NATURALNANO, INC. OBSERVATION RIGHTS AGREEMENT
Exhibit
10.1
This
Agreement is made on the 20th
day of
July 2007 by and among NaturalNano, Inc., a Nevada corporation (the “Company”),
Technology Innovations, llc,
a New
York limited liability company (the “Investor”) and Xxxxxxx X. Xxxxxx (“Xxxxxx”)
and Xxxx X. Xxxxxx (“Kenzie”), the designees to serve as the Investor’s initial
representatives for purposes of this Agreement.
Whereas,
the Investor is the registered and beneficial owner of 70,303,189 shares of
the
Common Stock of the Company, representing approximately 57.2% of the Company’s
issued and outstanding Common Stock; and
Whereas,
Weiner and Kenzie have served as members of the Board of Directors;
Now,
therefore, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. For
so
long as the Investor owns not less than 25% of the shares of the Company’s
Common Stock held by the Investor on the date hereof, the Company shall permit
two representatives designated by the Investor (who shall initially be Weiner
and Kenzie) to attend all meetings of the Company’s Board of Directors in a
nonvoting observer capacity and, in this respect, shall give such
representatives copies of all notices, minutes, consents, and other materials
that it provides to its directors at the same time and in the same manner as
provided to such directors; provided, however, that such representatives shall
agree to hold in confidence and trust and to act in a fiduciary manner with
respect to all information so provided; and provided, further, that the Company
may withhold any information and exclude such representatives from any meeting
or portion thereof if access to such information or attendance at such meeting
could (i) adversely affect the attorney-client privilege between the Company
and
its counsel, (ii) result in disclosure of trade secrets or a conflict of
interest, or (iii) if the Investor or a representative is a competitor of the
Company.
2. Each
of
the Investor, Weiner and Kenzie, severally and not jointly, agrees that it
or he
will keep confidential and will not disclose, divulge or use for any purpose,
other than to monitor the Investor’s investment in the Company, and
otherwise to act in a fiduciary manner with respect to, any confidential
information obtained from the Company, unless such confidential information
(i)
is known or becomes known to the
public in general (other than as a result of a breach of this Section 2 by
the
Investor, Weiner or Kenzie), (ii) is or has been independently developed or
conceived by the Investor, Weiner or Kenzie without use of the Company's
confidential information or (iii) is or has been made known or disclosed to
the
Investor, Weiner or Kenzie by a third party without a breach of any obligation
of confidentiality such third party may have to the Company; provided, however,
that (a) the Investor may disclose confidential information to the
Investor’s attorneys, accountants, consultants, and other professional advisers
to the extent necessary to obtain their services in connection with monitoring
the Investor’s investment in the Company and (b) the Investor, Weiner and Kenzie
may disclose confidential information as may be required by law, provided
that the Investor, Weiner and Kenzie give the Company at least 48 hours’ notice
prior to making any such required disclosure and take reasonable steps to
minimize the extent of any such required disclosure.
3. This
Agreement shall be governed by, and shall be interpreted in accordance with,
the
laws of the State of New York. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors,
assigns, heirs and personal representatives. This Agreement may be amended,
and
any provision hereof may be waived, only by a written instrument executed by
all
parties hereto.
In
witness whereof the Company, the Investor, Weiner and Kenzie have executed
this
Agreement as of the date first above set forth.
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NATURALNANO,
INC.
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| By: | /s/ Xxxxx X. Xxxxxxxxx, Ph.D. | |
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Xxxxx X. Xxxxxxxxx, Ph.D. |
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| President | ||
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TECHNOLOGY
INNOVATIONS, LLC
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| By: | /s/ Xxxxxxx X. Xxxxxx | |
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Xxxxxxx X. Xxxxxx |
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| Manager | ||
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx |
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(in
his individual capacity)
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/s/
Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx |
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(in
his individual capacity)
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