Document:

Exhibit
      10.3

     

    LICENSE
      AGREEMENT

     

    LICENSE
      AGREEMENT dated as of December 31, 2005 (the "Effective Date") by and between
      Ambit Corporation, a Delaware corporation ("Licensor"), and NaturalNano, Inc.,
      a
      Nevada corporation ("Licensee"). 

     

    WITNESSETH:

     

    WHEREAS,
      Licensor owns and wants to provide for the commercialization of an invention
      entitled "Personal Communication Device Connectivity Arrangement", which is
      the
      subject of U.S. Patent Number 6,885,845 (hereinafter "Invention");
      and

     

    WHEREAS,
      Licensee is in the business of selling materials to coat Shielded Structures
      and
      wishes to utilize the Invention for use in connection with Shielded Structures,
      by the acquisition or the development, manufacture, and sale of
      Products.

     

    NOW,
      THEREFORE, Licensor and Licensee, in consideration of the foregoing and the
      mutual promises contained herein and intending to be legally bound hereby agree
      as follows:

     

    1. DEFINITIONS 

     

    As
      used
      herein:

     

    1.1 "Affiliate"
      means any corporation, company, partnership, joint venture or other entity
      which
      controls, is controlled by or is under common control with the Licensee, as
      well
      as its successors, assigns and designees. 

     

    1.2 "Diligent
      Exploitation" means,
      as of
or
      before
a
      particular date:
      (a)
      receipt by Licensee of Revenue
      obligating
      Licensee
      to pay Licensor over
      $50,000
      under Sections
      7.1
and/or
      7.2
      hereunder in any twelve (12) month period preceding that
      date
      or
      (b) commencement by Licensee of a lawsuit for
      infringement of a Licensed
      Patent
where
      the
      claimed damages are reasonably anticipated to be in excess of $500,000 or (c)
      a
      first
      sale of
      a Product (directly or through
      a
      Sublicensee) in commercial quantities.

     

    1.3 "Enforcement
      Expenses" means all costs, fees and/or expenses incurred in connection with
      enforcement of Licensed Patents, including without limitation legal fees,
      contingent or otherwise.

     

    1.4 "Improvement"
      means any invention, discovery or improvement, whether patentable or not, which,
      if practiced, would infringe any Licensed Patents. 

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    1.5 "Joint
      Invention" means any patentable Improvement that includes co-inventors from
      Licensor and Licensee.

     

    1.6 "Licensee
      Patents" means patent applications and patents throughout the world on Licensee
      Improvements.

     

    1.7 "Licensed
      Field" means any use in which the Product is attached to or functions
      in a permanent or temporary
      structure, i.e. which is not intended as a form of transportation (such as
      trailer homes which are not self-powered or powered by a four wheel vehicle
      or
      attached by trailer hitch to a personal or recreational vehicle). "Licensed
      Field" includes without
      limitation use
      in
      buildings, rooms, churches, stores, houses, apartment buildings,
      trailer/manufactured homes, casinos, shopping malls, circus tents, cubicles,
      booths, arcades, bunkers, and silos. Use attached to real estate is
      presumptively in the "Licensed Field". "Licensed Field" excludes use on
      automobiles, recreational vehicles, trains, trucks, aircraft and ships
      (including cruise ships). Products attached to movable personal property are
      presumptively not in the "Licensed Field". 

     

    1.8 "Licensed
      Patents" means the Patents and all patent applications and patents disclosing
      and claiming a Licensor Improvement, including all reissues, continuations,
      divisionals and continuations-in-part thereof, and all corresponding foreign
      patent applications and patents.

     

    1.9 "Licensee
      Improvements" means all Improvements owned or licensable by
      Licensee.

     

    1.10 "Licensee
      Patents" means all patent applications and patents disclosing and claiming
      a
      Licensee Improvement, including all reissues, continuations, divisionals and
      continuations-in-part thereof, and all corresponding foreign patent applications
      and patents.

     

    1.11 "Licensor
      Improvements" means all Improvements owned or licensable by
      Licensor.

     

    1.12 "Net
      Sales" means gross revenues of Licensee and Affiliates from sales of Products,
      less only usual trade discounts, sales tax which the seller has to pay or
      absorb, customs duties and transportation and insurance charges, if not included
      in the gross price, and any and all Federal, foreign, State or local taxes
      (except income tax) incurred by the seller on such sales; provided, however,
      that Net Sales shall not include revenues from Sales by Licensee or Affiliates
      of Products that were purchased from a Sublicensee. 

     

    1.13 "Patents"
      means U.S. Patent No. 6,885,845 and all reissues, continuations, divisionals
      and
      continuations-in-part thereof.

     

    1.14 "Products"
      means any products the sale or use of which would, in the absence of this
      Agreement, infringe a Licensed Patent (whether by direct or contributory
      infringement or inducement to infringe).

     

    
      
        
        

      

      
        2

        
          

        

      

       

    

     

    1.15 "Proprietary
      Information" means information and trade secrets owned or controlled by a party
      at any time during the term of this Agreement, which relates to Products,
      including but not limited to, invention records, research records and reports,
      engineering and technical data, designs, production specifications, processes,
      methods, procedures, facilities and know-how; provided, however, that
      Proprietary Information does not include third party information which the
      possessor is contractually precluded from disclosing.

     

    1.16 "Revenues"
      means any consideration for the grant of a Sublicense, including without
      limitation one-time lump sums, minimums, running royalties and other payments,
      but excludes payments for (i) research and development or "non-recurring
      engineering" services, based on reasonable daily or hourly rates; (ii)
      reimbursement of out-of-pocket expenses incurred by Licensee; and
      (iii)
      the
      purchase of securities of Licensee at the fair market value of such
      securities.

     

    1.17 "Sales",
      "Sell, or "Sold" means any sale, transfer, lease, license, permission to use
      or
      other transfer of the right of possession or other conveyance by Licensee or
      an
      Affiliate.

     

    1.18 "Shielded
      Structures" means permanent
      or
temporary
      structures
      and
      components thereof, such as rooms,
      theatres and auditoriums,
      which have
      been
      treated to shield
      radio-frequency energy and thereby prevent or impede the reception of wireless
      radio signals.

     

    1.19 "Sublicense"
      means a license of all or any of the Licensed Patents by Licensor or
      Licensee.

     

    1.20 "Sublicensee"
      means a sublicensee of a Sublicense.

     

    1.21 "Territory"
      means world-wide. 

     

    2. GRANT
      OF LICENSE

     

    2.1 Licensor
      hereby grants to Licensee the exclusive (subject to Section 14),
      nontransferable, world-wide, royalty-bearing license under the Licensed Patents
      and Licensor’s Proprietary Information to make, have made, sell, offer for sale,
      use, and import Products, limited to the Licensed Field, with the right to
      grant
      Sublicenses,
      and
      including the right to sue and collect damages for past infringements in the
      Licensed Field. 

     

    2.2 Licensee
      hereby grants to Licensor a non-exclusive, nontransferable, world-wide,
      royalty-bearing
      (under Section 7.2) license under Licensee Patents and Licensee Proprietary
      Information to make, have made, sell, offer for sale, use, and import Products,
      other than in the Licensed Field, with a right to grant Sublicenses. 

     

    2.3 Each
      party may grant Sublicenses (within the scope of its license in this Section
      2)
      to persons or entities, without notification to the other, provided that each
      Sublicense contains a provision that the rights therein granted are personal
      to
      the Sublicensee and cannot be assigned or sublicensed, except in the case of
      a
      merger or acquisition or sale of all or substantially all of the assets to
      which
      the sublicense relates. Any
      Sublicense shall incorporate the substance of Sections 1.7, 1.12, 1.15, 8.2
      to
      8.4, 9.1, 9.2, 9.4, 12.1, 13.2 and 13.3, mutatis
      mutandis.

     

    
      
        
        

      

      
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    2.4 Any
      provision of this Agreement to the contrary notwithstanding, Licensor retains
      all rights under the Licensed Patents outside the Licensed Field.

     

    3. Improvements

     

    Should
      a
      consultant or employee of a party make or discover any Improvement, the party
      shall forthwith disclose or cause the same to be disclosed to the other party,
      and, if requested by the other party, make available or supply to the other
      party such information or data as is necessary or convenient for the proper
      understanding or use of such Improvement. 

     

    4. Ownership

     

    Notwithstanding
      the provisions of Section 3 or otherwise: 

     

    (a) Licensor
      shall own all right, title and interest in the Licensed Patents; and

     

    (b) Licensee
      shall own all right, title and interest in any Licensee Patents. 

     

    5. DEVELOPMENT
      OF PRODUCTS AND FULL USE OF PATENT

     

    5.1 Licensee
      shall use reasonable efforts to Sublicense the Licensed Patents in the Licensed
      Field.
      Licensee’s primary efforts shall be directed to Sublicensing existing
      manufacturers of Products and may not develop and/or and manufacture Products
      itself. Without limiting the foregoing, Licensee shall make reasonable efforts
      to effect Diligent Exploitation of the Licensed Patents within forty-eight
      (48)
      months from the Effective Date.

     

    5.2 Licensor
      shall enter into suitable agreements to cause present and former employees
      and
      consultants available to appear as factual or technical advisors, deponents
      or
      witnesses or for production of documents or other evidence in connection with
      any litigation instituted by Licensee to enforce the Licensed Patents. For
      such
      services, Licensee shall compensate present and former employees and consultants
      at reasonable consulting rates for time spent and reimburse their reasonable
      out-of-pocket costs. The relationship between Licensee and its consultants
      shall
      be outside the scope of this Agreement, except that such consulting agreements
      shall not under any circumstances grant Licensee rights to any Licensor
      intellectual property. 

     

    6. CONSIDERATION

     

    6.1 In
      consideration of the rights granted in Section 2.1, Licensee shall:

     

    
      
        
        

      

      
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    (a) pay
      Licensor One Hundred Thousand Dollars ($100,000) upon execution of this
      Agreement; 

     

    (b) pay
      Licensor the Royalties set forth in Sections 7.1
      and, if
      applicable, 7.3;
      and

     

    (c) promptly
      issue to Licensor One Hundred Thousand (100,000) shares of common stock of
      Licensee, par value $.001 (the "Shares"). If, during the eight (8) month period
      following the Effective Date, Licensor shall not have realized at least One
      Hundred Fifty Thousand Dollars ($150,000) in “Net Consideration” (gross
      consideration minus broker’s fees) from the sale of such Shares, Licensor shall
      have the right, by notice to Licensee, to a payment from Licensee equal to
      the
      difference between $150,000 and the cumulative Net Consideration received by
      Licensor for all such trades during such period provided that Licensor (w)
      has
      tendered to the Licensee all of the remaining unsold Shares, if any; (x) if
      it
      desires to sell all or any part of the Shares using a broker, has utilized
      a
      broker which is reasonably acceptable to Licensee; and (y) has used reasonable
      diligence to not sell any Shares at a per share price less than the fair market
      value of the Shares, as reported on the OTCBB at the time of sale. For the
      avoidance of doubt, Licensor shall be entitled to such payment even if it has
      made no effort to sell Shares. The Shares will have the registration rights
      and
      duties in connection with registration and other securities matters set forth
      in
      Exhibit A. 

     

    6.2 In
      consideration of the rights granted in Section 2.1,
      Licensor shall pay Licensee the Royalties set forth in Sections 7.2
      and, if
      applicable, 7.3.

     

    7. ROYALTIES
      and
      Royalty Sharing

     

    7.1 Licensee
      shall pay to Licensor Twenty Percent (20%) of any Revenues from Sublicenses
      granted by Licensee.

     

    7.2 Licensor
      shall pay to Licensee Twenty Percent (20%) of any Revenues from Sublicenses
      granted by Licensor to third parties.

     

    7.3 If
      a
      party makes Products, the parties shall negotiate in good faith the terms of
      payment therefor. In the absence of any other agreement, the party otherwise
      liable under this Section shall pay royalties at the rate of Twenty Percent
      (20%) of Net Sales of Products sold by it. 

     

    7.4 In
      the
      event of a Sale of Products between or among Licensee and/or Affiliates where
      there is a resale by an Affiliate to a non-Affiliate, any royalty shall be
      paid
      to Licensor based on the greater of (i) amounts paid by the Affiliate to
      Licensee or (ii) by the non-Affiliate to the Affiliate. 

     

    7.5 All
      payments shall be made in U.S. dollars at the recipient's address for notice.
      Such payments shall be paid on a calendar quarter basis, within thirty (30)
      days
      after each quarter. Each payment shall be accompanied by a detailed report,
      showing the basis on which the payment was computed, including without
      limitation the total Net
      Sales
      and
Revenues
      during
      such period, and the royalties payable thereon,
      calculated in the manner required in this Section 7.

     

    
      
        
        

      

      
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    8. REPORTING

     

    8.1 Licensee
      shall provide Licensor with written annual progress reports within by February
      28 of each year, which shall include, but not be limited to, reports of progress
      on Sublicensing, marketing and sales during the year, as well as plans for
      the
      coming year. If progress in any year differs materially from that anticipated
      in
      the plan for the preceding year, Licensee shall explain the reasons for the
      difference and prepare a modified plan for Licensor’s review. 

     

    8.2 Licensee
      shall report to Licensor the date of first sale of any Products within thirty
      (30) days of occurrence. Licensee shall report to Licensor when Licensee enters
      into any Sublicense
      for the
      Patent within thirty (30) days of execution of the Sublicense,
      and
      (upon request by Licensor) provide Licensor with a copy of such Sublicense.

     

    8.3 Each
      party shall keep, at its usual place of business, true and particular accounts
      of all matters connected with its sublicensing of Licensed Patents and its
      manufacture and sale of Products and shall keep books of account relating to
      royalties payable hereunder containing true entries complete in every particular
      as may be necessary or proper for enabling the amount of such royalties to
      be
      conveniently ascertained. 

     

    8.4 If
      requested in writing by a party, the other party shall, upon ten (10) business
      days notice and no more often than once per calendar year, make its books and
      records available for inspection during regular business hours by an independent
      certified public accountant engaged and paid for by the requesting party;
      provided, if any such audit reveals underpayment of licensee fees hereunder,
      audits (and re-audits) may be performed periodically until a two-year period
      elapses with no underpayment. Such
      party
      shall give the accountant all reasonably necessary facilities and
      information
      to
      enable the amount of the royalties to be verified.

     

    9. CONFIDENTIALITY 

     

    9.1 Neither
      party shall disclose any Proprietary Information received from the other party,
      except to employees, consultants or advisors to the party who must have access
      to the Proprietary Information to carry out the recipient’s obligations under
      this Agreement and to potential Sublicensees of the Licensed Patents, provided
      such disclosure is in accordance with Section 9.3. All employees or consultants
      shall be under a written obligation of confidentiality at least as restrictive
      as the provisions contained herein. Proprietary Information shall be maintained
      in confidence for so long as such Information is maintained in confidence by
      the
      owner thereof, but no longer than two (2) years after termination of this
      Agreement. 

     

    9.2 To
      protect Proprietary Information, the recipient shall adopt reasonable security
      measures, including, but not limited to, restricted access to such information,
      marking such information, and the selective destruction of sensitive materials.
      Upon termination of this Agreement, the recipient shall return or destroy all
      documents or materials embodying Proprietary Information of the
      other.

     

    
      
        
        

      

      
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    9.3 Any
      disclosure of Proprietary Information by Licensee to potential Sublicensees
      shall be prohibited, unless the potential Sublicensee has signed an agreement
      which imposes obligations of confidentiality and nonuse at least as restrictive
      as those imposed on Licensee hereunder.

     

    9.4 Paragraphs
      9.1 to 9.3 inclusive shall not apply to any part of the Proprietary information
      which:

     

    (a) 
      is
      published or is otherwise in the public domain through no fault of the receiving
      party; or 

     

    (b) 
      can be
      demonstrated by the receiving party to have been in its possession prior to
      receipt under this Agreement; or

     

    (c) 
      is
      properly obtained by the receiving party from a third party without restriction;
      or

     

    (d) 
      is
      independently developed by or for the receiving party without reliance, direct
      or indirect, on such information; or

     

    (e) 
      is
      disclosed by the receiving party to a third party with the written approval
      of
      the disclosing party; or

     

    (f) is
      obligated to be produced to comply with the requirement of a governmental body
      or an order of a court of competent jurisdiction.

     

    10. PROTECTION
      OF INTELLECTUAL PROPERTY

     

    10.1 Each
      party shall exercise reasonable diligence to file, prosecute and maintain United
      States patent applications ("Intellectual Property Protection"), in such party's
      name to protect its Improvements. Each party shall be responsible for all future
      costs, fees and expenses incurred in connection with the filing, prosecution
      and
      maintenance of its Intellectual Property Protection. 

     

    10.2 Each
      party shall:

     

    (a) 
      keep the
      other fully and currently informed of the progress of the prosecution of all
      U.S. and foreign patent applications, reissues and reexaminations of the
      Licensed Patents and Licensee Patents, as applicable;

     

    (b) 
      afford
      patent counsel for the other at least one (1) month’s notice before any response
      to any Office Action is due; and

     

    
      
        
        

      

      
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    (c) 
      cause
      its patent counsel to meet and confer with the other’s patent counsel, if and
      when requested, to discuss the progress and proposed response in any applicable
      patent application, reissue or reexamination.

     

    10.3 If,
      at
      any time during the term of this Agreement, either party elects to abandon
      any
      pending Intellectual Property Protection or any patent issued thereon, either
      domestic or foreign, it shall notify the other party of that decision at least
      two (2) months prior to any deadline for filing any response or taking any
      other
      action necessary to maintain any such Intellectual Property Protection.
      Thereafter, such other party shall have the right and option to take over the
      sole and exclusive responsibility for the prosecution of any such Intellectual
      Property Protection and/or the maintenance of any such patent solely at the
      other party's expense and in that event the rights granted under this Agreement
      shall become nonexclusive for that country or countries of the Territory.

     

    10.4 This
      Agreement constitutes, in part, a "joint research agreement" between Licensors
      and Licensee, as defined in the CREATE Act, 35 U.S.C. § 103(c), under which
      Licensee will carry out some of its obligations pursuant to Section 5.1.
      Intellectual property that is within the scope of the Licensed Patents will
      be
      deemed made as a result of activities undertaken within the scope of a joint
      research agreement and subject to the CREATE Act.

     

    10.5 Licensee,
      Affiliates and Sublicensees shall mark all Products in accordance with 35 U.S.C.
      §287. The marking shall be accomplished by fixing on the article or when, from
      the character of the article, this cannot be done, by fixing to it, or to the
      package wherein one or more of them is contained, a label including the notation
      "Licensed from AMBIT CORPORATION under United States Patent 6,885,845." Such
      marking shall also be included into all literature and/or advertising materials
      describing Products.

     

    11. NOTICE
      OF INFRINGEMENT AND ENFORCEMENT OF RIGHTS

     

    11.1 Immediately
      upon Licensee's learning of any infringement, misappropriation or other
      unauthorized use of Licensor's Proprietary Information, and/or Licensed Patents
      ("Intellectual Property Rights"), Licensee shall promptly inform
      Licensor.

     

    11.2 Licensee
      shall make commercially reasonable efforts to enforce the Licensed Patents
      against infringers in the Licensed Field; provided, however, that (except as
      specified in Section 11.3) Licensee shall not take any action against
an
      infringer if
      and
      then for so long as Licensor is involved in a lawsuit against
      that infringer concerning
      the infringed Licensed Patent.
      The
      party filing a patent infringement suit (“Initiating Party”) shall
      be
      responsible for all Enforcement Expenses incurred by such party; provided,
      any
      recovery in any patent infringement suit (whether by way of judgment, settlement
      or otherwise) by
      either
      party shall
      first be paid to reimburse all Enforcement Expenses of all parties and
      the
      balance shall be considered Revenues of Licensor or Licensee, as
      applicable.

     

    
      
        
        

      

      
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    11.3 The
      Initiating Party
      may join
the
      other
      party (“Other Party”) as
      a
      party
      plaintiff in any patent infringement suit involving Licensed Patents.
      The
      Initiating Party
      shall
      remain in control of the conduct of such suit,
      and
the
      Other
      Party shall
      cooperate fully in such suit.

     

    11.4 Licensor
      and Licensee may both wish to litigate the same Licensed Patents against the
      same or different infringers, consistent with the rights granted to Licensee
      in
      this Agreement. The parties agree that this is undesirable. Accordingly, before
      filing a lawsuit involving any Licensed Patents, the parties shall meet and
      confer and use reasonable efforts to agree on mutually acceptable counsel and
      a
      mutually acceptable litigation approach; provided, in the absence of such a
      mutually acceptable agreement within thirty (30) days of request, each party
      may
      engage whichever counsel it
      deems
      appropriate. Nothing herein limits a party's right to terminate the services
      of
      any counsel on any terms it deems appropriate.

     

    12. INDEMNITY;
      DISCLAIMER; LIMITATION OF LIABILITY

     

    12.1 Licensee
      hereby indemnifies and holds harmless Licensor and its employees, officers,
      board members, shareholders and agents (hereinafter "Indemnitees") from and
      against all claims, suits, liabilities, damages, costs, fees, expenses or losses
      arising out of any third party claims against Indemnitees for any damages,
      losses or liabilities whatsoever with respect to death or injury to any person
      and damage to any property arising from the possession, use or operation of
      Products produced or sold by Licensee or its customers. Licensor shall permit
      Licensee to control the defense of the lawsuit and shall cooperate as reasonably
      requested by Licensee.

     

    12.2 Each
      party warrants to the other that it has the right and power to enter into and
      perform this Agreement, and that this Agreement has been duly authorized and
      executed and is binding and enforceable in accordance with its terms.

     

    12.3 Licensor
      warrants to Licensee that:

     

    (a) it
      has
      good and marketable title to the Licensed Patents, free and clear of any liens
      or encumbrances; and

     

    (b) 
      it has
      not previously granted any license under the Licensed Patents to any third
      party; 

     

    (c) to
      the
      actual conscious knowledge of the officers of the Licensor as of the Effective
      Date, with no investigation having been made or required to be made, the Patents
      are valid and enforceable; and

     

    (d) as
      of the
      Effective Date, the Licensed
      Patents
      are in good standing with the United States Patent and Trademark Office with
      respect to necessary periodic filings and fee payments.

     

    
      
        
        

      

      
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    LICENSOR
      DOES NOT WARRANT THE VALIDITY OF ANY PATENTS OR THAT PRACTICE UNDER SUCH PATENTS
      SHALL BE FREE OF INFRINGEMENT.

     

    (e) EXCEPT
      AS
      EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR DISCLAIMS ANY AND ALL PROMISES,
      REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PATENTS OR TECHNOLOGY
      DESCRIBED THEREIN, INCLUDING ITS CONDITION, CONFORMITY TO ANY REPRESENTATION
      OR
      DESCRIPTION, THE EXISTENCE OF ANY LATENT OR PATENT DEFECTS THEREIN AND ITS
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR
      NONINFRINGEMENT.

     

    12.4 IN
      NO
      EVENT SHALL LICENSOR BE LIABLE FOR ANY USE BY LICENSEE OF THE PRODUCTS
      OR ANY
      LOSS, CLAIM, DAMAGE OR LIABILITY, OF WHATSOEVER KIND OR NATURE, WHICH MAY ARISE
      FROM OR IN CONNECTION THEREFROM, INCLUDING WITHOUT LIMITATION ANY DAMAGES,
      LOSSES OR LIABILITIES WHATSOEVER WITH RESPECT TO DEATH OR INJURY TO ANY PERSON
      AND DAMAGE TO ANY PROPERTY ARISING FROM THE POSSESSION, USE OR OPERATION OF
      PRODUCTS PRODUCED OR SOLD BY LICENSEE OR ITS CUSTOMERS. LICENSEE,
      AND NOT LICENSOR IS RESPONSIBLE FOR THE SAFETY AND EFFICACY OF PRODUCTS PRODUCED
      BY LICENSEE.

     

    13. ADVERTISING,
      PUBLICITY AND PUBLICATIONS

     

    13.1 In
      any
      publication (including advertisements, sales and trade literature and
      instruction manuals) relating to the Invention used pursuant to this Agreement,
      Licensee shall, where practical, give due credit to Licensor, as owner and
      licensor of the Invention.

     

    13.2 No
      right,
      title, interest or license to any trademark or service mark, is granted to
      Licensee.

     

    14. EFFECT
      OF FAILURE OF DILIGENT EXPLOITATION

     

    14.1 Regardless
      of whether
      or not
      Licensee has made diligent efforts under Section 5.1, if a Diligent Exploitation
      of the Licensed Patents has not occurred within forty-eight (48) months from
      the
      Effective Date, 

     

    (a) Licensor
      may by notice to Licensee convert the license granted in Section 2.1 from
      exclusive to non-exclusive. 

     

    (b) Licensor
      may by notice to Licensee require that the amount payable under Section 6.1(b)
      shall thereafter be a minimum of $12,500 every
      calendar
      quarter.

     

    (c) Licensor
      may by notice to Licensee terminate Licensor's obligation to pay royalties
      under
      Sections 6.2, 7.2 and 7.3 (and accordingly convert the license granted in
      Section 2.2 from royalty-bearing to fully paid up). 

     

    
      
        
        

      

      
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    14.2 Licensor's
      election of one or more of the above remedies does not compel or preclude its
      election of any of the other remedies under this Section 14 or otherwise
      available to Licensor in this Agreement or otherwise.

     

    15. TERM
      AND TERMINATION

     

    15.1 This
      Agreement shall commence on the Effective Date of this Agreement and shall
      continue until the expiration of the last-to-expire of the Licensed Patents.
      

     

    15.2 In
      the
      event of the breach of a material obligation hereunder by either party, the
      non-breaching party shall inform the other of said breach in writing. The
      alleged breaching party shall have thirty (30) days from the date of said
      notification during which to cure the breach. If the alleged breaching party
      does not cure the breach within thirty (30) days, the non-breaching party may
      terminate the Agreement upon written notification to the alleged breaching
      party.

     

    15.3 Licensee
      may terminate this Agreement by notice to Licensor for convenience, i.e. without
      the need for cause. 

     

    15.4 Termination
      of this Agreement shall not affect any sublicenses which Licensee may have
      granted and that are not in breach by the Sublicensee; provided, either (i)
      Licensee shall continue to be liable for any payments with respect to such
      sublicenses or (ii) Licensee may relieve itself from liability by causing each
      Sublicensee to elect to continue its sublicense by entering into a suitable
      agreement with Licensor. 

     

    15.5 Sections
      1, 4, 6.1, 9, 12, 13.2, 14, 16 and 17 of this Agreement shall survive any
      termination in accordance with their terms. Sections 6.2, 7 and 8 of this
      Agreement shall survive any termination with respect to any royalties and other
      payment accruing prior to termination. Termination shall not relieve either
      party of any liability for breach occurring prior to termination. Section 2.2
      shall survive any termination by Licensor under Section 15.2, and in such event
      the license therein shall be fully paid up and not royalty bearing.

     

    16. DISPUTE
      RESOLUTION

     

    16.1 Negotiation
      of Disputes.
      If any
      dispute arises under or related to this Agreement ("Dispute"), senior executives
      of the parties, with decision-making authority, will meet in Boston, MA within
      ten (10) days after notice and enter into good faith negotiations aimed at
      resolving the dispute. If they are unable to resolve the Dispute in an
      additional twenty (20) days, the Dispute shall be submitted to
      mediation/arbitration under in Sections 16.2 and 16.3.

     

    16.2 Mediation
      of Disputes.
      Subject
      to Section 16.1, the parties shall submit any unresolved Dispute as soon as
      possible, but no later than twenty (20) days after notice, to a mediator
      selected by the parties. Senior executives of the parties with decision-making
      authority shall be present at the mediation session, which shall be held in
      Boston, MA. If the Dispute is not resolved within an additional further thirty
      (30) days, the parties will proceed to arbitration as specified in Section
      16.3.

     

    
      
        
        

      

      
        11

        
          

        

      

       

    

     

    16.3 Arbitration
      of Certain Disputes.
      Any
      Dispute not resolved by Section 16.2 covered by Section 16.1 and 16.2 shall
      be
      resolved by an arbitration proceeding conducted in Boston, MA under the
      then-prevailing Rules for Commercial Arbitration of the American Arbitration
      Association ("AAA"). 

     

    (a) The
      proceeding shall be conducted by one (1) arbitrator, reasonably acceptable
      to
      the parties, who is a patent attorney with at least twenty (20) years of
      experience in the field of electronics, of which ten (10) years or more have
      been spent (at least in substantial part) handling licensing transactions.
      

     

    (b) The
      fees
      of the mediator and the AAA shall be divided equally between the
      parties.

     

    (c) The
      parties shall cooperate in good faith to proceed to an arbitration hearing
      within six (6) months after the Demand for Arbitration shall have been filed
      with the AAA. 

     

    (d) The
      arbitrator’s authority shall include the powers, in his/her discretion, to:

     

    (i) Permit
      limited discovery, including production of documents and depositions, to the
      extent required by the parties; and 

     

    (ii) Award
      the
      prevailing party its attorneys’ fees and out-of-pocket expenses, including its
      share of the mediator and AAA fees. 

     

    (e) The
      decision of the arbitrator shall be confidential, final and binding, and may
      be
      entered and enforced in any court of competent jurisdiction. 

     

    17. GENERAL

     

    17.1 Licensee
      shall not export any Product or enter into any Sublicense without fully
      complying with any and all United States export or munitions control regulations
      and laws.

     

    17.2 Licensor
      and Licensee are and shall remain independent contractors and nothing herein
      shall create a partnership or joint venture between Licensor and
      Licensee.

     

    17.3 Any
      notice required or permitted under this Agreement shall be in writing and
      delivered personally or by prepaid next-business-day delivery service, receipt
      required, to Licensee or Licensor at the addresses set forth below or such
      other
      addresses as shall have been duly notified, and shall be effective as of its
      delivery date:

     

    Licensor:   
      Ambit
      Corporation

    72
      Nickerson Road

    Ashland,
      MA 01721

    Attention:
      President

    
      
        
        

      

      
        12

        
          

        

      

       

    

     

    Licensee:  
      NaturalNano,
      Inc.

    150
      Lucius Gordon Drive, Suite 115

    West
      Henrietta, New York 14586

    Attention:
      President

     

    17.4 Waiver
      by
      either party of any provision of this Agreement shall not constitute a
      continuing waiver thereof or of any other provision of this
      Agreement.

     

    17.5 If
      any
      provision of this Agreement shall be held to be invalid, illegal or
      unenforceable, the validity, legality or enforceability of the remaining
      provisions shall not in any way be affected or impaired.

     

    17.6 This
      Agreement shall be construed in accordance with the laws of the Commonwealth
      of
      Massachusetts.

     

    17.7 This
      Agreement is the complete and exclusive statement between the parties relating
      to the subject matter hereof, and supersedes all prior understandings,
      communications, or representations, either oral or written, between the parties.
      This Agreement may not be modified or altered, except by a written instrument
      duly executed by Licensee and Licensor.

     

    17.8 Unless
      expressly stated to the contrary elsewhere in this Agreement, all rights, powers
      and privileges conferred hereunder upon the parties hereto shall be cumulative
      and not restrictive of those given by law.

     

    17.9 Section
      headings have been inserted herein for convenience of reference only and shall
      in no way modify or restrict any of the terms or provisions of this
      Agreement.

     

    17.10 This
      Agreement may be assigned by either party without the prior written consent
      of
      the other. This Agreement shall bind and inure to the benefit of the parties
      hereto and their respective successors and assigns.

     

    17.11 In
      the
      interpretation of this Agreement, words importing the singular or plural number
      shall be deemed to import the plural and singular number respectively, words
      denoting gender shall include all genders and references to persons shall
      include corporations or other bodies and vice versa.

     

    17.12 Neither
      party shall be held in breach of this Agreement because of acts or omissions
      caused by any act of God or other cause beyond the control of the parties,
      including, but not limited to, fire, floods, labor disputes, or other unforeseen
      circumstances.

     

    
      
        
        

      

      
        13

        
          

        

      

       

    

     

    IN
      WITNESS WHEREOF, the parties have set their hands and seals and duly executed
      this Agreement effective as of the date first above written.

    
      	 	 	 
	 	AMBIT
              CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/
              Robert J.
              Crowley              
	 	
              
                

              

              Name:
                Robert J. Crowley

              Title:
                CEO 

            

    

     

    
      	 	 	 
	 	NATURALNANO,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Michael
              Riedlinger                         
	 	
              
                

              

              Name:
                Michael Riedlinger

              Title:
                President

            

    

    
      
        
        

      

      
        14

        
          

        

      

       

    

     

    EXHIBIT
      A

    

    1. REGISTRATION
      

     

    1. Rights
      and Expenses.

    

    (a) The
      Licensor acknowledges that the
      Licensee has agreed to include the Shares (also referred to as the “Registrable
      Securities”) in any registration statement to be filed with the Securities and
      Exchange Commission (the “Commission”) for its own account or the accounts of
      others under the Securities Act of 1933 (the “Act”) any of its equity
      securities, other than on Form S-4 or Form S-8 or their equivalents relating
      to
      shares of common stock to be issued solely in connection with any acquisition
      of
      any entity or business or shares of common stock issuable in connection with
      stock option or other employee benefit plans. The piggy back registration rights
      shall be subject to underwriter’s approval and other such restrictions (the
“Registration Statement”). The Licensee shall use its good faith efforts to keep
      such Registration Statement continuously effective as long as the delivery
      of a
      prospectus thereunder is required under the Act and its regulations (including
      but not limited to Rule 144 thereunder or its successor regulations (“Rule
      144”)) in connection with the disposition of the Shares; provided, that it is
      agreed and acknowledged that such obligation of the Licensee to maintain the
      effectiveness of the Registration Statement shall cease upon the ability of the
      Licensor to sell or otherwise dispose of all of the Registrable Securities
      covered by the Registration Statement under Rule 144; provided further, that
      notwithstanding the Licensee’s obligation to maintain the effectiveness of the
      Registration Statement pursuant to the immediately preceding proviso, and
      notwithstanding the duration of any blackout period, such obligation to maintain
      the effectiveness of the Registration Statement shall cease under all
      circumstances no later than the second anniversary of the date of this Agreement
      (the “Final Date”).

    

    (b) The
      Licensee agrees to pay all Registration Expenses in connection with the
      Registration Statement. All Selling Expenses relating to Registrable Securities
      registered on behalf of the Licensor pursuant to the Registration Statement
      shall be borne by the Licensor. For purposes of this Agreement, “Registration
      Expenses” shall mean (1) all registration, listing, qualification and filing
      fees (including NASD filing fees), (ii) fees and disbursements of counsel for
      the Licensee, (iii) accounting fees incident to any such registration, (iv)
      blue
      sky fees and expenses (including counsel fees in connection with the preparation
      of a Blue Sky Memorandum and legal investment survey and NASD filings), (v)
      all
      expenses of any persons in preparing or assisting in preparing, printing,
      distributing, mailing and delivering the Registration Statement, any prospectus,
      any underwriting agreements, transmittal letters, securities sales agreements,
      securities certificates and other documents relating to the performance of
      and
      compliance with this Agreement. and (vi) all internal expenses of the Licensee
      (including all salaries and expenses of officers and employees performing legal
      or accounting duties); provided, however, Registration Expenses shall not
      include any Selling Expenses. For purposes of this Agreement, “Selling Expenses”
shall mean underwriting discounts, selling commissions and stock transfer taxes
      applicable to the Registrable Securities registered on behalf of the Licensor
      for Shares hereunder.

    
      
        
        

      

      
        15

        
          

        

      

       

    

     

    (c) The
      Licensor agrees, as a condition to the registration obligations with respect
      to
      the Licensor provided herein, to furnish to the Licensee such information
      regarding the Licensor required to be included in the Registration Statement,
      the ownership of Registrable Securities by the Licensor and the proposed
      distribution by the Licensor of such Registrable Securities as the Licensee
      may
      from time to time reasonably request in writing.

    

    (d) The
      Licensor agrees that, upon receipt of any notice from the Licensee of the
      happening of any event of the kind which the Licensee reasonably regards as
      requiring Licensor to discontinue sale of the Registrable Securities pursuant
      to
      the Registration Statement, the Licensor will forthwith discontinue disposition
      of the Registrable Securities pursuant to the affected Registration Statement
      until the Licensor’s receipt of the copies of any
      supplemented or amended prospectus as shall be required in the reasonable
      opinion of the Licensee, and, if so directed by the Licensee, the Licensor
      will
      deliver to the Licensee (at the expense of the Licensee), all copies in its
      possession, other than permanent file copies then in the Licensor's possession,
      of any prospectus covering such Registrable Securities which was current at
      the
      time of receipt of such notice.

    

    2. Indemnification;
      Contribution.

    

    (a) Indemnification
      by the Licensee. The Licensee agrees to indemnify and hold harmless each person
      who participates as an underwriter of the Securities pursuant to the
      Registration Statement, the Licensor and their respective partners, directors,
      officers and employees and each person, if any, who controls any Licensor or
      underwriter within the meaning of Section 15 of the Act or Section 20 of the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”) as
      follows:

    

    (i) against
      any and all losses, liabilities, claims, damages, judgments and reasonable
      expenses whatsoever, as incurred, arising out of any untrue statement or alleged
      untrue statement of a material fact contained in the Registration Statement
      pursuant to which Securities were registered under the Act, including all
      documents incorporated therein by reference, or the omission or alleged omission
      therefrom of a material fact required to be stated therein or necessary to
      make
      the statements therein not misleading or arising out of any untrue statement
      or
      alleged untrue statement of a material fact contained in any prospectus,
      including all documents incorporated therein by reference, or the omission
      or
      alleged omission therefrom of a material fact necessary in order to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading;

    
      
        
        

      

      
        16

        
          

        

      

       

    

     

    (ii) against
      any and all losses, liabilities, claims, damages, judgments and reasonable
      expenses whatsoever, as incurred, to the extent of the aggregate amount paid
      in
      settlement of any litigation, investigation or proceeding by any governmental
      agency or body, commenced or threatened, or of any other claim whatsoever based
      upon any such untrue statement or omission, or any such alleged untrue statement
      or omission, if such settlement is effected with the written consent of the
      Licensee; and

     

    (iii) against
      any and all reasonable expense whatsoever, as incurred (including fees and
      disbursements of counsel), incurred in investigating, preparing or defending
      against any litigation, investigation or proceeding by any governmental agency
      or body, commenced or threatened, in each case whether or not such person is
      a
      party, or any claim whatsoever based upon any such untrue statement or omission,
      or any such alleged untrue statement or omission; provided,
      however,
      that
      this indemnity agreement does not apply to the Licensor or underwriter with
      respect to any loss, liability, claim, damage, judgment or expense to the extent
      arising out of any untrue statement or alleged untrue statement of a material
      fact contained in any prospectus, or the omission or alleged omission therefrom
      of a material fact necessary to make the statements therein, in the light of
      the
      circumstances under which they were made, not misleading, in any such case
      made
      in reliance upon and in conformity with written information furnished to the
      Licensee by the Licensor or underwriter expressly for use in a Registration
      Statement (or any amendment thereto) or any prospectus (or any amendment or
      supplement thereto); and provided
      further,
      in the
      case of an offering that is not an underwritten offering, the Licensee will
      not
      be liable to the Licensor under the indemnity agreement in this Section 2(a)
      for
      any such loss, claim, damage, liability (or action or proceeding in respect
      thereof) or expense that arises out of the Licensor’s failure to send or give a
      copy of the final prospectus (as its may then be amended or supplemented) to
      the
      person asserting an untrue statement or alleged untrue statement or omission
      or
      alleged omission at or prior to the written confirmation of the sale of the
      Securities to such person if such statement or omission was corrected in such
      final prospectus (as it may then be amended or supplemented) and the Licensee
      has previously furnished copies thereof in accordance with this
      Agreement.

    

    (b) Indemnification
      by the Licensor. The Licensor agrees to indemnify and hold harmless the
      Licensee, and each underwriter and each of their respective partners, directors,
      officers and employees (including each officer of the Licensee who signed the
      Registration Statement), and each person, if any, who controls the Licensee
      or
      any underwriter within the meaning of Section 15 of the Act, against any and
      all
      losses, liabilities, claims, damages, judgments and expenses described in the
      indemnity contained in paragraph (a) of this Section (provided that any
      settlement of the type described therein is effected with the written consent
      of
      the Licensor), as incurred, but only with respect to untrue statements or
      alleged untrue statements of a material fact contained in any prospectus or
      the
      omissions or alleged omissions therefrom of a material fact necessary to make
      the statements therein, in light of the circumstances under which they were
      made, not misleading, in any such case made in reliance upon and in conformity
      with written information furnished to the Licensee by the Licensor expressly
      for
      use in such Registration Statement (or any amendment thereto) or such prospectus
      (or any amendment or supplement thereto).

    
      
        
        

      

      
        17

        
          

        

      

       

    

     

    (c) Conduct
      of Indemnification Proceedings. Each indemnified party or parties shall give
      reasonably prompt notice to each indemnifying party or parties of any action
      or
      proceeding commenced against it in respect of which indemnity may be sought
      hereunder, but which it or they may have under this indemnity agreement, except
      to the extent that the indemnifying party is materially prejudiced by such
      failure to give notice. If the indemnifying party or parties so elects within
      a
      reasonable time after receipt of such notice, the indemnifying party or parties
      may assume the defense of such action or proceeding at such indemnifying party’s
      or parties’ expense with counsel chosen by the indemnifying party or parties and
      approved by the indemnified party defendant in such action or proceeding, which
      approval shall not be unreasonably withheld; provided,
      however,
      that,
      if such indemnified party or parties determines in good faith that a conflict
      of
      interest exists and that therefore it is advisable for such indemnified party
      or
      parties to be represented by separate counsel or that, upon advice of counsel,
      there may be legal defenses available to it or them which are different from
      or
      in addition to those available to the indemnifying party, then the indemnifying
      party or parties shall not be entitled to assume such defense and the
      indemnified party or parties shall be entitled to separate counsel (limited
      in
      each jurisdiction to one counsel for all underwriters and another counsel for
      all other indemnified parties under this Subscription Agreement) at the
      indemnifying party’s or parties’ expense. If an indemnifying party or parties is
      not so entitled to assume the defense of such action or does not assume such
      defense, after having received the notice referred to in the first sentence
      of
      this paragraph, the indemnifying party or parties will pay the reasonable fees
      and expenses of counsel for the indemnified party or parties (limited in each
      jurisdiction to one counsel for all underwriters and another counsel for all
      other indemnified parties under this Subscription Agreement). No indemnifying
      party or parties will be liable for any settlement effected without the written
      consent of such indemnifying party or parties, which consent shall not be
      unreasonably withheld. If an indemnifying party is entitled to assume, and
      assumes, the defense of such action or proceeding in accordance with this
      paragraph, such indemnifying party or parties shall not, except as otherwise
      provided in this subsection (c), be liable for any fees and expenses of counsel
      for the indemnified parties incurred thereafter in connection with such action
      or proceeding.

    

    
      	 	
              (d)

            	
              Contribution.

            

    

     

    (i)
       In
      order
      to provide for just and equitable contribution in circumstances in which the
      indemnity agreement provided for in this Section is for any reason held to
      be
      unenforceable by the indemnified parties although applicable in accordance
      with
      its terms in respect of any losses, liabilities, claims, damages, judgments
      and
      expenses suffered by an indemnified party referred to therein, each applicable
      indemnifying party, in lieu of indemnifying such indemnified party, shall
      contribute to the amount paid or payable by such indemnified party as a result
      of such losses, liabilities, claims, damages, judgments and expenses in such
      proportion as is appropriate to reflect the relative fault of the Licensee
      on
      the one hand and of the Licensor (including, in each case, that of their
      respective officers, directors, employees and agents) on the other, in
      connection with the statements or omissions which resulted in such losses,
      liabilities, claims, damages, judgments or expenses, as well as any other
      relevant equitable considerations. The relative fault of the Licensee on the
      one
      hand and of the Licensor (including, in each case, that of their respective
      officers, directors, employees and agents) on the other, shall be determined
      by
      reference to, among other things, whether the untrue or alleged untrue statement
      of a material fact or the omission or alleged omission to state a material
      fact
      relates to information supplied by the Licensee, on the one hand, or by or
      on
      behalf of the Holder, on the other, and the parties’ relative intent, knowledge,
      access to information and opportunity to correct or prevent such statement
      or
      omission. The amount paid or payable by a party as a result of the losses,
      liabilities, claims, damages, judgments and expenses referred to above shall
      be
      deemed to include, subject to the limitations set forth in paragraph (c) of
      this
      Section, any legal or other fees or expenses reasonably incurred by such party
      in connection with investigating or defending any action or claim.

     

    
      
        
        

      

      
        18

        
          

        

      

       

    

     

    (ii) The
      Licensee and the Licensor agree that it would not be just and equitable if
      contribution pursuant to this paragraph (d) were determined by pro
      rata
      allocation or by any other method of allocation which does not take account
      of
      the equitable considerations referred to in sub-paragraph (i) above.
      Notwithstanding the provisions of this paragraph (d), in the case of
      distributions to the public, the Licensor shall not be required to contribute
      any amount in excess of the amount by which (A) the total price at which the
      Securities sold by the Licensor and distributed to the public were offered
      to
      the public exceeds (B) the amount of any damages which the Licensor has
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement or omission. No person guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the Act) shall be entitled to contribution
      from
      any person who was not guilty of such fraudulent misrepresentation.

     

    (iii) For
      purposes of this Section, each person, if any, who controls the Licensor or
      an
      underwriter within the meaning of Section 15 of the Act (and their respective
      partners, directors, officers and employees) shall have the same rights to
      contribution as the Licensor or underwriter; and each director of the Licensee,
      each officer of the Licensee who signed the Registration Statement and each
      person, if any, who controls the Licensee within the meaning of Section 15
      of
      the Act, shall have the same rights to contribution as the
      Licensee.

     

    2. LEGENDS,
      ETC.

     

    Licensor
      acknowledges that the certificates for the securities comprising the Shares
      which the Licensor will receive will contain a legend substantially as
      follows:

    
      
        
        

      

      
        19

        
          

        

      

       

    

    

    THE
      SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
      STATE, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED
      OF
      UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER
      SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE
      COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS IS
      AVAILABLE.

    

    Licensor
      further acknowledges that stop transfer orders will be placed upon the
      certificates for the securities comprising the Shares in accordance with the
      1933 Act.

    
      
        
        

      

      
        20Exhibit
      10.4

     

    JOINT
      RESEARCH AGREEMENT ASSIGNMENT

    AND
      NON-DISCLOSURE AGREEMENT

     

    JOINT
      RESEARCH AGREEMENT

     

    This
      Joint Research Agreement ("JRA")
      is
      effective as of May 25, 2005 by and between Nanolution,
      LLC
      ("Nanolution")
      and
NaturalNano
      Inc.
      ("NaturalNano")
      (also
      referred to herein as "the Parties"). 

     

    The
      parties have agreed to conduct and support joint research in the field of drug
      delivery utilizing naturally occurring halloysite nanotechnologies ("the
      Project"). This JRA covers the exchange of ideas and information as well as
      the
      performance of experimental, developmental, and/or research work ("the Work")
      performed under the Project, and the ownership of confidential or proprietary
      information, including any intellectual property. 

     

    The
      term
      of the Project shall be from May 25, 2005 and shall continue at least until
      the
      desired drug delivery technology has been proven commercially viable, or until
      mutually terminated by both parties. 

     

    The
      Work
      performed as a result of the Project shall be subject to this JRA regardless
      of
      where the Work is performed or by whom. In addition, all intellectual property,
      including but not limited to inventions, conceptions, ideas, know-how,
      discoveries, processes, machines, manufactures,
      compositions of matter, formulations, processes, biological material, biological
      methods, or any improvements thereof, whether or not patentable or suitable
      for
      other form of exclusive right or legal protection, conceived, made or derived
      during the course of Work within the Project under this JRA shall be owned
      by
      and assigned to the Parties as follows: 

     

    	·  	
            All
              medical uses and inventions that arise out of this JRA shall be owned
              by
              Nanolution. 

          

    	 	 

    	·  	
            All
              purification processes for raw halloysite and all non-medical applications
              that arise out of this JRA shall be owned by NaturalNano.
              

          

     

    
      	For:
NANOLUTION,
              LLC	 	 	For:
NATURALNANO
              INC. 
	 	 	 	 
	/s/ John
              Lanzafame	 	 	/s/ Michael
              D. Riedlinger     
	
              

            	 	 	
              

            
	Name:
              John
              Lanzafame
Title: President	 	 	Name:
              Michael
              Riedlinger
Title: President 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        -2-

      

    

     

    NON-DISCLOSURE
      AGREEMENT 

     

    The
      Parties acknowledge that each owns certain CONFIDENTIAL INFORMATION, as defined
      herein, which might relate to the inventions, conceptions, ideas, know-how,
      discoveries, processes, machines, manufactures, compositions of matter,
      formulations, processes, biological material, biological methods, or any
      improvements thereof, whether or not patentable or suitable for other form
      of
      exclusive right or legal protection, conceived, made or derived during the
      course of Work within the Project under this JRA; and 

     

    The
      Parties are willing to disclose to each other such necessary CONFIDENTIAL
      INFORMATION provided each Party preserves the confidential nature of the other
      Party's INFORMATION and uses it solely for purposes of this Agreement.

     

    The
      Parties agree as follows: 

     

    1.
      "CONFIDENTIAL INFORMATION" as used in this Agreement means all technical or
      business information disclosed by one of the Parties to another pursuant to
      the
      JRA that is identified at the time of disclosure or within thirty (30) days
      thereafter as being confidential and proprietary. No information will be
      regarded as CONFIDENTIAL INFORMATION if the Party to which it is disclosed
      can
      show by competent proof that such information 

     

    (a)
      was
      at the time of disclosure, or subsequently became, through no fault of the
      receiving Party, known to the general public through publication or otherwise;
      or 

     

    (b)
      was,
      subsequent to disclosure to a Party, lawfully and independently received by
      that
      Party from a third party who had the right to disclose it without restriction.
      

     

    Specific
      aspects or details of CONFIDENTIAL INFORMATION shall not be deemed to be within
      the public domain or in the possession of a Party merely because the
      CONFIDENTIAL INFORMATION is embraced by general disclosures in the public domain
      or in the possession of a Party. In addition, any combination of CONFIDENTIAL
      INFORMATION shall not be considered in the public domain or in the possession
      of
      a Party merely because individual elements thereof are in the public domain
      or
      in the possession of that Party unless the combination and its principles are
      in
      the public domain or in the possession of that Party. 

     

    2.
      Any
      Party, at its discretion, may disclose to another Party any CONFIDENTIAL
      INFORMATION that the disclosing Party, in its reasonable judgment, believes
      is
      sufficient to enable the receiving Party to arrive at conceptions, ideas,
      innovations, discoveries, inventions, compositions,
      biological material, biological methods, whether or not patentable or
      susceptible to any other form of legal protection, during performance Under
      the
      IRA. Any Party may also cause such
      disclosures to be made to the other Party on behalf of the disclosing Party
      by
      third parties who are Under obligations of confidentiality to the disclosing
      Party; such disclosures from third parties shall be deemed to be disclosures
      by
      the disclosing Party. 

     

    
      
         

      

      
         

        
          

        

      

      
         

        -3-

      

    

     

    3.
      In
      consideration of each and every disclosure of CONFIDENTIAL INFORMATION, the
      Parties agree to: 

     

    (a)
      treat
      as confidential and to preserve the confidentiality of all CONFIDENTIAL
      INFORMATION; 

     

    (b)
      use
      any and all CONFIDENTIAL INFORMATION solely in connection with the performance
      of the IRA and for no other purpose; 

     

    (c)
      make
      no disclosures of any CONFIDENTIAL INFORMATION to any party other than officers
      and employees of a Party to this IRA; 

     

    (d)
      limit
      access to CONFIDENTIAL INFORMATION to those officers and employees having a
      reasonable need for such INFORMATION and being boUnd by a written obligation
      to
      maintain the confidentiality of such INFORMATION; and 

     

    (e)
      maintain in confidence any information regarding the nature or scope of any
      transaction between the Parties, except to the extent such information must
      be
      disclosed pursuant to law, and then only after notifying the other Party of
      such
      requirement. 

     

    Any
      obligation imposed by this paragraph 3 may be waived in writing by a Party
      as to
      particular CONFIDENTIAL INFORMATION and to a particular use or disclosure.
      Any
      such waiver will have a one-time effect and will not apply to any subsequent
      situation regardless of its similarity. 

     

    4.
      All
      CONFIDENTIAL INFORMATION will remain the property of the disclosing Party and,
      upon request of the disclosing Party, the receiving Party shall promptly return
      to the disclosing Party all CONFIDENTIAL INFORMATION, or any part or
      reproduction thereof. 

     

    5.
      The
      obligations of each and every Party, and each employee and officer of each
      Party
      Under this Agreement will expire five (5) years from the termination of the
      JRA.

     

    6.
      This
      Agreement is subject to the laws (excluding conflicts rules) of the State of
      New
      York. 

    

    
      
         

      

      
         

        
          

        

      

      
         

        -4-

      

    

     

    7.
      The
      terms and provisions of this Agreement will inure to the benefit of the Parties,
      their respective successors and assigns and will be binding on said successors
      and assigns. This paragraph notwithstanding, neither Party may disclose any
      CONFIDENTIAL INFORMATION to any successor or assign absent prior written consent
      of the disclosing Party. 

     

    8.
      The
      Parties understand and agree that no right or license under any patent, patent
      application, or know-how is granted to any other Party or any other person
      by
      this Agreement or by any disclosure of any CONFIDENTIAL INFORMATION.

     

    ·  IN
      WITNESS WHEREOF, the parties have executed this Agreement on the date first
      written above. 

     

    
      	NANOLUTION, LLC	 	 	NATURALNANO
              INC.
	 	 	 	 
	/s/ John
              Lanzafame	 	 	/s/ Michael
              D. Riedlinger
	
              

            	 	 	
              

            
	Name:
              John
              Lanzafame
Title: President	 	 	Name:
              Michael
              Riedlinger
Title: President

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