Document:

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                                                                    Exhibit 10.1

                          LICENSE AND ROYALTY AGREEMENT

This agreement entered into the 15th day of June, 2003 by and between
NanoDynamics, Inc., a corporation with principal offices in Buffalo, NY,
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 have previously undertaken research
and development in the field of micron and submicron powder milling for the
synthesis of fine and/or ultra fine simple and composite metallic powders and
flakes; and

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

Witnesseth:

It is mutually agreed that CLARKSON will exert its best efforts in performing a
research program in accordance with the following:

     1.   EFFECTIVE DATE

          This Agreement is effective June 15, 2003 ("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 60% of LICENSEE.

          B.   "Licensed Field" means chemical and physical processes developed
               by Dr. Dan V. Goia including synthesis techniques and milling of
               micron and submicron powders for the synthesis of fine/ultrafine
               simple and composite metallic powders and flakes.

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

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          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 Dan
               V. Goia 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 Dan V. Goia (Inventor) at
               CLARKSON before the Effective Date relating to chemical and
               physical processes developed by Dr. Dan V. Goia including
               synthesis techniques and milling of micron and submicron powders
               for the synthesis of fine/ultrafine simple and composite metallic
               powders and flakes.

     3.   WARRANTY; SUPERIOR RIGHTS

          A.   Except for the rights, if any, of the Government of the United
               States, 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 (iii) 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 of America, 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 the Licensed
               Field, nor does CLARKSON make any representation that the
               inventors contained in Patent Rights do

                                       2

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               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 SPONSOR a royalty-bearing, exclusive
               worldwide license under Licensed Subject Matter to manufacture,
               have manufactured, and/or sell Licensed Products 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.   A running royalty equal to

          5% of net revenue for Licensed Products sales of first $500,000

          4% of net revenue for Licensed Products sales of next $500,000

          3% of net revenue for Licensed Products sales of next $1,000,000

          2% of net revenue for Licensed Products sales of next $3,000,000

          1% of net revenue for all Licensed Products sales in excess of
          $5,000,000.

                                       3

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          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 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.

          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:

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

          G.   LICENSEE is responsible for costs associated with patenting,
               enforcing and defending any resulting patents in the Licensed
               Field so long 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 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 Article 2; and

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

     7.   INFRINGEMENT BY THIRD PARTIES

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          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 unreasonably 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.

     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
          officers, 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

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               confidence, (ii) be used only for the purposes 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 confidential information. Upon LICENSEE'S
               request, publication will be delayed up to 60 additional days to
               enable LICENSEE to secure adequate intellectual property
               protection of LICENSEE'S property that would be affected by the
               publication.

     13.  PATENTS & INVENTIONS

          If after consultation with LICENSEE, both parties agree that a patent
          application should be filed for Licensed Subject Matter, CLARKSON will
          prepare and file the appropriate patent applications, and LICENSEE
          will pay the costs of searching, preparing, filing, prosecuting and
          maintaining same. If LICENSEE notifies CLARKSON that it does not
          intend to pay the cost of an application, or if LICENSEE does not
          respond or make an effort to agree with CLARKSON on the disposition of
          rights in the Subject Invention, then CLARKSON may file an application
          at its own expense and LICENSEE will have no rights to the invention.
          CLARKSON will provide LICENSEE a copy of any patent application for
          which LICENSEE has paid the cost of filing, as well as copies of any
          documents received or filed with the respective patent office during
          the prosecution thereof.

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     14.  SOLE AGREEMENT/CHANGE

          This Agreement, including all exhibits referenced heroin, 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.

     15.  NEW YORK LAW

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

     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 Ave., Box 5630
          Potsdam, NY 13699-5630
          Attn: Dr. Rebecca J. Sutcliffe

                                       8

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

CLARKSON                                LICENSEE

By: /s/ S.V. Babu                       By: /s/ Keith A. Blakely
    ---------------------------------       ------------------------------------
    Signature                               Signature

    S. V. Babu                              Keith A. Blakely
    Vice Provost for Research               CEO

    6/30/03                                 6/30/03
    ---------------------------------       ------------------------------------
    Date                                    Date

                                       9

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                                 FIRST AMENDMENT
                              DATED AUGUST 12, 2004
                        TO LICENSE AND ROYALTY AGREEMENT
                               DATED JUNE 15, 2003

This first amendment ("Amendment") dated as of the 12th day of August, 2004 to
the License and Royalty Agreement dated June 15th, 2003 by and between
NanoDynamics, Inc., a corporation with principal offices in Buffalo, New York,
hereinafter referred to as LICENSEE and CLARKSON UNIVERSITY, a corporation with
principal offices in Potsdam, New York, hereinafter referred to as CLARKSON
("License").

Whereas, the parties previously entered into the License with respect to
chemical and physical processes developed by Dr. Dan V. Goia including synthesis
techniques and milling of micron and submicron powders for the synthesis of
fine/ultrafine simple and composite metallic powders and flakes ("Licensed
Field");

Whereas, CLARKSON and LICENSEE have done, and are continuing to do, research and
development in the Licensed Field; and

Whereas, CLARKSON and LICENSEE seek to amend the License to cover the additional
research, clarify certain rights of LICENSEE under the License, and amend the
process for seeking patent protection.

Witnesseth:

The parties agree to amend the License as follows:

1. All capitalized terms used but not defined in this Amendment shall have the
meaning ascribed to them in the License.

2. The defined term "TECHNOLOGY RIGHTS" as used in this Amendment and the
License is hereby amended and restated in its entirety as follows:

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 Dan V.
Goia (Inventor) at CLARKSON either before August 12th, 2004 or after such date
with respect to any research or development efforts funded by LICENSEE all as
relates to chemical and physical processes developed by Dr. Dan V. Goia
including synthesis techniques and milling of micron and submicron powders for
the synthesis of fine/ultrafine simple and composite metallic powders. The
foregoing shall cover all metals except silver which is covered by separate
license agreement dated March 26, 2004.

3. The first sentence of Section 4. A. of the License is hereby amended and
restated in its entirety as follows:

                                       10

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A. CLARKSON hereby grants to LICENSEE a royalty-bearing, exclusive worldwide
license of the Licensed Subject Matter to manufacture, have manufactured, use,
sell, offer or sublicense the Licensed Products or Licensed Subject Matter for
use within the Licensed Field.

4. The royalty payable to CLARKSON under Section 5. A. shall apply to both
Licensed Products sales as well as all sublicensing fees, royalties or payments.

5. Section 13 is hereby amended and restated in its entirety as follows:

13. PATENTS & 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 U.S.A.),
LICENSEE shall notify CLARKSON in sufficient time for CLARKSON to file or
continue to prosecute such applications, and LICENSEES' rights with respect to
that foreign patent or patents shall terminate.

4. Except as amended by this Amendment, the License shall continue in full force
and effect.

The parties have caused their duly authorized representatives to execute this
Amendment as of the date above first written.

CLARKSON UNIVERSITY                     NANODYNAMICS, INC.

By: /s/ Rebecca J. Sutcliffe            By: /s/ Keith A. Blakely
    ---------------------------------       ------------------------------------
    Dr. Rebecca J. Sutcliffe                Keith A. Blakely, CEO
    Director of Research

                                       11<PAGE>

                                                                    Exhibit 10.2

                          LICENSE AND ROYALTY AGREEMENT

This agreement entered into the 26th day of March, 2004 by and between
NanoDynamics, a corporation with principal offices in Buffalo, NY, 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 have previously undertaken research
and development in the field of micron and submicron powder milling for the
synthesis of fine and/or ultrafine simple and composite metallic powders and
flakes; and

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

Witnesseth:

It is mutually agreed that CLARKSON will exert its best efforts in performing a
research program in accordance with the following:

     1.   EFFECTIVE DATE

     This Agreement is effective March 26, 2004 ("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 process developed by Dr. Dan V.
               Goia to synthesize highly dispersed uniform, crystalline
               nanosized silver powders.

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

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          F.   "NET REVENUES" means net sales less the value directly
               attributable to the silver content contained in the Licensed
               Product, calculated on the basis of the quoted spot price for
               Silver on the London Metal Exchange on the date of invoicing for
               each shipment of Licensed Product.

          G.   "PATENT RIGHTS" means CLARKSON'S rights in information or
               discoveries covered by patents anchor 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 Dan
               V. Goia as either sole or joint inventor ("Inventor") and which
               relate to the manufacture, use or sale of Licensed held.

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

          I.   "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 Dan V. Goia (Inventor) at
               CLARKSON before the Effective Date relating to chemical processes
               developed by Dr. Dan V. Goia to synthesize highly dispersed
               uniform, crystalline nanosized silver powders.

     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 (iii) 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

                                       2

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               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 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
               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 SPONSOR a royalty-bearing, exclusive
               worldwide license under Licensed Subject Matter to manufacture,
               have manufactured, and/or sell Licensed Products 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

               5% of net revenue for Licensed Products sales of first $1,000,000

               4% of net revenue for Licensed Products sales of next $1,000,000

               3% of net revenue for Licensed Products sales of next $2,000,000

               2% of net revenue for Licensed Products sales of next $4,000,000

               1% of net revenue for all Licensed Products sales in excess of
               $6,000,000.

                                       3

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          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 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 is issued 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:

                                       4

<PAGE>

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

          G.   LICENSEE is responsible for costs associated with patenting,
               enforcing and defending any resulting patents in the Licensed
               Field so long 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 in 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 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.

                                       5

<PAGE>

     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 then
               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.

     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.

                                       6

<PAGE>

     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 confidential information, Upon LICENSEE's
               request, publication will be delayed up to 54 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

               If after consultation with LICENSEE, both parties agree that a
               patent application should be filed for Licensed Subject Matter,
               CLARKSON will prepare and file the appropriate patent
               applications, and LICENSEE will pay the costs of searching,
               preparing, filing, prosecuting and maintaining same. If LICENSEE
               notifies CLARKSON that it does not intend to pay the cost of an
               application, or if LICENSEE does not respond or make an effort to
               agree with CLARKSON on the disposition of rights in the Subject
               Invention, then CLARKSON may file an application at its own
               expense and LICENSEE will have no rights to the invention.
               CLARKSON will provide LICENSEE a copy of any patent application
               for

                                       7

<PAGE>

               which LICENSEE has paid the cost of filing, as well as copies of
               any documents received or filed with the respective patent office
               during the prosecution thereof.

     14.  SOLE AGREEMENT

               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 be determined, in accordance
               with the law of the State of New York.

     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. Rebecca J. Sutcliffe

                                       8

<PAGE>

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

CLARKSON UNIVERSITY                     LICENSEE

By: /s/ Rebecca J. Sutcliffe            By: /s/ Keith A. Blakely
    ---------------------------------       ------------------------------------
Signature                               Signature

Rebecca J. Sutcliffe                    Keith A. Blakely
Director of Research                    CEO
                                        ----------------------------------------
                                        Title
3/26/04
-------------------------------------   3/26/04
Date                                    ----------------------------------------
                                        Date

                                       9

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