agreement.  This Amended and Restated
Operating Agreement may be amended only by a written Amendment executed and
delivered by all of the Members and any other Person who is then a member of the
Company.

      


      11.3           Construction.  Whenever
a singular number is used in this Operating Agreement and when required by the
context, the same shall include the plural and vice versa, and the masculine
gender shall include the feminine and neuter genders and vice
versa.

      


      11.4           Headings.  The
headings used in this Operating Agreement are for convenience only and shall not
be used to interpret or construe any provision of this Operating
Agreement.

      


      11.5           Waiver.  No
failure of a Member to exercise, and no delay by a Member in exercising, any
right or remedy under this Operating Agreement shall constitute a waiver of such
right or remedy.  No waiver by a Member of any such right or remedy
under this Operating Agreement shall be effective unless made in a writing duly
executed by all Members and specifically referring to each such right or remedy
being waived.

      


      11.6           Severability.  Whenever
possible, each provision of this Operating Agreement shall be interpreted in
such a manner as to be effective and valid under applicable
law.  However, if any provision of this Operating Agreement shall be
prohibited by or invalid under such law, it shall be deemed modified to conform
to the minimum requirements of such law or, if for any reason it is not deemed
so modified, it shall be prohibited or invalid only to the extent of such
prohibition or invalidity without the remainder thereof or any other such
provision being prohibited or invalid.

      


      11.7           Binding.  This
Operating Agreement shall be binding upon and inure to the benefit of all
Membersand each of the successors and Transferees of the Members as Interest
Holders only as permitted in accordance with the terms of this Agreement
..

      


      11.8           Counterparts.  This
Operating Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same
instrument.

      


      11.9           Governing
Law.  This Operating Agreement shall be governed by, and interpreted
and construed in accordance with, the laws of the State of New York, without
regard to principles of conflict of laws.

       

      
        
          
          

        

        
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      11.10           No
Third Party Beneficiary.   The covenants, obligations and rights
set forth in this Operating Agreement are not intended to benefit any creditor
of the Company or any other third Person and no such creditor or other third
Person shall, under any circumstances, have any right to compel any actions or
payments by the Manager and/or the Members or shall, by reason of any provision
contained herein, be entitled to make any claim in respect of any debt,
liability, obligation or otherwise against the Company or any
Member.

      


      11.11           Mediation.  Unless
otherwise specifically provided for in this Agreement, any disagreement between
the Members as provided in Section 5.8 above, or any other claim or controversy
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement of this Agreement, which is not resolved through negotiation
shall be settled by mediation in accordance with the current Commercial
Mediation Rules of the American Arbitration Association before resorting to
arbitration, litigation, or some other dispute resolution
procedure.  The costs of mediation shall be shared equally by the
parties to the dispute.  Mediation shall be required prior to the
submission of any of the foregoing to arbitration.

       

      11.12           Arbitration.         Unless
otherwise specifically provided for in this Agreement, any disagreement between
the Members as provided in Section 5.8 above or any other claim or controversy
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement of this Agreement, which is not resolved through negotiation or
mediation, shall be submitted to an arbitrator and settled by arbitration in the
City of Rochester, New York.  The arbitration shall be conducted in
accordance with the rules then in effect of the American Arbitration
Association.  The arbitrator shall be independent and shall have no
prior affiliation with the company or any Member.  Any award made by
the arbitrator shall be final, binding and conclusive on all members for all
purposes and judgment may be entered thereon in any court having
jurisdiction.  The costs of the arbitration, including reasonable
counsel fees and disbursements, of any Member who prevails shall be borne by the
non-prevailing Member.

      


      SIGNATURE
PAGE FOLLOWS

      


      


      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      


      


      


      


      IN WITNESS WHEREOF, the
individuals and entities signing this Amended and Restated Operating Agreement
below conclusively evidence their agreement to the terms and conditions of this
Agreement by so signing this Agreement.

      


      WORLDWIDE MEDICAL SOLUTIONS,
LLC

      


      


      By /s/ Richard M. Popovic

           Richard
M. Popovic, Sole Member

      


      


      


      NATURALNANO, INC.

      


      


      


      By:/s/ James Wemett

           James
Wemett, President

       

      


      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT
A

      


      Managers

      


      


      


      James
Wemett

      Richard
M. Popovic

      


      


       

      


      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      


      


      EXHIBIT
B

      


      Members

      


      
        
          	
                  Name           

                	
                  Address

                	
                  Membership

                  Interest

                	
                  Capital

                  Contribution

                	
                  Membership

                  Date

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                  NaturalNano,
      Inc.

                	
                  832
      Emerson St.

                	
                  51%

                	 
      	 
      
	
                   

                	
                  Rochester,
      NY 14613

                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                  WorldWide
      Medical  Solutions,
      LLC

                	
                  17
      Schoen Place

                	
                  49%

                	 
      	 
      
	
                   

                	
                  Pittsford,
      NY 14534