Document:

Unassociated Document

    EXHIBIT
      10.1

    TERMINATION
      AGREEMENT

    

    This
      Termination Agreement is made as of the 9th
      day of
      July 2006 by and between SBI Brightline XIII, LLC, a California limited
      liability company (“SBI”) and NaturalNano, Inc., a Nevada corporation (the
“Company”).

    

    Reference
      is made to that certain Stock Purchase Agreement dated as of March 30, 2006
      by
      and between SBI and the Company (the “Stock Purchase Agreement”) and to that
      certain warrant for the purchase of up to 3,300,000 shares of the Company’s
      Common Stock issued by the Company to SBI on March 30, 2006 (the
“Warrant”).

    

    For
      good
      and valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, SBI and the Company hereby agree as follows:

    

    
      	1.      	
              As
                of the date hereof, the Stock Purchase Agreement is terminated and
                of no
                further force and effect. In amplification of, and not by way of
                limiting,
                the foregoing, from and after the date hereof, the Company shall
                have no
                right under the Stock Purchase Agreement to require SBI to purchase,
                and
                SBI shall have no obligation under the Stock Purchase Agreement to
                purchase, any shares of the Common Stock of the
                Company.

            

    

    

    
      	2.      	
              As
                of the date hereof, the Warrant is cancelled and of no further force
                and
                effect, and all rights of SBI to acquire shares of the Company’s Common
                Stock by exercise of the Warrant shall be null and
                void.

            

    

    

    
      	3.      	
              Each
                of SBI and the Company, for itself and its members, managers,
                stockholders, officers, and directors, hereby forever releases the
                other
                party from all obligations of every nature that such other party
                may have
                had to it under the Stock Purchase Agreement or the
                Warrant.

            

    

    

    In
      witness whereof, SBI and the Company have executed this Termination Agreement
      as
      of the 9th
      day of
      July 2006.

    

    
      	
              SBI
                Brightline XIII, LLC

               

               

              By:   /s/
                Shelly Singhal

              
                

              

              Shelly
                Singhal, Manager

            	
              NaturalNano,
                Inc.

               

               

              By:  
                /s/
                Kathleen A. Browne

              
                

              

              Kathleen
                A. Browne, Chief Financial OfficerUnassociated Document

    
      EXHIBIT
        10.2

      STOCK
        PURCHASE AGREEMENT

       

      THIS
        STOCK PURCHASE AGREEMENT is made as of the 9th day
        of
        July
        2006 by
        and
        between NaturalNano, Inc., a corporation organized under the laws of the
        State
        of Nevada, with its principal offices at 150 Lucius Gordon Drive, Suite 115,
        West Henrietta, New York 14586 (the “Company”), and SBI Brightline XIII, LLC, a
        California limited liability company with its principal offices at 610 Newport
        Center Drive, Suite 1205, Newport Beach, California 92660 (the “Purchaser”).

       

      In
        consideration of the mutual covenants contained in this Stock Purchase
        Agreement, the Company and the Purchaser hereby agree as follows: 

      

      SECTION
        1. Authorization
        of Sale of the Shares.
        Subject
        to the terms and conditions of this Agreement, the Company may issue and
        sell to
        the Purchaser and the Purchaser shall purchase from the Company up to
        15,321,154
        shares
        of
        the Company’s Common Stock (the “Shares”), par value $.001 per share (the
“Common Stock”). The Company has authorized and has reserved and covenants to
        continue to reserve, free of preemptive rights and other similar contractual
        rights of stockholders, a sufficient number of its authorized but unissued
        shares of its Common Stock to cover the Shares which may be issued pursuant
        to
        the terms of this Agreement.

      

      SECTION
        2. Agreement
        to Purchase the Shares.

      

      2.1 Schedule
        2.1 attached hereto defines eighteen
        (18)
        tranches
        of
        Shares that the Purchaser has agreed to purchase from the Company (each,
        a
“Tranche”) and, with respect to each Tranche, sets forth the number of Shares
        constituting such Tranche (the “Tranche Shares”) and the purchase price per
        share for the Tranche Shares in such Tranche (the “Tranche Purchase Price”).

      

      2.2 The
        Company may, in its sole discretion, elect to sell the Tranche Shares of
        any
        Tranche to the Purchaser at any time after the date on which the Registration
        Statement (as defined in Section 7.1) of the Company covering the Shares
        is
        declared effective (the “Effective Date”); provided, however, (i) the Company
        must elect to sell all of the Tranche Shares included in a Tranche if it
        elects
        to sell any of the Tranche Shares in such Tranche; and (ii) the Company must
        elect to sell the Tranche Shares in the order that the Tranches are listed
        on
        Schedule 2.1. The Company may elect to sell Tranche Shares included in more
        than
        one Tranche at the same time. To effect its election to sell Shares, the
        Company
        must give written notice thereof (an “Election Notice”) to the Purchaser. The
        Election Notice shall specify the Tranche or Tranches with respect to which
        the
        election is being made and the date on which the closing of the sale and
        purchase of the Tranche Shares shall occur; provided, such date shall be
        a
        business day and shall not be earlier than five days after the date such
        Election Notice is given to the Purchaser. An Election Notice shall be
        irrevocable except as provided in Section 3.5.

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      SECTION
        3. Closing
        of the Purchase of the Shares.

      

      3.1 Subject
        to the satisfaction or waiver of the conditions precedent set forth in Sections
        3.2 and 3.3, the closing of a purchase of Tranche Shares by the Purchaser
        pursuant to this Agreement (each, a “Closing”) shall occur at 10:00 a.m. on the
        date specified in the Election Notice delivered by the Company with respect
        to
        such Tranche Shares (the time and date of the Closing of a particular Tranche
        is
        referred to herein as the “Tranche Closing Date”). Unless otherwise agreed by
        the Company and the Purchaser, each Closing shall occur at the offices of
        SBI,
        Newport Beach, California.

      

      3.2 The
        obligation of the Purchaser to purchase Tranche Shares at a Closing shall
        be
        subject to the satisfaction of the following conditions, or the waiver of
        such
        conditions by the Purchaser, at or prior to the applicable Tranche Closing
        Date:

      

      (a) the
        representations and warranties of the Company set forth in Section 4
        of this
        Agreement shall be true and correct with the same force and effect as though
        expressly made on and as of such Tranche Closing Date, except for
        representations or warranties made as of a particular date which representations
        and warranties shall be true and correct as of such date;

       

      (b) the
        Company shall have complied with all the agreements hereunder and satisfied
        all
        the conditions on its part to be performed or satisfied hereunder at or prior
        to
        such Tranche Closing Date;

       

      (c) the
        Company shall have delivered to the Purchaser a certificate executed by the
        Chairman of the Board or President and the chief financial or accounting
        officer
        of the Company, dated the applicable Tranche Closing Date, to the effect
        that
        the conditions in clauses (a) and (b) have been satisfied;

       

      (d) the
        Registration Statement shall have been declared effective and shall not have
        been withdrawn, no stop order suspending the effectiveness of the Registration
        Statement shall be in effect, and no proceedings for the suspension of the
        effectiveness of the Registration Statement shall have been instituted or
        threatened by the Securities and Exchange Commission (the
“Commission”);

       

      (e) Counsel
        to the Company shall have delivered its legal opinion to the Purchaser that
        the
        Tranche Shares being issued on such Tranche Closing Date will, upon issuance,
        be
        duly authorized, validly issued, fully paid and non-assessable.

       

      3.3 At
        each
        Closing, (i) the Purchaser shall pay to the Company, by wire transfer of
        immediately available funds to an account designated in writing by the Company
        at or prior to the Closing, the applicable Tranche Purchase Price for the
        Tranche Shares being purchased at the Closing, and (ii) the Company shall
        deliver to the Purchaser a stock certificate representing the Tranche Shares
        being purchased at the Closing or shall cause the Tranche Shares being purchased
        to be electronically issued to the Purchaser.

       

      3.4 If
        a
        Closing does not occur on a proposed Tranche Closing Date because the conditions
        specified in Sections 3.3 were not satisfied at the time of the applicable
        proposed Tranche Closing Date, the Election Notice with respect to the Tranche
        or Tranches proposed to be sold on such proposed Tranche Closing Date shall
        automatically be revoked; provided, however, such revocation shall not impair
        the right of the Company to give another Election Notice with respect to
        the
        Tranche or Tranches covered by the revoked Election Notice or to compel the
        Purchaser to purchase any Tranche Shares included in such Tranche or Tranches
        on
        a subsequent Tranche Closing Date on which the conditions specified in Section
        3.2 are satisfied.

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      SECTION
        4. Representations
        and Warranties of the Company.
        The
        Company hereby represents and warrants to the Purchaser as follows:

      

      4.1 Organization
        and Qualification.
        The
        Company is a corporation duly organized, validly existing and in good standing
        under the laws of its jurisdiction of incorporation and the Company is qualified
        to do business as a foreign corporation in each jurisdiction in which
        qualification is required, except where the failure to so qualify would not
        individually or in the aggregate have a material adverse effect on the financial
        condition, results of operations, properties or business of the Company taken
        as
        a whole.

      

      4.2 Subsidiaries.
        The
        Company has one wholly owned subsidiary, NaturalNano Research, Inc. 

       

      4.3 Issuance,
        Sale and Delivery of the Shares.
        The
        Shares have been duly authorized and, when issued, delivered and paid for
        in the
        manner set forth in this Agreement, will be duly authorized, validly issued,
        fully paid and nonassessable. No preemptive rights or other rights to subscribe
        for or purchase exist with respect to the issuance and sale of the Shares
        by the
        Company pursuant to this Agreement. No further approval or authority of the
        stockholders or the Board of Directors of the Company will be required for
        the
        issuance and sale of the Shares to be sold by the Company as contemplated
        herein.

      

      4.4 Authorized
        and Outstanding Capital Stock.
        The
        Company has authorized the issuance of 200,000,000 shares of Common Stock,
        of
        which approximately 121,881,407 shares are issued and outstanding as of the
        date
        of this Agreement. The Company has 10,000,000 shares of preferred stock
        authorized, none of which are issued or outstanding. The Company’s stock option
        plan provides for the granting of options to the Company’s employees, directors,
        consultants and advisors, to purchase an aggregate of up to 14,000,000 shares
        of
        Common Stock, of which, as of the date of this Agreement, options to purchase
        an
        aggregate of 9,158,333 shares of Common Stock were outstanding. In addition,
        the
        Company has granted warrants to purchase an aggregate of 4,500,000 shares
        of
        Common Stock as of the date of this Agreement. Except for shares of Common
        Stock, options and warrants described in this Section 4.3,
        as
        of the
        date of this Agreement,
        there
        are
        no
        authorized or outstanding options, warrants, preemptive rights, rights of
        first
        refusal or other rights to purchase any capital stock of the Company or any
        equity or debt securities convertible into or exchangeable or exercisable
        for
        capital stock of the Company.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      
        4.5 Due
          Execution, Delivery and Performance of the Agreements.
          The
          Company has full legal right, corporate power and authority to enter into
          this
          Agreement and to perform the transactions contemplated hereby. This Agreement
          has been duly authorized, executed and delivered by the Company. The execution,
          delivery and performance of this Agreement by the Company and the consummation
          of the transactions herein contemplated will not violate any provision
          of the
          organizational documents of the Company and will not result in the creation
          of
          any lien, charge, security interest or encumbrance upon any assets or property
          of the Company pursuant to the terms or provisions of, or will not conflict
          with, result in the breach or violation of, or constitute, either by itself
          or
          upon notice or the passage of time or both, a default under any agreement,
          mortgage, deed of trust, lease, franchise, license, indenture, permit or
          other
          instrument to which the Company is a party or by which the Company or any
          of its
          assets or properties may be bound or affected or any statute or any
          authorization, judgment, decree, order, rule or regulation of any court
          or any
          regulatory body, administrative agency or other governmental body applicable
          to
          the Company or any of its properties. No consent, approval, authorization
          or
          other order of any court, regulatory body, administrative agency or other
          governmental body is required for the execution, delivery and performance
          of
          this Agreement or the consummation by the Company of the transactions
          contemplated hereby, except for compliance with the Blue Sky laws and federal
          securities laws applicable to the offering of the Shares. Assuming the
          valid
          execution hereof by the Purchaser, this Agreement will constitute the legal,
          valid and binding obligation of the Company, enforceable in accordance
          with its
          terms, except as enforceability may be limited by applicable bankruptcy,
          insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally and except as enforceability may be subject to general
          principles of equity (regardless of whether such enforceability is considered
          in
          a proceeding in equity or at law) and except as the indemnification agreements
          of the Company in Section 7.3 hereof may be legally
          unenforceable.

      4.6 No
        Actions.
        There
        are no legal or governmental actions, suits or proceedings pending or, to
        the
        Company’s knowledge, threatened to which the Company is or may be a party which
        seeks to prevent or restrain the transactions contemplated by this Agreement
        or
        to recover damages as a result of the consummation of such
        transactions.

      

      4.7 Investment
        Company.
        The
        Company is not an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for an investment company, within the
        meaning of the Investment Company Act of 1940, as amended.

      

      4.8 Brokers.
        There
        is
        no broker, finder or other party that is entitled to receive from the Company
        any brokerage or finder’s fee or other fee or commission as a result of any
        transactions contemplated by this Agreement.

      

      4.9 Books
        and Records.
        The
        books, records and accounts of the Company accurately and fairly reflect,
        in
        reasonable detail, the transactions in, and dispositions of, the assets of,
        and
        the results of operations of, the Company, all to the extent required by
        generally accepted accounting principles. The Company maintains a system
        of
        internal accounting controls sufficient to provide reasonable assurances
        that
        (i) transactions are executed in accordance with management’s general or
        specific authorizations, (ii) transactions are recorded as necessary to permit
        preparation of financial statements in accordance with generally accepted
        accounting principles and to maintain asset accountability, (iii) access
        to
        assets is permitted only in accordance with management’s general or specific
        authorization and (iv) the recorded accountability for assets is compared
        with
        the existing assets at reasonable intervals and appropriate action is taken
        with
        respect to any differences.

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      4.10 Sole
        Representations and Warranties.
        Except
        for the representations and warranties contained in this Section 4, the Company
        makes no representation or warranty to the Purchaser, express or implied,
        in
        connection with the transactions contemplated by this Agreement.

      

      SECTION
        5. Representations,
        Warranties and Covenants of the Purchaser.
        The
        Purchaser represents and warrants to the Company as follows:

      

      5.1 Organization
        and Qualification.
        The
        Purchaser is a company duly organized, validly existing and in good standing
        under the laws of its jurisdiction of incorporation.

      

      5.2 Due
        Execution, Delivery and Performance of the Agreements.
        The
        Purchaser has full legal right, power and authority to enter into this Agreement
        and to perform the transactions contemplated hereby. This Agreement has been
        duly authorized, executed and delivered by the Purchaser. The execution,
        delivery and performance of this Agreement by the Purchaser and the consummation
        of the transactions herein contemplated will not violate any provision of
        the
        organizational documents of the Purchaser and will not result in the creation
        of
        any lien, charge, security interest or encumbrance upon any assets or property
        of the Purchaser pursuant to the terms or provisions of, or will not conflict
        with, result in the breach or violation of, or constitute, either by itself
        or
        upon notice or the passage of time or both, a default under any agreement,
        mortgage, deed of trust, lease, franchise, license, indenture, permit or
        other
        instrument to which the Purchaser is a party or by which the Purchaser or
        any of
        its assets or properties may be bound or affected or any statute or any
        authorization, judgment, decree, order, rule or regulation of any court or
        any
        regulatory body, administrative agency or other governmental body applicable
        to
        the Purchaser or any of its properties. No consent, approval, authorization
        or
        other order of any court, regulatory body, administrative agency or other
        governmental body is required for the execution, delivery and performance
        of
        this Agreement or the consummation by the Purchaser of the transactions
        contemplated hereby. Assuming the valid execution hereof by the Company,
        this
        Agreement will constitute the legal, valid and binding obligation of the
        Purchaser, enforceable in accordance with its terms, except as enforceability
        may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
        or similar laws affecting creditors’ rights generally and except as
        enforceability may be subject to general principles of equity (regardless
        of
        whether such enforceability is considered in a proceeding in equity or at
        law)
        and except as the indemnification agreements of the Purchaser in Section
        7.3
        hereof may be legally unenforceable.

      

      5.3 No
        Actions.
        There
        are no legal or governmental actions, suits or proceedings pending or, to
        the
        Purchaser’s knowledge, threatened to which the Purchaser is or may be a party
        which seeks to prevent or restrain the transactions contemplated by this
        Agreement or to recover damages as a result of the consummation of such
        transactions. The Purchaser has not been and is not currently the subject
        of an
        investigation or inquiry by the Securities and Exchange Commission, the NASD,
        or
        any state securities commission.

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      5.4 Nature
        of Purchaser.
        The
        Purchaser is knowledgeable, sophisticated and experienced in making, and
        is
        qualified to make, decisions with respect to investments in shares representing
        an investment decision like that involved in the purchase of the Shares,
        including investments in securities issued by the Company. The Purchaser
        is an
“accredited investor” within the meaning of Rule 501(a) of Regulation D
        promulgated under the Securities Act and would be considered a large,
        institutional accredited investor. The Purchaser is not a “dealer” within the
        meaning of the Securities Act or a “broker” or “dealer” within the meaning of
        the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The
        Purchaser is able to bear the economic risk of loss of the Purchaser’s entire
        investment in the Shares.

      

      5.5 Access
        to Information.
        The
        Purchaser has requested, received, reviewed and considered all information
        it
        deems relevant in making an informed decision to purchase the Shares. The
        Purchaser understands that the Company is still in the development stage
        and
        does not have operating revenues.

      

      5.5 Investment
        Intent.
        The
        Purchaser is acquiring the Shares in the ordinary course of its business
        and for
        its own account for investment only and with no present intention of
        distributing any of such Shares or entering into any arrangement or
        understanding with any other person regarding the distribution of such Shares
        (it being understood that the foregoing does not limit the Purchaser’s right to
        sell Shares pursuant to the Registration Statement).

       

      5.6 Sole
        Representations and Warranties.
        Except
        for the representations and warranties contained in this Section 5, the
        Purchaser makes no representation or warranty to the Company, express or
        implied, in connection with the transactions contemplated by this
        Agreement.

      

      SECTION
        6. Survival
        of Representations, Warranties and Agreements.
        Notwithstanding any investigation made by any party to this Agreement, all
        covenants, agreements, representations and warranties made by the Company
        and
        the Purchaser herein and in the certificates delivered pursuant hereto shall
        survive the execution of this Agreement, the delivery to the Purchaser of
        the
        Shares being purchased and the payment therefor.

      

      SECTION
        7.  Covenants. 

      

      7.1 Registration
        Procedures and Expenses.

      

      (a) As
        soon
        as practicable, but in any event no later than one hundred twenty (120) days
        following the date of this Agreement, the Company shall prepare and file
        with
        the Commission a registration statement on Form SB-2 or other applicable
        form as
        determined by the Company (the “Registration Statement”) for the purpose of
        registering the sale of the Shares by the Purchaser from time to time on
        the
        facilities of any securities exchange or trading system on which the Common
        Stock is then traded or in privately-negotiated transactions, which Registration
        Statement shall contain all material non-public information disclosed to
        the
        Purchasers by the Company in connection with the issuance and sale of the
        Shares. For purposes of this Section 7.1, the term “Shares” shall include any
        other securities of the Company issued in exchange for the Shares, as a dividend
        on the Shares or in connection with a stock split or other reorganization
        transaction affecting the Shares. The Company shall use its commercially
        reasonable efforts to cause the Registration Statement to become effective
        as
        soon as practicable.

       

      
        
          
          

        

        
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      (b) The
        Company shall prepare and file with the Commission such amendments and
        supplements to the Registration Statement and the prospectus forming a part
        thereof as may be necessary to keep the Registration Statement effective
        until
        the earliest date, after the date on which all of the Shares have been purchased
        pursuant to this Agreement or the obligation of the Purchaser to purchase
        the
        Shares pursuant to this Agreement has been terminated, on which (i) all the
        Shares have been disposed of pursuant to the Registration Statement, (ii)
        all of
        the Shares then held by the Purchaser may be sold under the provisions of
        Rule
        144 without limitation as to volume, whether pursuant to Rule 144(k) or
        otherwise, or (iii) the Company has determined that all Shares then held
        by the
        Purchaser may be sold without restriction under the Securities Act and has
        removed any stop transfer instructions relating to such Shares and offered
        to
        cause to be removed any restrictive legends on the certificates, if any
        representing such Shares (the period between the Effective Date and the earliest
        of such dates is referred to herein as the “Registration Period”). At any time
        after the end of the Registration Period, the Company may withdraw the
        Registration Statement and its obligations under this Section 7 (other than
        its
        obligations under Section 7.3) shall automatically terminate. 

      

      (c) The
        Purchaser agrees to comply with all federal and state securities laws and
        the
        rules and regulations promulgated thereunder in connection with any sale
        by it
        of the Shares, whether or not such sale is pursuant to the Registration
        Statement. In connection with the sale of any Shares pursuant to the
        Registration Statement, but without limiting the generality of the foregoing
        sentence, the Purchaser shall (i) comply with the provisions of Regulation
        M
        promulgated under the Exchange Act, and (ii) deliver to the purchaser of
        Shares
        the prospectus forming a part of the Registration Statement and all relevant
        supplements thereto which have been provided by the Company to the Purchaser
        on
        or prior to the applicable delivery date.

      

      (d) The
        Company shall not be obligated to prepare and file a post-effective amendment
        or
        supplement to the Registration Statement or the prospectus constituting a
        part
        thereof during the continuance of a Blackout Event. A “Blackout Event” means any
        of the following: (a) the possession by the Company of material information
        that
        is not ripe for disclosure in a registration statement or prospectus, as
        determined in good faith by the Chief Executive Officer or the Board of
        Directors of the Company or that disclosure of such information in the
        Registration Statement or the prospectus constituting a part thereof would
        be
        detrimental to the business and affairs of the Company; or (b) any material
        engagement or activity by the Company which would, in the good faith
        determination of the Chief Executive Officer or the Board of Directors of
        the
        Company, be adversely affected by disclosure in a registration statement
        or
        prospectus at such time. 

      

      (e) At
        least
        two (2) days prior to the filing with the Commission of the Registration
        Statement (or any amendment thereto) or the prospectus forming a part thereof
        (or any supplement thereto), the Company shall provide draft copies thereof
        to
        the Purchaser and shall consider incorporating into such documents such comments
        as the Purchaser (and its counsel) may propose to be incorporated therein.
        Notwithstanding the foregoing, no prospectus supplement, the form of which
        has
        previously been provided to the Purchaser, need be delivered in draft form
        to
        the Purchaser.

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

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

      

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

      

      (h) The
        Company shall file or cause to be filed such documents as are required to
        be
        filed by the Company for normal blue sky clearance in states specified in
        writing by the Purchaser; provided,
        however,
        that
        the Company shall not be required to qualify to do business or consent to
        service of process in any jurisdiction in which it is not now so qualified
        or
        has not so consented.

      

      (i) Throughout
        the Registration Period and so long as the Purchaser owns Shares purchased
        pursuant to this Agreement, the Company shall:

      

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

      

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

      

      Notwithstanding
        the foregoing, the Purchaser acknowledges that it may not be entitled to
        rely on
        Rule 144 in connection with the resale of its Shares.

      

      (j) The
        Company shall bear all expenses incurred by it in connection with the procedures
        in paragraphs (a) through (i) of this Section 7.1 and the registration of
        the
        Shares pursuant to the Registration Statement. The Company shall not be
        responsible for any expenses incurred by the Purchaser in connection with
        its
        sale of the Shares or its participation in the procedures in paragraphs (a)
        through (i) of this Section 7.1 including, without limitation, any fees and
        expenses of counsel or other advisers to the Purchaser and any underwriting
        discounts, brokerage fees and commissions incurred by the
        Purchaser.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      7.2 Covenants
        of the Purchaser.

      

      (a) The
        Purchaser acknowledges and understands that the Shares are "restricted
        securities" as defined in Rule 144. The Purchaser hereby agrees not to offer
        or
        sell (as such terms are defined in the Securities Act and the rules and
        regulations promulgated thereunder) any Shares unless such offer or sale
        is made
        (a) pursuant to an effective registration of the Shares under the Securities
        Act, or (b) pursuant to an available exemption from the registration
        requirements of the Securities Act. The Purchaser agrees that it will not
        engage
        in hedging transactions with regard to the Shares other than in compliance
        with
        the Securities Act. A proposed transfer shall be deemed to comply with this
        Section 7.2(a) if the Purchaser delivers to the Company a legal opinion in
        form
        and substance satisfactory to the Purchaser from counsel satisfactory to
        the
        Purchaser to the effect that such transfer complies with this Section
        7.2(a).

      

      (b) If
        at any
        time or from time to time after the Effective Date, the Company notifies
        the
        Purchaser in writing that the Registration Statement or the prospectus forming
        a
        part thereof (taking into account any prior amendments or supplements thereto)
        contains any untrue statement of a material fact or omits to state a material
        fact necessary to make the statements therein, in light of the circumstances
        under which they are made, not misleading, the Purchaser shall not offer
        or sell
        any Shares or engage in any other transaction involving or relating to the
        Shares (other than purchases of Shares pursuant to this Agreement), from
        the
        time of the giving of notice with respect to such untrue statement or omission
        until the Purchaser receives written notice from the Company that such untrue
        statement or omission no longer exists or has been corrected or disclosed
        in an
        effective post-effective amendment to the Registration Statement or a valid
        prospectus supplement to the prospectus forming a part thereof.

      

      (c) In
        connection with the sale of any Shares pursuant to the Registration Statement,
        the Purchaser shall deliver to the purchaser thereof the prospectus forming
        a
        part of the Registration Statement and all relevant supplements thereto which
        have been provided by the Company to the Purchaser on or prior to the applicable
        delivery date, all in accordance with the requirements of the Securities
        Act and
        the rules and regulations promulgated thereunder and any applicable blue
        sky
        laws.

      

      (d) The
        Company may refuse to register (or permit its transfer agent to register)
        any
        transfer of any Shares not made in accordance with this Section 7.2 and for
        such
        purpose may place stop order instructions with its transfer agent with respect
        to the Shares.

      

      (e) The
        Purchaser will cooperate with the Company in all respects in connection with
        the
        performance by the Company of its obligations under Section 7.1, including
        timely supplying all information reasonably requested by the Company (which
        shall include all information regarding the Purchaser, and any person who
        beneficially owns Shares held by the Purchaser within the meaning of Rule
        13d-3
        promulgated under the Exchange Act, and the proposed manner of sale of the
        Shares required to be disclosed in the Registration Statement) and executing
        and
        returning all documents reasonably requested in connection with the registration
        and sale of the Shares. The Purchaser hereby consents to be named as an
        underwriter in the Registration Statement, if applicable, in accordance with
        current Commission policy and, if necessary, to join in the request of the
        Company for the acceleration of the effectiveness of the Registration
        Statement.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      7.3 Indemnification.
        For the
        purpose of this Section 7.3: 

      

      
        	 	
                (i)

              	
                the
                  term “Purchaser Affiliate” shall mean any person who controls the
                  Purchaser within the meaning of Section 15 of the Securities Act
                  or
                  Section 20 of the Exchange Act; and

              

      

      

      
        	 	
                (ii)

              	
                the
                  term “Registration Statement” shall include any final prospectus, exhibit,
                  supplement or amendment included in or relating to the Registration
                  Statement referred to in Section 7.1.

              

      

      

      (a) The
        Company agrees to indemnify and hold harmless the Purchaser and each Purchaser
        Affiliate, against any losses, claims, damages, liabilities or expenses,
        joint
        or several, to which such Purchaser or such Purchaser Affiliate may become
        subject, under the Securities Act, the Exchange Act, or any other federal
        or
        state statutory law or regulation, or at common law or otherwise (including
        in
        settlement of any litigation, if such settlement is effected with the written
        consent of the Company), insofar as such losses, claims, damages, liabilities
        or
        expenses (or actions in respect thereof as contemplated below) arise out
        of or
        are based upon (i) any untrue statement or alleged untrue statement of any
        material fact contained in the Registration Statement, as amended as of the
        Effective Date, including any information deemed to be a part thereof as
        of the
        time of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant
        to
        Rule 434 promulgated under the Securities Act, or the prospectus, in the
        form
        first filed with the Commission pursuant to Rule 424(b) of the Regulations,
        or
        filed as part of the Registration Statement at the time of effectiveness
        if no
        Rule 424(b) filing is required (the “Prospectus”), or any amendment or
        supplement thereto, (ii) the omission or alleged omission to state in the
        Registration Statement as of the Effective Date a material fact required
        to be
        stated therein or necessary to make the statements in the Registration Statement
        or any post-effective amendment or supplement thereto, or in the Prospectus
        or
        any amendment or supplement thereto, not misleading, in each case in the
        light
        of the circumstances under which the statements contained therein were made,
        or
        (iii) any inaccuracy in the representations and warranties of the Company
        contained in this Agreement, or any failure of the Company to perform its
        obligations hereunder, and will reimburse the Purchaser and each such Purchaser
        Affiliate for any legal and other expenses as such expenses which are reasonably
        incurred by the Purchaser or such Purchaser Affiliate in connection with
        investigating, defending, settling, compromising or paying any such loss,
        claim,
        damage, liability, expense or action; provided,
        however,
        that
        the Company will not be liable in any such case to the extent that any such
        loss, claim, damage, liability or expense arises out of or is based upon
        (i) an
        untrue statement or alleged untrue statement or omission or alleged omission
        made in the Registration Statement, the Prospectus or any amendment or
        supplement thereto in reliance upon and in conformity with written information
        furnished to the Company by the Purchaser expressly for use therein, or (ii)
        the
        failure of the Purchaser to comply with the covenants and agreements contained
        in Section 7.2 hereof respecting the sale of the Shares, or (iii) the
        inaccuracy of any representations made by the Purchaser herein or (iv) any
        statement or omission in any Prospectus that is corrected or disclosed in
        any
        subsequent Prospectus that was delivered to the Purchaser prior to the pertinent
        sale or sales by the Purchaser.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      (b) The
        Purchaser will indemnify and hold harmless the Company, each of its directors,
        each of its officers who signed the Registration Statement and each person,
        if
        any, who controls the Company within the meaning of the Securities Act and
        the
        Exchange Act, against any losses, claims, damages, liabilities or expenses
        to
        which the Company, each of its directors, each of its officers who signed
        the
        Registration Statement or controlling person may become subject, under the
        Securities Act, the Exchange Act, or any other federal or state statutory
        law or
        regulation, or at common law or otherwise (including in settlement of any
        litigation, if such settlement is effected with the written consent of such
        Purchaser) insofar as such losses, claims, damages, liabilities or expenses
        (or
        actions in respect thereof as contemplated below) arise out of or are based
        upon
        (i) any failure to comply with the covenants and agreements contained in
        Section 7.2 hereof respecting the sale of the Shares, (ii) the inaccuracy
        of any representation made by the Purchaser herein, or (iii) any (x) untrue
        or
        alleged untrue statement of any material fact contained in the Registration
        Statement, the Prospectus, or any amendment or supplement thereto, or (y)
        omission or alleged omission to state in the Registration Statement, the
        Prospectus or any amendment or supplement thereto a material fact required
        to be
        stated therein or necessary to make the statements in the Registration Statement
        or any amendment or supplement thereto, or in the Prospectus or any amendment
        or
        supplement thereto, not misleading, in each case in the light of the
        circumstances under which they were made; provided, that the Purchaser’s
        indemnification obligation under this clause (iii) shall apply to the extent,
        and only to the extent, that such untrue statement or alleged untrue statement
        or omission or alleged omission was made in the Registration Statement, the
        Prospectus, or any amendment or supplement thereto, in reliance upon and
        in
        conformity with written information furnished to the Company by the Purchaser
        expressly for use therein, and will reimburse the Company, each of its
        directors, each of its officers who signed the Registration Statement or
        controlling person for any legal and other expense reasonably incurred by
        the
        Company, each of its directors, each of its officers who signed the Registration
        Statement or controlling person in connection with investigating, defending,
        settling, compromising or paying any such loss, claim, damage, liability,
        expense or action. 

      

      (c) Promptly
        after receipt by an indemnified party under this Section 7.3 of notice of
        the
        threat or commencement of any action, such indemnified party will, if a claim
        in
        respect thereof is to be made against an indemnifying party under this Section
        7.3, promptly notify the indemnifying party in writing thereof; provided,
        the
        omission so to notify the indemnifying party will not relieve it from any
        liability which it may have to any indemnified party for contribution (except
        as
        provided in paragraph (d)) or otherwise than under the indemnity agreement
        contained in this Section 7.3 or to the extent it is not prejudiced as a
        result
        of such failure. In case any such action is brought against any indemnified
        party and such indemnified party seeks or intends to seek indemnity from
        an
        indemnifying party, the indemnifying party will be entitled to participate
        in,
        and, to the extent that it may wish, jointly with all other indemnifying
        parties
        similarly notified, to assume the defense thereof with counsel reasonably
        satisfactory to such indemnified party. Upon receipt of notice from the
        indemnifying party to such indemnified party of its election so to assume
        the
        defense of such action and approval by the indemnified party of counsel,
        the
        indemnifying party will not be liable to such indemnified party under this
        Section 7.3 for any legal or other expenses subsequently incurred by such
        indemnified party in connection with the defense thereof unless the indemnified
        party shall not have employed counsel reasonably satisfactory to the indemnified
        party to represent the indemnified party within a reasonable time after notice
        of commencement of action, in which case the reasonable fees and expenses
        of
        counsel shall be at the expense of the indemnifying party.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

      (d) If
        the
        indemnification provided for in this Section 7.3 is required by its terms
        but is
        for any reason held to be unavailable to or otherwise insufficient to hold
        harmless an indemnified party under paragraphs (a) or (b) of this Section
        7.3 in
        respect to any losses, claims, damages, liabilities or expenses referred
        to
        herein (subject to the limitation of paragraph (c) of this Section 7.3),
        then
        each applicable indemnifying party shall contribute to the amount paid or
        payable by such indemnified party as a result of any losses, claims, damages,
        liabilities or expenses referred to herein (i) in such proportion as is
        appropriate to reflect the relative benefits received by the Company and
        the
        Purchaser from the placement of the Common Stock contemplated by this Agreement
        or (ii) if the allocation provided by clause (i) above is not permitted by
        applicable law, in such proportion as is appropriate to reflect not only
        the
        relative benefits referred to in clause (i) above but the relative fault
        of the
        Company and the Purchaser in connection with the statements or omissions
        or
        inaccuracies in the representations and warranties in this Agreement that
        resulted in such losses, claims, damages, liabilities or expenses, as well
        as
        any other relevant equitable considerations. The relative benefits received
        by
        the Company on the one hand and the Purchaser on the other shall be deemed
        to be
        in the same proportion as the amount paid by the Purchaser to the Company
        pursuant to this Agreement for the Shares purchased by the Purchaser that
        were
        sold pursuant to the Registration Statement bears to the difference (the
        “Difference”) between the amount such Purchaser paid for the Shares that were
        sold pursuant to the Registration Statement and the amount received by such
        Purchaser from such sale. The relative fault of the Company on the one hand
        and
        the Purchaser on the other shall be determined by reference to, among other
        things, whether the untrue or alleged statement of a material fact or the
        omission or alleged omission to state a material fact or the inaccurate or
        the
        alleged inaccurate representation and/or warranty relates to information
        supplied by the Company or by the Purchaser and the parties’ relative intent,
        knowledge, access to information and opportunity to correct or prevent such
        statement, omission or inaccuracy. The amount paid or payable by a party
        as a
        result of the losses, claims, damages, liabilities and expenses referred
        to
        above shall be deemed to include, subject to the limitations set forth in
        paragraph (c) of this Section 7.3, any legal or other fees or expenses
        reasonably incurred by such party in connection with investigating or defending
        any action or claim. The provisions set forth in paragraph (c) of this Section
        7.3 with respect to the notice of the threat or commencement of any threat
        or
        action shall apply if a claim for contribution is to be made under this
        paragraph (d); provided,
        however,
        that no
        additional notice shall be required with respect to any threat or action
        for
        which notice has been given under paragraph (c) for purposes of indemnification.
        The Company and each Purchaser agree that it would not be just and equitable
        if
        contribution pursuant to this Section 7.3 were determined solely by pro rata
        allocation or by any other method of allocation which does not take account
        of
        the equitable considerations referred to in this paragraph. Notwithstanding
        the
        provisions of this Section 7.3, the Purchaser shall not be required to
        contribute any amount in excess of the amount by which the Difference exceeds
        the amount of any damages that such Purchaser has otherwise been required
        to pay
        by reason of such untrue or alleged untrue statement or omission or alleged
        omission. 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.

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      

      7.4 Information
        Available.
        So long
        as the Registration Statement is effective covering the resale of Shares
        then
        still owned by the Purchaser, the Company will furnish to the Purchaser:
        

      

      (a) as
        soon
        as practicable after available, one copy of (i) its Annual Report to
        Stockholders (which Annual Report shall contain financial statements audited
        in
        accordance with generally accepted accounting principles by a firm of certified
        public accountants), (ii) upon written request, its Annual Report on Form
        10-KSB, (iii) upon written request, its Quarterly Reports on Form 10-QSB,
        (iv)
        upon written request, its Current Reports on Form 8-K, and (v) a full copy
        of
        the Registration Statement (the foregoing, in each case, excluding exhibits);
        and

      

      (b) upon
        the
        written request of the Purchaser, all exhibits excluded by the parenthetical
        to
        subparagraph (a)(v) of this Section 7.4.

      

      SECTION
        8. Notices.
        All
        notices, requests, consents and other communications hereunder shall be in
        writing, shall be mailed by first-class registered or certified airmail,
        confirmed facsimile or nationally recognized overnight express courier postage
        prepaid, and shall be deemed given when so mailed and shall be delivered
        as
        addressed as follows: 

      

      (a) if
        to the
        Company, to:

      

      NaturalNano,
        Inc.

      150
        Lucius Gordon Drive

      Suite
        115

      West
        Henrietta, New York 14586

      Phone:
         585.214.8005

      Facsimile: 585.214.8182

      Attn:
        Michael D. Riedlinger

      

      
        	 	 	
                or
                  to such other person at such other place as the Company shall designate
                  to
                  the Purchaser in writing; and

              

      

      

      (b) if
        to the
        Purchaser, at its address as set forth above or at such other address or
        addresses as may have been furnished to the Company in writing.

      

      SECTION
        9. Assignment.
        Neither
        party hereto may assign or delegate any of such party’s rights or obligations
        under or in connection with this Agreement, and any attempted assignment
        or
        delegation of such rights or obligations shall be void. Except as expressly
        provided in Section 7.3 with respect to Purchaser Affiliates, directors and
        controlling persons of the Company and officers of the Company who signed
        the
        Registration Statement, no person, including without limitation any person
        who
        purchases or otherwise acquires or receives any Shares from the Purchaser,
        is an
        intended third party beneficiary of this Agreement, and no party to this
        Agreement shall have any obligation arising under this Agreement to any person
        other than the other party hereto and, to the extent expressly provided in
        Section 7.3, Purchaser Affiliates, directors and controlling persons of the
        Company and officers of the Company who signed the Registration
        Statement.

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

       

      SECTION
        10. Changes.
        This
        Agreement may not be modified or amended except pursuant to an instrument
        in
        writing signed by the Company and the Purchaser. 

      

      SECTION
        11. Headings.
        The
        headings of the various sections of this Agreement have been inserted for
        convenience of reference only and shall not be deemed to be part of this
        Agreement.

      

      SECTION
        12. Severability.
        In case
        any provision contained in this Agreement should be invalid, illegal or
        unenforceable in any respect, the validity, legality and enforceability of
        the
        remaining provisions contained herein shall not in any way be affected or
        impaired thereby. 

      

      SECTION
        13. Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York without regard to its conflicts of law principles and the
        federal law of the United States of America. 

      

      SECTION
        14. Counterparts.
        This
        Agreement may be executed in two or more counterparts, each of which shall
        constitute an original, but all of which, when taken together, shall constitute
        but one instrument, and shall become effective when one or more counterparts
        have been signed by each party hereto and delivered to the other
        parties.

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        by
        their duly authorized representatives as of the day and year first above
        written. 

      

      NaturalNano,
        Inc.

       

      By:  
        /s/
        Kathleen A. Browne 
        
          

        

      

      Name: 
        Kathleen
        A. Browne

      Title: 
        Chief
        Financial Officer

       

       

      SBI
        Brightline XIII, LLC

       

      By: 
        /s/
        Shelly Singhal 
        
          

        

      

      Name:
        Shelly Singhal

      Title: 
        Managing
        Member

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        2.1

      

      TRANCHES

       

      
        	
                Tranche
                  No.

              	
                Number
                  of Tranche Shares

                Included
                  in Tranche

              	
                Tranche
                  Purchase Price per

                Tranche
                  Share (U.S. Dollars)

              
	
                1

              	
                625,000

              	
                $
                  0.75

              
	
                2

              	
                625,000

              	
                $
                  0.75

              
	
                3

              	
                625,000

              	
                $
                  0.75

              
	
                4

              	
                625,000

              	
                $
                  0.75

              
	
                5

              	
                625,000

              	
                $
                  0.85

              
	
                6

              	
                625,000

              	
                $
                  0.85

              
	
                7

              	
                625,000

              	
                $
                  0.85

              
	
                8

              	
                625,000

              	
                $
                  0.85

              
	
                9

              	
                1,250,000

              	
                $
                  0.95

              
	
                10

              	
                1,250,000

              	
                $
                  0.95

              
	
                11

              	
                1,125,000

              	
                $
                  1.05

              
	
                12

              	
                1,125,000

              	
                $
                  1.05

              
	
                13

              	
                1,000,000

              	
                $
                  1.15

              
	
                14

              	
                1,000,000

              	
                $
                  1.15

              
	
                15

              	
                900,000

              	
                $
                  1.20

              
	
                16

              	
                900,000

              	
                $
                  1.20

              
	
                17

              	
                885,577

              	
                $
                  1.30

              
	
                18

              	
                885,577

              	
                $
                  1.30

              

      

       

       

      
        
          
          

        

        -15-

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