WARRANT PURCHASE AGREEMENT
EXHIBIT
10.3
This
Warrant Purchase Agreement (the “Agreement”),
dated
as of August 9, 2006, is by and between NaturalNano, Inc., a
corporation, with
a
mailing address at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxx, Xxx
Xxxx
00000 (the “Seller”)
and
CRESTVIEW CAPITAL MASTER, LLC, with mailing address at 00 Xxxxxx Xxxxx, Xxxxx
X,
Xxxxxxxxxx, Xxxxxxxx 00000 (“Buyer”).
WITNESSETH:
WHEREAS,
Seller
holds a warrant for 750,000 shares
of
Common Stock (the
“Warrant”) of Atlas Mining Company, an Idaho corporation (the “Company”);
WHEREAS,
the
warrant is represented by Warrant certificate #022 dated January 28, 2005,
registered in the name of Seller on the books of the Company (the “Original Warrant”);
and
WHEREAS,
the
parties hereto desire that Seller sells, transfers, conveys and assigns to
Buyer, and Buyer purchases and acquires from Seller, the Warrant and any and
all
rights and benefits incident to the ownership thereof.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein, and
for
other good and valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION
1. Sale
and Purchase of Warrant; Closing.
1.1 Sale
and Purchase.
Subject
to the terms and conditions of this Agreement, Seller shall sell, convey, assign
and deliver to Buyer, and Buyer shall purchase from Seller, the Warrant and
any
and all rights and benefits incident to the ownership thereof for and in
consideration of the sum of $562,500 (the “Purchase Amount”), payable as set
forth in Section 1.2 hereof.
1.2 Closing:
Escrow Arrangement.
The
parties and Xxxxxxx X. Xxxxxx, Esq. as escrow agent (the “Escrow Agent”), are
today entering into an escrow agreement (the “Escrow Agreement”) under which
Buyer will deposit the Purchase Amount with the Escrow Agent for delivery to
Seller against receipt by the Escrow Agent of a Warrant containing the same
terms as the Original Warrant, in the name of the Buyer (the “New Warrant”).
Buyer agrees to deliver the Purchase Amount to the Escrow Agent within two
business days after the date hereof, and Seller agrees, within two business
days
after receipt of notification from the Escrow Agent of the Escrow Agent’s
receipt of the Purchase Amount, to deliver, via overnight courier, to the
Company (i) the Original Warrant, (ii) a duly executed instrument of transfer
(with signature medallion guaranteed, if required), (iii) copies of all
corporate or other applicable resolutions as to authority, if applicable, (iv)
all other documents necessary to ensure the proper transfer of the Original
Warrant, and (v) instructions that the New Warrant be delivered to the Escrow
Agent.
1.3 The
parties agree
that if required by the Company, they will arrange for counsel to deliver,
on or
as soon as practicable after the date the Original Warrant is delivered by
Seller, to the Company its
opinion, addressed to the Company, that the transfer of the Original Warrant
hereunder is exempt from the registration requirements of the Securities Act
of
1933, as amended (the “Act”). Seller and Buyer each hereby acknowledges and
agrees that said counsel will be relying upon the representations and warranties
made by it herein as if made directly to said counsel.
1.4 If
delivery of the New Warrant is not made to the Escrow Agent within 45 days
from
the date hereof, Buyer shall have the right to terminate this Agreement as
provided in the Escrow Agreement.
1.5 Additional
Covenants.
Buyer
and Seller each agrees to take promptly such steps, and execute and deliver
such
instruments, corporate resolutions and other documents, as may be reasonably
requested by the Company, or the transfer agent of the Company (the
“Transfer
Agent”)
to
cause the Company to deliver the New Warrant to the Escrow
Agent. In
addition, the Seller will use its reasonable best efforts to cooperate with
the
Buyer in the Buyer’s efforts to have the Company extend the expiration date of
the New Warrant.
SECTION
2. Representations
and Warranties of Buyer.
For
purposes of this Section 2, the term Warrant refers to both the Original Warrant
and New Warrant. Buyer represents and warrants to Seller, as of the date hereof,
as follows:
2.1 Organization;
Authority.
Buyer,
is duly organized, validly existing and in good standing under the laws of
the
jurisdiction of its organization, with full right, power and authority to enter
into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder, and the execution, delivery
and performance by Buyer of the documents and transactions contemplated by
this
Agreement have been duly authorized by all necessary corporate or similar action
on the part of Buyer. This Agreement, when executed and delivered by Buyer,
will
constitute a valid and legally binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
any other laws of general application affecting enforcement of creditors’ rights
generally, (b) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies, or (c) to the extent
the indemnification provisions contained herein may be limited by federal or
state securities laws.
2.2 Investment
Intent.
Buyer
is acquiring the Warrant for investment and for its own account and not as
a
nominee or agent, and not with a view to or for sale in connection with any
distribution, resale or public offering of such Warrant or any part thereof
in
violation of the Act. Buyer does not presently have any contract, undertaking,
agreement or arrangement with any entity, organization or individual (each
a
“Person”)
to
sell, transfer or grant participations to any Person with respect to the
Warrant.
2.3 Investment
Experience; Access to Information.
Buyer
(a) has such knowledge and experience in financial and business matters as
to be
capable of evaluating the merits and risks of its investment in the Warrant
and
to make an informed decision to so invest, has so evaluated and understands
said
risks and merits, and can afford a complete loss of such investment, (b)
understands the terms of, and risks associated with, the acquisition of the
Warrant, and (c) has had the opportunity to review such disclosure regarding
the
Company, its business, its financial condition and its prospects as Buyer has
determined to be necessary in connection with the purchase of the Warrant,
including all of the Company’s filings with the Securities and Exchange
Commission.
2.4 Buyer
Status.
At the
time Buyer was offered the Warrant it was, and at the date hereof it is, an
“accredited
investor”
as
that
term is defined in Rule 501(a) under the Act. Buyer is not, and is not required
to be, registered as a broker-dealer under Section 15 of the Securities Exchange
Act of 1934 (the “Exchange Act”).
2.5 Restrictions
on Transfer.
Buyer
understands that (a) the Warrant has not been registered under the Act or the
laws of any state, (b) the Warrant and the Warrant Shares (as defined in the
Warrant) will be “restricted securities” as said term is defined in Rule 144 of
the Rules and Regulations promulgated under the Act, (c) neither the Warrant
nor
the Warrant Shares may be sold, pledged or otherwise transferred unless a
registration statement for such transaction is effective under the Act and
any
applicable state laws, or unless an exemption from such registration provisions
are available with respect to such transaction, and (d) the New Warrant and,
unless registered, certificates for Warrant Shares will bear a legend to the
effect that the transfer of the Warrant or the Warrant Shares is subject to
the
aforestated and a transfer request must, if required by the Company, be
accompanied by an opinion of legal counsel satisfactory to the Company that
such
transfer is exempt from registration under the Act, and (e) “stop transfer”
instructions will be placed against the New Warrant and the Warrant
Shares.
2.6 General
Solicitation.
Buyer
is not purchasing the Warrant as a result of any advertisement, article, notice
or other communication regarding the Warrant published in any newspaper,
magazine or similar media or broadcast over television or radio or presented
at
any seminar or any other general solicitation or general advertisement (each,
a
“General Solicitation”).
2.7 No
Conflicts or Violations.
Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, does or will violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency, or court to which
Buyer is subject or any provision of its organizational documents or other
similar governing instruments, or conflict with, violate or constitute a default
under, any agreement, credit facility, debt or other instrument or understanding
to which Buyer is a party or by which it is bound.
2.8 No
Litigation.
There
is no action, suit, proceeding, judgment, claim or investigation pending, or
to
the knowledge of Buyer, threatened against Buyer which could reasonably be
expected in any manner to challenge or seek to prevent, enjoin, alter or
materially delay any of the transactions contemplated by this
Agreement.
2.9
Consents.
No
authorization, consent, approval or other order of, or declaration to or filing
with, any governmental agency or body or other Person is required for the valid
authorization, execution, delivery and performance by Buyer of this Agreement
and the consummation of the transactions contemplated hereby.
2.10 Non-Public
Information.
Buyer
is not purchasing the Warrant “on the basis of” (as defined in Rule 10b5-1 of
the Exchange Act) any material, non-public information about the Company or
the
Warrant.
SECTION
3. Representations
and Warranties of Seller.
Seller
represents and warrants to Buyer, as of the date hereof, as
follows:
3.1 Authorization
of Agreement.
Seller
is duly organized, validly existing and in good standing under the laws of
the
jurisdiction of its organization with full right, power and authority to enter
into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder, and the execution, delivery
and performance by Seller of the documents and transactions contemplated by
this
Agreement have been duly authorized by all necessary corporate or similar action
on the part of Seller. This Agreement, when executed and delivered by Seller,
will constitute a valid and legally binding obligation of Seller, enforceable
against Seller in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
any other laws of general application affecting enforcement of creditors’ rights
generally, (b) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, or (c) to the
extent the indemnification provisions contained herein may be limited by federal
or state securities laws.
3.2 Title
to the Warrant.
Seller
is the lawful owner of the Warrant with good and marketable title thereto,
and
Seller has the absolute right to sell, assign, convey, transfer and deliver
the
Warrant and any and all rights and benefits incident to the ownership thereof,
all of which rights and benefits are being transferred by Seller to Buyer free
and clear of all the following (collectively called “Claims”) of any nature
whatsoever: security interests, liens, pledges, claims (pending or threatened),
charges, escrows, encumbrances, lock-up arrangements, options, rights of first
offer or refusal, community property rights, mortgages, indentures, security
agreements or other agreements, arrangements, contracts, commitments,
understandings or obligations, whether written or oral and whether or not
relating in any way to credit or the borrowing of money. Delivery to Buyer
of
the Warrant will (i) pass good and marketable title to the Warrant to Buyer,
free and clear of all Claims (assuming that Buyer is a bona fide purchaser
within the meaning of the Illinois Uniform Commercial Code), and (ii) convey,
free and clear of all Claims, any and all rights and benefits incident to the
ownership of such Warrant.
3.3 Original
Acquisition; No General Solicitation.
The
Warrant was originally acquired by Seller on or about January 28, 2005 for
investment and for its
own
account and not with a view to, or for sale in connection with, any
distribution, resale or public offering of such Warrant or any part thereof
in
violation of the Act. At the xxxx Xxxxxx acquired the Warrant, it was an
accredited investor, competent to evaluate the merits and risks of acquiring
the
Warrant. Seller did not offer nor is it selling the Warrant to Buyer by any
form
of General Solicitation.
3.4 No
Conflicts or Violations.
Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, does or will violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency, or court to which
Seller is subject or any provision of its organizational documents or other
similar governing instruments, or conflict with, violate or constitute a default
under any agreement, credit facility, debt or other instrument or understanding
to which Seller is a party or by which it is bound.
3.5 No
Litigation.
There
is no action, suit, proceeding, judgment, claim or investigation pending or,
to
the knowledge of Seller, threatened against Seller which could reasonably be
expected in any manner to challenge or seek to prevent, enjoin, alter or
materially delay any of the transactions contemplated by this
Agreement.
3.6 Consents.
No
authorization, consent, approval or other order of, or declaration to or filing
with, any governmental agency or body or other Person is required for the valid
authorization, execution, delivery and performance by Seller of this Agreement
and the consummation of the transactions contemplated hereby.
3.7 Bankruptcy.
Seller
is not under the jurisdiction of a United States bankruptcy court or involved
in
any comparable bankruptcy proceeding in any jurisdiction in the world or in
any
insolvency proceeding, conservatorship or reorganization in any jurisdiction
in
the world.
3.8 Non-Employee
and Non-Affiliate Status.
Seller
is not, as of the date of this representation, and has never been, an employee,
officer, director or direct or indirect beneficial owner of ten percent (10%)
or
more of any class of equity security of the Company, or of any entity, directly
or indirectly, controlling, controlled by or under common control with the
Company, or otherwise been an “affiliate” as that term is used under Rule 144
promulgated under the Act (“Rule 144”).
For
purposes of this paragraph, “Seller” includes any person that would be included
with Seller for purposes of Rule 144(a)(2).
3.9 Non-Public
Information.
Seller
is not selling the Warrant “on the basis of”
(as
defined in Rule 10b5-1 of the Exchange Act) any material, non-public information
about the Company or the Warrant.
3.10 Delivery.
Seller
has delivered to Buyer true copies of the Warrant and all amendments thereto,
if
any.
SECTION
4. Survival
of Representations and Warranties; Etc.
All
representations and warranties of Buyer and Seller shall survive the closing
hereunder. Seller may rely upon this Agreement for the purpose of assuring
its
compliance with federal securities law.
SECTION
5. Indemnification.
Each
party hereto shall indemnify and hold harmless the other party (and its
respective affiliates, directors, officers, employees, successors and assigns)
from and against any and all losses, claims, damages, liabilities and expenses
based upon, arising out of or otherwise in respect of, any inaccuracy in, or
any
breach of, the representations or warranties of such party or the covenants
or
agreements made by such party in this Agreement or the Escrow Agreement.
Notwithstanding the foregoing, Seller’s obligation to indemnify Buyer shall not
exceed the Purchase Amount actually received by Seller.
SECTION
6. Notices.
Any
notice required or permitted by this Agreement shall be in writing and shall
be
deemed sufficient upon delivery, when delivered personally or to the recipient’s
offices by a recognized overnight courier service or sent by facsimile (upon
confirmation of receipt) addressed to the party to be notified at such party’s
mailing address or facsimile number as set forth below.
Seller
Natural
Nano, Inc.
000
Xxxxxx Xxxxxx Xxxxx
Xxxxx
000
X.
Xxxxxxxxx, Xxx Xxxx 00000
Attn:
Xxxxxxxx X. Xxxxxx
Facsimile:
(000) 000-0000
with
a copy to:
Xxxx
Xxxxxxxxx
Xxxxx
Xxxxxxx LLP
Omni
Plaza
00
Xxxxx Xxxxx Xxxxxx
Xxxxxx,
Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Buyer
Crestview
Capital Master, LLC
00
Xxxxxx Xxxxx
Xxxxx
X
Xxxxxxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxxx Xxxxx
Facsimile:
(000) 000-0000
with
a copy to:
Xxxxxx
Xxxx Xxxxxx & Xxxxxx, LLP
000
Xxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxx, Esq.
Facsimile:
(000) 000-0000
SECTION
7. Successors
and Assigns.
This
Agreement shall be binding on and inure to the benefit of each of the parties
hereto and any successors to the respective businesses of Buyer or Seller.
Neither Buyer nor Seller may assign its or his rights or obligations hereunder
except to persons described in the preceding sentence.
SECTION
8. Expenses.
Each
party hereto shall pay the fees and expenses of any broker engaged by such
party
and of such party’s advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, and shall
hold the other party hereto harmless against any liability, loss or expense
(including, without limitation, reasonable attorneys’ fees and out-of-pocket
expenses) arising in connection with any claim for such fees and expenses;
provided,
however,
that
Seller shall pay any transfer, stamp or similar taxes, if any, that are payable
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
SECTION
9. Execution
Counterparts.
This
Agreement may be executed and delivered via facsimile in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION
10. Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired hereby and the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
SECTION
11. Entire
Agreement. This
Agreement represents the entire agreement of the parties hereto with respect
to
the matters contemplated hereby, and there are no written or oral
representations, warranties, understandings or agreements with respect hereto
except as expressly set forth herein.
SECTION
12. Amendments;
Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by each party or, in the case
of
a waiver, by the party against whom enforcement of any such waiver is
sought.
SECTION
13. Confidentiality. Each
of
Buyer and Seller hereby agrees, without the prior written consent of the other,
to not disclose, and to otherwise keep confidential, the sale of the Warrant
contemplated hereby, except to the extent that disclosure thereof is required
to
effectuate the transfer as contemplated herein or by law, rule or regulation;
provided,
however,
that
Buyer and Seller may disclose information regarding such sale to their
respective employees, accountants, attorneys and equity holders.
SECTION
14. Governing
Law; Consent to Jurisdiction and Service of Process.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Illinois, without regard to the conflicts of laws
principles thereof. The parties hereto hereby irrevocably agree that any suit
or
proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in the
City of Chicago, State of Illinois. By their execution hereof, the parties
hereby covenant and irrevocably submit to the in personam jurisdiction of any
such court and agree that any process in any such action may be served upon
any
of them personally, or by registered mail, return receipt requested, or by
nationally recognized overnight courier service, with the same force and effect
as if personally served upon them in Chicago. The parties hereto waive any
claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense of lack of in personam jurisdiction with respect
thereto.
************************
IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Agreement as of the date first
above-written.
| NATURALNANO, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxxx X. Xxxxxx | |
|
Name: Xxxxxxxx
X. Xxxxxx
Title: Chief
Financial Officer
Facsimile:
(000) 000-0000
|
||
|
CRESTVIEW
CAPITAL MASTER, LLC
By:
Crestview Capital Partners, LLC
(sole
member)
|
||
| |
|
|
| By: | /s/ Xxxxxx X. Wash | |
|
Name: Xxxxxx X. Wash
Title: Manager
Facsimile: (000)-000-0000
|
||
