Exhibit
        4.5

       

      NEITHER
        THESE WARRANTS NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS
        HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
        OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED OR
        TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
        SECURITIES UNDER THE ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
        AVAILABLE.

      


      


      
        	
                2,250,000
                  Warrants

              	
                November
                  29, 2005

              


      

      
 

      NATURALNANO
        INC.

       

      WARRANTS

       

      NaturalNano
        Inc., a Nevada corporation (“NaturalNano”),
        certifies that, for value received, SBI USA, LLC (“SBI”), or registered assigns
        (the “Holder”),
        is the owner of Two Million Two Hundred Fifty Thousand (2,250,000) Warrants
        of
        NaturalNano (the “Warrants”).
        Each Warrant entitles the Holder to purchase from NaturalNano at any time
        prior
        to the Expiration Date (as defined below) one share of the common stock of
        NaturalNano (the “Common
        Stock”)
        for $0.23 per share (the “Exercise
        Price”),
        on the terms and conditions hereinafter provided. The Exercise Price and
        the
        number of shares of Common Stock purchasable upon exercise of each Warrant
        are
        subject to adjustment as provided in this Certificate. 

      


      1. Vesting;
        Expiration Date; Exercise

      


      1.1 Vesting.
        The Warrants shall vest and become exercisable as of the date of this
        Certificate.

      


      1.2 Expiration
        Date. The Warrants shall expire on March 31, 2006 (the “Expiration
        Date”).

      


      1.3 Manner
        of Exercise. The Warrants are exercisable by delivery to NaturalNano of the
        following (the “Exercise
        Documents”):
        (a) this Certificate (b) a written notice of election to exercise the Warrants;
        and (c) payment of the Exercise Price in cash or by check. Within three business
        days following receipt of the foregoing, NaturalNano shall execute and deliver
        to the Holder: (a) a certificate or certificates representing the aggregate
        number of shares of Common Stock purchased by the Holder, and (b) if less
        than
        all of the Warrants evidenced by this Certificate are exercised, a new
        certificate evidencing the Warrants not so exercised.

      


      1.4 Warrant
        Exercise Limitation. Notwithstanding any other provision of this Agreement,
        if as of the date of exercise NaturalNano has a class of securities registered
        under Section 12 of the Securities Exchange Act of 1934, as amended, Holder
        may
        not exercise Warrants under this Section 1 to the extent that immediately
        following such exercise Holder would beneficially own 5% or more of the
        outstanding Common Stock of NaturalNano. For this purpose, a representation
        of
        the Holder that following such exercise it would not beneficially own 5%
        or more
        of the outstanding Common Stock of NaturalNano shall be conclusive and binding
        upon NaturalNano unless the number of shares of Common Stock for which the
        Holder seeks to exercise Warrants would themselves represent 5% or more of
        the
        outstanding Common Stock of NaturalNano following such exercise.

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      
        2. Adjustments
          of Exercise Price and Number and Kind of Conversion
          Shares



      2.1 In
        the event that NaturalNano shall at any time hereafter (a) pay a dividend
        in
        Common Stock or securities convertible into Common Stock; (b) subdivide or
        split
        its outstanding Common Stock; (c) combine its outstanding Common Stock into
        a
        smaller number of shares; then the number of shares to be issued immediately
        after the occurrence of any such event shall be adjusted so that the Holder
        thereafter may receive the number of shares of Common Stock it would have
        owned
        immediately following such action if it had exercised the Warrants immediately
        prior to such action and the Exercise Price shall be adjusted to reflect
        such
        proportionate increases or decreases in the number of shares.

      


      2.2 In
        case
        of any reclassification, capital reorganization, consolidation, merger, sale
        of
        all or substantially all of NaturalNano’s assets or any other change in the
        Common Stock of NaturalNano, other than as a result of a subdivision,
        combination, or stock dividend provided for in Section 2.1 (any of which,
        a
“Change Event”), then, as a condition of such Change Event, lawful provision
        shall be made, and duly executed documents evidencing the same from NaturalNano
        or its successor shall be delivered to the Holder, so that the Holder shall
        have
        the right at any time prior to the expiration of the Warrants to purchase,
        at a
        total price equal to that payable upon the exercise of the Warrants, the
        kind
        and amount of shares of stock and other securities and property receivable
        in
        connection with such Change Event by a holder of the same number of shares
        of
        Common Stock as were purchasable by the Holder immediately prior to such
        Change
        Event. In any such case appropriate provisions shall be made with respect
        to the
        rights and interest of the Holder so that the provisions hereof shall thereafter
        be applicable with respect to any shares of stock or other securities and
        property deliverable upon exercise hereof, and appropriate adjustments shall
        be
        made to the Exercise Price per share payable hereunder, provided the Exercise
        Price for all the Warrants shall remain the same. The
        provisions of this Section 2.2 shall similarly apply to successive
        reclassifications, capital reorganizations, mergers, consolidations, sales
        or
        other transfers. Notwithstanding the foregoing, in the event NaturalNano
        enters
        into a reverse merger (the “Reverse
        Merger”)
        with a
        corporation that is obligated to file reports under Section 13 of the Securities
        Exchange Act of 1934, as amended (the “Public
        Company”),
        or a
        subsidiary of such corporation, pursuant to which NaturalNano’s shareholders
        will acquire control of the Public Company, each Warrant shall thereafter
        entitle the Holder to purchase one share of the Common Stock of the Public
        Company at the Exercise Price in effect immediately prior to the Reverse
        Merger,
        notwithstanding that in the Reverse Merger outstanding shares of Common Stock
        of
        NaturalNano may be exchanged for more than one share of the Public Company’s
        Common Stock.

      


      3. Reservation
        of Shares. NaturalNano
        shall at all times reserve and keep available out of its authorized but unissued
        shares of Common Stock, such number of shares of Common Stock as shall from
        time
        to time be issuable upon exercise of the Warrants. If at any time the number
        of
        authorized but unissued shares of Common Stock shall not be sufficient to
        permit
        the exercise of the Warrants, NaturalNano shall promptly seek such corporate
        action as may be necessary to increase its authorized but unissued shares
        of
        Common Stock to such number of shares as shall be sufficient for such
        purpose.

       

      
        
          
          

        

        
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        4. Certificate
          as to Adjustments. In
          each case of any adjustment in the Exercise Price, or number or type of
          shares
          issuable upon exercise of these Warrants, the Chief Financial Officer of
          NaturalNano shall compute such adjustment in accordance with the terms
          of these
          Warrants and prepare a certificate setting forth such adjustment and showing
          in
          detail the facts upon which such adjustment is based, including a statement
          of
          the adjusted Exercise Price. NaturalNano shall promptly send (by facsimile
          and
          by either first class mail, postage prepaid or overnight delivery) a copy
          of
          each such certificate to the Holder.



      5. Loss
        or Mutilation. Upon
        receipt of evidence reasonably satisfactory to NaturalNano of the ownership
        of
        and the loss, theft, destruction or mutilation of this Certificate, and of
        indemnity reasonably satisfactory to it, and (in the case of mutilation)
        upon
        surrender and cancellation of these Warrants, NaturalNano will execute and
        deliver in lieu thereof a new Certificate of like tenor as the lost, stolen,
        destroyed or mutilated Certificate.

      


      6. Representations
        and Warranties of NaturalNano. NaturalNano
        hereby represents and warrants to Holder that:

      


      6.1 Due
        Authorization. All corporate action on the part of NaturalNano, its
        officers, directors and shareholders necessary for (a) the authorization,
        execution and delivery of, and the performance of all obligations of NaturalNano
        under, these Warrants, and (b) the authorization, issuance, reservation for
        issuance and delivery of all of the Common Stock issuable upon exercise of
        these
        Warrants, has been duly taken. These Warrants constitute a valid and binding
        obligation of NaturalNano enforceable in accordance with their terms, subject,
        as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
        reorganization and similar laws affecting creditors’ rights generally and to
        general equitable principles.

      


      6.2 Organization.
        NaturalNano is a corporation duly organized, validly existing and in good
        standing under the laws of the State of Nevada and has all requisite corporate
        power to own, lease and operate its property and to carry on its business
        as now
        being conducted and as currently proposed to be conducted.

      


      6.3 Valid
        Issuance of Stock. Any shares of Common Stock issued upon exercise of the
        Warrants in accordance with their terms will be duly and validly issued,
        fully
        paid and non-assessable.

      


      6.4 Governmental
        Consents. All consents, approvals, orders, authorizations or registrations,
        qualifications, declarations or filings with any federal or state governmental
        authority on the part of NaturalNano required in connection with the issuance
        of
        the Warrants have been obtained.

      


      7. Representations
        and Warranties of SBI.
        SBI, and any subsequent holder of Warrants, by its acceptance hereof, represents
        and warrants to NaturalNano that:

      


      7.1 It
        is acquiring the Warrants for its own account, for investment purposes
        only.

      


      7.2 It
        understands that an investment in the Warrants and in the shares of Common
        Stock
        issuable upon exercise of the Warrants involves a high degree of risk, and
        it
        has the financial ability to bear the economic risk of this investment in
        the
        Warrants and such shares, including a complete loss of such investment. It
        has
        adequate means for providing for its current financial needs and has no need
        for
        liquidity with respect to this investment.

       

      
        
          
          

        

        
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      7.3 It
        has such knowledge and experience in financial and business matters that
        it is
        capable of evaluating the merits and risks of an investment in the Warrants
        and
        in the shares of Common Stock issuable upon exercise of the Warrants and
        in
        protecting its own interest in connection with such transactions.

      


      7.4 It
        understands that neither the Warrants nor the shares of Common Stock issuable
        upon exercise of the Warrants have been registered under the Securities Act
        of
        1933, as amended (the “Securities
        Act”)
        or under any state securities laws. It is familiar with the provisions of
        the
        Securities Act and Rule 144 thereunder and understands that the restrictions
        on
        transfer on the Warrants and on the shares of Common Stock issuable upon
        exercise of the Warrants may result in it being required to hold the Warrants
        or
        such shares for an indefinite period of time.

      


      7.5 It
        agrees not to sell, transfer, assign, gift, create a security interest in,
        or
        otherwise dispose of, with or without consideration (collectively, “Transfer”)
        any of the Warrants or any of the shares of Common Stock issuable upon exercise
        of the Warrants except pursuant to an effective registration statement under
        the
        Securities Act or an exemption from registration. As a further condition
        to any
        such Transfer, except in the event that such Transfer is made pursuant to
        an
        effective registration statement under the Securities Act, if in the reasonable
        opinion of counsel to NaturalNano any such Transfer would not be exempt from
        the
        registration and prospectus delivery requirements of the Securities Act,
        NaturalNano may require the Holder and the contemplated transferee to furnish
        NaturalNano with letters setting forth such information and agreements as
        may be
        reasonably requested by NaturalNano to ensure compliance with the Securities
        Act.

      


      8. Notices
        of Record Date

      


      In
        the event:

      


      8.1 NaturalNano
        shall take a record of the holders of its Common Stock (or other stock or
        securities at the time receivable upon the exercise of these Warrants), for
        the
        purpose of entitling them to receive any dividend or other distribution,
        or any
        right to subscribe for or purchase any shares of stock of any class or any
        other
        securities or to receive any other right; or

      


      8.2 of
        any consolidation or merger of NaturalNano with or into another corporation,
        any
        capital reorganization of NaturalNano, any reclassification of the capital
        stock
        of NaturalNano, or any conveyance of all or substantially all of the assets
        of
        NaturalNano to another corporation in which holders of NaturalNano’s stock are
        to receive stock, securities or property of another corporation; or

      


      8.3 of
        any voluntary dissolution, liquidation or winding-up of NaturalNano;
        or

      


      8.4 of
        any redemption or conversion of all outstanding Common Stock;

      


      then,
        and in each such case, NaturalNano will mail or cause to be mailed to the
        Holder
        a notice specifying, as the case may be, (a) the date on which a record is
        to be
        taken for the purpose of such dividend, distribution or right, or (b) the
        date
        on which such reorganization, reclassification, consolidation, merger,
        conveyance, dissolution, liquidation, winding-up, redemption or conversion
        is to
        take place, and the time, if any is to be fixed, as of which the holders
        of
        record of Common Stock (or such stock or securities as at the time are
        receivable upon the exercise of these Warrants), shall be entitled to exchange
        their shares of Common Stock (or such other stock or securities), for securities
        or other property deliverable upon such reorganization, reclassification,
        consolidation, merger, conveyance, dissolution, liquidation or winding-up.
        NaturalNano shall use all reasonable efforts to ensure such notice shall
        be
        delivered at least five days prior to the date therein specified. 

       

      
        
          
          

        

        
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      9.    Registration
        Rights.
        

      


      9.1 Definitions.
        For purposes of this Section 9, the following terms shall have the meanings
        set
        forth below:

      


      9.1.1 A
        “Blackout
        Event”
        means any of the following: (a) the possession by NaturalNano of material
        information that is not ripe for disclosure in a registration statement or
        prospectus, as determined reasonably and in good faith by the Chief Executive
        Officer or the Board of Directors of NaturalNano or that disclosure of such
        information in the Registration Statement or the prospectus constituting
        a part
        thereof would be materially detrimental to the business and affairs of
        NaturalNano; or (b) any material engagement or activity by NaturalNano which
        would, in the reasonable and good faith determination of the Chief Executive
        Officer or the Board of Directors of NaturalNano, be materially adversely
        affected by disclosure in a registration statement or prospectus at such
        time.


      


      9.1.2 “Exchange
        Act”
        shall mean the Securities Exchange Act of 1934, as amended.

      


      9.1.3 “Included
        Shares”
        shall mean any Registrable Shares included in a Registration.

      


      9.1.4 “Registrable
        Shares”
        shall mean the shares of Common Stock (or such stock or securities as at
        the
        time are receivable upon the exercise of these Warrants) issuable upon exercise
        of the Warrants and any other warrants and or other securities issued to
        SBI in
        connection with performing investor relations services for NaturalNano, and
        shares or securities issued as a result of stock split, stock dividend or
        reclassification of such shares.

      


      9.1.5 “Registration”
        shall mean a registration of securities under the Securities Act. 

      


      9.1.6 “Registration
        Period”
        with respect to any Registration Statement shall mean the period commencing
        the
        effective date of the Registration Statement and ending upon withdrawal or
        termination of the Registration Statement.

      


      9.1.7 “Registration
        Statement”
        shall mean a registration statement, as amended from time to time, filed
        with
        the SEC in connection with a Registration.

      


      9.1.8 “SEC”
        shall mean the Securities and Exchange Commission.

      


      9.2 Piggyback
        Registration. Unless the Registrable Shares are then included in a
        Registration Statement or can be sold under the provisions of Rule 144 without
        limitation as to volume, whether pursuant to Rule 144(k) or otherwise, if
        NaturalNano shall determine to register any Common Stock under the Securities
        Act for sale in connection with a public offering of Common Stock (other
        than
        pursuant to an employee benefit plan or in connection with a merger, acquisition
        or similar transaction), NaturalNano will give written notice thereof to
        Holder
        and will include in such Registration Statement any of the Registrable Shares
        which Holder may request be included by a writing delivered to NaturalNano
        within 15 days after the notice given by NaturalNano to Holder; provided,
        however, that if the offering is to be firmly underwritten, and the
        representative of the underwriters of the offering refuse in writing to include
        in the offering all of the shares of Common Stock requested by NaturalNano
        and
        others, the shares to be included shall be allocated first to NaturalNano
        and
        any shareholder who initiated such Registration and then among the others
        (including Holder) based on the respective number of shares of Common Stock
        held
        by such persons. If NaturalNano decides not to, and does not, file a
        Registration Statement with respect to such Registration, or after filing
        determines to withdraw the same before the effective date thereof, NaturalNano
        will promptly so inform Holder, and NaturalNano will not be obligated to
        complete the registration of the Included Shares included therein. 

       

      
        
          
          

        

        
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      9.3 Certain
        Covenants. In connection with any Registration: 

      


      9.3.1 NaturalNano
        shall take all lawful action such that the Registration Statement, any amendment
        thereto and the prospectus forming a part thereof do not contain an untrue
        statement of a material fact or omit to state a material fact required to
        be
        stated therein or necessary to make the statements therein, in light of the
        circumstances under which they are made, not misleading. Upon becoming aware
        of
        the occurrence of any event or the discovery of any facts during the
        Registration Period that make any statement of a material fact made in the
        Registration Statement or the related prospectus untrue in any material respect
        or which material fact is omitted from the Registration Statement or related
        prospectus that requires the making of any changes in the Registration Statement
        or related prospectus so that it will not contain any untrue statement of
        a
        material fact or omit to state a material fact necessary to make the statements
        therein, in light of the circumstances under which they are made, not misleading
        (taking into account any prior amendments or supplements), NaturalNano shall
        promptly notify Holder, and, subject to the provisions of Section 9.4, as
        soon
        as reasonably practicable prepare (but, subject to Section 9.4, in no event
        more
        than five business days in the case of a supplement or seven business days
        in
        the case of a post-effective amendment) and file with the SEC a supplement
        or
        post-effective amendment to the Registration Statement or the related prospectus
        or file any other required document so that, as thereafter delivered to a
        purchaser of Shares from Holder, such prospectus will not contain any untrue
        statement of a material fact or omit to state a material fact necessary to
        make
        the statements therein, in light of the circumstances under which they were
        made, not misleading.

      


      9.3.2 At
        least three business days prior to the filing with the SEC of the Registration
        Statement (or any amendment thereto) or the prospectus forming a part thereof
        (or any supplement thereto), NaturalNano shall provide draft copies thereof
        to
        Holder and shall consider incorporating into such documents such comments
        as
        Holder (and its counsel) may propose to be incorporated therein. Notwithstanding
        the foregoing, no prospectus supplement need be delivered in draft form to
        Holder.

      


      9.3.3 NaturalNano
        shall promptly notify Holder upon the occurrence of any of the following
        events
        in respect of the Registration Statement or the prospectus forming a part
        thereof: (a) the receipt of any request for additional information from the
        SEC
        or any other federal or state governmental authority, the response to which
        would require any amendments or supplements to the Registration Statement
        or
        related prospectus; (b) the issuance by the SEC or any other federal or state
        governmental authority of any stop order suspending the effectiveness of
        the
        Registration Statement or the initiation of any proceedings for that purpose;
        or
        (c) the receipt of any notification with respect to the suspension of the
        qualification or exemption from qualification of any of the Shares for sale
        in
        any jurisdiction or the initiation or threatening of any proceeding for such
        purpose.

      


      9.3.4 NaturalNano
        shall furnish to Holder with respect to the Included Shares registered under
        the
        Registration Statement (and to each underwriter, if any, of such Included
        Shares) such number of copies of prospectuses and such other documents as
        Holder
        may reasonably request, in order to facilitate the public sale or other
        disposition of all or any of the Included Shares by Holder pursuant to the
        Registration Statement.

       

      
        
          
          

        

        
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      9.3.5 In
        connection with any registration pursuant to Section 9.2, NaturalNano shall
        file
        or cause to be filed such documents as are required to be filed by NaturalNano
        for normal Blue Sky clearance in states specified in writing by Holder;
provided,
        however,
        that NaturalNano shall not be required to qualify to do business or consent
        to
        service of process in any jurisdiction in which it is not now so qualified
        or
        has not so consented.

      


      9.3.6 NaturalNano
        shall bear and pay all expenses incurred by it and Holder (other than
        underwriting discounts, brokerage fees and commissions and fees and expenses
        of
        more than one law firm) in connection with the Registration of the Registrable
        Shares pursuant to the Registration Statement; provided, however, that
        NaturalNano shall not be obligated to pay the fees and expenses of more than
        one
        legal counsel who shall serve as counsel to all selling shareholders in such
        Registration. 

      


      9.3.7 NaturalNano
        shall require each legal opinion and accountant’s “cold comfort” letter in
        connection with the Registration, if any, to be rendered to Holder as well
        as
        NaturalNano and/or its Board of Directors. 

      


      9.3.8 As
        a condition to including Registrable Shares in a Registration Statement,
        Holder
        must provide to NaturalNano such information regarding itself, the Registrable
        Shares held by it and the intended method of distribution of such Included
        Shares as shall be required to effect the registration of the Included Shares
        and, if the offering is being underwritten, Holder must provide such powers
        of
        attorney, indemnities and other documents as may be reasonably requested
        by the
        managing underwriter.

      


      9.3.9 Following
        the effectiveness of a Registration Statement, upon receipt from NaturalNano
        of
        a notice that such Registration Statement contains an untrue statement of
        material fact or omits to state any material fact required to be stated therein
        or necessary to make the statements therein not misleading in light of the
        circumstances under which they were made, Holder will immediately discontinue
        disposition of Included Shares pursuant to the Registration Statement until
        NaturalNano notifies Holder that it may resume sales of Included Shares and,
        if
        necessary, provides to Holder copies of the supplemental or amended prospectus.
        

      


      9.4 Blackout
        Event. NaturalNano shall not be obligated to file a post-effective amendment
        or supplement to the Registration Statement or the prospectus constituting
        a
        part thereof during the continuance of a Blackout Event; provided, however,
        that
        no Blackout Event may be deemed to exist for more than 60 days. Without the
        express written consent of Holder, if required to permit the continued sale
        of
        Shares by Holder, a post-effective amendment or supplement to Registration
        Statement or the prospectus constituting a part thereof must be filed no
        later
        than the 61st
        day following commencement of a Blackout Event.

      


      9.5 Rule
        144. With a view to making available to Holder the benefits of Rule 144,
        NaturalNano agrees, until such time as Holder can sell all remaining Registrable
        Shares under the provisions Rule 144(k), to:

      


      9.5.1.1 comply
        with the provisions of paragraph (c)(1) of Rule 144; and

      



      
        
          
          

        

        
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        9.5.1.2 file
          with the SEC in a timely manner all reports and other documents required
          to be
          filed by NaturalNano pursuant to Section 13 or 15(d) under the Exchange
          Act;
          and, if at any time it is not required to file such reports but in the
          past had
          been required to or did file such reports, it will, upon the request of
          a
          Purchaser, make available other information as required by, and so long
          as
          necessary to permit sales of its Shares pursuant to, Rule
          144.



      9.6 
        NaturalNano Indemnification. In connection with any Registration covering
        Included Shares, NaturalNano agrees to indemnify and hold harmless Holder,
        and
        its officers, directors and agents (including broker or
        underwriter selling Included Shares for Holder), and each person, if any,
        who
        controls Holder within the meaning of Section 15 of the Securities Act or
        Section 20 of the Exchange Act from and against any and all losses, claims,
        damages and liabilities caused by (a) any violation or alleged violation
        by
        NaturalNano of the Securities Act, Exchange Act, any state securities laws
        or
        any rule or regulation promulgated under the Securities Act, Exchange Act
        or any
        state securities laws, (b) any untrue statement or alleged untrue statement
        of a
        material fact contained in any registration statement or prospectus relating
        to
        the Included Shares (as amended or supplemented if NaturalNano shall have
        furnished any amendments or supplements thereto) or any preliminary prospectus,
        or (c) caused by any omission or alleged omission to state therein a material
        fact required to be stated therein or necessary to make the statements therein
        not misleading in light of the circumstances under which they were made,
        except
        insofar as such losses, claims, damages or liabilities are caused by any
        such
        untrue statement or omission or alleged untrue statement or omission based
        upon
        information furnished in writing to NaturalNano by Holder or on Holder’s behalf
        expressly for use therein.

      


      9.7 Holder
        Indemnification. Holder, by requesting that Registrable Shares be included
        in a Registration, agrees to indemnify and hold harmless NaturalNano, its
        officers, directors and agents and each person, if any, who controls NaturalNano
        within the meaning of either Section 15 of the Securities Act or Section
        20 of
        the Exchange Act to the same extent as the indemnity from NaturalNano to
        Holder
        set forth in Section 9.6, but only with respect to information furnished
        or
        required to be furnished in writing by Holder or on Holder’s behalf expressly
        for use in any registration statement or prospectus relating to the Registrable
        Shares, or any amendment or supplement thereto, or any preliminary prospectus.
        

      


      9.8 Indemnification
        Procedures. In case any proceeding (including any governmental
        investigation) shall be instituted involving any person in respect of which
        indemnity may be sought pursuant to this Section 9, such person (an
“Indemnified
        Party”)
        shall promptly notify the person against whom such indemnity may be sought
        (the
“Indemnifying
        Party”)
        in writing and the Indemnifying Party shall assume the defense thereof,
        including the employment of counsel reasonably satisfactory to such Indemnified
        Party, and shall assume the payment of all fees and expenses; provided that
        the
        failure of any Indemnified Party so to notify the Indemnifying Party shall
        not
        relieve the Indemnifying Party of its obligations hereunder except to the
        extent
        (and only to the extent that) that the Indemnifying Party is materially
        prejudiced by such failure to notify. In any such proceeding, any Indemnified
        Party shall have the right to retain its own counsel, but the fees and expenses
        of such counsel shall be at the expense of such Indemnified Party unless
        (a) the
        Indemnifying Party and the Indemnified Party shall have mutually agreed to
        the
        retention of such counsel or (b) in the reasonable judgment of such Indemnified
        Party representation of both parties by the same counsel would be inappropriate
        due to actual or potential differing interests between them. It is understood
        that the Indemnifying Party shall not, in connection with any proceeding
        or
        related proceedings in the same jurisdiction, be liable for the reasonable
        fees
        and expenses of more than one separate firm of attorneys (in addition to
        any
        local counsel) at any time for all such Indemnified Parties (including in
        the
        case of Holder, all of its officers, directors and controlling persons) and
        that
        all such fees and expenses shall be reimbursed as they are incurred. In the
        case
        of any such separate firm for the Indemnified Parties, the Indemnified Parties
        shall designate such firm in writing to the Indemnifying Party. The Indemnifying
        Party shall not be liable for any settlement of any proceeding effected without
        its written consent (which consent shall not be unreasonably withheld or
        delayed), but if settled with such consent, or if there be a final judgment
        for
        the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
        Indemnified Parties from and against any loss or liability (to the extent
        stated
        above) by reason of such settlement or judgment. No Indemnifying Party shall,
        without the prior written consent of the Indemnified Party, effect any
        settlement of any pending or threatened proceeding in respect of which any
        Indemnified Party is or could have been a party and indemnity could have
        been
        sought hereunder by such Indemnified Party, unless such settlement includes
        an
        unconditional release of such Indemnified Party from all liability arising
        out
        of such proceeding.

       

      
        
          
          

        

        
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      9.9 Contribution.
        To the extent any indemnification by an Indemnifying Party is prohibited
        or
        limited by law, the Indemnifying Party agrees to make the maximum contribution
        with respect to any amounts for which, he, she or it would otherwise be liable
        under this Section 9 to the fullest extent permitted by law; provided, however,
        that (a) no contribution shall be made under circumstances where a party
        would
        not have been liable for indemnification under this Section 9 and (b) no
        seller
        of Registrable Securities guilty of fraudulent misrepresentation (within
        the
        meaning used in the Securities Act) shall be entitled to contribution from
        any
        party who was not guilty of such fraudulent misrepresentation.

      


      10. Nontransferability.
        SBI may not sell or transfer any Warrants to any person other than a director,
        officer, employee, manager or affiliate of SBI (or a person controlled by
        one or
        more directors, officers, employees, managers or affiliates of SBI) or to
        a
        person or entity that assists SBI in providing services to
        NaturalNano without the consent of NaturalNano.

      


      11. Severability.
        If
        any term, provision, covenant or restriction of these Warrants is held by
        a
        court of competent jurisdiction to be invalid, void or unenforceable, the
        remainder of the terms, provisions, covenants and restrictions of these Warrants
        shall remain in full force and effect and shall in no way be affected, impaired
        or invalidated.

      


      12. Notices.
        All
        notices, requests, consents and other communications required hereunder shall
        be
        in writing and shall be effective when delivered or, if delivered by registered
        or certified mail, postage prepaid, return receipt requested, shall be effective
        on the third day following deposit in United States mail: to the Holder,
        at SBI
        USA, LLC, 610 Newport Center Drive, Newport Beach, CA 92660; and if addressed
        to
        NaturalNano, at NaturalNano Inc., 150 Lucius Gordon Drive, West Henrietta,
        NY
        14586, or such other address as Holder or NaturalNano may designate in
        writing.

      


      13. No
        Rights as Shareholder. The
        Holder shall have no rights as a shareholder of NaturalNano with respect
        to the
        shares issuable upon exercise of the Warrants until the receipt by NaturalNano
        of all of the Exercise Documents. 

       

      
        
          
          

        

        
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                NaturalNano
                  Inc.

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              
	 	
                Its:

              	
                 

              
	 	
                

              


      

       

      


      Agreed
        to and accepted by:

      


      SBI
        USA, LLC

       

      


      By:
        _____________________________
Shelly
        Singhal, Manager

       

      


      


      



      
        
          
          

        

        
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      EXHIBIT
        “A”

      NOTICE
        OF EXERCISE

      (To
        be signed only upon exercise of the Warrants)

      
 

      To:   NaturalNano
        Inc.

      


      The
        undersigned hereby elects to purchase shares of Common Stock (the
“Warrant Shares”) of NaturalNano Inc.
        (“NaturalNano”), pursuant to the terms of the enclosed warrant
        certificate (the “Certificate”). The undersigned tenders
        herewith payment of the exercise price pursuant to the terms of the Certificate.
        

      


      The
        undersigned hereby represents and warrants to, and agrees with, NaturalNano
        as
        follows: 

      


      1.    Holder
        is acquiring the Warrant Shares for its own account, for investment purposes
        only and not with a view to distribution in violation of the Securities Act
        of
        1933, as amended (the “Securities
        Act”).

      


      2.    Holder
        understands that an investment in the Warrant Shares involves a high degree
        of
        risk, and Holder has the financial ability to bear the economic risk of this
        investment in the Warrant Shares, including a complete loss of such investment.
        Holder has adequate means for providing for its current financial needs and
        has
        no need for liquidity with respect to this investment.

      


      3.    Holder
        has such knowledge and experience in financial and business matters that
        it is
        capable of evaluating the merits and risks of an investment in the Warrant
        Shares and in protecting its own interest in connection with this
        transaction.

      


      4.    Holder
        understands that the issuance of the Warrant Shares to Holder has not been
        registered under the Securities Act or under any state securities laws. Holder
        is familiar with the provisions of the Securities Act and Rule 144 thereunder
        and understands that the restrictions on transfer on the Warrant Shares may
        result in Holder being required to hold the Warrant Shares for an indefinite
        period of time unless the transfer by Holder is registered under the Securities
        Act.

      


      5.    Holder
        agrees not to sell, transfer, assign, gift, create a security interest in,
        or
        otherwise dispose of, with or without consideration (collectively, “Transfer”)
        any of the Warrant Shares except pursuant to an effective registration statement
        under the Securities Act or an exemption from registration. As a further
        condition to any such Transfer, except in the event that such Transfer is
        made
        pursuant to an effective registration statement under the Securities Act,
        if in
        the reasonable opinion of counsel to NaturalNano any Transfer of the Warrant
        Shares by the contemplated transferee thereof would not be exempt from the
        registration and prospectus delivery requirements of the Securities Act,
        NaturalNano may require the contemplated transferee to furnish NaturalNano
        with
        an investment letter setting forth such information and agreements as may
        be
        reasonably requested by NaturalNano to ensure compliance by such transferee
        with
        the Securities Act.

       

      
        
          
          

        

        
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      Each
        certificate evidencing the Warrant Shares will bear the following
        legend:

      


      “THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS AND
        MAY NOT BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN
        EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS
        AN
        EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

      


      6.    Immediately
        following this exercise of Warrants, if as of the date of exercise NaturalNano
        has a class of securities registered under Section 12 of the Securities Exchange
        Act of 1934, as amended, the undersigned will not beneficially own five percent
        (5%) or more of the then outstanding Common Stock of NaturalNano (based on
        the
        number of shares outstanding set forth in the most recent periodic report
        filed
        by NaturalNano with the Securities and Exchange Commission and any additional
        shares which have been issued since that date of which Holder is aware have
        been
        issued).

      


      


      Number
        of Warrants Exercised: ______________

      


      


      Dated:
        ____________________   

       
____________________________________

      
        
          
          

        

        
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