Document:

Exhibit
      4.6

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (the “Agreement”) is made and entered into as of
      7th day of March 2007 by and among NaturalNano,
      Inc.,
      a
      Nevada
      corporation (the “Company”), and the investors identified on the signature page
      hereto (each an “Investor”
and
      collectively “Investors”).

     

    W
      I T
      N E S S E T H:

    

    WHEREAS,
      pursuant to the Loan Agreement, as hereinafter defined, the Investors are
      purchasing the Company’s 8% Senior Secured Convertible Notes and Warrants, upon
      conversion and exercise of which the Investors will receive shares of the
      Company’s common stock, par value $.001 per share (“Common Stock”);
      and

    

    WHEREAS,
      the
      ability of the Investors to sell their shares of Common Stock is subject to
      certain restrictions under the Securities Act; and

    

    WHEREAS,
      as a
      condition to the Investors’ obligations to purchase the Notes and Warrants, the
      Company has agreed to provide the Investors with a mechanism that will permit
      the Investors to sell their shares of Common Stock in the future, as set forth
      in this Agreement.

    

      NOW,
      THEREFORE,
      in
      consideration of the premises and of the mutual covenants and agreements, and
      subject to the terms and conditions herein contained, the parties hereto hereby
      agree as follows:

     

    1. Definitions.

     

    (a) Unless
      otherwise defined herein, capitalized terms used herein shall have the following
      meanings:

     

    (i)
      “Affiliate” of a Person means any Person: (a) which directly or indirectly
      Controls, or is Controlled by, or is under common Control with, the subject
      Person; (2) which directly or indirectly beneficially owns or holds a majority
      of the outstanding shares of any class of voting stock of the subject Person;
      or
      (3) a majority of the shares of any class of voting stock of which is directly
      or indirectly beneficially owned or held by the subject Person.

     

    (ii)
      “Black-Out Period” shall have the meaning set forth in Section 4(a)(ii) of this
      Agreement.

     

    (iii)
      “Business Day” means any day except a Saturday, Sunday or other day on which
      commercial banks in New York City are authorized or required by law to be
      closed.

     

    (iv)
      “Closing Date” shall have the meaning set forth in the Loan
      Agreement.

     

    (v)
      “Common Stock” shall have the meaning set forth in the preamble and any other
      capital stock of the Company which is issuable upon conversion of the Notes
      and
      exercise of the Warrants.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (vi)
      “Commission” means the Securities and Exchange Commission

     

    (vii)
      “Control” means the possession, directly or indirectly, of the power to direct
      or cause the direction of the management and policies of a Person, whether
      through the ownership of voting securities, by contract, or
      otherwise.

     

    (viii)
      “Covered Securities” shall mean the Notes, the Warrants and any other securities
      upon the conversion or exercise of which Registrable Securities may be
      issued.

     

    (ix)
      “Daily Amount” shall have the meaning set forth in Section 2(f) of this
      Agreement.

     

    (x)
      “Delay Period” shall have the meaning set forth in Section 2(f) of this
      Agreement.

     

    (xi)
      “Demand Registration” shall have the meaning set forth in Section 2(b) of this
      Agreement.

     

    (xii)
      “Exchange” means the principal stock exchange or market on which the Company’s
      Common Stock is traded.

     

    (xiii)
      “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
      rules and regulations thereunder, or any similar or successor
      statute.

     

    (xiv)
      “Expenses” means all expenses incident to the Company’s performance of or
      compliance with its obligations under this Agreement, including, without
      limitation, all registration, filing, listing, stock exchange and NASD fees,
      all
      fees and expenses of complying with state securities or blue sky laws (including
      fees, disbursements and other charges of counsel for the underwriters only
      in
      connection with blue sky filings), all word processing, duplicating and printing
      expenses, messenger and delivery expenses, the fees, disbursements and other
      charges of counsel for the Company and of its independent public accountants,
      including the expenses incurred in connection with “cold comfort” letters
      required by or incident to such performance and compliance, any fees and
      disbursements of underwriters customarily paid by the issuer of securities,
      and
      including legal fees of not more than twenty thousand dollars ($20,000) to
      one
      counsel selected by the Investors, but excluding from the definition of Expenses
      underwriting discounts and commissions and applicable transfer taxes, if any,
      or
      legal and other expenses incurred by any sellers (except as provided above),
      which discounts, commissions, transfer taxes and legal and other expenses shall
      be borne by the seller or sellers of Registrable Stock in all
      cases.

     

    (xv)
      “Filing Date” shall mean the date by which the Company shall file a registration
      statement pursuant to Section 2(a) of this Agreement.

     

    (xvi)
      “Holder” shall mean a holder of Covered Securities or Registrable
      Securities.

     

    (xvii)
      “Loan Agreement” shall mean the Loan and Security Agreement dated the date of
      this Agreement among the Company and the Investors.

     

    (xviii)
      “NASD” means the National Association of Securities Dealers, Inc. and NASD
      Regulation, Inc.

    
      
        
        

      

      
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    (xix)
      “Person” means any individual, corporation, partnership, limited liability
      company, firm, joint venture, association, joint stock company, trust,
      unincorporated organization, governmental or regulatory body or subdivision
      thereof or other entity.

     

    (xx)
      “Purchase Price” shall mean $3,250,000.

     

    (xxi)
      “Recapitalization Event” shall mean any stock dividend, split or other
      distribution, combination or shares or reverse split, or recapitalization.
      

     

    (xxii)
      “Registrable Securities” means and includes the shares of Common Stock issuable
      upon conversion of the Notes and upon exercise of the Warrants issued pursuant
      to the Loan Agreement and any additional shares of Common Stock which may be
      issuable pursuant the Loan Agreement or this Agreement or upon conversion or
      exercise of any securities issuable pursuant to the Loan Agreement or this
      Agreement, including shares of Common Stock issuable as interest pursuant to
      the
      Note and any securities issued pursuant to Section 7.18 of the Loan Agreement
      and such number of shares issuable pursuant to Section 2(f)(i) of this Agreement
      as the Holders may request. As to any particular Registrable Securities, such
      securities will cease to be Registrable Securities when (a) they have been
      effectively registered under the Securities Act and disposed of in accordance
      with the registration statement covering them, (b) they are or may be freely
      traded without registration and without restriction pursuant to Rule 144(k)
      under the Securities Act (or any similar provisions that are then in effect),
      or
      (c) they have been otherwise transferred and new certificates for them not
      bearing a restrictive legend have been properly issued by the Company, and
      the
      Company shall not have “stop transfer” instructions against them.

     

    (xxiii)
      “Registration Maintenance Period” has the meaning set forth in Section 4(a)(ii)
      of this Agreement.

     

    (xxiv)
      “Required Effectiveness Date” shall have the meaning set forth in Section 2(a)
      of this Agreement.

     

    (xxv)
      “Securities Act” means the Securities Act of 1933, as amended, and the rules and
      regulations thereunder, or any similar or successor statute.

     

    (xxvi)
      “Transfer” means any transfer, sale, assignment, pledge, hypothecation or other
      disposition of any interest. “Transferor” and “Transferee” have correlative
      meanings.

     

    (b) Unless
      defined otherwise, capitalized terms used in this Agreement that are defined
      in
      the Loan Agreement shall have the identical meaning herein as in the Loan
      Agreement.

     

    (c) All
      references to laws, rules and forms shall relate to the laws, rules and forms
      as
      in effect on the date of the Agreement and shall include any amendments thereto
      and any subsequent successor laws, rules and forms.

     

    2. Registration
      of Registrable Securities.

     

    (a) Mandatory
      Registration.
      The
      Company shall prepare and file within 60 days following the Closing Date (the
      “Filing Date”) a registration statement (the “Registration Statement”) covering
      the sale of such number of Registrable Securities as the Investors shall elect
      by written notice to the Company, and absent such election, covering the sale
      of
      all of the Registrable Securities. The Company shall use its best efforts to
      cause the Registration Statement to be declared effective by the Commission
      on
      the Required Effective Date. The Required Effective Date shall mean the first
      to
      occur of (i) 120 days following the Closing Date or 150 days from the Closing
      Date if the staff of the Commission issues comments on the Registration
      Statement, (ii) ten (10) days following the receipt of a “No Review” or similar
      letter from the Commission with respect to the Registration Statement, or (iii)
      the third (3rd)
      business day following the day the Company receives notice from the Commission
      that the Commission has determined that the Registration Statement is eligible
      to be declared effective without further comments by the Commission. Nothing
      contained herein shall be deemed to limit the number of Registrable Securities
      to be registered by the Company pursuant to this Agreement. As a result, if
      the
      Registration Statement does not relate to the maximum number of Registrable
      Securities acquired by (or issuable to) the holders of the Shares of the Company
      issued to the Investors pursuant to the Notes, the Loan Agreement and the
      Warrants the Company shall be required to promptly file a separate registration
      statement (utilizing Rule 462 promulgated under the Securities Act, if
      applicable) relating to such Registrable Securities which then remain
      unregistered. The provisions of this Agreement shall relate to any such separate
      registration statement as if it were an amendment to the Registration
      Statement.

    
      
        
        

      

      
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    (b) Demand
      Registration.
      Subject
      to the limitations of Section 2(a) of this Agreement, at any time and from
      time
      to time, the Investors may request the registration under the Securities Act
      of
      all or part of the Registrable Shares then outstanding (a “Demand
      Registration”). Subject to the conditions of Section 3 of this Agreement, the
      Company shall use its best efforts to file such registration statement under
      the
      Securities Act as promptly as practicable, but not later than sixty (60) days
      after the date any such request is received by the Company and to cause such
      registration statement to be declared effective, subject to the policies of
      the
      Commission relating to the filing of registration statements relating to
      securities acquired in the same or related transactions. The Company shall
      notify the Investors promptly when any such registration statement has been
      declared effective. The parties intend that all Registrable Securities are
      to be
      registered pursuant to Section 2(a) of this Agreement, and that this Section
      2(b) is intended solely to provide the Investors with registration rights in
      the
      event that all of the Registrable Securities are not included in the
      registration statement required by Section 2(a), either because the number
      of
      Registrable Shares had to be reduced in order for the offering to be deemed
      a
      secondary offering under Rule 415 of the Commission pursuant to the Securities
      Act or because the Investors believed that the Commission’s formal or informal
      guidelines would not permit the registration of all of the Registrable
      Securities.

     

    (c) Registration
      Statement Form.
      Registration statements under Section 2(a) and Section 2(b) shall be on the
      appropriate registration form of the Commission as shall permit the disposition
      of such Registrable Securities in accordance with the intended method or methods
      of disposition specified in the Registration Statement.

     

    (d) Expenses.
      The
      Company will pay all Expenses in connection with any registration required
      by
      under Sections 2(a) and 2(b) of this Agreement.

     

    (e) Effective
      Registration Statement.
      A
      registration required to be filed pursuant to Sections 2(a) and 2(b) shall
      not
      be deemed to have been effected (i) unless a registration statement with respect
      thereto has become effective, provided that a registration which does not become
      effective after the Company filed a registration statement with respect thereto
      solely by reason of the refusal to proceed of any holder of Registrable
      Securities (other than a refusal to proceed based upon the advice of counsel
      set
      forth in a letter signed by such counsel and provided to the Company relating
      to
      a disclosure matter unrelated to such holder) shall be deemed to have been
      effected by the Company, (ii) if, after it has become effective, such
      registration becomes subject to any stop order, injunction or other order or
      extraordinary requirement of the Commission or other governmental agency or
      court for any reason and such stop order or other action continues in effect
      for
      five trading days or (iii) if, after it has become effective, such registration
      ceases to be effective for more than the allowable Black-Out
      Periods.

    
      
        
        

      

      
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    (f) Liquidated
      Damages.

     

    (i)
      If
      (a) the Company does not file a Registration Statement covering Registrable
      Securities pursuant to Section 2(a) of this Agreement by the Filing Date, or
      (b)
      the Registration Statement filed pursuant to said Section 2(a) is not declared
      effective by the Required Effective Date, or (c) the Registrable Securities
      are
      registered pursuant to an effective Registration Statement and such Registration
      Statement or other Registration Statement(s) demanded by Investors including
      the
      Registrable Securities is not effective in the period from the Required
      Effective Date through two years following the Closing Date, subject to
      allowable Black-Out Periods, the Company shall pay the Investors in kind, as
      liquidated damages and not as a penalty, an amount equal to the applicable
      Daily
      Amount for each day in each of the following periods (a “Delay Period”): the
      period (x) between the Filing Date and the date that the Registration Statement
      is filed with the Commission, (y) between the Required Effective Date and the
      date that the Registration Statement is declared effective and (z) during which
      the Registration Statement is not effective other than, in each case, for
      permitted Black-Out Periods. The liquidated damages shall accrue on the first
      day of each Delay Period and be payable on the same date of each of the
      following calendar months which includes any part of the Delay Period. Such
      shares shall be delivered not later than the first business day of the calendar
      month following the month in which such shares accrued in accordance with the
      preceding sentence. The parties agree that the only damages payable for a
      violation of the terms of this Agreement with respect to which liquidated
      damages are expressly provided shall be such liquidated damages. Nothing shall
      preclude the Investors from pursuing or obtaining specific performance or other
      equitable relief with respect to this Agreement. The parties hereto agree that
      the liquidated damages provided for in this Section 2(f) constitute a reasonable
      estimate of the damages that may be incurred by the Investors by reason of
      the
      failure of the Registration Statement(s) to be filed or declared effective
      or to
      be maintained effective in accordance with the provisions hereof. The term
      “Daily Amount” shall mean 0.0333% of the principal amount of Notes relating to
      the shares of Common Stock issuable upon conversion of the Notes registered
      or
      to be registered. For example, if the shares of Common Stock issuable upon
      conversion of Notes in the principal amount of $1,000,000 are registered in
      the
      Registration Statement for sale by a Holder, the Daily Amount relating to such
      Holder will be $333.33. The Daily Amount shall be paid in cash unless any Holder
      shall elect, with respect to his securities, to receive payment of liquidated
      damages in shares of Common Stock. Payment shall be made monthly, not later
      than
      the fifth business day of the month for liquidated damages accrued during the
      prior calendar month. If a Holder desires to receive payment for liquidated
      damages due with respect to any month in stock, such holder shall advise the
      Company in writing not later than the last day of the month of such election.
      Such election shall continue in force until and unless the Holder notifies
      the
      Company that it revokes the election, in which event the Company shall
      thereafter make payment in cash. If, at the election of the Holder, the Company
      pays liquidated damages in shares of Common Stock, such shares of Common Stock
      shall be valued at the average of the closing price per share of the Common
      Stock (as reported by Bloomberg L.P. or, if the Common Stock is traded on the
      Nasdaq Stock Market or the New York or American Stock Exchange, as reported
      by
      such market or exchange) for the last five trading days of the calendar month
      with respect to which the liquidated damages are accrued.

     

    (ii)
      Notwithstanding the provisions of Section 2(f)(i) of this
      Agreement:

     

    (A) The
      obligation of the Company with respect to any Investor terminates when the
      sum
      of (x) the Registrable Securities issuable upon conversion of exercise of
      Covered Securities owned by such Investor and its transferees plus (y) the
      Registrable Securities such Investor and its transferees own, in the aggregate
      represent less than 5% of its shares of Registrable Securities issuable upon
      the
      Covered Securities initially purchased by the Investor pursuant to the Loan
      Agreement.

    
      
        
        

      

      
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    (B) In
      the
      event that the Company shall fail to file the Registration Statement by the
      Filing Date but the Registration Statement shall have been declared effective
      by
      the Required Effectiveness Date, then no liquidated damages shall be payable
      with respect to the failure to file by the Filing Date. The Company shall pay
      any such liquidated damages into an escrow account with counsel acceptable
      to
      the Holders, and, if the Registration Statement is not declared effective by
      the
      Required Effective Date, the liquidated damages for the failure to file by
      the
      Filing Date shall be promptly paid to the Holders on the first business day
      following the Required Effectiveness Date.

     

    (C) In
      the
      event that, because of the limitation resulting from the Commission’s
      interpretation of Rule 415 of the Commission pursuant to the Securities Act,
      the
      Company is unable to register all of the Registrable Securities, the liquidated
      damages per day shall be based on the number of shares of Common Stock issuable
      upon conversion of the Notes which are included in the Registration Statement.
      

     

    (D) In
      the
      event that, at the time of a failure of the Company to maintain the
      effectiveness of the Registration Statement, the Holders have sold Registrable
      Securities pursuant to the Registration Statement, no liquidated damages shall
      be payable with respect to such Registrable Securities. 

     

    (E) The
      maximum liquidated damages payable pursuant to this Section 2(f) shall be
      $803,400.

     

    (F) No
      fractional shares of Common Stock shall be issued. Any fractional shares which
      would otherwise be issued on any date on which Common Stock is to be issued
      pursuant to this Section 2(f) of this Agreement, shall be carried forward;
      provided, however, that if, at the expiration of the period during which
      liquidated damages is payable there remains a fractional shall which has not
      been applied to liquidated damages, the Company shall have no further obligation
      to issue such fractional share.

     

    (G) In
      no
      event shall the Company be required to pay any liquidated damages in the event
      that the Company can demonstrate by clear and convincing evidence that the
      failure of the registration statement to be declared effective by the Required
      Effective Date results in whole or in part from either (a) the failure of any
      Investor to provide information relating to the Investor and its proposed method
      of sale or any other information concerning the Investor that is required to
      be
      included in the registration statement or (b) any delays resulting from
      questions raised by the Commission or any other regulatory agency, market or
      exchange concerning any Investor or the affiliates of any Investor.

     

    3. Piggy-Back
      Registration Rights.

     

    (a) Registration
      Statement.
      Provided that the Registrable Securities have not been registered or if a
      registration statement has not been filed with respect to the Registrable
      Securities, if at any time after the date hereof but before the second
      anniversary of the date hereof, the Company proposes to register any of its
      securities under the Securities Act (other than by a registration in connection
      with an acquisition in a manner which would not permit registration of
      Registrable Securities for sale to the public, on Form S-8, or any successor
      form thereto, on Form S-4, or any successor form thereto and other than pursuant
      to Section 2 of this Agreement), whether or not on an underwritten basis (either
      best-efforts or firm-commitment), then, the Company will each such time give
      prompt written notice to all holders of Registrable Securities and Covered
      Securities of its intention to do so and of such holders of Registrable
      Securities’ rights under this Section 3(a). Upon the written request of any such
      holders of Registrable Securities made within ten (10) days after the receipt
      of
      any such notice (which request shall specify the Registrable Securities intended
      to be disposed of by such holders of Registrable Securities and the intended
      method of disposition thereof), the Company will, subject to the terms of this
      Agreement, use its commercially reasonable best efforts to effect the
      registration under the Securities Act of the Registrable Securities, to the
      extent requisite to permit the disposition (in accordance with the intended
      methods thereof as aforesaid) of such Registrable Securities so to be
      registered, by inclusion of such Registrable Securities in the registration
      statement which covers the securities which the Company proposes to register,
      provided that if, at any time after written notice of its intention to register
      any securities and prior to the effective date of the registration statement
      filed in connection with such registration, the Company shall determine for
      any
      reason either not to register or to delay registration of such securities,
      the
      Company may, at its election, give written notice of such determination to
      each
      holders of Registrable Securities and, thereupon, (i) in the case of a
      determination not to register, shall be relieved of this obligation to register
      any Registrable Securities in connection with such registration (but not from
      its obligation to pay the Expenses in connection therewith), without prejudice,
      however, to the rights of any holder or holders of Registrable Securities
      entitled to do so to request that such registration be effected as a
      registration under Section 2, and (ii) in the case of a determination to delay
      registering, shall be permitted to delay registering any Registrable Securities,
      for the same period as the delay in registering such other securities. No
      registration effected under this Section 3(a) shall relieve the Company of
      its
      obligation to effect any registration upon request under Section 2 except to
      the
      extent that Registrable Securities are registered and sold pursuant thereto.
      The
      Company will pay all Expenses in connection with each registration of
      Registrable Securities requested pursuant to this Section 3(a).

    
      
        
        

      

      
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    (b) Priority
      In Incidental Registrations.
      If the
      managing underwriter of an underwritten offering contemplated by this Section
      3
      shall inform the Company and holders of the Registrable Securities requesting
      such registration by letter of its belief that the number of securities
      requested to be included in such registration exceeds the number which can
      be
      sold in such offering, then the Company will include in such registration,
      to
      the extent of the number which the Company is so advised can be sold in such
      offering, (i) first securities proposed by the Company to be sold for its own
      account, and (ii) second to holders of securities having demand registration
      rights and exercising such rights in connection with such registration statement
      and the holders of Registrable Securities and Covered Securities, on a pari
      passu basis and (iii) third securities of other selling security holders
      requesting to be included in such registration (other than affiliates of the
      Company), on a pari passu basis, and (iv) to affiliates of the
      Company.

     

    4. Registration
      Procedures.

     

    (a) Procedures.
      If and
      whenever the Company is required to effect the registration of any Registrable
      Securities under the Securities Act as provided in Section 2(a) and 2(b) of
      this
      Agreement, the Company shall, as expeditiously as possible:

     

    (i)
      prepare and file with the Commission the Registration Statement, or amendments
      thereto, to effect such registration (including such audited financial
      statements as may be required by the Securities Act or the rules and regulations
      promulgated thereunder) and thereafter use its commercially reasonable best
      efforts to cause such registration statement to be declared effective by the
      Commission, as soon as practicable, but in any event no later than the Required
      Effectiveness Date (with respect to a registration pursuant to Section 2(a)
      of
      this Agreement); provided, however, that before filing such registration
      statement or any amendments thereto, the Company will furnish to one counsel
      selected by the holders of Registrable Securities which are to be included
      in
      such registration, copies of all such documents proposed to be
      filed;

    
      
        
        

      

      
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    (ii)
      with
      respect to any registration statement pursuant to Section 2(a) or Section 2(b),
      prepare and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective and to comply with
      the
      provisions of the Securities Act with respect to the disposition of all
      Registrable Securities covered by such registration statement until the earlier
      to occur of two (2) years after the Closing Date (subject to the right of the
      Company to suspend the effectiveness thereof for not more than 15 consecutive
      Trading Days or an aggregate of 20 Trading Days during any calendar year (each
      a
“Black-Out Period”)) or such time as all of the securities which are the subject
      of such registration statement cease to be Registrable Securities (such period,
      in each case, the “Registration Maintenance Period”);

     

    (iii)
      furnish to each holder of Registrable Securities covered by such registration
      statement such number of conformed copies of such registration statement and
      of
      each such amendment and supplement thereto (in each case including all
      exhibits), such number of copies of the prospectus contained in such
      registration statement (including each preliminary prospectus and any summary
      prospectus) and any other prospectus filed under Rule 424 under the Securities
      Act, in conformity with the requirements of the Securities Act, and such other
      documents, as such holder of Registrable Securities and underwriter, if any,
      may
      reasonably request in order to facilitate the public sale or other disposition
      of the Registrable Securities owned by such holder of Registrable Securities;
      

     

    (iv)
      use
      its commercially reasonable best efforts to register or qualify all Registrable
      Securities and other securities covered by such registration statement under
      such other U.S. federal or state securities laws or U.S. state blue sky laws
      as
      any U.S. holder of Registrable Securities thereof shall reasonably request,
      to
      keep such registrations or qualifications in effect for so long as such
      registration statement remains in effect, and take any other action which may
      be
      reasonably necessary to enable such holder of Registrable Securities to
      consummate the disposition in such jurisdictions of the securities owned by
      such
      holder of Registrable Securities, except that the Company shall not for any
      such
      purpose be required to qualify generally to do business as a foreign corporation
      in any jurisdiction wherein it would not but for the requirements of this
      Section 4(a)(iv) be obligated to be so qualified or to consent to general
      service of process in any such jurisdiction;

     

    (v)
      use
      its commercially reasonable best efforts to cause all Registrable Securities
      covered by such registration statement to be registered with or approved by
      such
      other governmental agencies or authorities as may be necessary to enable the
      U.S. holder of Registrable Securities to consummate the disposition of such
      Registrable Securities in accordance with the plan of distribution set forth
      in
      the registration statement;

     

    (vi)
      if
      such registration includes an underwritten public offering, furnish to each
      holder of Registrable Securities a signed counterpart, addressed to such holder
      of Registrable Securities, and the underwriters, of an opinion of counsel for
      the Company, dated the effective date of such registration statement and an
      opinion dated the date of the closing under the underwriting agreement in the
      form required by the underwriting agreement), and

    
      
        
        

      

      
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    (vii)
      notify the Investors and their counsel promptly and confirm such advice in
      writing promptly after the Company has knowledge thereof:

     

    (A) when
      the
      Registration Statement, the prospectus or any prospectus supplement related
      thereto or post-effective amendment to the Registration Statement has been
      filed, and, with respect to the Registration Statement or any post-effective
      amendment thereto, when the same has become effective;

     

    (B) of
      any
      request by the Commission for amendments or supplements to the Registration
      Statement or the prospectus or for additional information;

     

    (C) of
      the
      issuance by the Commission of any stop order suspending the effectiveness of
      the
      Registration Statement or the initiation of any proceedings by any Person for
      that purpose; and

     

    (D) of
      the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification of any Registrable Securities for sale under the securities or
      blue sky laws of any jurisdiction or the initiation or threat of any proceeding
      for such purpose;

     

    (viii)
      notify each holder of Registrable Securities covered by such registration
      statement, at any time when a prospectus relating thereto is required to be
      delivered under the Securities Act, upon discovery that, or upon the happening
      of any event as a result of which, the prospectus included in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state any material facts required to be stated therein or necessary
      to
      make the statements therein not misleading in the light of the circumstances
      then existing, and at the request of any such holder of Registrable Securities
      promptly prepare and furnish to such holder of Registrable Securities a
      reasonable number of copies of a supplement to or an amendment of such
      prospectus as may be necessary so that, as thereafter delivered to the Investors
      of such securities, such prospectus shall not include 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 not misleading in the light of the
      circumstances then existing;

     

    (ix)
      use
      its commercially reasonably efforts to obtain the withdrawal of any order
      suspending the effectiveness of the Registration Statement at the earliest
      possible moment;

     

    (x)
      otherwise use its commercially reasonable best efforts to comply with all
      applicable rules and regulations of the Commission;

     

    (xi)
      make
      available to its security holders, as soon as reasonably practicable, an
      earnings statement covering the period of at least twelve months, but not more
      than eighteen months, beginning with the first full calendar month after the
      effective date of such registration statement, which earnings statement shall
      satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
      thereunder;

     

    (xii)
      enter into such agreements and take such other actions as the Investors shall
      reasonably request in writing (at the expense of the requesting or benefiting
      Investors) in order to expedite or facilitate the disposition of such
      Registrable Securities; and

     

    (xiii)
      use its best efforts to list all Registrable Securities covered by such
      registration statement on any securities exchange or market on which the Common
      Stock is then listed.

    
      
        
        

      

      
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    (xiv)
      in
      the event that the Company, with the consent of the Agent, as defined in the
      Loan agreement, or of holders of a majority of the Registrable Securities,
      includes in a registration statement filed pursuant to Section 2(a) or 2(b)
      of
      this Agreement any shares of Common Stock which are not Registrable Securities
      and, as a result of comments from the Commission, the Company is required to
      reduce the number of shares of Common Stock which may be registered pursuant
      to
      the registration statement, all of such other shares of Common Stock will be
      withdrawn from the registration statement before any Registrable Securities
      are
      withdrawn.

     

    (b) Limitation.
      The
      Company will not file any registration statement pursuant to Section 2(a) or
      Section 2(b), or amendment thereto or any prospectus or any supplement thereto
      to which the Investors shall reasonably object, provided that the Company may
      file such documents in a form required by law or upon the advice of its
      counsel.

     

    (c) Necessary
      Consents.
      The
      Company represents and warrants to each holder of Registrable Securities that
      it
      has obtained all necessary waivers, consents and authorizations necessary to
      execute this Agreement and consummate the transactions contemplated hereby
      other
      than such waivers, consents and/or authorizations specifically contemplated
      by
      the Loan Agreement.

     

    (d) Discontinuation
      of Sales.
      Each
      holder of Registrable Securities agrees that, upon receipt of any notice from
      the Company of the occurrence of any event of the kind described in Section
      4(a)(viii), such Holder will forthwith discontinue such holder of Registrable
      Securities’ disposition of Registrable Securities pursuant to the Registration
      Statement relating to such Registrable Securities until such holder of
      Registrable Securities’ receipt of the copies of the supplemented or amended
      prospectus contemplated by said Section 4(a)(viii) and, if so directed by the
      Company, will deliver to the Company (at the Company’s expense) or destroy all
      copies, other than permanent file copies, then in such Holder’s possession of
      the prospectus relating to such Registrable Securities current at the time
      of
      receipt of such notice.

     

    5. Underwritten
      Offerings.

     

    (a) Incidental
      Underwritten Offerings.
      If the
      Company at any time proposes to register any of its securities under the
      Securities Act as contemplated by Section 3(a) of this Agreement and such
      securities are to be distributed by or through one or more underwriters, the
      Company will, if requested by any Holder, as provided in Section 3(a) and
      subject to the provisions of Section 3(b), use its commercially reasonable
      best
      efforts to arrange for such underwriters to include all the Registrable
      Securities to be offered and sold by such Holder among the securities to be
      distributed by such underwriters. In no event shall any Investor be deemed
      an
      underwriter for purposes of this Section 5. This Section 5 shall not apply
      to
      any Registrable Securities theretofore registered pursuant to Section 2 of
      this
      Agreement.

     

    (b) Participation
      In Underwritten Offerings.
      No
      Holder may participate in any underwritten offering under Section 3(a) unless
      such holder of Registrable Securities (i) agrees to sell such Holder’s
      securities on the basis provided in any underwriting arrangements approved,
      subject to the terms and conditions hereof, by the holders of a majority of
      Registrable Securities to be included in such underwritten offering and (ii)
      completes and executes all questionnaires, indemnities, underwriting agreements
      and other documents (other than powers of attorney) required under the terms
      of
      such underwriting arrangements. Notwithstanding the foregoing, no underwriting
      agreement (or other agreement in connection with such offering) shall require
      any holder of Registrable Securities to make a representation or warranty to
      or
      agreements with the Company or the underwriters other than representations
      and
      warranties contained in a writing furnished by such holder of Registrable
      Securities expressly for use in the related registration statement or
      representations, warranties or agreements regarding such Holder, such Holder’s
      Registrable Securities and such Holder’s intended method of distribution and any
      other representation required by law.

    
      
        
        

      

      
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    (c) Preparation;
      Reasonable Investigation.
      In
      connection with the preparation and filing of each registration statement under
      the Securities Act pursuant to this Agreement, the Company will give the Holders
      of Registrable Securities registered under such registration statement, and
      their respective counsel and accountants, the opportunity to participate in
      the
      preparation of such registration statement, each prospectus included therein
      or
      filed with the Commission, and each amendment thereof or supplement thereto,
      and
      will give each of them such access to its books and records and such
      opportunities to discuss the business of the Company with its officers and
      the
      independent public accountants who have certified its financial statements
      as
      shall be necessary, in the reasonable opinion of such holders’ and such
      underwriters’ respective counsel, to conduct a reasonable investigation within
      the meaning of the Securities Act.

     

    6. Indemnification.
      

     

    (a) Indemnification
      by the Company.
      In
      connection with any registration statement filed by the Company pursuant to
      Section 2 or 3 of this Agreement, the Company shall, and hereby agrees to,
      indemnify and hold harmless, each Holder and seller of any Registrable
      Securities covered by such registration statement, each Person who participates
      as an underwriter in the offering or sale of such securities and each other
      Person, if any, who controls such Holder or any such underwriter within the
      meaning of the Securities Act, and their respective directors, officers,
      partners, agents and Affiliates from and against any and all losses, claims,
      damages or liabilities, joint or several, to which they or any of them may
      become subject under the Securities Act, the Exchange Act, or other federal
      or
      state statutory law or regulation, at common law or otherwise, insofar as such
      losses, claims, damages or liabilities (or actions in respect thereof), which
      are collectively referred to as “Losses,” arise out of or are based upon (i) any
      untrue statement or alleged untrue statement of a material fact made by the
      Company contained in the Registration Statement, or any amendment thereof,
      or in
      any Preliminary Prospectus or the Prospectus, or any amendment thereof or
      supplement thereto, or in any blue sky application or other document executed
      by
      the Company specifically for that purpose (or based upon written information
      furnished by the Company) filed in any state or other jurisdiction in order
      to
      qualify any of the Securities or other Securities under the securities laws
      thereof (any such application, document or information being referred to as
      a
“Blue Sky Application”); or (ii) the omission or alleged omission to state in
      any such Registration Statement, Preliminary Prospectus or Prospectus, or
      amendment thereof or supplement thereto, or Blue Sky Application a material
      fact
      required to be stated therein or necessary to make the statements made therein
      not misleading, and agrees to reimburse each such indemnified party for any
      legal or other expenses reasonably incurred by it in connection with
      investigating or defending against any such loss, claim, damage, liability
      or
      action; provided, however, that the Company will not be liable in any such
      case
      to the extent that any such loss, claim, damage, or liability arises out of
      or
      is based upon any such untrue statement or alleged untrue statement or omission
      or alleged omission made therein or omitted therefrom in reliance upon and
      in
      conformity with written information furnished to the Company by or on behalf
      of
      any Holder or any underwriter acting on behalf of any Holder specifically for
      use in connection with the preparation thereof, and further provided, however,
      that the foregoing indemnity with respect to any untrue statement, alleged
      untrue statement, omission, or alleged omission contained in any Preliminary
      Prospectus shall not inure to the benefit of any Holder or other Person from
      whom the Person asserting any such loss, claims any of, damage, or liability
      purchased any of the securities that are the subject thereof (or to the benefit
      of any person who controls such Holder or other Person), if a copy of the
      prospectus was not delivered to such person with or prior to the written
      confirmation of the sale of such security to such person and such prospectus
      corrected the matter from the preliminary prospectus. The indemnify provided
      for
      in this Section 6(a) shall remain in full force and effect regardless of any
      investigation made by or on behalf of the indemnified party and shall survive
      any transfer of the Registrable Shares by the indemnified party. This indemnity
      agreement will be in addition to any liability that the Company may otherwise
      have.

    
      
        
        

      

      
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    (b) Indemnification
      by Holder.
      In
      connection with any registration statement filed by the Company pursuant to
      Section 2 or 3 of this Agreement in which a Holder has registered for sale
      Registrable Securities, each Holder or seller of Registrable Securities shall,
      and hereby agrees to, indemnify and hold harmless the Company and each of its
      directors, officers, employees and agents, each other Person, if any, who
      controls the Company and each other seller and such seller’s directors,
      officers, stockholders, partners, employees, agents and affiliates from and
      against any and all Losses to which they or any of them may become subject
      under
      the Securities Act, the Exchange Act, or other federal or state statutory law
      or
      regulation, at common law or otherwise, insofar as such losses, claims, damages,
      or liabilities (or actions in respect thereof) arise out of or are based upon
      (i) any untrue statement or alleged untrue statement of a material fact
      contained in the Registration Statement, or any amendment thereof, or in any
      preliminary prospectus or the prospectus, or any amendment thereof or supplement
      thereto, or in a blue sky application, or (ii) the omission or the alleged
      omission to state in any such Registration Statement, preliminary prospectus
      or
      prospectus, amendment thereof or supplement thereto, or Blue Sky Application
      a
      material fact required to be stated therein or necessary to make the statements
      made therein not misleading, in each case to the extent, but only to the extent,
      that the same was made therein or omitted therefrom in reliance upon and in
      conformity with written information furnished to the Company by or on behalf
      of
      such Holder specifically for use in the preparation thereof, and agrees to
      reimburse each such indemnified party for any legal or other expenses reasonably
      incurred by it in connection with investigating or defending against any such
      loss, claim, damage, liability or action. The indemnify provided for in this
      Section 6(b) shall remain in full force and effect regardless of any
      investigation made by or on behalf of the indemnified party and shall survive
      any transfer of the Registrable Shares by the indemnified party. In no event
      shall the liability of any Holder pursuant to this Section 6(b) exceed the
      lesser of (x) the purchase price paid by the Holder for the Registrable
      Securities sold pursuant to the Registration Statement or (y) the net proceeds
      from the sale of the Registrable Securities by the Holder pursuant to the
      Registration Statement..

     

    (c) Procedure.
      Within
      five (5) days after receipt by an indemnified party under Section 6(a) or 6(b)
      of this Agreement of notice of the commencement of any action, such indemnified
      party shall, if a claim in respect thereof is to be made against an indemnifying
      party under such subsection, notify the indemnifying party in writing of the
      commencement thereof; the failure so to notify the indemnifying party shall
      relieve the indemnifying party from any liability under this Section 8 as to
      the
      particular item for which indemnification is then being sought, unless such
      indemnifying party has otherwise received actual notice of the action at least
      thirty (30) days before any answer or response is required by the indemnifying
      party in its defense of such action, but will not relieve it from any liability
      that it may have to any indemnified party otherwise than under this Section
      6.
      If any such action is brought against any indemnified party and it notifies
      the
      indemnifying party of the commencement thereof, the indemnifying party will
      be
      entitled to participate therein and, to the extent that it may elect by written
      notice delivered to the indemnified party promptly after receiving the aforesaid
      notice from such indemnified party, to assume the defense thereof; provided,
      that if the defendants in any such action include both the indemnified party
      and
      the indemnifying party and either (i) the indemnifying party or parties agree,
      or (ii) in the opinion of counsel for the indemnified parties, representation
      of
      both the indemnifying party or parties and the indemnified party or parties
      by
      the same counsel is inappropriate under applicable standards of professional
      conduct because of actual or potential conflicting interests between them,
      then
      the indemnified party or parties shall have the right to select separate counsel
      to assume such legal defense and to otherwise participate in the defense of
      such
      action. The indemnifying party will not be liable to such indemnified party
      under this Section 6 for any legal or other expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof unless (x) the
      indemnified party shall have employed counsel in connection with the assumption
      of legal defenses in accordance with the proviso to the immediately preceding
      sentence (it being understood, however, that the indemnifying party shall not
      be
      liable for the expenses of more than one separate counsel in each jurisdiction
      which counsel is approved by indemnified parties (whether pursuant to this
      Agreement or other agreements if the claim relates to the same or similar
      allegations) holding a majority of the shares as to which indemnification is
      claimed), (ii) the indemnifying party shall not have employed counsel to
      represent the indemnified party within a reasonable time after notice of
      commencement of the action, or (iii) the indemnifying party has authorized
      the
      employment of counsel for the indemnified party at the expense of the
      indemnifying party. In no event shall an indemnifying party be liable under
      this
      Section 6 for any settlement, effected without its written consent, which
      consent shall not be unreasonably withheld, of any claim or action against
      an
      indemnified party.

    
      
        
        

      

      
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    (d) Contribution.
      If the
      indemnification provided for in this Section 6 shall for any reason be
      unavailable to an indemnified party under Sections 6(a) and 6(b) of this
      Agreement in respect of any Losses, then, in lieu of the amount paid or payable
      under said Section 6(a) or 6(b), the indemnified party and the indemnifying
      party under said Section 6(a) or 6(b) shall contribute to the aggregate Losses
      (including legal or other expenses reasonably incurred in connection with
      investigating the same) (i) in such proportion as is appropriate to reflect
      the
      relative fault of the Company and the prospective sellers of Registrable
      Securities covered by the registration statement which resulted in such Loss
      or
      action in respect thereof, with respect to the statements, omissions or action
      which resulted in such Loss or action in respect thereof, as well as any other
      relevant equitable considerations, or (ii) if the allocation provided by clause
      (i) above is not permitted by applicable law, in such proportion as shall be
      appropriate to reflect the relative benefits received by the Company, on the
      one
      hand, and such prospective sellers, on the other hand, from their sale of
      Registrable Securities; provided, that, for purposes of this clause (ii), the
      relative benefits received by any prospective sellers shall be deemed not to
      exceed (and the amount to be contributed by any Holder shall not exceed) the
      amount received by such Person. No Person guilty of fraudulent misrepresentation
      (within the meaning of Section 11(f) of the Securities Act) shall be entitled
      to
      contribution from any Person who was not guilty of such fraudulent
      misrepresentation. The obligations, if any, of the Selling Holders of
      Registrable Securities to contribute as provided in this Section 6(d) are
      several in proportion to the relative value of their respective Registrable
      Securities covered by such registration statement and not joint. In addition,
      no
      Person shall be obligated to contribute hereunder any amounts in payment for
      any
      settlement of any action or Losses effected without such Person’s
      consent.

     

    7. Rule
      144.
      The
      Company shall file in a timely manner the reports required to be filed by it
      under the Securities Act and the 1934 Act (including but not limited to the
      reports under Sections 13 and 15(d) of the Exchange Act referred to in
      subparagraph (c) of Rule 144 adopted by the Commission under the Securities
      Act)
      and the rules and regulations adopted by the Commission thereunder (or, if
      the
      Company is not required to file such reports, will, upon the request of any
      holder of Registrable Securities, make publicly available other information)
      and
      will take such further action as any holder of Registrable Securities may
      reasonably request, all to the extent required from time to time to enable
      such
      holder to sell Registrable Securities without registration under the Securities
      Act within the limitation of the exemptions provided by (a) Rule 144 under
      the
      Securities Act, as such Rule may be amended from time to time, or (b) any
      similar rule or regulation hereafter adopted by the Commission. Upon the request
      of any holder of Registrable Securities, the Company will deliver to such holder
      a written statement as to whether it has complied with the requirements of
      this
      Section 7. The Company shall, within two business days after a Holder provides
      documentation relating to a sale pursuant to Rule 144 or Rule 144(k), whichever
      shall be appropriate, the Company will cause its legal counsel to provide such
      opinion of counsel as the Company’s transfer agent may require in order to
      enable the Holder to transfer the shares. If the Company fails to comply with
      this Section 7, the Company shall pay the Holder the Daily amount applicable
      to
      the shares which the Holder is seeking to transfer, commencing on the third
      business day after the documentation is presented to the Company’s or its
      transfer agent. The Daily Amount shall be based on the conversion price
      applicable to the Notes at the date of the transfer or, if the Notes shall
      have
      been paid or fully converted, the last conversion price. For example, if the
      applicable conversion price is $.20, and the Holder is seeking to transfer
      or
      have the legend removed from 1,000,000 shares, daily amount will be based on
      Notes in the principal amount of $200,000. The provisions of Section 2(d) of
      the
      Warrant and Section 2.9.3 of the Note shall also apply in the event that the
      Company fails to deliver a timely opinion of counsel as required by this Section
      7.

    
      
        
        

      

      
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    8. Miscellaneous.

     

    (a) Amendments
      and Waivers.
      This
      Agreement may be amended and the Company may take any action herein prohibited,
      or omit to perform any act herein required to be performed by it, only if the
      Company shall have obtained the written consent to such amendment, action or
      omission to act, of the Holder or Holders seventy five percent (75%) or more
      of
      the sum of the shares of (i) Registrable Securities issued at such time, plus
      (ii) Registrable Securities issuable upon exercise or conversion of the Covered
      Securities. Each holder of any Registrable Securities at the time or thereafter
      outstanding shall be bound by any consent authorized by this Section 8(a),
      whether or not such Registrable Securities shall have been marked to indicate
      such consent.

     

    (b) Nominees
      For Beneficial Owners.
      In the
      event that any Registrable Securities are held by a nominee for the beneficial
      owner thereof, the beneficial owner thereof shall be treated as the holder
      of
      such Registrable Securities for purposes of any request or other action by
      any
      Holder or Holders of Registrable Securities pursuant to this Agreement or any
      determination of any number of percentage of shares of Registrable Securities
      held by a holder or holders of Registrable Securities contemplated by this
      Agreement. The Company may require assurances reasonably satisfactory to it
      of
      such owner’s beneficial ownership or such Registrable Securities.

     

    (c) Notices.
      Except
      as otherwise provided in this Agreement, all notices, requests and other
      communications to any Person provided for hereunder shall be in writing and
      shall be given to such Person (a) in the case of a party hereto other than
      the
      Company, addressed to such party in the manner set forth in the Loan Agreement
      or at such other address as such party shall have furnished to the Company
      in
      writing, or (b) in the case of any other Holder of Registrable Securities or
      Covered Securities, at the address of such Holder set forth on the signature
      page of this Agreement, or (c) in the case of the Company, at the address set
      forth on the signature page hereto, to the attention of its Chief Financial
      Officer or other officer designated by the Company, or at such other address,
      or
      to the attention of such other officer, as the Company shall have furnished
      to
      each holder of Registrable Securities at the time outstanding. Each such notice,
      request or other communication shall be effective (i) upon receipt if given
      by
      mail, or (ii) if given by any other means (including, without limitation, by
      fax
      or air courier), when delivered at the address specified above, provided that
      any such notice, request or communication shall not be effective until received,
      provided, that notice by fax shall not be deemed received unless receipt is
      acknowledged.

    
      
        
        

      

      
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    (d) Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of and be enforceable
      by the parties hereto. In addition, and whether or not any express assignment
      shall have been made, the provisions of this Agreement which are for the benefit
      of the parties hereto other than the Company shall also be for the benefit
      of
      and enforceable by any subsequent holder of any Registrable Securities. Each
      of
      the holders of the Registrable Securities agrees, by accepting any portion
      of
      the Registrable Securities after the date hereof, to the provisions of this
      Agreement including, without limitation, appointment of the Investor or the
      Investor’s designated representative to act on behalf of such holder pursuant to
      the terms hereof which such actions shall be made in the good faith discretion
      of the Investors’ representative and be binding on all persons for all
      purposes.

     

    (e) Descriptive
      Headings.
      The
      descriptive headings of the several sections and paragraphs of this Agreement
      are inserted for reference only and shall not limit or otherwise affect the
      meaning hereof.

     

    (f) Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York applicable to agreements executed and to be performed wholly
      within such State without regard to principles of conflicts of law. Each party
      hereby (i) consent to the exclusive jurisdiction of the United States District
      Court for the Southern District of New York and Supreme Court of the State
      of
      New York in the County of New York in any action relating to or arising out
      of
      this Agreement, (ii) agrees that any process in any such action may be served
      upon it either (x) by certified or registered mail, return receipt requested,
      or
      by hand delivery or overnight courier service which obtains evidence of
      delivery, with the same full force and effect as if personally served upon
      such
      party in New York City or (y) any other manner of service permitted by law,
      and
      (iii) waives any claim that the jurisdiction of any such tribunal is not a
      convenient forum for any such action and any defense of lack of in personam
      jurisdiction with respect thereto. The
      parties executing this Agreement agree to waive trial by
      jury.
      The
      prevailing party shall be entitled to recover from the other party its
      reasonable attorney’s fees and costs. In the event that any provision of this
      Agreement is invalid or unenforceable under any applicable statute or rule
      of
      law, then such provision shall be deemed inoperative to the extent that it
      may
      conflict therewith and shall be deemed modified to conform with such statute
      or
      rule of law. Any such provision which may prove invalid or unenforceable under
      any law shall not affect the validity or enforceability of any other provision
      of any agreement.

     

    (g) Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding between the parties
      and supersedes all prior or contemporaneous written or oral agreements,
      promises, representations, understandings, letters of intent and negotiations,
      among the parties with respect to the subject matter of this Agreement. No
      part
      of this Agreement may be modified or amended, nor may any right be waived,
      except by a written instrument which expressly refers to this Agreement, states
      that it is a modification or amendment of this Agreement or a waiver and is
      signed by the parties to this Agreement in the case of a modification or
      amendment, or by the party granting the waiver in the case of a waiver, subject
      to Section 8(a) of this Agreement. No course of conduct or dealing or trade
      usage or custom and no course of performance shall be relied on or referred
      to
      by any party to contradict, explain or supplement any provision of this
      Agreement, it being acknowledged by the parties to this Agreement that this
      Agreement is intended to be, and is, the complete and exclusive statement of
      the
      agreement with respect to its subject matter. Any waiver shall be limited to
      the
      express terms thereof and shall not be construed as a waiver of any other
      provisions or the same provisions at any other time or under any other
      circumstances. No delay or failure by either party to exercise any right under
      this Agreement, and no partial or single exercise of that right, shall
      constitute a waiver of that or any other rights.

    
      
        
        

      

      
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    (h) Severability.
      If any
      provision of this Agreement, or the application of such provisions to any Person
      or circumstance, shall be held invalid, the remainder of this Agreement, or
      the
      application of such provision to Persons or circumstances other than those
      to
      which it is held invalid, shall not be affected thereby.

     

    (i) Binding
      Effect.
      All the
      terms and provisions of this Agreement whether so expressed or not, shall be
      binding upon, inure to the benefit of, and be enforceable by the parties and
      their respective administrators, executors, legal representatives, heirs,
      successors and assignees. 

     

    (j) Preparation
      of Agreement.
      This
      Agreement shall not be construed more strongly against any party regardless
      of
      who is responsible for its preparation. The parties acknowledge each contributed
      and is equally responsible for its preparation. 

     

    (k) Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by the different
      parties hereto in separate counterparts, each of which when executed shall
      be
      deemed to be an original, but all of which taken together shall constitute
      one
      and the same agreement. A facsimile transmission of this signed Agreement shall
      be legal and binding on all parties hereto. 

     

    

    [SIGNATURES
      ON FOLLOWING PAGE]

    
      
        
        

      

      
        -
          16 -

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      Investors and the Company have as of the date first written above executed
      this
      Agreement.

    

    

    NATURALNANO,
      INC.

    

    
      	 	 	 	 
	By:
              /s/ Cathy A. Fleischer	 	 	 
	
              
Name:
              Cathy A. Fleischer	 	 	
            
	Title:
              President	 	 	 

    

     

    INVESTORS

     

    
      	
              Investor

            	 	 	 
	Platinum Partners Long Term Growth
              IV	 	 	 
	 	 	 	 
	 	 	 	 
	By:  /s/
              Mark Nordlicht	 	 	 
	
              

              Name:
                Mark Nordlicht

              Title:  
                Pres

              Address:
                152
                W. 57th Street, 54th Floor

               
                New York, NY 10019

              Telecopier:
                (212)

            	 	 	
            
	Longview Special Financing,
              Inc.	 	 	 

    

     

    
      	 	 	 	 
	By:
              /s/ François
              Morax	 	 	 
	
              

              Name:
                François
                Morax

              Title:  
                Director

              Address:
                Lindstrassse
                6

               6341
                Baar

               Switzerland

              Telecopier:

            	 	 	
            
	Platinum
              Advisors, LLC	 	 	 

    

     

    
      	 	 	 	 
	By:
              /s/ Mark Nordlicht	 	 	 
	
              

              Name:
                Mark Nordlicht

              Title:

              Address:
                152
                W. 57th Street, 54th Floor

               
                New York, NY 10019

              Telecopier:
                (212)

            	 	 	
            

    

    
      
        
        

      

      
        -
          17 -Exhibit
      10.1

     

    

     

    PLEDGE
      AGREEMENT

     

    This
      Pledge Agreement dated this 7th day of March, 2007, among
      NaturalNano,
      Inc.,
      a
      Nevada
      corporation (the “Company”), and the pledgees identified on the signature page
      hereto (each a “Pledgee” and collectively the “Pledgees”) and Platinum Advisors
      LLC, a limited liability company, as agent for the Pledgees (the
“Agent”).

     

    W
      I T
      N E S S E T H:

     

    WHEREAS,
      the Company entered into a Loan and Security Agreement (the “Loan Agreement”),
      dated as of March 5, 2007, pursuant to which the Company issued to the Pledgees
      its 8% Senior Secured Convertible Notes in the total principal amount of
      $3,347,500; and

     

    WHEREAS,
      as a condition to the Pledgees’ purchase of the Notes and Warrants pursuant to
      the Loan Agreement, the Company has agreed to pledge and grant a security
      interest in the capital stock of NaturalNano Research, Inc., a Delaware
      corporation and wholly-owned subsidiary of the Company (“NN Research”), and any
      other subsidiaries which the Company may create or acquire during the period
      that the Notes are outstanding and any other equity interest which the Company
      may acquire;

     

    NOW,
      THEREFORE, the parties hereto agree as follows:

     

    1. Defined
      Terms.
      All
      capitalized terms used in this Agreement which are defined in the Loan Agreement
      and not defined herein shall have the meanings given to them in the Loan
      Agreement.

     

    2. Pledge
      and Grant of Security Interest.
      To
      secure the full and punctual payment of all loans, advances, debts,
      liabili-ties, obligations, covenants and duties owing by the Company to the
      Pledgees of every kind and description (whether or not evidenced by any note
      or
      other instrument and whether or not for the payment of money), direct or
      in-direct, absolute or contingent, due or to become due, now existing or
      hereafter arising, whether or not such obliga-tions are related to the
      transaction described in this Agreement, the Loan Agreement and the other
      Transaction Documents, by class, or kind, or whether or not contem-plated by
      the
      parties at the time of the granting of this security interest, including without
      limitation, all interest, fees, charges, expenses and attorneys’ fees chargeable
      to the Company or incurred by the Agent or the Pledgees in connection with
      the
      Notes and the transactions contemplated by the Transaction Documents or
      otherwise (collectively, the “Obligations”), the Company hereby pledges,
      assigns, hypothecates, transfers and grants a security interest to Pledgees
      in
      all of the following (the “Pledged Collateral”):

     

    (a) the
      10,000,000 shares of common stock of NN Research, representing all of the issued
      and outstanding shares of capital stock of NN Research and represented by stock
      certificate no. 2 (together with any additional shares or other equity interests
      in NN Research which may be hereafter acquired by the Company, the “Pledged
      Shares”), the certificates representing the Pledged Shares and all dividends,
      cash, instruments and other property or proceeds from time to time received,
      receivable or otherwise distributed in respect of or in exchange for any or
      all
      of the Pledged Shares;

     

    (b) all
      shares of capital stock of, or equity or beneficial interest in, any Person
      (each, together with NN Research, an “Issuer”) which becomes a Subsidiary or
      which is required to be pledged to the Pledgees pursuant to Section 7.20 of
      the
      Loan Agreement, including, without limitation, dividends or a distribution
      in
      connection with any increase or reduction of capital, reclassification, merger,
      amalgamation, consolidation, sale of assets, combination of shares, stock split,
      spin-off or split-off (which shares shall be deemed to be part of the Pledged
      Collateral), and the certificates representing such shares, and all dividends,
      cash, instruments and other property or proceeds from time to time received,
      receivable or otherwise distributed in respect of or in exchange for any or
      all
      of such shares; and

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) all
      options and rights, whether as an addition to, in substitution of or in exchange
      for any Pledged Shares and all dividends, cash, instruments and other property
      or proceeds from time to time received, receivable or otherwise distributed
      in
      respect of or in exchange for any or all such options and rights.

     

    3. Delivery
      of Collateral.
      All
      certificates representing or evidencing the Pledged Shares shall be delivered
      to
      and held by or on behalf of Pledgees by the Agent pursuant hereto and shall
      be
      accompanied by duly executed instruments of transfer or assignment in blank,
      all
      in form and substance satisfactory to Pledgees. Upon an Event of Default (as
      defined below) under the Note or the Loan Agreement that has occurred and is
      continuing beyond any applicable grace period, the Pledgees and the Agent shall
      have the right, during such time in its discretion and without notice to the
      Company, to transfer to or to register in the name of the Agent or any of its
      nominees any or all of the Pledged Shares to be held by the Agent pursuant
      to
      this Agreement. In addition, the Agent shall have the right at such time to
      exchange certificates or instruments representing or evidencing Pledged Shares
      for certificates or instruments of smaller or larger denominations.

     

    4. Representations
      and Warranties of the Company.
      The
      Company represents and warrants to the Pledgees and the Agent (which
      representations and warranties shall be deemed to continue to be made until
      all
      of the Obligations have been paid in full) that:

     

    (a) the
      execution, delivery and performance by the Company of this Agreement and the
      pledge of the Pledged Collateral hereunder do not and will not result in any
      violation of any agreement, indenture, instrument, license, judgment, decree,
      order, law, statute, ordinance or other governmental rule or regulation
      applicable to the Company;

     

    (b) this
      Agreement constitutes the legal, valid, and binding obligation of the Company
      enforceable against the Company in accordance with its terms;

     

    (c) the
      Company is the sole record and beneficial owner of all of the Pledged
      Shares;

     

    (d) all
      of
      the Pledged Shares have been duly authorized, validly issued and are fully
      paid
      and non-assessable;

     

    (e) no
      consent or approval of any person (including any Issuer), corporation,
      governmental body, regulatory authority or other entity, is or will be necessary
      for (i) the execution, delivery and performance of this Agreement, (ii) the
      exercise by the Pledgee of any rights with respect to the Pledged Collateral
      or
      (iii) the pledge and assignment of, and the grant of a security interest in,
      the
      Pledged Collateral hereunder;

     

    (f) there
      are
      no pending or, to the best of the Company’s knowledge, threatened actions or
      proceedings before any court, judicial body, administrative agency or arbitrator
      which may materially adversely affect the Pledged Collateral;

    
      
        
        

      

      
        -
          2 -

        
          

        

      

      
        
        

      

    

    (g) the
      Company has the requisite power and authority to enter into this Agreement
      and
      to pledge and assign the Pledged Collateral to the Pledgees in accordance with
      the terms of this Agreement;

     

    (h) the
      Company owns the Pledged Collateral, except for the pledge and security interest
      granted to Pledgee hereunder, the Pledged Collateral shall be, immediately
      following the closing of the transactions contemplated by the Loan Agreement,
      free and clear of any other security interest, pledge, claim, lien, charge,
      hypothecation, assignment, offset or encumbrance whatsoever (collectively,
      “Liens”) other than the Pledgees’ and the Agent’s security in the Pledged
      Collateral;

     

    (i) other
      than restrictions generally applicable under the Securities Act, there are
      no
      restrictions on transfer of the Pledged Shares contained in the certificate
      of
      incorporation or by-laws (or equivalent organizational documents) of the Issuer
      or otherwise which have not otherwise been enforceable and legally complied
      with
      or waived as the case may be, by the necessary parties;

     

    (j) none
      of
      the Pledged Shares have been issued or transferred in violation of the
      securities registration, securities disclosure or similar laws of any
      jurisdiction to which such issuance or transfer may be subject;

     

    (k) the
      Pledged Shares constitute one hundred percent (100%) of the issued and
      outstanding shares of NN Research.

     

    5. Covenants.
      The
      Company covenants and agrees that, until the Obligations shall be satisfied
      in
      full:

     

    (a) The
      Company will not sell, assign, transfer, convey, or otherwise dispose of its
      rights in or to the Pledged Collateral or any interest therein; nor will the
      Company create, incur or permit to exist any Lien whatsoever with respect to
      any
      of the Pledged Collateral or the proceeds thereof other than that created
      hereby. 

     

    (b) The
      Company will, at its expense, defend Pledgees’ and the Agent’s right, title and
      security interest in and to the Pledged Collateral against the claims of any
      other party.

     

    (c) The
      Company shall at any time, and from time to time, upon the written request
      of
      the Agent, execute and deliver such further documents and do such further acts
      and things as the Agent may reasonably request in order to effect the purposes
      of this Agreement including, but without limitation, delivering to Agent upon
      the occurrence of an Event of Default irrevocable proxies in respect of the
      Pledged Collateral in form satisfactory to the Agent. Until receipt thereof,
      upon an Event of Default that has occurred and is continuing beyond any
      applicable grace period, this Agreement shall constitute Company’s proxy to
      Agent, on behalf of the Pledgees, or its nominee to vote all shares of Pledged
      Collateral then registered in each Company’s name.

     

    (d) The
      Company will not consent to or approve the issuance of (i) any additional shares
      of any class of shares or other equity interests of the Issuer; or (ii) any
      securities convertible either voluntarily by the holder thereof or automatically
      upon the occurrence or non-occurrence of any event or condition into, or any
      securities exchangeable for, any such shares, unless, in either case, such
      shares are pledged as Collateral pursuant to this Agreement.

    
      
        
        

      

      
        -
          3 -

        
          

        

      

      
        
        

      

    

    6. Voting
      Rights and Dividends.
      Until
      the occurrence of an Event of Default which is continuing: (i) the Company
      may
      exercise all rights to vote with respect to any Pledged Collateral; (ii) the
      Company shall be entitled to receive all dividends (whether paid or distributed
      in cash, securities or other property). In addition to the Pledgee’s rights and
      remedies set forth in Section 8 hereof, in case an Event of Default shall have
      occurred and be continuing, beyond any applicable cure period, the Pledgee
      shall
      (x) be entitled to vote the Pledged Collateral, (y) be entitled to give
      consents, waivers and ratifications in respect of the Pledged Collateral (the
      Company hereby irrevocably constituting and appointing the Pledgee, with full
      power of substitution, the proxy and attorney-in-fact of the Company for such
      purposes) and (z) be entitled to collect and receive for its own use cash
      dividends paid on the Pledged Collateral. The Company shall not be permitted
      to
      exercise or refrain from exercising any voting rights or other powers if, in
      the
      reasonable judgment of the Agent or any Pledgee, such action would have a
      material adverse effect on the value of the Pledged Collateral or any part
      thereof; and, provided,
      further,
      that
      the Company shall give at least five (5) days’ written notice of the manner in
      which the Company intends to exercise, or the reasons for refraining from
      exercising, any voting rights or other powers other than with respect to any
      election of directors and voting with respect to any incidental matters.
      Following the occurrence of an Event of Default, all dividends and all other
      distributions in respect of any of the Pledged Collateral, shall be delivered
      to
      the Agent to hold as Collateral and shall, if received by the Company, be
      received in trust for the benefit of the Pledgees, be segregated from the other
      property or funds of the Company, and be forthwith delivered to the Agent as
      Collateral in the same form as so received (with any necessary
      endorsement).

     

    7. Event
      of Default.
      An
      Event of Default shall be deemed to have occurred and may be declared by any
      Pledgee upon the occurrence of an “Event of Default” under and as defined in the
      Loan Agreement or in the Notes which shall have occurred and be continuing
      beyond any applicable cure period.

     

    8. Remedies.

     

    (a) In
      case
      an Event of Default shall have occurred, the Agent and/or the Pledgees
      may: 

     

    (i) Transfer
      any or all of the Pledged Collateral into its name, or into the name of its
      nominee or nominees;

     

    (ii) Exercise
      all corporate rights with respect to the Pledged Collateral including, without
      limitation, all rights of conversion, exchange, subscription or any other
      rights, privileges or options pertaining to any shares of the Pledged Collateral
      as if it were the absolute owner thereof, including, but without limitation,
      the
      right to exchange, at its discretion, any or all of the Pledged Collateral
      upon
      the merger, consolidation, amalgamation, reorganization, recapitalization or
      other readjustment of the Issuer thereof, or upon the exercise by the Issuer
      of
      any right, privilege or option pertaining to any of the Pledged Collateral,
      and,
      in connection therewith, to deposit and deliver any and all of the Pledged
      Collateral with any committee, depository, transfer agent, registrar or other
      designated agent upon such terms and conditions as it may determine, all without
      liability but
      subject to the requirements of applicable law except
      to
      account for property actually received by it; and

     

    (iii) Subject
      to any requirement of applicable law including for greater certainty, the
      Uniform Commercial Code of New York (the “UCC”), sell, assign and deliver the
      whole or, from time to time, any part of the Pledged Collateral at the time
      held
      by the Pledgee, at any private sale or at public auction, with or without
      demand, advertisement or notice of the time or place of sale or adjournment
      thereof or otherwise (all of which are hereby waived, except such notice as
      is
      required by applicable law and cannot be waived), for cash or credit or for
      other property for immediate or future delivery, and for such price or prices
      and on such terms as the Pledgee in its sole discretion may determine, or as
      may
      be required by applicable law, provided that the foregoing shall be done in
      a
      commercially reasonable manner.

    
      
        
        

      

      
        -
          4 -

        
          

        

      

      
        
        

      

    

    (b) The
      Company hereby waives and releases any and all right or equity of redemption,
      whether before or after sale hereunder. At any such sale, unless prohibited
      by
      applicable law, the Pledgee may bid for and purchase the whole or any part
      of
      the Pledged Collateral so sold free from any such right or equity of redemption.
      All moneys received by the Agent or the Pledgees hereunder whether upon sale
      of
      the Pledged Collateral or any part thereof or otherwise shall be held by the
      Agent or the Pledgees and applied by it as provided in Section 10 of this
      Agreement. No failure or delay on the part of the Agent or the Pledgees in
      exercising any rights hereunder shall operate as a waiver of any such rights
      nor
      shall any single or partial exercise of any such rights preclude any other
      or
      future exercise thereof or the exercise of any other rights hereunder. Neither
      the Agent nor any Pledgee shall have any duty as to the collection or protection
      of the Pledged Collateral or any income thereon nor any duty as to preservation
      of any rights pertaining thereto, except to apply the funds in accordance with
      the requirements of Section 10 hereof. The Agent or any Pledgee may exercise
      its
      rights with respect to property held hereunder without resort to other security
      for or sources of reimbursement or payment of the Obligations. In addition
      to
      the foregoing, to the extent applicable, Pledgees shall have all of the rights,
      remedies and privileges of a secured party under the UCC regardless of the
      jurisdiction in which enforcement hereof is sought.

     

    9. Private
      Sale.
      The
      Company recognizes that the Pledgees or the Agent on behalf of the Pledgees
      may
      be unable to effect (or to do so only after delay which would adversely affect
      the value that might be realized from the Pledged Collateral) a public sale
      of
      all or part of the Pledged Collateral by reason of certain prohibitions
      contained in the Securities Act and may be compelled to resort to one or more
      private sales to a restricted group of purchasers who will be obliged to agree,
      among other things, to acquire such Pledged Collateral for their own account,
      for investment and not with a view to the distribution or resale thereof. The
      Company agrees (a) that any such private sale may be at prices and on terms
      that
      are less favorable to the seller than if sold at public sales and (b) that
      such
      private sales shall be deemed to have been made in a commercially reasonable
      manner. The Company agrees that the Agent and the Pledgees have no obligation
      to
      delay sale of any Pledged Collateral for the period of time necessary to permit
      the Issuer to register the Pledged Collateral for public sale under the
      Securities Act.
      The
      Agent and/or the Pledgees or any of them acting with or without the others
      shall
      have the right to purchase all or any part of the Pledged Collateral at any
      public or private sale and in each case make payment therefor by any means,
      whether by credit against the Obligations or otherwise. If the Agent or the
      Pledgees propose to sell the Pledged Collateral to either the Agent, any of
      the
      Pledgees or any affiliate of the Agent or any Pledgee (an “Affiliated
      Purchaser”), the Agent shall advise the Company in writing as to the terms of
      sale and the Company shall have five (5) business days to provide the Agent
      with
      evidence that it has received a better offer, accompanied by the terms of the
      better offer and payment or reasonable evidence of payment. Upon receipt of
      the
      better offer, the Agent shall so notify the Affiliated Purchaser and the
      Affiliated Purchaser shall have five (5) business days to match the better
      offer, and, if they do not match the better offer by the expiration of the
      five
      (5) day period, the Agent shall sell the Pledged Collateral to the party making
      the better offer. If such party does not purchase the Pledged Collateral on
      the
      terms of the better offer within five (5) business days after the second five
      (5) day period, the Agent may sell the Pledged Collateral to the Affiliated
      Purchaser on the initial terms on which the Affiliated Purchaser initially
      proposed to purchase the Pledged Collateral.

     

    10. Proceeds
      of Sale.
      Subject
      to applicable law, the proceeds of any collection, recovery, receipt,
      appropriation, realization or sale of the Pledged Collateral shall be applied
      by
      the Agent or the Pledgees as follows:

    
      
        
        

      

      
        -
          5 -

        
          

        

      

      
        
        

      

    

    First,
      to
      the payment of all costs, reasonable expenses and charges of the Agent and
      the
      Pledgees and to the reimbursement of the Agent and the Pledgees for the prior
      payment by them of such costs, reasonable expenses and charges incurred in
      connection with the care and safekeeping of the Pledged Collateral (including,
      without limitation, the reasonable expenses of any sale or any other disposition
      of any of the Pledged Collateral), the expenses of any taking, legal fees and
      reasonable expenses, court costs, any other fees or expenses incurred or
      expenditures or advances made by Pledgee in the protection, enforcement or
      exercise of its rights, powers or remedies hereunder;

     

    Second,
      to the payment of the Obligations, in whole or in part, in such order as the
      Agent or the Pledgees may elect, whether or not such Obligations are then
      due;

     

    Third,
      to
      the extent applicable, to such persons, firms, corporations or other entities
      as
      required by applicable law including, without limitation, Section 9-504(1)(c)
      of
      the UCC; and

     

    Fourth,
      to the extent of any surplus, to the Company or as a court of competent
      jurisdiction may direct.

     

    In
      the
      event that the proceeds of any collection, recovery, receipt, appropriation,
      realization or sale are insufficient to satisfy the Obligations, the Company
      shall be liable for the deficiency plus the costs and fees of any lawyers
      employed by Pledgee to collect such deficiency.

     

    11. Waiver
      of Marshalling.
      The
      Company hereby waives any right to compel any marshalling of any of the Pledged
      Collateral.

     

    12. No
      Waiver.
      Any and
      all of the Pledgees’ rights with respect to the Liens granted under this
      Agreement shall continue unimpaired, and Company shall be and remain obligated
      in accordance with the terms hereof, notwithstanding (a) the bankruptcy,
      insolvency or reorganization of the Company, (b) the release or substitution
      of
      any item of the Pledged Collateral at any time, or of any rights or interests
      therein, or (c) any delay, extension of time, renewal, compromise or other
      indulgence granted by the Agent or any Pledgee in reference to any of the
      Obligations. The Company hereby waives all notice of any such delay, extension,
      release, substitution, renewal, compromise or other indulgence, and hereby
      consents to be bound hereby as fully and effectively as if the Company had
      expressly agreed thereto in advance. No delay or extension of time by the Agent
      or any Pledgee in exercising any power of sale, option or other right or remedy
      hereunder, and no failure by the Agent or any Pledgee to give notice or make
      demand, shall constitute a waiver thereof, or limit, impair or prejudice the
      Pledgees’ right to take any action against the Company or to exercise any other
      power of sale, option or any other right or remedy.

     

    13. Expenses.
      The
      Pledged Collateral shall secure, and the Company shall pay to Pledgee on demand,
      from time to time, all reasonable
      costs
      and expenses, (including but not limited to, reasonable legal fees and costs,
      taxes, and all transfer, recording, filing and other charges) of, or incidental
      to, the custody, care, transfer, administration of the Pledged Collateral or
      any
      other collateral, or in any way relating to the enforcement, protection or
      preservation of the rights or remedies of the Agent and the Pledgees under
      this
      Agreement or with respect to any of the Obligations.

     

    14. The
      Agent Appointed Attorney-In-Fact and Performance by the Agent and the
      Pledgees.

     

    (a) Upon
      the
      occurrence of an Event of Default, the Company hereby irrevocably
      constitutes
      and appoints the Agent as such Company’s true and lawful attorney-in-fact, with
      full power of substitution, to execute, acknowledge and deliver any instruments
      and to do in such Company’s name, place and stead, all such acts, things and
      deeds for and on behalf of and in the name of the Company, which the Company
      could or might do or which the Agent may deem necessary, desirable or convenient
      to accomplish the purposes of this Agreement, including, without limitation,
      to
      execute such instruments of assignment or transfer or orders and to register,
      convey or otherwise transfer title to the Pledged Collateral into the Agent’s
      name, as agent for the Pledgees. The Company hereby ratifies and confirms all
      that said attorney-in-fact may so do and hereby declares this power of attorney
      to be coupled with an interest
      and
      irrevocable.
      If the
      Company fails to perform any agreement herein contained, the Agent or any
      Pledgee may itself perform or cause performance thereof, and any costs and
      expenses of the Pledgee incurred in connection therewith shall be paid by the
      Company as provided in Section 10 hereof.

    
      
        
        

      

      
        -
          6 -

        
          

        

      

      
        
        

      

    

    (b) The
      Pledgees hereby acknowledge and appoint the Agent to act on their behalf as
      provided in this Agreement, and that, in so acting, the Agent is acting on
      behalf of the Pledgees. The Agent shall incur no liability to the Pledgees
      for
      any action taken or any omission to take any action unless such action or
      failure of action resulted from the Agent’s gross negligence or willful conduct.

     

    15. Waivers. EACH
      PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
      TRIAL
      BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
      CONNECTION WITH THIS AGREEMENT OR ANY OTHER DOCUMENTS CONTEMPLATED TO BE
      EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER
      CONSTITUTES A MATERIAL INDUCEMENT FOR PLEDGEES TO ACCEPT THIS
      AGREEMENT.

     

    16. Recapture.
      Notwithstanding anything to the contrary in this Agreement, if the Pledgees
      receives any payment or payments on account of the Obligations, which payment
      or
      payments or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside and/or required to be repaid to a trustee,
      receiver, interim receiver, receiver and manager or any other party under the
      United States Bankruptcy Code, or any other federal, provincial or state
      bankruptcy, reorganization, moratorium or insolvency law relating to or
      affecting the enforcement of creditors’ rights generally, common law or
      equitable doctrine, then to the extent of any sum not finally retained by the
      Pledgees, the Company’s obligations to the Pledgees shall be reinstated and this
      Agreement shall remain in full force and effect (or be reinstated) until payment
      shall have been made to Pledgees, which payment shall be due on demand and
      shall
      bear interest at the highest rate of interest payable under the
      Note.

     

    17. Miscellaneous.

     

    (a) This
      Agreement sets forth the entire agreement and understanding between the parties
      and supersedes all prior
      or
      contemporaneous written or oral
      agreements, promises, representations, understandings, letters
      of intent and
      negotiations, between
      the parties with respect to the subject matter
      of this
      Agreement. No part of
      this
      Agreement
      may be
      modified or amended, nor may any right be waived,
      except
      by a written
      instrument which expressly refers to this Agreement, states that it is a
      modification or amendment of this Agreement or a waiver and is signed by the
      parties to this Agreement, or, in the case of waiver, by the party granting
      the
      waiver. No course of conduct or dealing or trade usage or custom and no course
      of performance shall be relied on or referred to by any party to contradict,
      explain or supplement any provision of this Agreement, it being acknowledged
      by
      the parties that this Agreement is intended to be, and is, the complete and
      exclusive statement of the agreement with respect to its subject matter, subject
      to the Loan Agreement and the Notes. Any waiver shall be limited to the express
      terms thereof and shall not be construed as a waiver of any other provisions
      or
      the same provisions at any other time or under any other circumstances. No
      delay
      or failure by either party to exercise any right under this Agreement, and
      no
      partial or single exercise of that right, shall constitute a waiver of that
      or
      any other rights.

    
      
        
        

      

      
        -
          7 -

        
          

        

      

      
        
        

      

    

    (b) In
      the
      event that any provision of this Agreement or the application thereof to the
      Company or any circumstance in any jurisdiction governing this Agreement shall,
      to any extent, be invalid or unenforceable under any applicable statute,
      regulation, or rule of law, such provision shall be deemed inoperative to the
      extent that it may conflict therewith and shall be deemed modified to conform
      to
      such statute, regulation or rule of law, and the remainder of this Agreement
      and
      the application of any such invalid or unenforceable provision to parties,
      jurisdictions, or circumstances other than to whom or to which it is held
      invalid or unenforceable shall not be affected thereby, nor shall same affect
      the validity or enforceability of any other provision of this
      Agreement.

     

    (c) This
      Agreement shall inure to the benefit of and be binding upon the Company, and
      the
      Company’s successors and assigns, and shall inure to the benefit of and be
      binding upon the Agent, the Pledgees and their respective successors and
      assigns.

     

    (d) Any
      notice or other communication required or permitted pursuant to this Agreement
      shall be given in the manner and to the address and person set forth in the
      Loan
      Agreement. 

     

    (e) This
      Agreement and the rights of the parties shall be construed and enforced in
      accordance with the laws of the State of New
      York
      applicable to agreements executed and to be performed wholly within such state
      and without regard to
      principles of conflicts of law.
      Each
      party irrevocably (a) consents to the jurisdiction of the federal and state
      courts situated
      in New
      York County, New York in
      any
      action that may be brought pursuant to this Agreement, and (b)
      submits to and accepts, with respect to its properties and assets, generally
      and
      unconditionally, the in personam jurisdiction of the aforesaid courts, waiving
      any defense that such court is not a convenient forum. In any such litigation
      to
      the extent permitted by applicable law, each party waives personal service
      of
      any summons, complaint or other process, and agrees that the service thereof
      may
      be made either (i) in the manner for giving of notices provided in Section
      17(d)
      of this Agreement (other than by telecopier) or (ii) in any other manner
      permitted by law. 

     

    (f) All
      captions in this Agreement are included herein for convenience of reference
      only
      and shall not constitute part of this Agreement for any other
      purpose.

     

    (g) This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original and all of which when taken together shall constitute one
      and
      the same agreement. Any signature delivered by a party by facsimile transmission
      or by sending a scanned copy by electronic mail shall be deemed an original
      signature hereto.

     

    (h) If
      there
      is any inconsistency between the provisions of this Agreement and the provisions
      of the Loan Agreement or Note, the provisions of the Loan Agreement and the
      Note
      shall prevail.

     

    IN
      WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
      and
      year first written above.

     

    [Signatures
      on following pages]

    
      
        
        

      

      
        -
          8 -

        
          

        

      

      
        
        

      

    

    SIGNATURE
      PAGE TO PLEDGE AGREEMENT 

     

    
      	 	 	 
	 	NATURALNANO,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Cathy
              A. Fleischer
	 	
              Name:       

            	
              
Cathy
              A. Fleischer
	 	Title:          
              	President

    

     

    
      	 	 	 
	 	PLATINUM
              ADVISORS
              LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Mark Nordlicht
	 	
               

              Name:           

            	
              
Mark
              Nordlicht
	 	Title: 	
            

    

     

    
      	 	 	 
	 	PLEDGEES:
	 	 
	 	Platinum Partners Long Term Growth
              IV
	 
 	 
 	 
 
	 	By:  	/s/ Mark Nordlicht
	 	Name:  	
              
Mark
              Nordlicht
	 	Title:	Pres
	 	Address:  	152 W. 57th Street, 54th Floor
	 	 	New York, NY 10019
	 	Telecopier:  	(212)
	 	Longview Special
              Financing, Inc.

      	 	 	 
	 	By:  	/s/
              François
              Morax
	 	Name:        	
              
François
              Morax
	 	Title: 	Director
	 	Address: 	Lindstrassse
              6
	 	6341 Baar
	 	Switzerland
	 	
              Telecopier: 
                

            	 
	 	Platinum Advisors,
              LLC

    

     

    
      	 	 	 
	 	By:  	/s/ Mark Nordlicht
	 	Name:        	
              
Mark
              Nordlicht
	 	Title:	 
	 	Address: 	152 W. 57th Street, 54th Floor
	 	 	New York, NY 10019
	 	Telecopier:  	(212)

    

    
      
        
        

      

      
        -
          9 -

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