Document:

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                                                                    Exhibit 10.3

                          LICENSE AND ROYALTY AGREEMENT

This agreement entered into the 1st day of February, 2007 by and between ND
Fusion, Inc., a New York corporation with offices at 901 Fuhrmann Blvd, Buffalo,
N.Y., hereinafter referred to as LICENSEE, and CLARKSON UNIVERSITY, a
corporation with principal offices in Potsdam, New York, hereinafter called
CLARKSON.

Whereas, CLARKSON UNIVERSITY and LICENSEE or its Affiliates have previously
undertaken research and development in (i) the field of design of thin film
rotating tube reactors and similar systems useful for process intensification
(ii) the process of operating and using such reactors and systems to synthesize
complex organic and inorganic molecules, and (iii) unique compositions of matter
resulting from such process; and

Whereas, CLARKSON UNIVERSITY and LICENSEE seek to commercialize processes,
techniques and products resulting from said field.

Witnesseth:

     1.   EFFECTIVE DATE

          This Agreement is effective February 1, 2007 ("Effective Date").

     2.   DEFINITIONS

          As used in this Agreement, the following terms have the meanings
          indicated:

          A.   "AFFILIATE" means any business entity more than 50% owned by
               LICENSEE, any business entity which owns more than 50% of
               LICENSEE, or any business entity that is more than 50% owned by a
               business entity that owns more than 50% of LICENSEE.

          B.   "LICENSED FIELD" means chemical processes, instrumentation of
               equipment developed by Dr. Roshan Jachuck for the design of thin
               film rotating tube reactors and similar systems useful for
               process intensification (ii) the process of operating and using
               such reactors and systems to synthesize complex organic and
               inorganic molecules, and (iii) unique compositions of matter
               resulting from such process.

          C.   "LICENSED PRODUCT" means any product sold by LICENSEE comprising
               Licensed Subject Matter pursuant to this Agreement.

          D.   "LICENSED SUBJECT MATTER" means inventions and discoveries
               covered by Patent Rights or Technology Rights within the Licensed
               Field.

          E.   "NET SALES" means the gross revenues received by LICENSEE from
               the Sale of Licensed Products, less sales and/or use taxes
               actually paid, import and/or export duties actually paid,
               outbound transportation prepaid or

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               allowed and amounts allowed or credited due to returns (not to
               exceed the original billing or invoice amount).

          F.   "PATENT RIGHTS" means CLARKSON's rights in information or
               discoveries covered by patents and/or patent applications,
               whether domestic or foreign, and all divisions continuations,
               continuations-in-part, reissues, reexaminations or extensions
               thereof, and any letters patent that issue thereon, which name
               Roshan Jachuck as either sole or joint inventor ("Inventor") and
               which relate to the manufacture, use or sale of licensed Field.

          G.   "SALE OR SOLD" means the transfer or disposition of a Licensed
               Product for value to a party other than LICENSEE.

          H.   "TECHNOLOGY RIGHTS" means CLARKSON's rights in technical
               information, know-how, processes, procedures, compositions,
               devices, methods, formulas, protocols, techniques, software,
               designs, drawings or data created by Roshan Jachuck (Inventor) at
               CLARKSON before the Effective Date or after that date with
               respect to any research or development efforts funded by LICENSEE
               or its Affiliates all as relates to the Licensed Subject Matter.

     3.   WARRANTY; SUPERIOR RIGHTS

          A.   Except for the rights, if any of the Government of the United
               States or the State of New York, as set forth below, Clarkson
               represents and warrants its belief that (i) it is the owner of
               the entire right, title, and interest in and to Licensed Subject
               Matter, (ii) it has the sole right to grant licenses thereunder,
               and it has not knowingly granted licenses thereunder to any other
               entity that would restrict rights granted to LICENSEE except as
               stated herein.

          B.   LICENSEE understands that the licensed Subject Matter may have
               been developed under a funding agreement with the Government of
               the United States and/or the State of New York, and if so, that
               the Government may have certain rights relative thereto. This
               Agreement is explicitly made subject to the Government's rights
               under any agreement and any applicable law or regulation. If
               there is a conflict between an agreement, applicable law or
               regulation and this Agreement, the terms of the Government
               agreement, applicable law, or regulation shall prevail.

          C.   LICENSEE understands and acknowledges that CLARKSON, by this
               Agreement, makes no representation as to the operability or
               fitness of any use, safety, efficacy, ability to obtain
               regulatory approval, patentability, and/or breadth of the
               Licensed Subject Matter. CLARKSON, by this Agreement, also makes
               no representation as to whether there are any patents now held,
               or which will be held, by others or by CLARKSON in

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               the Licensed Field, nor does CLARKSON make any representation
               that the inventors contained in Patent Rights do not infringe any
               other patents now held or that will be held by others or by
               CLARKSON.

          D.   LICENSEE, by execution hereof, acknowledges, covenants and agrees
               that it has not been induced in any way by CLARKSON or its
               employees to enter into this Agreement, and further warrants and
               represents that (i) it has conducted sufficient due diligence
               with respect to all items and issues pertaining to this Article 3
               and all other matters pertaining to this Agreement; and (ii)
               LICENSEE has adequate knowledge and expertise, or has utilized
               knowledgeable and expert consultants, to adequately conduct the
               due diligence, and agrees to accept all risks inherent herein.

     4.   LICENSE

          A.   CLARKSON hereby grants to LICENSEE a royalty-bearing, exclusive
               worldwide license under Licensed Subject Matter to manufacture,
               have manufactured, use, offer, sublicense and/or sell Licensed
               Products or Licensed Subject Matter for use within Licensed
               Field. This grant is subject to the payment by LICENSEE to
               CLARKSON of all consideration as provided herein, and is further
               subject to rights retained by CLARKSON to:

               a.   Publish the general scientific findings from research
                    related to Licensed Subject Matter subject to the terms of
                    Section 12, Confidential Information; and

               b.   Use Licensed Subject Matter for research, teaching and other
                    educationally-related purposes.

          B.   LICENSEE may extend the license granted herein to any Affiliate
               if the Affiliate consents to be bound by this Agreement to the
               same extent as LICENSEE.

     5.   PAYMENT AND REPORTS

          A.   In consideration of the rights granted by CLARKSON to LICENSEE
               under this Agreement, LICENSEE will pay CLARKSON the following:

                    A running royalty equal to:

          (i) on all sublicensing fees, payments and royalties ("Fees") received
     by LICENSEE or its Affiliates with respect to any sublicense of Licensed
     Subject Matter to independent third parties equal to five percent (5%) of
     cumulative Fees;

          (ii) a royalty, on Sales by LICENSEE or its Affiliates of any and all
     materials whether powder, liquid or solid, consisting of a composition of
     matter or utilizing in its

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     method of production one or more claims covered by the Licensed Subject
     Matter equal to two percent (2%) of Net Sales of such materials; and

          (iii) a royalty, on Sales by LICENSEE or its Affiliates of any and all
     devices or components covered by the Licensed Subject Matter equal to three
     percent (3%) of such devices and components.

In any sale of an end product by FUSION incorporates Affected Materials or
Affected Products, Net Sales of Affected Materials or Affected Products shall be
the amount that FUSION would charge to a Third Party for the Affected Materials
or Affected Products incorporated into the end product if sold on a stand-alone
basis.

In any sale of an end product by LICENSEE or its Affiliates incorporates a
Licensed Product, the Net Sales shall be the amount that LICENSEE or its
Affiliates would charge to a Third Party for the Licensed Product incorporated
into the end product if sold on a stand-alone basis.

          B.   In the event that CLARKSON and LICENSEE, upon mutual agreement,
               amend the license from exclusive to non-exclusive, the royalty
               rates set herein shall be reduced by 50%.

          C.   During the Term of this Agreement and for one year thereafter,
               LICENSEE agrees to keep complete and accurate records of its
               Sales and Net Sales of Licensed Products under the license
               granted in this Agreement in sufficient detail to enable the
               royalties payable hereunder to be determined. Licensee agrees to
               permit CLARKSON or its representatives, at CLARKSON's expense, to
               periodically examine its books, ledgers, and records during
               regular business hours for the purpose of and to the extent
               necessary to verify any report required under this Agreement. If
               the amounts due to CLARKSON are determined to have been
               underpaid, LICENSEE will pay the cost of the examination and
               accrued interest at the highest allowable rate.

          D.   Bi-annually, beginning immediately after the Effective Date,
               LICENSEE must deliver to CLARKSON a true and accurate written
               report, even if no payments are due CLARKSON, giving the
               particulars of the business conducted by LICENSEE during the
               preceding 6 calendar months under this Agreement as are pertinent
               to calculating payments hereunder. This report will include at
               least:

               a.   The quantities of Licensed Subject Matter that it has
                    produced;

               b.   The total Sales;

               c.   The calculation of royalties thereon; and

               d.   The total royalties computed and due CLARKSON.

          Simultaneously with the delivery of each report, Licensee must pay to
          CLARKSON the amount, if any, due for the period of each report.

          E.   On or before each anniversary of the Effective Date, irrespective
               of having a first Sale or offer for Sale, LICENSEE must deliver
               to CLARKSON a

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               written progress report as to LICENSEE's efforts and
               accomplishments during the preceding year in diligently
               commercializing Licensed Subject Matter and the LICENSEE's
               commercialization plans for the upcoming year. In the event
               LICENSEE fails to demonstrate that LICENSEE has taken effective
               steps within three years after a patent application is filed to
               bring the Licensed Subject Matter to the point of practical
               application, then CLARKSON shall have the right to grant a
               non-exclusive or exclusive license to responsible applicants
               under terms that are reasonable under the circumstances, or
               require LICENSEE to do so.

          F.   All amounts payable here by LICENSEE must be paid in United
               States funds without deductions for taxes, assessments, fees, or
               charges of any kind. Checks must be payable to CLARKSON
               UNIVERSITY and addressed to:

                    Division of Research
                    Attn: Ms. Constance M. Ferguson
                    Grants & Contracts Administrator
                    8 Clarkson Ave., PO Box 5630
                    Potsdam, NY 13699-5630

          LICENSEE is responsible for costs associated with preparing, filing
          and prosecuting any patent applications relevant to this agreement and
          enforcing, defending, and paying, any Maintenance fees of any
          resulting patents in the Licensed Field so long as and in all
          countries in which its license remains.

     6.   TERM AND TERMINATION

          A.   The term of this Agreement is from the Effective Date to the full
               end of the terms or term of any patent licensed under this
               agreement, or for 15 years, whichever is longer and so long as
               LICENSEE fulfills the financial obligations set forth this
               Agreement;

          B.   This Agreement will earlier terminate automatically if LICENSEE
               becomes bankrupt, insolvent and/or if the business of the
               LICENSEE is placed in the hands of a receiver, assignee, or
               trustee, whether by voluntary act of LICENSEE or otherwise, or
               upon 30 days' written notice from CLARKSON if LICENSEE breaches
               or defaults on its obligation to make payments (if any are due)
               or reports, in accordance with the terms of Article 2, unless,
               before the end of the 30 day period, LICENSEE has cured the
               default or breach and so notifies CLARKSON in writing, stating
               the manner of the cure, or upon 90 days' written notice if
               LICENSEE breaches or defaults on any other obligation under this
               Agreement, unless, before the end of the 90 day period, LICENSEE
               has cured the default or breach and so notifies CLARKSON in
               writing, stating the manner of the cure, or at any time by mutual
               written consent between LICENSEE and

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               CLARKSON, upon 180 days' written notice to all parties and
               subject to any terms herein which survive termination.

          C.   If this Agreement is terminated for any cause;

               a.   nothing herein shall be construed to release either party of
                    any obligation matured prior to the effective date of the
                    termination;

               b.   after the effective date of the termination, LICENSEE may
                    sell all Licensed Products and parts therefore it has on
                    hand at the date of termination, if it pays earned royalties
                    thereon according to the terms of Articles 4 and 5; and

               c.   LICENSEE will be bound by the provisions of Articles 10, 11
                    and 12 of this Agreement.

     7.   INFRINGEMENT BY THIRD PARTIES

          A.   LICENSEE, at its own expense, must enforce any patent exclusively
               licensed hereunder against infringement by third parties and it
               is entitled to retain recovery from such enforcement. LICENSEE
               must pay CLARKSON a royalty on any monetary recovery if the
               monetary recovery is for damages or a reasonable royalty in lieu
               thereof. If LICENSEE does not file suit against a substantial
               infringer of a patent within 6 months of knowledge thereof, then
               CLARKSON may enforce any patent licensed hereunder on behalf of
               itself and LICENSEE, CLARKSON retaining all recoveries from such
               enforcement and/or reducing the license granted hereunder to
               non-exclusive.

          B.   In any infringement suit or dispute, the parties agree to
               cooperate fully with each other. At the request and expense of
               the party bringing suit, the other party will permit access to
               all relevant personnel, records, papers, information, samples,
               specimens, etc., during regular business hours.

     8.   ASSIGNMENT

               Except in connection with the sale of substantially all of
               LICENSEE's assets to a third party, this Agreement may not be
               assigned by LICENSEE without the prior written consent of
               CLARKSON, which will not be unreasonable withheld.

     9.   PATENT MARKING

               LICENSEE must permanently and legibly mark all products and
               documentation manufactured or sold by it under this Agreement
               with a patent notice as may be permitted or required under Title
               35, United States Code.

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     10.  INDEMNIFICATION

               LICENSEE agrees to hold harmless and indemnify CLARKSON, its
               officers, employees and agents from and against any claims,
               demands, or causes of action whatsoever, including without
               limitation those arising on account of any injury or death of
               persons or damage to property caused by, or arising out of, or
               resulting from, the exercise or practice of the license granted
               hereunder by LICENSEE, its Affiliates or their offices,
               employees, agents or representatives.

     11.  PUBLICITY

               Neither party shall use the name of the other party without that
               party's express written consent.

     12.  CONFIDENTIAL INFORMATION & PUBLICATION

          A.   Each party agrees that all information contained in documents
               marked "confidential" and forwarded to one by the other (i) be
               received in strict confidence, (ii) be used only for the purpose
               of this agreement, and (iii) not be disclosed by the recipient
               party, its agents or employees without the prior written consent
               of the other party, except to the extent that the recipient party
               can establish competent proof that such information:

               a.   Was in the public domain at the time of disclosure,

               b.   Later became part of the public domain through no act or
                    omission of the recipient party, its employees, agents,
                    successors or assigns,

               c.   Was lawfully disclosed to the recipient party by a third
                    party having the right to disclose it,

               d.   Was already known by the recipient party at the time of
                    disclosure,

               e.   Was independently developed by the recipient, or

               f.   Is required by law or regulation to be disclosed.

          B.   Each party's obligation of confidence hereunder shall be
               fulfilled by using at least the same degree of care with the
               other party's confidential information as it uses to protect its
               own confidential information. This obligation shall exist while
               this Agreement is in full force and for a period of 3 years
               thereafter.

          C.   CLARKSON will submit its manuscript for any proposed publication
               of research related to Licensed Subject Matter to LICENSEE at
               least 30 days before publication, and LICENSEE shall have the
               right to review and comment upon the publication in order to
               protect LICENSEE's

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               confidential information. Upon LICENSEE's request, publication
               will be delayed up to 60 additional days to enable LICENSEE to
               secure adequate intellectual property protection for LICENSEE's
               property that would be affected by the publication.

     13.  PATENTS AND INVENTIONS

               LICENSEE shall provide and be responsible for patent filings,
               prosecutions and maintenance worldwide, including the selection
               of patent counsel and payment of all cost associated with such
               counsel as well as all costs and fees associated with filings,
               prosecutions and maintenance. LICENSEE shall have the right, in
               its sole discretion, to decide what portion of the Technology
               Rights to retain as trade secrets or to file for patent
               protection beginning in the U.S.A. All patent applications shall
               list CLARKSON and LICENSEE as the co-owners. LICENSEE shall
               promptly inform CLARKSON or CLARKSON's attorney of all actions
               taken by any patent office and all actions taken by LICENSEE with
               regard to prosecution of any patent application. CLARKSON agrees
               to reasonably cooperate in this effort including execution of all
               necessary applications, documents and writings. Once a U.S.
               patent application is filed, should LICENSEE elect not to
               prosecute such patent application in foreign countries (other
               than the U.S.A.), LICENSEE shall notify CLARKSON in sufficient
               time for CLARKSON to file or continue to prosecute such
               applications, and LICENSEE's rights with respect to that foreign
               patent or patents shall terminate.

     14.  SOLE AGREEMENT/CHANGE

               This Agreement, including all exhibits referenced herein, shall
               be the complete Agreement of the parties hereto and shall
               supersede all prior agreements and understandings between the
               parties respective the subject matter hereof. Any changes or
               modifications of this Agreement must be in writing and signed by
               both parties.

     15.  NEW YORK LAW

               This Agreement shall be construed, and the legal relations
               between the parties hereto shall he determined, in accordance
               with the law of the State of New York.

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     16.  NOTICES

               Any notice and correspondence required by this Agreement if to
               the LICENSEE must be given in writing to:

               NanoDynamics,
               901 Fuhrmann Road
               Buffalo, NY 14203
               ATTN: Dr. Keith A. Blakely

               Any notice and correspondence other than reports and invoices as
               provided for herein if to CLARKSON shall be given in writing to:

               Division of Research
               Clarkson University
               8 Clarkson Avenue, P.O. Box 5630
               Potsdam, NY 13699-5630
               Attn: Dr. Gregory C. Slack

     The parties have caused their duly authorized representatives to execute
     this Agreement.

CLARKSON UNIVERSITY                     LICENSEE

By: /s/ Gregory C. Slack                By: /s/ Keith A. Blakely
    ---------------------------------       ------------------------------------
Signature                               Signature
Director of Research                    President
-------------------------------------   ----------------------------------------
Title                                   Title

15 Mar 07                               21 Mar 07
-------------------------------------   ----------------------------------------
Date                                    Date

                                       9<PAGE>

                                                                    Exhibit 10.4

                               RESEARCH AGREEMENT

This agreement is entered into the 2nd day of June, 2006, by and between
NanoDynamics, Inc., a corporation with principal offices in Buffalo, New York
("SPONSOR"), and CLARKSON UNIVERSITY, a New York not-for-profit education
corporation with principal offices in Potsdam, New York ("CLARKSON").

It is mutually agreed that SPONSOR will provide research support to CLARKSON
for, and CLARKSON will exert its commercially reasonable efforts in performing,
a research program in accordance with the following:

1.   SCOPE OF WORK

     CLARKSON will utilize its commercially reasonable efforts to provide
     certain inventions and intellectual property associated therewith
     pertaining to (i) The design of thin film reactors and similar systems
     useful for process intensification (ii) the process of operating and using
     such reactors and systems to synthesize complex organic and inorganic
     molecules, and (iii) unique compositions of matter resulting from such
     process.

2.   PERIOD OF PERFORMANCE

     The term of this Agreement shall be from June 2, 2005 through June 1, 2007,
     (the "Contract Period") unless terminated as hereinafter provided. The term
     may be extended upon mutual agreement of the parties.

3.   COSTS

     A.   Sponsor shall provide research support to Clarkson for the Research
          Program at a fixed amount of $70,000 for the Contract Period,
          according to the Research Program budget set forth on Attachment A.
          The Principal Investigator may re-budget funds as needed to best
          accomplish the research; provided, however, that in no event shall
          SPONSOR be obligated to contribute additional funds in support of the
          Research Program absent its further written agreement to do so.

     B.   CLARKSON will submit invoices to SPONSOR on the following date(s):
          (check one)

                    [ ] Annually    On __________

                    [ ] Quarterly   On __________

                    [X] Monthly     On __________

                    [ ] Other       On __________

     C.   All invoices shall be sent to the following address:

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               NanoDynamics, Inc.
               Attn: Anthony DeSimone, VP/CAO
               901 Fuhrmann Blvd.
               Buffalo, NY 14203

     D.   CLARKSON shall maintain complete and accurate accounting records to
          substantiate charges hereunder. The SPONSOR shall have reasonable
          access to such records for purposes of audit and verification of such
          charges during the term of this Agreement and for a period of one year
          after its completion. Such audit and verification activities shall be
          conducted upon prior written notice at a mutually agreeable time
          during normal business hours and in a manner calculated to avoid
          disruption of CLARKSON's operations.

     E.   The agreed upon payment represents all direct and indirect costs
          associated with conducting the Research Program that are to be charged
          to SPONSOR, including all overhead and infrastructure costs. CLARKSON
          agrees not to utilize any additional external source of financial
          support for any part of the Research Program.

4.   RESEARCH PROGRAM

     A.   CLARKSON will use commercially reasonable efforts to conduct the
          Research Program described in Attachment A under the direction of Dr.
          Roshan Jachuck (the "Principal Investigator").

     B.   SPONSOR understands that CLARKSON's primary mission is education and
          advancement of knowledge and that the Research Program will be
          designed to carry out that mission. The manner of performance of the
          Research Program shall be determined solely by the Principal
          Investigator. CLARKSON does not guarantee specific results.

     C.   SPONSOR understands that CLARKSON may from time to time be involved in
          similar research on behalf of itself and others. CLARKSON shall be
          free to initiate and/or continue such research provided that it does
          not cover essentially the same if scope of the Research Program
          described in Attachment A while this Agreement is in effect, and
          SPONSOR shall not gain any rights via this Agreement to other
          research.

     D.   CLARKSON does not guarantee that any patent rights will result from
          the Research Program, that the scope of any patent rights relating to
          the Research Program will cover SPONSOR's commercial interest, or that
          any patent rights will be free of dominance by other patents,
          including those based on inventions made by other inventors employed
          by CLARKSON.

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5.   TECHNICAL REPORTS

     Progress reports shall be provided by CLARKSON to SPONSOR quarterly during
     the contract period and a final report shall be submitted within ninety
     (90) days after the end of the contract period.

6.   CONFIDENTIAL INFORMATION

     A.   "Confidential Information" shall mean that information: (1) disclosed
          to CLARKSON by SPONSOR in connection with, and during the term of,
          this Agreement; and (2) which relates to SPONSOR's past, present and
          future research, development and business activities; and (3) which
          has been identified in writing to CLARKSON at the time of disclosure
          as the confidential information of SPONSOR. The term Confidential
          Information shall not mean any information which is known to CLARKSON
          prior to receipt from SPONSOR, or, without breach of this Agreement,
          is publicly disclosed by a third party without (to CLARKSON's
          knowledge) an obligation of confidence either prior or subsequent to
          receipt by CLARKSON.

     B.   For a period of (5) years from the effective date of this Agreement,
          CLARKSON agrees to hold all SPONSOR Confidential Information in
          confidence and, except as otherwise provided in this Agreement, not to
          use such Confidential Information other than for the benefit of
          SPONSOR. Except as may be authorized by SPONSOR in writing or as
          required by law or legal process, for such period of time, CLARKSON
          agrees not to disclose any Confidential information, by publication or
          otherwise, to any person other than those persons whose services
          CLARKSON requires and who have a need to know the Confidential
          Information for purposes of carrying out the terms of this Agreement,
          and who are obligated to comply with the provisions of this Section 6.

     C.   CLARKSON shall not be responsible for disclosure of Confidential
          Information by employees of CLARKSON after termination of their
          employment if CLARKSON takes reasonable steps to prevent such
          Confidential Information disclosure violations.

     D.   In the event of a loss of any items containing Confidential
          Information, CLARKSON shall promptly notify SPONSOR in writing.

     E.   CLARKSON retains the right to refuse to accept any purportedly
          Confidential Information which it does not consider to be essential to
          performance of research pursuant to this Agreement, or which it
          believes to be improperly designated as such.

7.   PUBLICATION

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     A.   Notwithstanding Section 6, the investigators, students, and CLARKSON
          personnel engaged in the Research Program shall be permitted to
          present at symposia and national or regional professional meetings,
          and to publish in journals of their own choosing or otherwise,
          accounts of the results of such research, provided that SPONSOR shall
          have been furnished a copy of the proposed publication or presentation
          prior to submission and shall not have objected to the presentation or
          publication within thirty (30) days after receipt of such copy. Delays
          beyond thirty (30) days will be permitted only for the purpose of
          applying for any appropriate Intellectual property protection. The
          investigator, student(s) and CLARKSON personnel shall cooperate in all
          reasonable respects in making revisions to any proposed disclosures if
          considered by SPONSOR to be in conflict with a patent position
          intended or being asserted or maintained by SPONSOR. However, in no
          event may SPONSOR delay publication or presentation beyond six months
          after a copy has been furnished to SPONSOR as described above.

     B.   Limitations on publications and presentations, identified in A above,
          shall not limit the discussion of pertinent portions of the Research
          Program with co-workers on CLARKSON's campus in performing the
          Research Program, nor shall they prohibit student(s) from presenting
          theses in fulfillment of requirements for advanced degrees.

8.   INTELLECTUAL PROPERTY RIGHTS

     A.   SPONSOR INVENTIONS. Rights to inventions, improvements, and
          discoveries, whether or not patentable, conceived or fixed in a
          tangible medium under any Research Project Initiative solely or
          substantially by the employees/agents of SPONSOR shall belong to
          SPONSOR ("SPONSOR Invention"). SPONSOR Invention(s) shall not be
          subject to the terms and conditions of this Agreement.

     B.   CLARKSON INVENTIONS. Rights to inventions, improvements, and
          discoveries, whether or not patentable, conceived or fixed in a
          tangible medium under any Research Project Initiative solely or
          substantially by the employees/agents of CLARKSON shall belong to
          CLARKSON (hereafter "CLARKSON Invention"). SPONSOR shall be notified
          of any such invention promptly after an invention disclosure is
          received by CLARKSON. In consideration of SPONSOR's sponsorship,
          CLARKSON hereby grants to SPONSOR a non-exclusive, transferable,
          irrevocable, world-wide, royalty-free license to use such CLARKSON
          inventions in all fields of use. Pursuant to Section 8.D, SPONSOR will
          be provided a first right to negotiate an exclusive license in all
          fields of use under any CLARKSON Invention with royalty arrangements
          and contractual terms to be negotiated as early as possible.

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     C.   JOINT INVENTIONS. Rights to inventions, improvements, and discoveries,
          whether or not patentable, conceived or fixed in a tangible medium
          under any Research Project Initiative jointly by one or more SPONSOR
          employees/agents and one or more employees and/or agents of CLARKSON,
          shall belong to SPONSOR and CLARKSON jointly ("Joint Invention"). Both
          SPONSOR and CLARKSON have the right to make, have made, reproduce,
          use, sell, and offer to sell Joint Inventions in consultation with the
          other party. In the event, SPONSOR requests exclusive ownership or use
          of the Joint Invention in all fields of use, CLARKSON and SPONSOR will
          promptly enter into negotiations for an EXCLUSIVE license agreement
          for SPONSOR in all fields of use with mutually agreeable royalty
          arrangements and contractual terms.

     D.   LICENSING. CLARKSON grants SPONSOR the first option to negotiate, in
          good faith, an EXCLUSIVE royalty-bearing license in all fields of use
          to make, have made, reproduce, use, sell, and offer to sell all
          CLARKSON Inventions and all Joint Inventions made in the course of
          work under this Agreement. In the event that SPONSOR and CLARKSON are
          unable to negotiate an exclusive license with SPONSOR within one
          hundred twenty (120) days from the date CLARKSON provides SPONSOR with
          notification of the invention, then CLARKSON will be free to enter
          into NON-EXCLUSIVE licenses with any one or more third parties.

     E.   GOVERNMENT RIGHTS. Notwithstanding the contents of Sections 8.A
          through 8.D above, SPONSOR and CLARKSON each recognize and acknowledge
          that federally-funded sponsored research is predisposed to, and
          conditioned upon, compliance with certain intellectual property rights
          as will be addressed in the federally-funded sponsored program
          instrument (e.g. grant, cooperative agreement, contract). SPONSOR and
          CLARKSON each agree to comply with the legal and regulatory
          requirements of any such federally-funded sponsored Research Program.

     F.   NO LICENSE. Except as expressly provided in this Agreement, including
          any Addenda, no license, express nor implied, shall inure to the
          benefit of either SPONSOR or CLARKSON under any patents, copyrights,
          trademarks or service marks now owned by either of them or as a result
          of a patent being granted to one of them for inventions made
          exclusively by its employees/agents, or for copyrights vested in one
          of them due to works of original authorship by its employees/agents.

     G.   PATENT COSTS. Without limiting CLARKSON's ownership rights as
          described Section 8.B., SPONSOR shall pay all costs associated with
          CLARKSON obtaining and maintaining patent protection for CLARKSON
          Intellectual Property. Provided, however, if SPONSOR decides that it
          is not appropriate to apply for patent protection for CLARKSON
          Intellectual Property, SPONSOR shall have no obligation to pay for
          such costs and in such event the rights granted under Section 8.B

                                       5

<PAGE>

          to SPONSOR by CLARKSON in respect to such Intellectual Property shall
          automatically lapse.

9.   PUBLICITY

     Notwithstanding any other provisions of this Agreement, SPONSOR will not
use the name, service marks or trademarks of CLARKSON, or of any CLARKSON staff
or students, in any publicity without the prior written approval of CLARKSON.
CLARKSON will not use the name, service marks or trademarks of SPONSOR, or of
any employee of SPONSOR, in any publicity without the prior written approval of
SPONSOR.

10.  CLARKSON'S OBLIGATIONS-EMPLOYEES/OTHER

     A.   CLARKSON will have an appropriate agreement with each of its employees
          or others whose services CLARKSON may require, sufficient to enable
          CLARKSON to comply with all the terms of this Agreement.

     B.   Personnel provided by CLARKSON are employees of CLARKSON and will not
          for any purpose be considered employees or agents of SPONSOR.

     C.   The parties shall be independent contractors and not joint venturers,
          principal and agent, or any other similar relationship. Neither party
          shall have, or hold itself out as having, the power or authority to
          bind or create liability for the other by its negligent or intentional
          act or omission.

11.  EQUIPMENT

     Title to all equipment purchased for the Research Program shall vest with
     CLARKSON at the time of purchase unless otherwise specified herein.

12.  WARRANTIES

     CLARKSON represents and warrants that CLARKSON is under no obligation or
     restriction, nor will CLARKSON assume any such obligation or restriction,
     which would in any way materially interfere or be inconsistent with, or
     present a conflict of interest concerning, the services to be furnished by
     CLARKSON under this Agreement.

     CLARKSON and SPONSOR each represent and warrant to the other party that
     they have full power and authority to enter into this Agreement and carry
     out the transactions contemplated by this Agreement and that all necessary
     corporate action has been duly taken in this regard.

13.  ASSIGNMENT AND DELEGATION

     No right or interest in this Agreement shall be assigned by CLARKSON
     without the written permission of SPONSOR and any purported assignment is
     void. No

                                       6

<PAGE>

     delegation of the services or other obligations owed by CLARKSON to
     SPONSOR, whether set forth in Section 1 or elsewhere in this Agreement,
     shall be made without SPONSOR's prior written permission.

14.  TERMINATION/SURVIVAL

     A.   Either CLARKSON or SPONSOR may terminate this Agreement upon thirty
          (30) days' written notice to the other without necessity of
          demonstrating cause. In the event of such termination, the parties
          shall negotiate an equitable settlement based on actual expenses plus
          any non-cancelable commitments incurred by CLARKSON through the
          effective date of termination, less any sums paid by SPONSOR. In no
          event shall the settlement exceed the sum due under Section 3.

     B.   Either party may terminate this Agreement upon 10 days' prior written
          notice of a material breach by the other party, unless the breaching
          party cures the breach to the reasonable satisfaction of the
          non-breaching party within such 10 day period.

     C.   Subject to CLARKSON's rights under Section 8, in the event of
          termination of this Agreement pursuant to Section 14.A., termination
          of this Agreement pursuant to Section 14.B. due to breach by CLARKSON,
          or expiration of this Agreement, CLARKSON shall turn over to SPONSOR
          all work product of the services rendered under this Agreement, in its
          "as is" condition at the effective date of the termination or
          expiration of this Agreement, CLARKSON shall also return to SPONSOR
          all drawings, blueprints, descriptions, papers, or documents which
          contain SPONSOR's Confidential Information.

     D.   The rights and obligations of the parties under Sections 6, 7, 8, 9
          and 15 shall survive any cancellation, expiration or termination of
          this Agreement.

15.  WARRANTY AND LIABILITY DISCLAIMERS

     A.   SPONSOR ACKNOWLEDGES THAT NEITHER CLARKSON NOR ANY OF ITS TRUSTEES,
          OFFICERS, EMPLOYEES, AGENTS, OR REPRESENTATIVES MAKES ANY WARRANTIES
          (INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS
          FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR TITLE), EXPRESS OR
          IMPLIED, CONCERNING THE RESULTS OF THE RESEARCH PROGRAM (INCLUDING
          WITHOUT LIMITATION ANY INVENTIONS). ALL WARRANTIES MADE OR TO BE MADE
          IN CONNECTION WITH THE RESULTS OF THE RESEARCH PROGRAM OR ANY
          INVENTIONS SHALL BE MADE SOLELY BY SPONSOR, AND NONE OF SUCH
          WARRANTIES SHALL DIRECTLY, OR INDIRECTLY BY

                                       7

<PAGE>

          IMPLICATION, OBLIGATE IN ANY WAY CLARKSON OR ANY OF CLARKSON'S
          TRUSTEES, OFFICERS, EMPLOYEES, AGENTS, OR REPRESENTATIVES.

     B.   Neither CLARKSON nor any of its trustees, officers, employees, agents,
          or representatives will be liable for any direct, indirect,
          consequential or other damages suffered by SPONSOR or any other party
          as a result of SPONSOR's use of the results of the Research Program.

16.  INDEMNIFICATION

     SPONSOR shall defend with competent counsel, indemnify, and hold harmless
     CLARKSON and its trustees, officers, employees, agents and representatives
     from and against any and all claims, demands, actions, suits and
     proceedings (whether civil, criminal or administrative), and all liability,
     loss, expense (including reasonable attorneys' fees), costs or damages,
     relating directly or indirectly to or arising out of the use of the results
     of the Research Program by or for the benefit of SPONSOR or any of its
     licensees, successors, assignees, or ultimate end-users.

17.  INSURANCE

     A.   Beginning at the commencement of the Research Program, SPONSOR shall,
          at its sole cost and expense, procure and maintain commercial general
          liability insurance in amounts not less than $1,000,000.00 per
          incident and $2,000,000.00 annual aggregate, and SPONSOR shall have
          CLARKSON, its trustees, officers, employees, agents, and
          representatives named as additional insureds. Such commercial general
          liability insurance shall provide (I) product liability coverage; (ii)
          broad form contractual liability coverage for SPONSOR's
          indemnification obligations under this Agreement; and (iii) coverage
          for litigation costs. The minimum amounts of insurance coverage
          required shall not be construed to create a limit of SPONSOR's
          liability with respect to its indemnification obligations under this
          Agreement.

     B.   SPONSOR shall maintain such commercial general liability insurance
          beyond the expiration or termination of this Agreement if the policy
          is a claims made policy during (i) the period that any subject matter
          developed pursuant to this Agreement is being commercially distributed
          or sold by or for the benefit of SPONSOR or any its licensees or
          assignees; and (ii) the five (5) year period immediately after such
          period.

     C.   SPONSOR shall provide CLARKSON with written evidence of such insurance
          upon CLARKSON's request. SPONSOR shall arrange for CLARKSON to receive
          written notice at least fifteen (15) days prior to the cancellation,
          non-renewal or material change in such insurance.

18.  SOLE AGREEMENT/CHANGE

                                       8

<PAGE>

     This Agreement, including all exhibits referenced herein, shall be the
     complete Agreement of the parties hereto and shall supersede all prior
     agreements and understandings between the parties respecting the subject
     matter hereof. Any changes or modifications of this Agreement must be in
     writing and signed by both parties.

19.  NEW YORK LAW

     This Agreement shall be construed, and the legal relations between the
     parties hereto shall be determined, in accordance with the laws of the
     State of New York without regard to its conflicts of laws principles.

20.  NOTICES

     All notices and correspondence required to be given hereunder shall be in
     writing and, if to SPONSOR, sent to:

               Diane J. McMahon
               Corporate Counsel
               NonoDynamics, Inc.
               901 Fuhrmann Blvd.
               Buffalo, NY 14203

except as otherwise provided herein for reports and invoices, and, if to
CLARKSON sent to:

               Clarkson University
               Division of Research
               101 Bertrand H. Snell Hall
               PO Box 5630
               Potsdam, NY 13699-5630
               ATTN: Gregory C. Slack, Director of Research and Technology
                     Transfer

21.  COMPLIANCE WITH LAWS

     CLARKSON and SPONSOR shall comply with, and this Agreement shall be
     subordinate to, all applicable federal, state and municipal laws, rules and
     regulations in connection with the performance of the Research Project and
     the disclosure and use of the results thereof.

     To the extent that the United States Government (through any of its
     agencies or otherwise) has funded research as part of the Research Program,
     the parties acknowledge that the United States Government is entitled, as a
     right, under the provisions of 35 U.S.C. Section 202-212 and applicable
     regulations of Title 37 of the Code of Federal Regulations, to a
     non-exclusive, nontransferable, irrevocable, paid-up license to practice or
     have practiced any of the inventions conceived or made pursuant to the
     Research Program for governmental purposes and any

                                       9

<PAGE>

     license granted to SPONSOR as a result of such inventions shall be subject
     to such right.

22.  WAIVER

     A failure by one of the parties to this Agreement to assert its rights for
     or upon any breach or default of this Agreement shall not be deemed a
     waiver of such rights nor shall any such waiver be implied from acceptance
     of any payment. No such failure or waiver in writing by any one of the
     parties hereto with respect to any rights, shall extend to or affect any
     subsequent breach or impair any right consequent thereon.

23.  SEVERABILITY.

     The parties agree that it is the intention of neither party to violate any
     public policy, statutory or common laws, and governmental or supranational
     regulations; that if any sentence, paragraph, clause or combination of the
     same is in violation of any applicable law or regulation, or is
     unenforceable or void for any reason whatsoever, such sentence, paragraph,
     clause or combinations of the same shall be inoperative and the remainder
     of the Agreement shall remain binding upon the parties.

24.  EXPORT CONTROL COMPLIANCE REQUIREMENTS.

     This agreement shall be in accordance with the Export Control Compliance
     regulations.

The parties have caused this Agreement to be signed in duplicate by their duly
authorized representatives.

CLARKSON UNIVERSITY                     SPONSOR

By: /s/ Gregory Slack                   By: /s/ Keith A. Blakely
    ---------------------------------       ------------------------------------
Signature                               Signature

Gregory C. Slack                        Keith A. Blakely
-------------------------------------   ----------------------------------------
Director of Research and Technology     Title
Transfer

05 July 06                              07/07/06
-------------------------------------   ----------------------------------------
Date                                    Date

                                       10

<PAGE>
Principal Investigator

/s/ Signature
-------------------------------------
Signature

07/07/06
-------------------------------------
Date

                                       11

<PAGE>

                                  ATTACHMENT A
                       RESEARCH PROGRAM (INCLUDING BUDGET)

     -    Photo polymerization of acrylates using narrow channel reactor

     -    Photo as well as thermal polymerization of styrene using rotating tube
          reactor

     -    Microwave assisted reactions in compact continuous flow reactors

     -    Mass transfer characteristics of gas-liquid flow in narrow channel
          reactors

     -    Bio diesel production using narrow channel system.

"Jachuck will play hands on role for design, development and commissioning of
the first three prototype IPSs (Intensified Process Systems). Once a standard
design has been established and a commercial sale has been made Jachuck's role
will shift into R&D planning, new designs of process modules, novel process
design, promotion of ND Fusion's activity within the industrial as well as
academic circle by means of presentation in internationally reputed conferences,
exhibitions and workshops. Jachuck will also act as a solution provider for
process intensification related issues as and when this is deemed to be
essential."

                                       12

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