Document:

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                                                                    Exhibit 10.7

                              ELF Supply Agreement

                                     between

                           Spectra Science Corporation

                                       and

                           Albany International Corp.

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                                Supply Agreement

     This Agreement is made and entered into as of November __, 2000 between
Spectra Science Corporation (hereinafter "SPECTRA"), a Delaware corporation
having its principal place of business at 321 South Main Street, Suite 102,
Providence, Rhode Island 02903, and Albany International Corp. (hereinafter
"ALBANY"), a Delaware corporation having its principal address at Post Office
Box 1907, Albany, New York 12201.

                                  INTRODUCTION

     WHEREAS, SPECTRA has designed and developed certain dispersed laser
technology for use in garment and textile identification, on which technology
the Licensed Product, as defined herein, is based;

     WHEREAS, ALBANY wishes to manufacture the Licensed Product on behalf of
SPECTRA, pursuant to rights granted to ALBANY by SPECTRA under the License
Agreement dated as of November __, 1997 between SPECTRA and ALBANY; and

     WHEREAS, SPECTRA wishes to purchase, and ALBANY is willing to supply, the
Licensed Product to SPECTRA, in accordance with the terms and conditions set
forth herein.

     NOW THEREFORE, in consideration of the foregoing premises, the parties
agree as follows:

                                    ARTICLE I

                                   Definitions

     1.1   "Agreement" shall mean this Supply Agreement, as amended from time to
time.

     1.2   "Annual Production Limit" shall mean [***] pounds of Licensed
Product in any calendar year during the term of this Agreement.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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     1.3   [***]

     1.4   "Capital Contribution" shall have the meaning set forth in Section
3.4 hereof.

     1.5   "Effective Date" shall mean the effective date of this Agreement as
set forth on the first page hereof.

     1.6   "License Agreement" shall mean that certain License Agreement dated
as of November __, 1997 by and between SPECTRA and ALBANY.

     1.7 "Licensed Product" shall mean [***], as described in greater detail by
the Product Specifications attached hereto as Exhibit A.

     1.8   "Licensed Product Purchase Price" shall have the meaning set forth in
Section 3.1 hereof.

     1.9   The following terms (and any other capitalized terms used but not
defined herein) shall have the definitions as set forth in the License
Agreement:

           Affiliate
           ALBANY Technical Information
           Due Diligence
           SPECTRA Technical Information

                                   ARTICLE II

                      Sale and Purchase of Licensed Product

     2.1   Supply of SPECTRA Requirements. Subject to the Annual Production
Limit, ALBANY shall use Due Diligence to supply to SPECTRA and its Affiliates
and sublicensees such quantities of Licensed Product as SPECTRA may order in
accordance herewith. SPECTRA

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                                        2

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shall purchase that portion of its requirements of Licensed Product from ALBANY
that do not exceed the Annual Production Limit. To the extent that SPECTRA's
requirements of Licensed Product exceed the Annual Production Limit, SPECTRA
shall be free to seek a second source of supply of the Licensed Product.

           2.1.1   SPECTRA Option to Supply [***]. SPECTRA shall have the option
     to supply ALBANY with all of ALBANY's requirements for [***] (for example,
     [***]) for use in connection with ALBANY's manufacture and supply of
     Licensed Product to SPECTRA.

     2.2   [Supply of ALBANY Requirements. SPECTRA shall use Due Diligence to
supply to ALBANY and its Affiliates and sublicensees such quantities of laser
readers and reading devices for use with Licensed Product as ALBANY may order in
accordance herewith. Purchase and delivery terms and conditions shall be as
agreed to in good faith by the parties.]

     2.3   Quantity

           2.3.1   Subject to subsection 2.3.2, SPECTRA shall provide ALBANY
     with annual purchase orders for Licensed Product, specifying for each
     calendar year the quantities of Licensed Product to be manufactured and
     shipped by ALBANY within that year; provided, however, that the minimum
     quantity of Licensed Product ordered by SPECTRA for any given year shall
     not be less than the applicable quantity for that year set forth on Exhibit
     B to this Agreement, and the maximum quantity ordered by SPECTRA for any
     year shall not exceed the Annual Production Limit. SPECTRA shall provide
     each purchase order to ALBANY not less than [***] prior to the
     commencement of the timeframe required by ALBANY to produce the quantity of
     the Licensed Product specified by SPECTRA. For purposes of this section
     2.3.1., the

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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     timeframe required by ALBANY to produce Licensed Product shall be equal to
     [***] of Licensed Product. By way of example only, if SPECTRA provides a
     purchase order for [***] pounds of Licensed Product, the purchase order
     must be provided not less than [***] plus [***] prior to the end of the
     year in which delivery is to be made. All orders for Licensed Product to be
     purchased hereunder shall be placed on purchase order form in a form to be
     agreed to by the parties. In the event of any inconsistency between this
     Agreement and the terms of any such purchase order, the terms of this
     Agreement shall prevail.

          2.3.2 Notwithstanding any other provision of this Section 2.3, the
     purchase order for Licensed Product for [***] shall be in the form attached
     to this Agreement as Exhibit C.

     2.4   Delivery. All Licensed Product delivered to SPECTRA shall be F.O.B.
ALBANY's plant, Mansfield, Massachusetts. All Licensed Product shall be shipped
by ALBANY for SPECTRA's receipt by the end of the calendar year specified in the
purchase order received from SPECTRA pursuant to the terms of Section 2.3.
ALBANY shall assist SPECTRA in arranging any desired insurance (in amounts that
SPECTRA shall determine) and transportation to any destinations specified in
writing by SPECTRA. All customs duties, costs, taxes, insurance premiums and
other expenses relating to such transportation and delivery shall be at
SPECTRA's expense. ALBANY shall provide customary shipping documentation in
accordance with that requested in SPECTRA's purchase order, as well as such
other usual and customary documentation relating to the material shipped as
SPECTRA may reasonably request in writing for each shipment. ALBANY shall
package Licensed Product for shipment hereunder

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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in accordance with all applicable laws in the United States. ALBANY will use Due
Diligence to honor any purchase order for Licensed Product received from
SPECTRA, in addition to those submitted in accordance with Section 2.4 above,
which relates to additional supplies of Licensed Product being purchased by
SPECTRA to replace supplies lost or damaged in shipment from ALBANY.

                                   ARTICLE III

                               Price and Payments

     3.1   Payments to ALBANY from SPECTRA.

          3.1.1 The Licensed Product Purchase Price during the term of this
     Agreement shall be [***] of Licensed Product produced and sold by ALBANY to
     SPECTRA, provided however, that in the event the quantity of Licensed
     Product ordered by SPECTRA, within the limitations of the Annual Production
     Limit, increases to such a point that ALBANY shall recognize an economy of
     scale in the production of the Licensed Product, the parties shall
     renegotiate the Licensed Product Purchase Price in good faith, based on a
     post-tax internal rate of return to ALBANY [***], taking into account any
     actual Capital Contributions made by ALBANY prior to such time.

           3.1.2   SPECTRA shall make monthly progress payments to ALBANY in an
     amount equal to the Licensed Product Purchase Price multiplied by the
     number of pounds of Licensed Product produced by ALBANY during the
     preceding month. The amount of Licensed Product produced by ALBANY during a
     given month shall be determined prior to the end of each calendar month
     pursuant to an inventory assessment to be conducted in good faith by ALBANY
     in a manner mutually agreeable to the parties, and payment shall

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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     be due within thirty (30) days of receipt by SPECTRA from ALBANY of such
     determination.

     3.2   [Payments from ALBANY to SPECTRA. SPECTRA shall charge prices for
laser readers and reading devices which are no greater than those it charges
other customers for similar products with comparable wavelength, energy fluence,
lifetime and speed. All SPECTRA readers will be comparable in price, features
and quality to readers available from other suppliers. Payments terms and
conditions shall be as agreed to in good faith by the parties.]

     3.3 Capital Contributions. In accordance with, and subject to the dollar
limitations set forth in, Sections 3.3.1 and 3.3.2, SPECTRA and ALBANY shall
each contribute the capital necessary to purchase the equipment and services
required to fulfill the obligations of this Agreement which are listed on
Exhibit D hereto (a "Capital Contribution"). Any Capital Contribution required
to be made by SPECTRA pursuant to this Section 3.3 shall be paid to ALBANY no
later than 30 days from the date of ALBANY's binding written commitment with a
supplier of capital equipment or services with respect to the same. It is
estimated by the parties that the total Capital Contribution necessary to
fulfill the obligations of this Agreement is [***], however, neither party makes
any representation that this estimate will not be exceeded.

           3.3.1   Capital Contribution of SPECTRA. SPECTRA shall contribute
     [***] of the capital required to fulfill the obligations of
     this Agreement, provided however, that in no event shall SPECTRA's
     obligations under this Section 3.3 exceed [***].

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                                        6

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               3.3.2 Capital Contribution of ALBANY. ALBANY shall contribute
          [***] of the capital required to fulfill the obligations of this
          Agreement, provided however, that in no event shall ALBANY's
          obligations under Section 3.3 exceed [***].

                                   ARTICLE IV

                         Quality Control; Nonconformity

     4.1   Quality Control. SPECTRA shall be responsible for quality testing, at
its own expense, with respect to conformity of the Licensed Product with any
Product Specifications set forth on Exhibit A that are not explicitly set out in
the definition of "Licensed Product" in Section 1.7. Quality testing to ensure
compliance with the explicit characteristics set forth in the definition of
"Licensed Product" in Section 1.7 shall be ALBANY's responsibility, at ALBANY's
expense.

     4.2   Nonconformity. SPECTRA shall be deemed to have accepted delivery of
Licensed Product in good order and condition, unless SPECTRA has notified ALBANY
in writing of any short delivery or nonconformity in respect of a shipment of
Licensed Product within thirty (30) days following receipt of same by SPECTRA.
Notwithstanding the foregoing, in the case of any nonconformity which is not
readily apparent or discoverable upon reasonable inspection within such
thirty-day period, any claim of nonconformity with respect thereto shall not be
deemed waived and delivery of the Licensed Product shall not be deemed to have
been accepted if SPECTRA notifies ALBANY within forty-eight (48) hours following
the date on which SPECTRA learns of such nonconformity.

     4.3   Nonconformity Report. Any claim of nonconformity hereunder shall be
accompanied by a report of analysis of the allegedly nonconforming Licensed
Product prepared

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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by or on behalf of SPECTRA. If, after analyzing a sample of such Licensed
Product, ALBANY confirms SPECTRA's claim of nonconformity, ALBANY shall, at
SPECTRA's election, replace the nonconforming Licensed Product with conforming
Licensed Product at ALBANY's expense or refund the entire Licensed Product
Purchase Price paid therefore to SPECTRA. Pursuant to written directions from
ALBANY, SPECTRA shall either return the nonconforming Licensed Product to
ALBANY, or destroy the same, in each case, at ALBANY's expense. If ALBANY's
analysis does not confirm SPECTRA's claim of nonconformity, the parties shall
commence good faith discussions with a view to resolving the issue.

     4.4   Survival of Indemnification and Warranty. Notwithstanding anything to
the contrary contained in this Article IV, ALBANY's warranties and
indemnification obligations hereunder shall survive the failure by SPECTRA to
reject any Licensed Product.

                                    ARTICLE V

                              Term and Termination

     5.1   Term. Unless earlier terminated pursuant to this Article V, this
Agreement shall extend for the five (5) year period following the Effective Date
of this Agreement.

     5.2   Termination.

           5.2.1   Termination by Default. If either party materially defaults
     in the performance of any material agreement, condition or covenant of this
     Agreement or the License Agreement, and such default or noncompliance shall
     not have been remedied, or steps initiated to remedy the same to the other
     party's reasonable satisfaction, within sixty (60) days (or 15 days in the
     case of non-payment) after receipt by the defaulting party of a notice
     thereof from the other party, the party not in default may terminate this
     Agreement.

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     Any right to terminate arising under this Section 5.2 shall be stayed if,
     during the relevant cure period, the party alleged to have been in default
     shall:

           (i)     have initiated arbitration in accordance with Section 9.7
                   below, with respect to the alleged default; and

           (ii)    be diligently and in good faith cooperating in the prompt
                   resolution of such arbitration proceedings.

The right of either party to terminate this Agreement shall not be affected in
any way by the failure of such party to take any action with respect to any
prior circumstance or default which may have given rise to a right to terminate.

          5.2.2 Termination in the Absence of [***]. In the event that SPECTRA
     and [***] shall not have executed the [***] by [***], the parties may elect
     to terminate this Agreement, in which case Section 5.3.2 shall apply.

     5.3   Financial Obligations in the Event of a Termination by Default.

          5.3.1 In the event this Agreement is terminated by SPECTRA in
     accordance with Section 5.2, ALBANY shall pay to SPECTRA the residual value
     of any Capital Contribution actually paid by SPECTRA, amortized on a [***]
     basis from the date of payment of SPECTRA's Capital Contribution.

           5.3.2   In the event this Agreement is terminated by ALBANY in
     accordance with Section 5.2, SPECTRA shall pay to ALBANY the residual value
     of any Capital Contribution actually paid by ALBANY, amortized on a [***]
     basis from the date of ALBANY's Capital Contribution.

           5.3.3   Upon termination of this Agreement, ALBANY agrees to transfer
     any proprietary technology and know-how with respect to manufacture of the
     Licensed

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                                        9

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     Product, together with the equipment purchased with the parties' Capital
     Contributions, for a value to be determined in good faith by the parties,
     taking into account all Capital Contributions already made by each side.

     5.4   Termination.

     Termination of this Agreement for any reason, or expiration of this
Agreement, will not affect (i) obligations which have accrued as of the
effective date of termination or expiration, and (ii) rights and obligations
which, from the context thereof, are intended to survive termination or
expiration of this Agreement.

                                   ARTICLE VI

                                 Confidentiality

     6.1   Undertaking. During the term of this Agreement, each party shall keep
confidential, and other than as provided herein shall not use or disclose,
directly or indirectly, any trade secrets, confidential or proprietary
information, or any other knowledge, information, documents or materials, owned,
developed or possessed by the other party, whether in tangible or intangible
form, the confidentiality of which such other party takes reasonable measures to
protect, including but not limited to SPECTRA Technical Information and ALBANY
Technical Information. Each party shall take any and all lawful measures to
prevent the unauthorized use and disclosure of such information, and to prevent
unauthorized persons or entities from obtaining or using such information. Each
party further agrees to refrain from directly or indirectly taking any action
that would constitute or facilitate the unauthorized use or disclosure of such
information. Each party may disclose such information to its officers, employees
and agents, to authorized licensees and sublicensees, and to subcontractors in
connection with the development or manufacture of Licensed Products, to the
extent necessary to enable such parties

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to perform their obligations hereunder or under the applicable license,
sublicense or subcontract, as the case may be; provided that such officers,
employees, agents, licensees, sublicensees and subcontractors have entered into
appropriate confidentiality agreements for secrecy and non-use of such
information which by their terms shall be enforceable by injunctive relief at
the instance of the disclosing party. Each party shall be liable for any
unauthorized use and disclosure of such information by its officers, employees
and agents and any such sublicensees and subcontractors.

     6.2   Exceptions. Notwithstanding the foregoing, the provisions of Section
6.1 hereof shall not apply to knowledge, information, documents or materials
which the receiving party can establish conclusively: (i) have entered the
public domain without such party's breach of any obligation owed to the
disclosing party; (ii) have become known to the receiving party prior to the
disclosing party's disclosure of such information to such receiving party; (iii)
are permitted to be disclosed by the prior written consent of the disclosing
party; (iv) have become known to the receiving party from a source other than
the disclosing party other than by breach of an obligation of confidentiality
owed to the disclosing party; (v) are disclosed by the disclosing party to a
third party without restrictions on its disclosure; (vi) are independently
developed by the receiving party without breach of this Agreement; or (vii) are
required to be disclosed by the receiving party to comply with applicable laws
or regulations, to defend or prosecute litigation or to comply with governmental
regulations, provided that the receiving party provides prior written notice of
such disclosure to the disclosing party and takes reasonable and lawful actions
to avoid or minimize the degree of such disclosure.

     6.3   Publicity. The timing and content of any press releases or other
public communications relating to this Agreement and the transactions
contemplated herein will, except

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as otherwise required by law, be determined jointly by SPECTRA and ALBANY. No
press release or other public communications or sales material shall refer to
ALBANY without ALBANY's written consent. Neither party hereto nor its
representatives or employees shall make any public disclosure, whether to the
press, stockholders or otherwise, revealing the material non-public terms of
this Agreement or of any amendment hereto without the prior written approval of
the other, provided however, that nothing shall prevent either party hereto from
making such disclosures or statements which in the opinion of counsel are
legally required or may be required in the opinion of such party's certified
public accountant to conform to generally accepted accounting principles. In the
event any such disclosure or statement is required, the disclosing party will
endeavor to give prior written notice to the other party, wherever practicable,
of the proposed disclosure or statement and the reason therefor.

     6.4   Survival. The provisions of this Article VI shall survive the
termination of this Agreement. The obligations of confidentiality,
non-disclosure and non-use set forth in this Article VI shall survive the
termination of this Agreement for any reason and shall continue in effect until
the relevant information falls within any of the exceptions provided for in
Section 6.2 above.

                                   ARTICLE VII

                         Representations and Warranties

     7.1   SPECTRA's Representations.

     SPECTRA hereby represents and warrants to ALBANY the following:

     1.    SPECTRA is a corporation organized, validly existing and in corporate
good standing under the laws of Delaware, has all requisite corporate power and
authority to own and

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operate its property and carry on its business and is not required to qualify to
do business in any other jurisdiction.

       2.     The execution and delivery of this Agreement have been duly and
validly authorized by all necessary corporate action on the part of SPECTRA, and
(assuming valid execution by ALBANY) this Agreement is a valid and binding
obligation of SPECTRA enforceable against it.

       3.     As of the date of this Agreement, SPECTRA is not a party to any
agreement or understanding, oral or written, which would, in any manner, be
inconsistent with the rights granted herein to ALBANY and shall not, during the
term of this Agreement, enter into any agreement or understanding, oral or
written, nor directly or indirectly engage in any activity which would, in any
manner, be inconsistent with the rights herein granted to ALBANY.

       4.     SPECTRA represents that any Product Specifications provided to
ALBANY with respect to the Licensed Product shall comply with all applicable
laws of each applicable jurisdiction into which SPECTRA intends to sell the
Licensed Product.

       7.2    ALBANY's Representations.

       ALBANY hereby represents and warrants to SPECTRA as follows:

       1.     ALBANY is a corporation organized, validly existing and in
corporate good standing under the laws of Delaware, has all requisite corporate
power and authority to own and operate its property and carry on its business
and is not required to qualify to do business in any other jurisdiction.

       2.     The execution and delivery of this Agreement has been duly and
validly authorized by all necessary corporate action on the part of ALBANY, and
(assuming valid execution by SPECTRA) this Agreement is a valid and binding
obligation of ALBANY enforceable against it.

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       3.     As of the date of this Agreement, ALBANY is not a party to any
agreement or understanding, oral or written, which would, in any manner, be
inconsistent with the rights granted herein to SPECTRA and shall not, during the
term of this Agreement, enter into any agreement or understanding, oral or
written, nor directly or indirectly engage in any activity which would, in any
manner, be inconsistent with the rights herein granted to SPECTRA.

       4.     ALBANY represents and warrants that all Licensed Product
manufactured hereunder shall be free from defects in materials and workmanship
under normal use and service.

       5.     ALBANY represents and warrants that all Licensed Product delivered
hereunder shall comply in all material respects with, and shall be labeled in
conformity with, the Product Specifications provided by SPECTRA in Exhibit A
hereto.

       7.3    Limitations on Liability. THE EXPRESS WARRANTIES STATED ABOVE ARE
THE ONLY WARRANTIES MADE, AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, (1) ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR (2) ANY WARRANTY INCLUDED IN ANY PURCHASE
ORDER, INVOICE, ACKNOWLEDGMENT OR OTHER DOCUMENT RECEIVED BY ONE PARTY FROM THE
OTHER.

                                  ARTICLE VIII
                                 Indemnification

       8.1    Indemnification by SPECTRA. Subject to ALBANY's compliance with
its obligations set forth in this Agreement, SPECTRA shall indemnify and hold
ALBANY, its Affiliates and sublicensees and its and their directors, officers,
employees and agents harmless from and against any liability, damage or expense
(including reasonable attorneys' fees and costs

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and other expenses of litigation), resulting from (i) the material breach by
SPECTRA of any of its representations, warranties or covenants contained in this
Agreement, or (ii) the successful enforcement (i.e., a judgment issued by a
court of competent jurisdiction against SPECTRA unappealable or unappealed by
SPECTRA within the time allowed therefor) by ALBANY of its indemnification
rights set forth in clause (i) of this Section 8.1.

       8.2    Indemnification by ALBANY. Subject to SPECTRA's compliance with
its obligations set forth in this Agreement, ALBANY shall indemnify and hold
SPECTRA, its Affiliates and its and their directors, trustees, officers,
employees and agents harmless from and against any liability, damage or expense
(including reasonable attorneys' fees and costs and other expenses of
litigation), resulting from (i) the material breach by ALBANY of any of its
representations, warranties or covenants contained in this Agreement; or (ii)
the successful enforcement (i.e., a judgment issued by a court of competent
jurisdiction against ALBANY, unappealable or unappealed by ALBANY within the
time allowed therefor) by SPECTRA of its indemnification rights set forth in
clauses (i) of this Section 8.2.

       8.3    Indemnification Procedures. A party (the "indemnitee") which
intends to claim indemnification under this Article VIII shall promptly notify
the other party (the "indemnitor") in writing of the action, claim or liability
with respect to which the claim of indemnification relates. The indemnitee shall
permit, and shall cause its employees and agents to permit, the indemnitor, at
its discretion, to settle any such action, claim or liability, the defense and
settlement of which shall be under the complete control of the indemnitor;
provided, however, that such settlement shall not adversely affect the
indemnitee's rights hereunder or impose any obligations on the indemnitee in
addition to those set forth herein in order for it to exercise those rights. No
such action, claim or liability shall be settled without the prior written
consent of the indemnitor, and

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the indemnitor shall not be responsible for any legal fees or other costs
incurred other than as provided herein. The indemnitee, its employees and agents
shall cooperate fully with the indemnitor and its legal representatives in the
investigation and defense of any action, claim or liability covered by this
indemnification. The indemnitee shall have the right, but not the obligation, to
be represented by counsel of its own selection and expense.

                                   ARTICLE IX
                            Miscellaneous Provisions

       9.1    Waiver. No provision of the Agreement may be waived except in
writing by both parties hereto. No failure or delay by either party hereto in
exercising any right or remedy hereunder or under applicable law will operate as
a waiver thereof, or a waiver of a particular right or waiver of any right or
remedy on any subsequent occasion.

       9.2    Force Majeure. Neither party shall be held liable or responsible
to the other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement, other than an obligation to make a payment, when such failure or
delay is caused by or results from fire, floods, embargoes, government
regulations, prohibitions or interventions, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotion's, strikes, lockouts,
acts of God, or any other cause beyond the reasonable control of the affected
party.

       9.3    Relationships of the Parties. Both parties are independent
contractors under this Agreement. Nothing contained in this Agreement is
intended nor is to be construed so as to constitute SPECTRA and ALBANY as
partners, agents or joint venturers with respect to this Agreement. Neither
party hereto shall have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other party or to bind
the other party

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to any contract, agreement or undertaking with any third party. All contracts,
expenses and liabilities undertaken or incurred by one party in connection with
or relating to the use, development, manufacture, marketing or sale of Licensed
Product shall be undertaken, incurred or paid exclusively by that party, and not
as an agent or representative of the other party.

       9.4    Severability. It is the intention of the parties to comply with
all applicable laws domestic or foreign in connection with the performance of
its obligations hereunder. In the event that any provision of this Agreement, or
any part hereof, is found invalid or unenforceable, the remainder of this
Agreement will be binding on the parties hereto, and will be construed as if the
invalid or unenforceable provision or part thereof had been deleted, and the
Agreement shall be deemed modified to the extent necessary to render the
surviving provisions enforceable to the fullest extent permitted by law.

       9.5    Government Acts. In the event that any act, regulation, directive,
or law of a government within the Territory, including its departments, agencies
or courts, should make impossible or prohibit, restrain, modify or limit any
material act or obligation of SPECTRA or ALBANY under this Agreement and if any
party to this Agreement is adversely affected thereby, the parties shall attempt
in good faith to negotiate a lawful and enforceable modification to this
Agreement which substantially eliminates the adverse effect; provided that
failing any agreement, in that regard, the party, if any, who is adversely
affected, shall have the right, at its option, to suspend or terminate this
Agreement.

       9.6    Assignment. This Agreement may not be assigned or otherwise
transferred by either party without the written consent of the other party
which, in the case of assignment to an Affiliate, shall not be unreasonably
withheld or delayed; provided, however, that either party may, without such
consent, assign this Agreement in connection with the transfer or sale of all or

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substantially all of its business or in the event of its merger or consolidation
with another company. Any purported assignment in violation of the preceding
sentence shall be void. Any permitted assignee shall assume all obligations of
its assignor under this Agreement. No assignment shall relieve either party of
responsibility for the performance of any accrued obligation which such party
then has hereunder.

       9.7    Dispute Resolution. Disputes arising out of or relating to any
provision of this Agreement or the breach thereof, which the parties hereto are
unable to resolve, shall be submitted to and be settled in accordance with the
provisions of Article IX of the License Agreement.

       9.8    Counterparts. This Agreement may be executed in duplicate both of
which shall be deemed to be originals, and both of which shall constitute one
and the same Agreement.

       9.9    Notice. All communications between the parties with respect to any
of the provisions of this Agreement will be sent to the addresses set out below,
or to other addresses as notified by the parties for the purpose of this clause,
by prepaid certified air mail which shall be deemed received by the other party
on the fifth business day following deposit in the mails, or by fax or other
electronic means of communication (which shall be deemed received when
transmitted), with confirmation by letter given by the close of business on the
next following business day:

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       if to SPECTRA, at:

              Spectra Science Corporation
              321 South Main Street
              Suite 102
              Providence, RI  02903
              Attn: Nabil Lawandy

       with a copy to:

              Kenneth S. Boger, Esq.

       if to ALBANY, at:

              Albany International Corp.
              PO Box 1907
              Albany, New York 12201
              Attn: Ed Hahn

       with a copy to:

              Charles J. Silva, Jr.

       9.10   Headings. The paragraph headings are for convenience only and will
not be deemed to affect in any way the language of the provisions to which they
refer.

       9.11   Authority. The undersigned represent that they are authorized to
sign this Agreement on behalf of the parties hereto. The parties each represent
that no provision of this Agreement will violate any other agreement that a
party may have with any other person or company. Each party has relied on that
representation in entering into this Agreement.

       9.12   Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without regard to the doctrine of conflicts of
laws.

       9.13   Entire Agreement. This Agreement, including the Schedules appended
hereto, contains the entire understanding of the parties relating to the matters
referred to herein, and may only be amended by a written document, duly executed
on behalf of the respective parties.

                                       19

<PAGE>

       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.

Date of signature:____________________   Date of signature:____________________

SPECTRA SCIENCE CORPORATION              ALBANY INTERNATIONAL CORP.

By: /s/ Nabil Lawandy                    By: /s/ Edward Holm
   ---------------------------           -----------------------------
Name:                                    Name:
Title:                                   Title:

                                       20

<PAGE>

                                                                       EXHIBIT A

                             Product Specifications

                                       21

<PAGE>

                                                                       EXHIBIT B

               Minimum Orders of Licensed Product by Calendar Year

2001                   [***] pounds

2002                   [***] pounds

2003                   [***] pounds

2004                   [***] pounds

2005                   [***] pounds

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                                       22<PAGE>

                                                                    Exhibit 10.8

                                License Agreement

                                     between

                           Spectra Science Corporation

                                       and

                           Albany International Corp.

                                  CONFIDENTIAL

<PAGE>

                                LICENSE AGREEMENT

                                Table of Contents

INTRODUCTION...................................................................1

ARTICLE I - Definitions........................................................1

ARTICLE II - License...........................................................5

2.1  Grant to ALBANY from SPECTRA..............................................5

2.2  Due Diligence.............................................................6

ARTICLE III - Supply...........................................................6

ARTICLE IV - Research and Development..........................................7

4.1  Support by ALBANY.........................................................7

4.2  Exchange of Information...................................................7

4.3  New Inventions............................................................7

ARTICLE V - Payments...........................................................8

5.1  Payments from ALBANY to SPECTRA...........................................8

5.2  Reduction in Payments.....................................................9

5.3  ALBANY Royalty Reports....................................................9

ARTICLE VI - Confidentiality..................................................10

6.1  Undertaking..............................................................10

6.2  Exceptions...............................................................10

6.3  Publicity................................................................11

6.4  Survival.................................................................11

ARTICLE VII - Patent Preparation..............................................11

                  License Agreement - Table of Contents Page 1
                                  Confidential

<PAGE>

                                LICENSE AGREEMENT

                          Table of Contents (Continued)

ARTICLE VIII - Infringement...................................................12

8.1  Infringement.............................................................12

8.2  Third Party Patent Rights................................................13

ARTICLE IX - Dispute Resolution...............................................14

9.1  Governing Law; Jurisdiction..............................................14

9.2  Arbitration..............................................................14

ARTICLE X - Term and Termination..............................................16

10.1 Term.....................................................................16

10.2 Termination For Cause....................................................16

10.3 Effect of Termination....................................................16

ARTICLE XI - Indemnification..................................................16

11.1 Indemnification by SPECTRA...............................................16

11.2 Indemnification by ALBANY................................................17

11.3 Indemnification Procedures...............................................17

ARTICLE XII - Miscellaneous Provisions........................................18

12.1  No Warranty.............................................................18

12.2  Waiver..................................................................19

12.3  Force Majeure...........................................................19

12.4  Severability............................................................19

12.5  Government Acts.........................................................19

12.6  Assignment..............................................................19

12.7  Counterparts............................................................20

12.8  No Agency...............................................................20

12.9  Notice..................................................................20

12.10 Headings................................................................21

                  License Agreement - Table of Contents Page 2
                                  Confidential

<PAGE>

                                LICENSE AGREEMENT

                          Table of Contents (Continued)

12.11 Authority...............................................................21

12.12 Governing Law...........................................................21

12.13 Entire Agreement........................................................21

SCHEDULE 1.6 - SPECTRA Patents

EXHIBIT A - Supply Agreement

                  License Agreement - Table of Contents Page 3
                                  Confidential

<PAGE>

                                License Agreement

     This Agreement is made and entered into as of November 7, 1997 between
Spectra Science Corporation (hereinafter "SPECTRA"), a Delaware corporation
having its principal place of business at 155 South Main Street, Suite 101,
Providence, RI 02903, and Albany International Corp. (hereinafter "ALBANY"), a
Delaware Corporation having its principal address at P.O. Box 1907, Albany, New
York 12201.

                                  Introduction

     WHEREAS, SPECTRA has designed and developed certain dispersed laser
technology for use in garment and textile identification;

     WHEREAS, ALBANY has experience and expertise in developing and
manufacturing dispersed laser products; and

     WHEREAS, ALBANY wishes to obtain, and SPECTRA is willing, and has the
unrestricted right, to grant to ALBANY in accordance with the terms and
conditions set forth herein, the right to manufacture and sell textile products
incorporating dispersed laser technology.

     NOW THEREFORE, in consideration of the foregoing premises, the parties
agree as follows:

                                    Article I

                                   Definitions

     1.1. "Added Value" shall mean the difference between the Net Sales price of
an ALBANY Product incorporating Licensed Textile Product and the Net Sales price
of the most recent arm's-length sale of the same ALBANY Product not
incorporating such Licensed Textile Product to a similarly situated customer.
The parties agree that customers are similarly situated if they purchase the
same or similar Albany Products in similar proportions and volumes, for the same
or similar applications, and on the same or similar payment, inventory,
warehousing,

                           License Agreement - Page 1
                                  Confidential

<PAGE>

shipment and service level terms. The parties agree that sales of Albany
Products under contracts for new mill or machine start-ups shall not be used as
basis for comparison. "Added Value" shall in each case be adjusted to take into
account differences in product size, treatments and other special charges. In
cases in which no arm's-length sale of the same ALBANY Product not incorporating
such Licensed Textile Product has been made during the prior six months, the
"Added Value" shall be such amount as the parties shall mutually determine.

     1.2. "Affiliate" shall mean at any time, any person or legal entity then
directly or indirectly controlled by, controlling or under common control with
the party with respect to which this term is associated, and shall include,
without limitation, any person or legal entity which owns, either of record or
beneficially, more than fifty (50%) percent of the voting stock of any party
hereto, or more than fifty (50%) percent of the voting stock of which is owned
by any party hereto. The term "control" as referenced in the preceding sentence
shall include the power to direct decisions of another person or legal entity,
including the power to direct the management and policies of another person or
legal entity, whether by reason of ownership or contract. For purposes of this
Agreement, Beier Albany & Co. and Beier Albany & Co. (Proprietary) Ltd. shall
each be deemed an "Affiliate" of ALBANY.

     1.3. "Agreed Margin" shall mean, with respect to any Licensed Textile
Product, [***]

     1.4. "ALBANY Product" shall mean a product manufactured by ALBANY or any of
its Affiliates used in paper or pulp mill applications (including, without
limitation, forming, press

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                           License Agreement - Page 2
                                  Confidential

<PAGE>
$END

and dryer fabrics, roll cover fabrics, press, transfer and calendar belts and
filtration media), industrial fabrics (including filtration media) and
industrial belts.

     1.5. "ALBANY Technical Information" shall mean all know-how and proprietary
information of ALBANY, its Affiliates and its sublicensees relating to the
incorporation of Licensed Technology into Albany Products, including any such
know-how or proprietary information lawfully obtained from a third party without
restriction on disclosure to SPECTRA; provided that ALBANY Technical Information
shall not mean or include any information that relates to ALBANY Products
generally, whether or not combined with Licensed Technology.

     1.6. "Billable Value" shall mean, with respect to services provided during
any period, the sum of (a) the number of hours spent by each ALBANY engineer,
scientist, technician or other employee working on SPECTRA research and
development projects during such period, multiplied by the applicable hourly
rate for such engineer, scientist, technician or employee, as such rates may be
in effect from time to time, and (b) ALBANY's out-of-pocket and other direct
expenses and disbursements incurred during such period as a result of such work.

     1.7. "SPECTRA Patents" shall mean any existing or later-filed United States
and foreign patents and patent applications owned by SPECTRA or any of its
Affiliates, or under which any such person has rights under license, containing
claims describing Licensed Technology, applications of dispersed laser
technology or a Licensed Textile Product, including any and all divisions,
continuations, continuations-in-part, extensions, substitutions, renewals,
confirmations, supplementary protection certificates, registrations,
revalidations, reissues or additions of or to any of the aforesaid patents and
patent applications, including, without limitation, the patents, applications,
etc. set forth on Schedule 1.6 hereto. SPECTRA will keep ALBANY informed of
additions and amendments to the SPECTRA Patents.

     1.8. "SPECTRA Technical Information" shall mean all know-how and
proprietary information of SPECTRA and its Affiliates relating to the
development or use of a Licensed Textile Product, including but not limited to
processes, techniques, methods, products, materials, and compositions, and
including any know-how or proprietary information lawfully obtained from a third
party without restriction on disclosure to ALBANY.

                           License Agreement - Page 3
                                  Confidential

<PAGE>
$END

     1.9. "Due Diligence" shall mean all commercially reasonable efforts.

     1.10. "Effective Date" shall mean the effective date of this Agreement as
set forth on the first page hereof.

     1.11. "First Commercial Sale" shall mean the first sale of a Licensed PMC
Product by ALBANY, or an Affiliate or sublicensee of ALBANY, to a third party,
or the first sale of a SPECTRA Product by SPECTRA, or an Affiliate or sublicense
of SPECTRA, to a third party.

     1.12. "Licensed Patent" shall mean the claims of any SPECTRA Patent
covering [***].

     1.13. "Licensed Textile Product" shall mean monofilaments, threads or
textiles which incorporate Licensed Technology. Licensed Textile Product shall
not include any product which is not within ALBANY's existing technical and
manufacturing capacity.

     1.14. "Licensed PMC Product" shall mean an ALBANY Product which
incorporates Licensed Textile Product.

     1.15. "Licensed Technology" shall mean the dispersed laser technology
described in the SPECTRA Patents.

     1.16. "Net Sales" shall mean the gross sales (i.e., gross invoice prices)
of Licensed PMC or SPECTRA Products, as the case may be, billed by ALBANY or
SPECTRA, or any of its Affiliates, as the case may be, to non-Affiliate
customers, less (a) actual credited allowances to such non-Affiliate customers
for damaged, outdated and returned Licensed PMC or SPECTRA Products, as the case
may be, (b) the amounts of actual and customary trade and cash discounts and
rebates given that were not already credited to such non-Affiliate customers at
the time of invoice, (c) all sales taxes, excise taxes, use taxes or
import/export duties actually paid by the seller, and (d) transportation and
insurance charges, actually paid by the seller provided that:

          1.16.1. in the case of any sale or other disposal of a Licensed PMC
     Product or a SPECTRA Product by a party hereto to an Affiliate, for resale,
     the Net Sales shall be

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                           License Agreement - Page 4
                                  Confidential

<PAGE>
$END

     calculated as above on the value charged or invoiced on the first arm's
     length sale to a party who is not an Affiliate;

          1.16.2. in the case of any sale which is not invoiced, Net Sales shall
     be calculated at the time when the Licensed PMC Product or SPECTRA Product
     is paid for by substituting the actual purchase price received for such
     product for the "gross invoice prices" referred to above;

          1.16.3. in the case of any other sale or other disposal for value,
     such as barter or counter-trade, of any Licensed PMC Product or SPECTRA
     Product, or part thereof, otherwise than in an arm's length transaction
     exclusively for money, Net Sales shall be calculated as above by
     substituting the fair market value of the Licensed PMC Product or SPECTRA
     Product (if higher) in the relevant location of sale or disposal for the
     "gross invoice price".

     1.17. "SPECTRA Product" shall mean a product manufactured by SPECTRA or one
of its Affiliates which incorporates Licensed Textile Product.

     1.18. "Supply Agreement" shall mean that certain Supply Agreement of even
date herewith by and between SPECTRA and ALBANY, attached as Exhibit A hereto.

     1.19. "Valid Claim" means a claim of an issued and unexpired Licensed
Patent.

                                   Article II

                                     License

     2.1. Grant to ALBANY from SPECTRA. SPECTRA hereby grants to ALBANY
(including its Affiliates) the sole and exclusive right and license worldwide
under the Licensed Patents, to manufacture and sell all of SPECTRA's
requirements for Licensed Textile Product, and to make, use and sell Licensed
PMC Products. The above-referenced license shall not extend to the manufacture
of and sale of Licensed Textile Product, alone, to anyone other than SPECTRA or
its Affiliates. ALBANY shall have the right to grant sublicenses under the
Licensed Patents on terms consistent with this Agreement, provided that ALBANY
shall

                           License Agreement - Page 5
                                  Confidential

<PAGE>
$END

forthwith notify SPECTRA of the grant of any such sublicense, together with the
name and address of any such sublicensee, shall provide SPECTRA with a summary
of the principal terms, with financial terms redacted, of any such sublicense,
shall promptly take all reasonable steps in the event of the breach of any such
sublicense by the sublicensee to enforce the same, and in the event of a breach
of any such sublicense shall, if so requested by SPECTRA, terminate that
sublicense in accordance with the procedures prescribed therein. ALBANY shall
not permit any third party (including ALBANY subcontractors or sublicensees) to
use SPECTRA Technical Information without provisions safeguarding
confidentiality equivalent to those provided in this Agreement. Promptly
following the execution of this Agreement, and continuously during the term
hereof, SPECTRA shall furnish to ALBANY SPECTRA Technical Information and
information concerning SPECTRA Patents reasonably necessary in order for ALBANY
to perform its obligations hereunder, as such information becomes available.

     2.2. Due Diligence. ALBANY shall use Due Diligence to develop Licensed
Textile Products and to develop and introduce Licensed PMC Products to its
customers worldwide and to maintain their commercial availability after
introduction to the extent that ALBANY shall reasonably determine. ALBANY shall
not be obligated to take or continue any action or expend any sum unless it has
made a determination in good faith that such action or expense is commercially
reasonable in light of prevailing business and economic factors and consistent
with its other business activities.

                                   Article III

                                     Supply

     ALBANY will supply and SPECTRA will, and will cause each of its Affiliates
to, purchase exclusively from ALBANY all of SPECTRA's requirements for Licensed
Textile Product, upon the terms and conditions set forth in the Supply
Agreement.

     SPECTRA will supply and ALBANY will purchase exclusively from SPECTRA all
of ALBANY's requirements for laser readers and reading devices for use with
Licensed PMC Products, upon the terms and conditions set forth in the Supply
Agreement.

                           License Agreement - Page 6
                                  Confidential

<PAGE>
$END

                                   Article IV

                            Research and Development

     4.1. Support by ALBANY. At no cost to SPECTRA, ALBANY shall support
SPECTRA's reasonable research and development needs relating to the development
of polymer formulations, fibers and textiles utilizing the Licensed Technology;
provided that ALBANY shall not be obligated to provide any services that exceed
its current technical and manufacturing capacity. In particular, ALBANY shall
use its best efforts, consistent with its current level of commitment, to
develop Licensed Textile Product, in monofilament or other forms, suitable for
use in garment and textile identification, and to continue to work with SPECTRA
to solve the specific problems of increasing the wavelength palette, increasing
the mechanical and chemical wear of fibers, and camouflaging the filters for
linen applications. This support by ALBANY shall include problem-solving as well
as small-scale sample preparations aimed at product development. The foregoing
notwithstanding, ALBANY's obligations under this Section 4.1 shall be limited so
that the Billable Value of services provided hereunder during any calendar year
shall not exceed the following amounts: [***]

     4.2. Exchange of Information. SPECTRA and ALBANY will meet informally on a
regular basis to discuss research and development of Licensed Technology and
Licensed Textile Product, and, subject to Article VI hereof, will freely share
technical information, including SPECTRA Technical Information and ALBANY
Technical Information, which is not subject to restrictions imposed by a third
party on disclosure to or use by the other party.

     4.3. New Inventions. The ownership of any new inventions arising directly
from the research and development activities provided for in this Article will
be as agreed upon by the

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                           License Agreement - Page 7
                                  Confidential

<PAGE>
$END

parties on a case-by-case basis prior to the start of any specific project. In
the absence of any such agreement, any invention that relates primarily to
ALBANY Products shall be the property of ALBANY, and any invention that relates
primarily to Licensed Technology shall be the property of SPECTRA.

                                    Article V

                                    Payments

     5.1. Payments From ALBANY to SPECTRA. ALBANY shall pay to SPECTRA a royalty
equal to (a) (i) [***]; or (ii) if such ALBANY Product is only offered with such
Licensed Textile Product as a Licensed PMC Product, [***]; and (b) [***].
Payments relating to Licensed PMC Products sold in any quarter will be made
within 45 days of the end of such quarter. In the event that either ALBANY
notifies SPECTRA that ALBANY believes that [***], the parties will meet to
discuss the possibility of either reducing or increasing such royalty, as the
case may be.

     5.2. Reduction in Payments. If (i) at the end of the second full calendar
year following First Commercial Sale of a Licensed PMC Product, the Licensed
Textile Product incorporated into such Licensed PMC Product is not the subject
of a Valid Claim; and (ii) ALBANY can demonstrate that a competitive product has
been commercially launched by a third party, and that the sale of the
competitive product would have been prohibited were there a Valid

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                           License Agreement - Page 8
                                  Confidential

<PAGE>
$END

Claim covering the Licensed Technology, then the applicable percentages in
Section 5.1 shall be reduced accordingly, by an amount determined in good faith
by the parties.

     5.3. ALBANY Royalty Reports.

          5.3.1. During the term of this Agreement after its First Commercial
     Sale of a Licensed PMC Product, ALBANY shall furnish to SPECTRA within 45
     days after the end of each fiscal quarter a written report or reports
     covering each of ALBANY's fiscal quarters (currently ending on the last day
     of March, June, September, and December, each such fiscal quarter being
     sometimes referred to herein as a "royalty period") showing (a) the Net
     Sales of all such products during the royalty period by ALBANY and each
     Affiliate; (b) the royalties, payable in United States Dollars ("Dollars"),
     which shall have accrued hereunder in respect of such sales; and (c) if
     applicable, the exchange rates used in converting the royalties into
     Dollars from the currencies in which sales were made. With respect to sales
     of products invoiced in Dollars, the Net Sales and royalty payable shall be
     expressed in Dollars. With respect to sales of products invoiced in a
     currency other than Dollars, the Net Sales and royalty payable shall be
     expressed in the domestic currency of the party making the sale together
     with the Dollar equivalent of the royalty payable, calculated using the
     simple average of the exchange rates published in The Wall Street Journal
     under the heading "Currency Trading" on the last day of each month during
     the royalty period in which The Wall Street Journal Currency Trading table
     (or its then equivalent) is published. ALBANY shall keep accurate records
     in sufficient detail to enable the royalties hereunder to be determined and
     to be verified by SPECTRA.

                                   Article VI

                                 Confidentiality

     6.1. Undertaking. During the term of this Agreement, each party shall keep
confidential, and other than as provided herein shall not use or disclose,
directly or indirectly, any trade secrets, confidential or proprietary
information, or any other knowledge, information, documents or materials, owned,
developed or possessed by the other party, whether in tangible or intangible
form, the confidentiality of which such other party takes reasonable measures to

                           License Agreement - Page 9
                                  Confidential

<PAGE>
$END

protect, including but not limited to SPECTRA Technical Information and ALBANY
Technical Information. Each party shall take any and all lawful measures to
prevent the unauthorized use and disclosure of such information, and to prevent
unauthorized persons or entities from obtaining or using such information. Each
party further agrees to refrain from directly or indirectly taking any action
which would constitute or facilitate the unauthorized use or disclosure of such
information. Each party may disclose such information to its Affiliates,
officers, employees and agents, to authorized licensees and sublicensees, and to
subcontractors in connection with the development or manufacture of Licensed
Textile Products, to the extent necessary to enable such parties to perform
their obligations hereunder or under the applicable license, sublicense or
subcontract, as the case may be; provided, that such Affiliates, officers,
employees, agents, licensees, sublicensees and subcontractors have entered into
appropriate confidentiality agreements for secrecy and non-use of such
information which by their terms shall be enforceable by injunctive relief at
the instance of the disclosing party. Each party shall be liable for any
unauthorized use and disclosure of such information by its Affiliates, officers,
employees and agents and any such sublicensees and subcontractors.

     6.2. Exceptions. Notwithstanding the foregoing, the provisions of Section
6.1 hereof shall not apply to knowledge, information, documents or materials
which the receiving party can establish conclusively: (i) have entered the
public domain without such party's breach of any obligation owed to the
disclosing party; (ii) have become known to the receiving party prior to the
disclosing party's disclosure of such information to such receiving party; (iii)
are permitted to be disclosed by the prior written consent of the disclosing
party; (iv) have become known to the receiving party from a source other than
the disclosing party other than by breach of an obligation of confidentiality
owed to the disclosing party; (v) are disclosed by the disclosing party to a
third party without restrictions on its disclosure; (vi) are independently
developed by the receiving party without breach of this Agreement; or (vii) are
required to be disclosed by the receiving party to comply with applicable laws
or regulations, to defend or prosecute litigation or to comply with governmental
regulations, provided that the receiving party provides prior written notice of
such disclosure to the disclosing party and takes reasonable and lawful actions
to avoid or minimize the degree of such disclosure.

                           License Agreement - Page 10
                                  Confidential

<PAGE>
$END

     6.3. Publicity. The timing and content of any press releases or other
public communications relating to this Agreement and the transactions
contemplated herein will, except as otherwise required by law, be determined
jointly by SPECTRA and ALBANY. No press release or other public communications
or sales material shall refer to ALBANY without ALBANY's written consent.
Neither party hereto nor its representatives or employees shall make any public
disclosure, whether to the press, stockholders or otherwise, revealing the
material non-public terms of this Agreement or of any amendment hereto without
the prior written approval of the other, provided however, that nothing shall
prevent either party hereto from making such disclosures or statements which in
the opinion of counsel are legally required or may be required in the opinion of
such party's certified public accountant to conform to generally accepted
accounting principles. In the event any such disclosure or statement is
required, the disclosing party will endeavor to give prior written notice to the
other party, wherever practicable, of the proposed disclosure or statement and
the reason therefor.

     6.4. Survival. The provisions of this Article VI shall survive the
termination of this Agreement. The obligations of confidentiality,
non-disclosure and non-use set forth in this Article VI shall survive the
termination of this Agreement and shall continue in effect until the relevant
information falls within any of the exceptions provided for in Section 6.2
above.

                                   Article VII

                               Patent Preparation

     SPECTRA shall be responsible for the preparation, filing, prosecution and
maintenance of any and all patent applications and patents included in the
SPECTRA Patents. Each party shall provide to the other prompt notice as to all
matters which may come to its attention and which may affect the preparation,
filing, prosecution or maintenance of any such patent applications or patents.
ALBANY acknowledges the importance of maintaining the confidentiality of any
inventions or other information relating to potential patent claims prior to the
filing of patent applications with respect thereto and will cooperate fully with
SPECTRA with respect to such matters. If SPECTRA fails to take with Due
Diligence any action reasonably necessary to prepare, file, prosecute or
maintain patents and patent applications included in the SPECTRA Patents, ALBANY
may take such action at its own expense on behalf

                           License Agreement - Page 11
                                  Confidential

<PAGE>
$END

of SPECTRA after first providing SPECTRA with thirty (30) days written notice of
its intention to do so.

                                  Article VIII

                                  Infringement

     8.1. Infringement. Each party shall notify the other promptly of any
possible infringements, unauthorized possession, knowledge or use of the
intellectual property embodied in any of the Licensed Patents by others, of
which such party becomes aware, and shall promptly furnish the other party with
full details of such infringements, unauthorized possession, knowledge or use.
SPECTRA shall have the first right, but not the obligation, at its expense, to
bring any legal action on account of any such infringements, unauthorized
possessions, knowledge or use, and ALBANY shall cooperate with SPECTRA, as
SPECTRA may reasonably request, in connection with any such action. In the event
that SPECTRA decides to bring suit, SPECTRA shall give prompt written notice to
ALBANY of that fact, and ALBANY shall take all reasonable steps to assist
SPECTRA in such suit. SPECTRA shall be entitled to all amounts recovered in such
suit, except that ALBANY shall have the right to elect, by written notice
delivered to SPECTRA within sixty (60) days following receipt by ALBANY of the
written notice from SPECTRA referenced in the preceding sentence, to pay up to
fifty (50%) percent of the litigation costs (in addition to the fees and
expenses of any separate legal counsel retained by ALBANY) and receive a
percentage of any recovery equal to the percentage of total litigation costs
(not including the fees and expenses of any separate legal counsel retained by
ALBANY) paid by ALBANY, subject to the following adjustments:

          8.1.1. Each party shall first be entitled to receive reimbursement of
     its share of the litigation costs incurred by it as aforesaid;

          8.1.2. ALBANY shall be entitled to the full amount of any damages
     awarded for lost profits or revenues from decreased sales of Licensed PMC
     Products as a result of such infringement; and

                           License Agreement - Page 12
                                  Confidential

<PAGE>
$END

          8.1.3. ALBANY shall pay SPECTRA, out of any such damages awarded for
     lost profits or revenues from decreased sale of ALBANY Products, an amount
     equal to the payments SPECTRA would have otherwise received hereunder and
     under the Supply Agreement, if such sales of Licensed PMC Products had
     occurred otherwise.

     ALBANY must make such election within sixty (60) days of its receipt of
SPECTRA's notice that SPECTRA has decided to bring suit. ALBANY shall also have
the right to be represented by separate counsel, at its own expense, in any such
suit. SPECTRA shall have control over any such suit, and decisions as to
settlement, methods, and terms and conditions for resolving the suit shall be
made by SPECTRA after consultation with ALBANY.

     If, within sixty (60) days after receipt by SPECTRA of a written request
from ALBANY that SPECTRA bring an action, SPECTRA does not do so, ALBANY shall
have the right, but not the obligation, at its expense and in its own name or in
the name of SPECTRA, if required by law, to do so on its own behalf and on
behalf of SPECTRA, and SPECTRA shall cooperate with ALBANY, as ALBANY may
reasonably request, in connection with such action. No such legal action may be
settled by one party without the other's prior written consent, which consent
shall not be unreasonably withheld. In such event, ALBANY shall be entitled to
all amounts recovered in such suit.

     8.2. Third Party Patent Rights. Except for the representations of SPECTRA
in Section 12.1 hereof, neither party gives any warranty regarding the
infringement of third party rights by practice of the license granted hereunder.
Nevertheless, each party will promptly notify the other in the event (i) any
relevant third party patents come to its notice, (ii) any warning letter or
other notice of infringement is received by a party, or (iii) any action, suit
or proceeding is brought against a party alleging infringement of a patent right
of any third person by reason of the manufacture, use or sale of Licensed PMC
Products. The parties shall consult with each other to consider appropriate
steps to respond to such claims including, without limitation, litigation, the
undertaking of a license with the third person patent holder or termination of
any license granted hereunder. If any warning letter or other notice of
infringement is received by a party to this Agreement, or an action, suit or
proceeding is brought against a party to this Agreement alleging infringement of
a patent right of any third person or entity by reason of the manufacture, use
or

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$END

sale of Licensed PMC Products, the recipient party shall promptly notify the
other party. The parties shall consult with each other to consider appropriate
steps to respond to such claims including, without limitation, litigation, the
undertaking of a license with the third person patent holder or termination of
any license granted hereunder. If ALBANY loses any action, suit or proceeding
referred to in this Section 8.2, whether by judgment, award, decree or
settlement (provided that no such action, suit or proceeding shall be settled
without the consent of SPECTRA), and is required to pay a royalty or other
damage award to such third person, ALBANY shall be entitled to a credit against
any aggregate amounts otherwise due to SPECTRA under this Agreement or the
Supply Agreement in an amount equal to one hundred (100%) percent of the amounts
paid to such third person, provided that the aggregate amounts otherwise due to
SPECTRA under this Agreement and the Supply Agreement in respect of any calendar
quarter shall not be reduced by more than one hundred (100%) percent (including
any reduction on account of any credit taken pursuant to the preceding
sentence).

                                   Article IX

                               Dispute Resolution

     9.1. Governing Law; Jurisdiction. This Agreement shall be governed and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts. Both parties hereto agree to submit to personal jurisdiction in
the Commonwealth of Massachusetts and to accept and agree to venue in that
State.

     9.2. Arbitration. In the event of any controversy or claim arising out of
or relating to any provision of this Agreement or the breach thereof, the
parties shall try to settle their differences amicably between themselves. Any
such controversy or claim which the parties are unable to resolve shall
initially be submitted for review and resolution by the Chief Executive Officer
of SPECTRA and a senior executive officer of ALBANY. Failing settlement of any
other controversy, any such controversy or claim shall, upon the written request
of one party delivered to the other party, be submitted to and be settled by
arbitration in Boston, Massachusetts in accordance with the rules of the
American Arbitration Association (the "AAA") then in effect (except as
hereinafter stated), and judgment upon the award rendered by the arbitrators
shall be final and may be entered in any court having jurisdiction thereof.

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$END

Notwithstanding anything to the contrary which may be contained in the rules of
the AAA, the parties further agree as follows:

          9.2.1. Each party will appoint one person approved by the AAA and
     otherwise independent and unaffiliated with either party to hear and
     determine the dispute within fifteen (15) days after receipt of notice of
     arbitration from the noticing party. The two persons so chosen will select
     a third impartial arbitrator, and their majority decision will be final and
     conclusive upon the parties hereto. If either party fails to designate its
     arbitrator within fifteen (15) days after delivery of the notice provided
     for herein, then the arbitrator designated by the one party will act as
     sole arbitrator, and will be deemed to be the single, mutually approved
     arbitrator to resolve the controversy. In the event the parties are unable
     to agree upon a rate of compensation for the arbitrators, they will be
     compensated for their services at a rate to be determined by the AAA.

          9.2.2. The parties shall enjoy, but are not limited to, the same
     rights to discovery as they would enjoy under the Federal Rules of Civil
     Procedure for the district in which the City of Boston is located.

          9.2.3. Each party will bear its own costs, including attorneys' fees,
     in the arbitration, and will split equally the cost of the arbitrators.

          9.2.4. The arbitrators will, upon the request of either party, issue a
     written opinion of their findings of fact and conclusions of law and shall
     deliver a copy of such opinion to both parties.

          9.2.5. Upon receipt of such written opinion, either party will have
     the right, within fifteen (15) days thereof, to file with the arbitrators a
     motion to reconsider, and the arbitrators thereupon will reconsider the
     issues raised by said motion and either confirm or alter their decision,
     which will then be final and conclusive upon both parties hereto. The costs
     of such a motion for reconsideration and written opinion of the
     arbitrators, including attorneys' fees, will be paid by the non-prevailing
     party. Any motion to reconsider shall be sent to the other party at the
     time it is filed with the arbitrators.

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$END

     The arbitration carried out hereunder shall apply to the exclusion of
regular legal means, provided that, in urgent situations in which time is of the
essence, the rights of the parties to obtain proper remedies in courts of law or
equity shall remain unimpaired.

                                    Article X

                              Term and Termination

     10.1. Term. The term of this Agreement shall extend until the last to
expire of the Licensed Patents.

     10.2. Termination For Cause. In addition to rights of termination which may
be granted to either party under other provisions of this Agreement, either
party may terminate this Agreement upon thirty (30) days' prior written notice
to the other party upon the material breach by such other party of any of its
obligations under this Agreement, provided that such termination shall become
effective only if the breaching party shall fail to remedy or cure the breach
within such thirty (30) day period.

     10.3. Effect of Termination. Termination of this Agreement for any reason,
or expiration of this Agreement, will not affect: (i) obligations which have
accrued as of the effective date of termination or expiration, and (ii) rights
and obligations which, from the context thereof, are intended to survive
termination or expiration of this Agreement.

                                   Article XI

                                 Indemnification

     11.1. Indemnification by SPECTRA. Subject to ALBANY's compliance with its
obligations set forth in this Agreement, SPECTRA shall indemnify and hold
ALBANY, its Affiliates and sublicensees and its and their directors, officers,
employees and agents harmless from and against any liability, damage or expense
(including reasonable attorneys' fees and costs and other expenses of
litigation), resulting from (i) the material breach by SPECTRA of any of its
representations, warranties or covenants contained in this Agreement, or (ii)
the successful enforcement (i.e., a judgment issued by a court of competent
jurisdiction against SPECTRA

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                                  Confidential

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$END

unappealable or unappealed by SPECTRA within the time allowed therefor) by
ALBANY of its indemnification rights set forth in clause (i) of this Section
11.1.

     11.2. Indemnification by ALBANY. Subject to SPECTRA's compliance with its
obligations set forth in this Agreement, ALBANY shall indemnify and hold
SPECTRA, its Affiliates and its and their directors, trustees, officers,
employees and agents harmless from and against any liability, damage or expense
(including reasonable attorneys' fees and costs and other expenses of
litigation), resulting from (i) the material breach by ALBANY of any of its
representations, warranties or covenants contained in this Agreement; or (ii)
the successful enforcement (i.e., a judgment issued by a court of competent
jurisdiction against ALBANY, unappealable or unappealed by ALBANY within the
time allowed therefor) by SPECTRA of its indemnification rights set forth in
clauses (i) or (ii) of this Section 11.2.

     11.3. Indemnification Procedures. A party (the "indemnitee") which intends
to claim indemnification under this Article XI shall promptly notify the other
party (the "indemnitor") in writing of the action, claim or liability with
respect to which the claim of indemnification relates. The indemnitee shall
permit, and shall cause its employees and agents to permit, the indemnitor, at
its discretion, to settle any such action, claim or liability, the defense and
settlement of which shall be under the complete control of the indemnitor;
provided, however, that such settlement shall not adversely affect the
indemnitee's rights hereunder or impose any obligations on the indemnitee in
addition to those set forth herein in order for it to exercise those rights. No
such action, claim or liability shall be settled without the prior written
consent of the indemnitor, and the indemnitor shall not be responsible for any
legal fees or other costs incurred other than as provided herein. The
indemnitee, its employees and agents shall cooperate fully with the indemnitor
and its legal representatives in the investigation and defense of any action,
claim or liability covered by this indemnification. The indemnitee shall have
the right, but not the obligation, to be represented by counsel of its own
selection and expense.

                          License Agreement - Page 17
                                  Confidential

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$END

                                   Article XII

                            Miscellaneous Provisions

     12.1. No Warranty. SPECTRA represents and warrants (a) that it has the
corporate power and authority to enter into this Agreement and to grant the
license provided for herein; (b) that, to the best of its knowledge, the
exercise by ALBANY of the rights granted hereunder will not result in the
infringement of valid patents of any third party; (c) that, except for the
License Agreement dated as of March 2, 1994 by and between Brown University,
Brown University Research Foundation and Spectra Science Corporation ("the Brown
Agreement"), it is not a party to or paying royalties under any other agreement
relating to the Licensed Technology; (d) the transactions contemplated hereby do
not conflict with, and will not cause a default under, the Brown Agreement or
any other agreement to which it is a party; and (e) it is not currently in
default and, to the best of its knowledge, no other party is currently in
default under, the Brown Agreement. Each of ALBANY and SPECTRA represents and
warrants that (a) it is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware, with full power and
authority to enter into this Agreement and the Supply Agreement and perform the
transactions contemplated hereby and thereby, and (b) once this Agreement and
the Supply Agreement have been executed and delivered by each of the parties
thereto, it will be the legal, valid and binding obligation of such party,
enforceable in accordance with its terms. Except as provided in this Section
12.1 above, neither party makes any warranty of any kind whatsoever, either
express or implied, to the other party, or to any customer of such other party,
as to the ability of such other party to utilize the patents or technical
information of the other party. Each party (the "Indemnifying Party") shall
indemnify and shall hold the other harmless against and from any and all claims
of third parties for damages due to personal injury arising out of the actions
of the Indemnifying Party, its Affiliates, agents, employees, sublicensees or
subcontractors, including but not limited to claims arising in connection with
the development, manufacturing, assembly, or sale of Licensed Textile Product,
Licensed PMC Product or products incorporating Licensed Textile Product or
Licensed PMC Product by the Indemnifying Party or its Affiliates, sublicensees
or subcontractors.

                          License Agreement - Page 18
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$END

     12.2. Waiver. No provision of the Agreement may be waived except in writing
by both parties hereto. No failure or delay by either party hereto in exercising
any right or remedy hereunder or under applicable law will operate as a waiver
thereof, or a waiver of a particular right or waiver of any right or remedy on
any subsequent occasion.

     12.3. Force Majeure. Neither party shall be held liable or responsible to
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement,
other than an obligation to make a payment, when such failure or delay is caused
by or results from fire, floods, embargoes, government regulations, prohibitions
or interventions, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotion's, strikes, lockouts, acts of God, or any
other cause beyond the reasonable control of the affected party.

     12.4. Severability. It is the intention of the parties to comply with all
applicable laws domestic or foreign in connection with the performance of their
respective obligations hereunder. In the event that any provision of this
Agreement, or any part hereof, is found invalid or unenforceable, the remainder
of this Agreement will be binding on the parties hereto, and will be construed
as if the invalid or unenforceable provision or part thereof had been deleted,
and the Agreement shall be deemed modified to the extent necessary to render the
surviving provisions enforceable to the fullest extent permitted by law.

     12.5. Government Acts. In the event that any act, regulation, directive, or
law of a government or any subdivision or agency thereof should make impossible
or prohibit, restrain, modify or limit any material act or obligation of ALBANY
or SPECTRA under this Agreement and if any party to this Agreement is adversely
affected thereby, the parties shall attempt in good faith to negotiate a lawful
and enforceable modification to this Agreement which substantially eliminates
the adverse effect; provided that failing any agreement, in that regard, the
party, if any, who is adversely affected, shall have the right, at its option,
to terminate this Agreement.

     12.6. Assignment. This Agreement may not be assigned or otherwise
transferred by either party without the written consent of the other party
which, in the case of assignment to an Affiliate, shall not be unreasonably
withheld; provided, however, that either party may, without

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$END

such consent, assign this Agreement in connection with the transfer or sale of
all or substantially all of its business or in the event of its merger,
acquisition or consolidation with another company. Any purported assignment in
violation of the preceding sentence shall be void. Any permitted assignee shall
assume all obligations of its assignor under this Agreement. No assignment shall
relieve either party of responsibility for the performance of any accrued
obligation which such party then has hereunder.

     12.7. Counterparts. This Agreement may be executed in duplicate both of
which shall be deemed to be originals, and both of which shall constitute one
and the same Agreement.

     12.8. No Agency. Notwithstanding any of the provisions of this Agreement,
neither party shall at any time enter into, incur, or hold itself out to third
parties as having authority to enter into or incur, on behalf of the other
party, any commitment, expense, or liability whatsoever, and all contracts,
expenses and liabilities undertaken or incurred by one party in connection with
or relating to the development, manufacture or sale of Licensed Textile Product
or products incorporating Licensed Textile Product shall be undertaken, incurred
or paid exclusively by that party except as specifically referenced herein, and
not as an agent or representative of the other party.

     12.9. Notice. All communications between the parties with respect to any of
the provisions of this Agreement will be sent to the addresses set out below, or
to other addresses as notified by the parties for the purpose of this clause, by
prepaid, certified air mail which shall be deemed received by the other party on
the fifth business day following deposit in the mails, or by facsimile
transmission or other electronic means of communication (which shall be deemed
received when transmitted), with confirmation by letter given by the close of
business on the next following business day:

          if to ALBANY, at:

                    Albany International Corp.
                    PO Box 1907
                    Albany, New York 12201
                    Attention: Ed Hahn

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$END

                    with a copy to:
                    Charles J. Silva, Jr.

          if to SPECTRA, at:

                    Spectra Science Corporation
                    155 South Main Street
                    Suite 101
                    Providence, RI 02903
                    Attention: Nabil Lawandy

     12.10. Headings. The paragraph headings are for convenience only and will
not be deemed to affect in any way the language of the provisions to which they
refer.

     12.11. Authority. The undersigned represent that they are authorized to
sign this Agreement on behalf of the parties hereto. The parties each represent
that no provision of this Agreement will violate any other agreement that a
party may have with any other person or company. Each party has relied on that
representation in entering into this Agreement.

     12.12. Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without regard to the doctrine of conflicts of
laws.

     12.13. Entire Agreement. This Agreement, including the Schedules appended
hereto, contains the entire understanding of the parties relating to the matters
referred to herein, and may only be amended by a written document, duly executed
on behalf of the respective parties.

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$END

     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.

                                     SPECTRA SCIENCE CORPORATION

                                     By: /s/ Nabil M. Lawandy
                                         ---------------------------------------
                                        Name:  Nabil M. Lawandy
                                        Title: President & CEO

                                     Date of Signature: November 3, 1997

                                     ALBANY INTERNATIONAL CORP.

                                     By: /s/ Frank R. Schmeler
                                         ---------------------------------------
                                        Name:  Frank R. Schmeler
                                        Title: Executive Vice President & Chief
                                               Operating Officer-PMC

                                     Date Of Signature: November 6, 1997

                           License Agreement - Page 22
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$END

                                                                    SCHEDULE 1.6

                                 SPECTRA Patents

Patent Title                                    Inventor   Patent
------------                                    --------   ------

[***]

[***]

[***]

[***]

[***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                        License Agreement - Schedule 1.6
                                  Confidential

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