Document:

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                                                                   Exhibit 10.25

                               SERVICES AGREEMENT

     THIS SERVICES AGREEMENT, dated as of June 21, 2007 (this "Agreement"), by
and between Epic Energy Solutions, LLC, a Delaware limited liability company
(the "Company"), and NanoDynamics, Inc. a Delaware corporation ("Provider").

                                    RECITALS

     WHEREAS, the Company desires that Provider provide the Services (as defined
below) and Facilities (as defined below) to the Company, and Provider desires to
provide the Services and Facilities to the Company; and

     WHEREAS, the Company and Provider wish to set forth the terms and
conditions of the Services and provide for a fair reimbursement of the costs to
Provider of the Services and Facilities without any profit or markup to the
Company.

                                    AGREEMENT

     NOW THEREFORE, in consideration of the premises, the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Provider hereby
agree as follows:

     1. Term. The initial term of this Agreement shall commence on the date
hereof and end on June 30, 2008 ("Initial Term") and will be automatically
renewed for successive six month periods ("Renewal Terms" and together with the
Initial Term, the "Term") unless either party elects to terminate this Agreement
effective as of the end of the Initial Term or any Renewal Term. Notice of
termination shall be made no later than thirty (30) days prior to the end of the
Initial Term or ninety (90) days prior to the end of any Renewal Term.

     2. Provision of Services and Facilities.

          (a) During the Term, Provider agrees to provide to the Company the
services (the "Services"), including but not limited to those set forth on
Exhibit A hereto, and the facilities and office equipment (the "Facilities"),
including but not limited to those set forth on Exhibit B hereto, in a manner
and on such basis as shall be specified in, or otherwise contemplated by, the
Company's then-current annual business plan (including the annual budget) as
adopted by a Super Majority Decision (as defined in the Company's Limited
Liability Company Agreement) and in effect from time to time during the Term
hereof (as same may be amended, the "Annual Plan"). Unless otherwise provided in
the Annual Plan, the Services and the Facilities shall be provided by Provider
on a continuous basis without requiring any specific request or further
authorization from the Company. The Company shall furnish a copy of the Annual
Plan to Provider not less than 30 days prior to the effective date thereof.

          (b) The Services and Facilities specified on Exhibits A and B hereto,
respectively, are indicative only and are not intended to be an exhaustive
listing of the nature and

<PAGE>

scope of the Services and Facilities to be provided by Provider hereunder, and
the parties agree that Provider shall provide all such Services and Facilities
as shall be reasonably required under (or consistent with) the Annual Plan
(subject to Provider's express agreement to provide any Services and Facilities
not specified on Exhibits A or B hereto, which agreement shall not be
unreasonably withheld), or as the parties may otherwise mutually agree during
the Term.

          (c) Nothing in this Agreement shall in any way limit the power or the
obligation of the board of managers of the Company to uphold and discharge its
fiduciary and other responsibilities under the Limited Liability Company Act of
the State of Delaware.

          (d) The Services required hereunder shall be performed by Provider
itself or through a third-party contractor selected by Provider, as Provider
shall determine in its sole discretion.

     3. Fees; Payments.

The fees to be paid to the Provider by the Company in consideration of its
provision of the Services and Facilities hereunder (the "Fees") shall be based
upon, and derived from, the relevant cost estimates for such Services and
Facilities as reflected in the annual budget contained within the applicable
Annual Plan (the "Annual Budget"). The Fees will be based upon actual Provider's
internal costs (including, without limitation, allocable overhead and
administrative costs), and third-party costs incurred on the Company's behalf,
without any markup or profit. The Fees shall be payable by the Company to the
Provider on a quarterly basis, in advance, on the first business day of each
fiscal quarter of the Company, in an amount equal to one-quarter of the
estimated annual cost for such Services and Facilities quoted in, or derived
from, the applicable Annual Budget. The first Fee payment hereunder shall be due
and payable by the Company on the date hereof, and shall be pro rated for the
actual number of days in the Company's current fiscal quarter.

     4. Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their respective successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person, including, without limitation, any employee,
stockholder or creditor of the parties hereto, any rights or remedies of any
nature whatsoever under or by reason of this Agreement.

     5. Assignment. This Agreement and the rights and obligations of a party
hereunder may be assigned only upon the written consent of the other party to
this Agreement. Any other attempted assignment shall be null and void.

     6. Amendments. Any amendment, modification or waiver of any provision of
this Agreement shall only be effective if evidenced by a written instrument
signed by an officer of the Provider and an officer of the Company.

     7. Confidentiality. Provider and the Company hereby agree to hold in trust
and maintain confidential all information relating to the other party or any of
their subsidiaries and affiliates that is disclosed by either party to the other
in connection with or during the Term of this Agreement whether orally,
visually, in writing or in any other tangible form and includes,

                                       -2-

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but is not limited to, technical, economic and business data, know-how,
drawings, business plans and computer information data bases. Without prejudice
to the rights and remedies of any party to this Agreement, either Provider or
the Company, as the case may be, shall be entitled to equitable relief by way of
an injunction if the other party hereto breaches or threatens to breach any
provision of this Section 7.

     8. Independent Contractor. Provider shall not be an agent, partner or
employee of the Company as a result of any provision of this Agreement, but
rather shall be deemed an independent contractor.

     9. Governing Law. The parties hereby agree that this Agreement shall be
governed by and construed under and in accordance with the laws of the State of
New York, without regard to conflict of laws.

     10. Waiver. Any delay or omission or failure to exercise any right or
remedy provided for herein shall not constitute a waiver of any provision of
this Agreement and shall not limit any party's right thereafter to enforce any
provision or exercise any right.

     11. Headings. All Section headings in this Agreement are not to be
considered a part of this Agreement and are for convenience only and shall not
be deemed to control or affect the meaning or construction of any of the
provisions hereof.

     12. Notices. Any notice to be given or made hereunder by any party to the
other shall be in writing and hand delivered, mailed or telecopied as follows:

          If to the Company, addressed to:

               Epic Energy Solutions, LLC
               901 Fuhrmann Boulevard
               Buffalo, New York 14203
               Attn.: Chief Executive Officer
               Telephone: (716) 853-4900
               Facsimile: (716) 853-8996

          If to Provider, addressed to:

               NanoDynamics, Inc.
               901 Fuhrmann Boulevard
               Buffalo, New York 14203
               Attn.: Richard L. Berger, President
               Telephone: (716) 853-4900
               Facsimile: (716) 853-8996

                            [Signature Page Follows]

                                       -3-

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     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.

                                        NANODYNAMICS, INC.

                                        By: /s/ KEITH BLAKELY
                                            ------------------------------------
                                        Name: Keith Blakely
                                        Title: Chief Executive Officer

                                        EPIC ENERGY SOLUTIONS, LLC

                                        By: /s/ KEITH BLAKELY
                                            ------------------------------------
                                        Name: Keith Blakely
                                        Title: Chief Executive Officer

                      Signature Page to Services Agreement

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                                    EXHIBIT A

                                    SERVICES

     Administrative services including payroll, accounting, banking, human
resources, information technology, facilities management, quality management,
environmental health and safety management, insurance and risk management and
contract administration.

                         Exhibit A to Services Agreement

<PAGE>

                                    EXHIBIT B

                                   FACILITIES

     (a) Office and laboratory space, as may be specified in the Annual Plan;
and

     (b) Information systems including workstations, computers, cellphones,
laptops, telephone equipment, internet, telecommunication lines, printers, faxes
and copiers.

                         Exhibit B to Services Agreement<PAGE>

                                                                   Exhibit 10.26

                          MASTER DEVELOPMENT AGREEMENT

     This Master Development Agreement ("AGREEMENT"), is entered into as of June
21, 2007 (the "EFFECTIVE DATE"), by and between NanoDynamics, Inc., a
corporation duly organized under the laws of the State of Delaware and having
its principal place of business at 901 Fuhrmann Blvd., Buffalo, NY 14203
("NANODYNAMICS"), and Epic Energy Solutions, LLC, a limited liability company
duly organized under the laws of the State of Delaware and having its principal
place of business at 901 Fuhrmann Blvd., Buffalo, NY 14203 ("COMPANY").
NanoDynamics and Company may hereinafter be referred to individually as a
"PARTY" or collectively as the "PARTIES."

     WHEREAS, Company was formed by NDI-1 Partners, LLC, a wholly-owned
subsidiary of NanoDynamics ("NDI-1"), and Nano-applications Holdings B.V., a
wholly-owned subsidiary of Shell Technology Ventures Fund 1 B.V.
("NANO-APPLICATIONS"), to develop and commercialize nano-enabled applications in
the fields of: (a) power generation from solar energy; and (b) exploration,
production and processing of oil, gas and related hydrocarbons; and

     WHEREAS, NanoDynamics is recognized as being a leader in the design and
development of nano-materials and nano-enabled products and applications
including but not limited to pre-manufacturing components and devices with
potential applications of interest to Company; and

     WHEREAS, NanoDynamics and Company mutually desire to establish a
development relationship with each other to further both Parties' businesses;
and

     WHEREAS, NanoDynamics and Company have entered into that certain
Intellectual Property License Agreement dated June 21, 2007 ("IP LICENSE
AGREEMENT"), under which NanoDynamics and Company have agreed to certain
licensing terms relating to intellectual property, and NanoDynamics and Company
wish to clarify the licensing and ownership terms that relate to any additional
intellectual property to be provided as contemplated in this Agreement.

     NOW THEREFORE, in consideration of the mutual terms and conditions set
forth herein, the Parties hereby agree as follows:

     1. Scope of the Agreement.

          (a) SCOPE AND DEVELOPMENT PROJECTS. This Agreement is a master
agreement that applies to those situations where Company desires to engage
NanoDynamics's expertise to develop nano-enabled applications, components and
devices relating to solar energy; or to the exploration, production, and
processing of oil, gas and related hydrocarbons, all to the extent part of the
Company Field of Use as defined in the IP License Agreement. Each shall be
referred to as a "DEVELOPMENT PROJECT" and collectively as the "DEVELOPMENT
PROJECTS." Company shall propose a Development Project to NanoDynamics, and
NanoDynamics shall indicate its interest in the Development Project by defining
and describing the Development Project to Company in the form attached hereto as
EXHIBIT A ("SAMPLE DEVELOPMENT PROJECT EXHIBIT NO. __") (each a "DEVELOPMENT
PLAN"). It is the intent of the parties that NanoDynamics

<PAGE>

will provide support for Development Projects related to Projects, as defined in
the IP License Agreement, during the term of this Agreement, and NanoDynamics,
subject to reasonable availability of its personnel and other resources, will
not fail to respond in a commercially reasonable manner to a request for such
support by Company. Each Development Plan shall specify the particular
Development Project, the technology(ies) utilized, the prospective customer
application, the estimated cost and duration of the development effort, and the
payment schedule. Each Development Plan shall, when executed, become an addendum
to this Agreement. The first Development Plan shall be titled "DEVELOPMENT PLAN
NO. 1," and additional Development Plans shall be sequentially numbered.

          (b) EXECUTION. Company shall have 30 days after the date of delivery
of a Development Plan by NanoDynamics to agree in writing to same. If Company
fails to agree in writing to the Development Plan, it shall be of no further
force or effect.

          (c) INTELLECTUAL PROPERTY OWNERSHIP. If Company executes a Development
Plan under Section 1(b) above, all intellectual property rights with respect to
both license and ownership rights for any intellectual property developed as the
result of the work authorized by the Development Plan shall be owned in
accordance with the terms of Section 2.

          (d) REPRESENTATIVES. Each Party shall designate one or more authorized
representatives to interact with the other for purposes of this Agreement. If
Company executes a Development Plan, the representatives shall diligently work
together in good faith to prepare and negotiate the Development Plan. The
representatives shall periodically meet and confer as necessary, either in
person or by telephone, to discuss prospective Development Projects and
performance with respect to existing Development Plans.

          (e) COSTS AND PAYMENTS. NanoDynamics shall charge for its services
hereunder based upon actual NanoDynamics internal costs (including, without
limitation, allocable overhead and administrative costs), and third-party costs
incurred on Company's behalf, without any markup or profit. NanoDynamics shall
invoice Company for all amounts on or after the due date, as set forth in each
Development Plan. Payment will be due 30 days after presentation of invoice
unless a longer period is otherwise indicated therein.

          (f) CONDUCT OF THE WORK. Each Development Project shall be conducted
in accordance with its respective Development Plan, unless a change is agreed to
in writing by the authorized representatives of each party. NanoDynamics shall
advise Company quarterly on the progress of each Development Plan and will
advise Company promptly if it becomes of the opinion that any Development
Project may not be completed on the schedule and budget set forth in its
respective Development Plan.

     2. Intellectual Property. The parties acknowledge that a Development Plan
may relate to certain NDI Background Technology, as such term is defined in the
IP License Agreement. Under such agreement, NanoDynamics has granted to Company
certain licenses in the NDI Background Technology, and this Agreement is not
intended to alter such licenses.

          (a) NEW TECHNOLOGY.

                                       -2-

<PAGE>

               (i) OWNERSHIP. NanoDynamics acknowledges that all Technology
delivered to Company by NanoDynamics hereunder other than Pre-Existing
Technology ("NEW TECHNOLOGY"), will be the sole property of Company, subject to
the license set forth in Section 2(a)(ii) below. NanoDynamics hereby assigns and
shall assign (or cause to be assigned) to Company all rights in the New
Technology and any intellectual property rights embodied therein.

               (ii) LICENSES. Company grants to NanoDynamics the irrevocable,
worldwide, non-exclusive, royalty-free and non-transferable (except as specified
in Section 9 below) licenses, solely outside the Company Field of Use (as
defined below), under its intellectual property rights in the New Technology, to
make (including the right to practice any method), have made, use, lease, sell,
offer for sale and import products embodying the New Technology. Such license to
New Technology will be fully sublicenseable and will include the right to have
contract manufacturers and foundries manufacture the products outside the
Company Field of Use. NanoDynamics may, subject to any prior grant of rights by
Company, acquire exclusive licenses under Company's intellectual property rights
related to the New Technology. Any such licenses shall be governed by Sections
4.1 and 4.2 of the IP License Agreement, as well as the other pertinent sections
of the IP License Agreement referred to therein. Unless NanoDynamics acquires
such exclusive rights, Company shall retain the right to license the New
Technology to others and the right to commercialize such New Technology itself,
even outside the Company Field of Use.

          (b) PRE-EXISTING TECHNOLOGY.

               (i) OWNERSHIP. Company agrees that, as between the Parties,
NanoDynamics will retain all intellectual property rights in the Pre-Existing
Technology, subject to the license set forth in Section 2(b)(ii) below.

               (ii) LICENSES. NanoDynamics grants to Company the irrevocable,
worldwide, non-exclusive, royalty-free and non-transferable (except as specified
in Section 9 below) licenses, solely in the Company Field of Use (as defined
below), under its intellectual property rights in the Pre-Existing Technology,
to make (including the right to practice any method), have made, use, lease,
sell, offer for sale and import Company products embodying the Pre-Existing
Technology. Such license to Pre-Existing Technology will be sublicenseable only
with NanoDynamics's prior written consent, which will not be unreasonably
withheld and will include the right to have contract manufacturers and foundries
manufacture the products in the Company Field of Use for Company with
NanoDynamics's prior written consent, which will not be unreasonably withheld.
The parties acknowledge that the resale or distribution of Epic Products by
Distributors (as each of those terms are defined in the IP License Agreement)
will not be deemed a sublicense for purposes of this Section.

          (c) FURTHER ASSURANCES. NanoDynamics shall execute any additional
documents deemed reasonably necessary to effect and evidence Company's rights
with respect to the intellectual property elements set forth above.

          (d) DEFINITIONS.

                                       -3-

<PAGE>

               (i) "PRE-EXISTING TECHNOLOGY" means Technology prepared,
conceived, or reduced to practice by NanoDynamics prior to the execution of the
applicable Development Plan or outside of the scope of such Development Plan.
Pre-Existing Technology will, however, exclude NDI Background Technology, as
such term is defined in Section 1.1(p) of the IP License Agreement. The parties
acknowledge that, for the avoidance of doubt, NDI Background Technology is
licensed to Company as and to the extent described in the IP License Agreement.

               (ii) "COMPANY FIELD OF USE" has the meaning set forth in the IP
License Agreement for the Epic Field of Use.

               (iii) "TECHNOLOGY" means all technology, including all know how,
show how, techniques, design rules, trade secrets, inventions, algorithms,
routines, software, files, databases, works of authorship, processes, devices,
prototypes, schematics, test methodologies, hardware development tools, any
media on which any of the foregoing is recorded and any other tangible
embodiments of any of the foregoing.

     3. Confidentiality.

          (a) "CONFIDENTIAL INFORMATION" means: information, technical data, and
know-how that is not otherwise in the public domain and as to which the owner
actively undertakes to restrict or control the disclosure to third parties in a
manner reasonably intended to maintain its confidentiality, and that is
disclosed or transferred pursuant to, this Agreement. "CONFIDENTIAL INFORMATION"
excludes information that: (i) was in the Receiving Party's possession before
receipt from the Disclosing Party or was obtained from a source other than the
Disclosing Party; (ii) is or becomes a matter of public knowledge through no
fault of the Receiving Party; (iii) is rightfully received by the Receiving
Party from a third party without a duty of confidentiality; (iv) is
independently developed by the Receiving Party without reference to or
utilization of the Disclosing Party's Confidential Information; (v) is disclosed
under operation of law or by order of a court or other authority, so long as the
obligations of Section 3(e) have been met; or (vi) is disclosed by the Receiving
Party with the Disclosing Party's prior written approval.

                                       -4-

<PAGE>

          (b) CONFIDENTIALITY AND NON-USE OBLIGATIONS. Each Party receiving
Confidential Information ("RECEIVING PARTY") from the other Party ("DISCLOSING
PARTY") shall: (i) protect the Confidential Information of the Disclosing Party
by using the same degree of care, but no less than a reasonable degree of care,
to prevent the unauthorized use, dissemination, or publication of the
Confidential Information as Receiving Party uses to protect its own confidential
information of a like nature; (ii) not use such Confidential Information except
to exercise the licenses granted to it hereunder; and (iii) not disclose such
Confidential Information to any Third Party, except as expressly permitted under
this Agreement, without prior written consent of the Disclosing Party.

          (c) DISCLOSURE TO SUBLICENSEES. Company has the right to disclose to
its sublicensees permitted under this Agreement portions of Confidential
Information as reasonably necessary in the exercise of Company's sublicense
rights under this Agreement, subject to the sublicensee's agreement in writing
to confidentiality, protection, and non-use terms at least as protective of the
Disclosing Party as the provisions of this Agreement.

          (d) RESIDUALS. The Parties acknowledge that, for avoidance of doubt,
NanoDynamics may use and otherwise exploit generally applicable ideas, concepts,
and know-how of NanoDynamics that that may be embodied in the New Technology, or
that NanoDynamics may use in the preparation of the New Technology, subject to
Company's rights in its Confidential Information as described in Section 3.

          (e) COMPELLED DISCLOSURE. If the Receiving Party believes that it will
be compelled by law or by a court or other authority to disclose Confidential
Information of the Disclosing Party, it shall: (i) give the Disclosing Party
prompt written notice so that the Disclosing Party may take steps to oppose such
disclosure; (ii) take reasonable steps to limit the scope of any required
disclosure of Confidential Information; and (iii) cooperate with the Disclosing
Party in its attempts to oppose such disclosure, but in any event the Receiving
Party shall not be prohibited from complying with such requirement.

     4. Term and Termination.

          (a) INITIAL TERM. This Agreement shall have a term of five years
commencing on the Effective Date ("TERM").

          (b) TERMINATION FOR CAUSE. Either Party may terminate this Agreement
or any Development Plan during the Term upon written notice to the other Party,
but only if:

               (i) the other Party files a bankruptcy petition of any type
(which petition is not dismissed within 90 days), is declared bankrupt, becomes
insolvent, makes an assignment for the benefit of creditors, goes into
liquidation or receivership or otherwise loses legal control of its business; or

               (ii) the other Party is in material breach of this Agreement (or
the applicable Development Plan) and has failed to cure such breach within 30
days of receipt of written notice thereof from the first Party.

                                       -5-

<PAGE>

In addition, (1) NanoDynamics may terminate this Agreement in the event Company
is dissolved or Company's business affairs are wound up, as described in Article
XIV of the Limited Liability Company Agreement of Company, of even date herewith
between Nano-applications and NDI-1 (the "LLC AGREEMENT"), and (2) NanoDynamics
may terminate this agreement at any time NanoDynamics holds less than 30% of the
total outstanding Membership Interests of Company, as such term is defined in
the LLC Agreement; however, such termination shall not terminate any obligations
of NanoDynamics with respect to performance or completion of Development Plans
to which NanoDynamics has previously agreed in writing.

          (c) SURVIVAL. The Parties acknowledge that expiration of this
Agreement shall not terminate each Development Plan executed hereunder prior to
the date of termination or expiration, unless the Parties expressly agree to the
contrary in writing. In addition, the terms of Sections 1(c) ("INTELLECTUAL
PROPERTY OWNERSHIP"); 2 ("INTELLECTUAL PROPERTY"); 3 ("CONFIDENTIALITY"); 4
("TERM AND TERMINATION"); 5 ("WARRANTY, DISCLAIMER AND LIMITATION OF
LIABILITY"); 6 ("EXPORT CONTROL"); 7 ("DISPUTES"); 8 ("NOTICES"); 9
("ASSIGNMENT"); 10 ("WAIVER OR MODIFICATION"); 11 ("RELATIONSHIP OF PARTIES");
12 ("PUBLICITY"); 13 ("APPLICABLE LAW"); 14 ("ENTIRE AGREEMENT"); 15 ("MULTIPLE
COPIES OR COUNTERPARTS"); 16 ("HEADINGS"); 17 ("SEVERABILITY"); and 18 ("FAILURE
OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE") will survive any termination or
expiration of this Agreement. In addition, the obligations of the parties with
respect to any Project Plan in progress at the time of any termination shall
continue until completion of that Plan, except in the case of termination as a
result of breach by Company.

     5. WARRANTY, DISCLAIMER AND LIMITATION OF LIABILITY.

          (a) NanoDynamics hereby represents and warrants that, to the best of
its knowledge as of the date of delivery, and with no further duty of
investigation implied, the Pre-Existing Technology and New Technology do not and
will not infringe any intellectual property right of any third party.

          (b) NanoDynamics hereby represents and warrants that the services
provided hereunder will be provided in a professional and workmanlike manner in
accordance with prevailing industry standards; provided, however that Company's
sole remedy for breach of the foregoing warranty is for NanoDynamics to
re-perform the services at no additional charge. Any other warranties regarding
performance of the services or the quality of the deliverables hereunder, if
any, will be set forth in the applicable Development Plan.

          (c) EXCEPT AS EXPLICITLY SET FORTH IN THIS SECTION 5, NANODYNAMICS
MAKES NO WARRANTIES WHATSOEVER TO COMPANY, EXPRESS OR IMPLIED, WITH REGARD TO
THE PRODUCTS OR SERVICES OF NANODYNAMICS OR TO THE RESULTS OF ANY DEVELOPMENT
PLAN, AND NANODYNAMICS SPECIFICALLY DISCLAIMS ALL SUCH WARRANTIES AND
CONDITIONS, INCLUDING ANY WARRANTY OF TITLE, MERCHANTABILITY, AND FITNESS FOR A
PARTICULAR PURPOSE.

          (d) IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
PUNITIVE, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, BUT NOT LIMITED TO, LOST PROFITS,

                                       -6-

<PAGE>

LOST REVENUES, LOST BUSINESS PROJECTS, LOSS OF USE OR EQUIPMENT DOWN TIME, AND
LOSS OF OR CORRUPTION TO DATA) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY DEVELOPMENT PLAN, REGARDLESS OF THE LEGAL THEORY UNDER WHICH SUCH DAMAGES
ARE SOUGHT, AND EVEN IF THE PARTIES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES OR LOSS. THE LIABILITY OF EITHER PARTY TO THE OTHER FOR ANY CLAIMS,
LIABILITIES, ACTIONS OR DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY DEVELOPMENT PLAN, HOWSOEVER CAUSED AND REGARDLESS OF THE LEGAL THEORY
ASSERTED, INCLUDING BREACH OF CONTRACT OR WARRANTY, TORT, STRICT LIABILITY,
STATUTORY LIABILITY OR OTHERWISE, SHALL NOT, IN THE AGGREGATE, EXCEED THE
AMOUNTS PAID OR PAYABLE FOR THE SPECIFIC DEVELOPMENT PROJECT UNDER WHICH SUCH
CLAIM AROSE.

     6. Export Control. The Parties to this Agreement shall comply with all
applicable United States export and foreign import laws, rules, and regulations
in the performance of the Parties' responsibilities and obligations under this
Agreement. Without limiting the generality of the foregoing, the Parties shall
not disclose any U.S.-origin products, know-how, technical data, documentation
or other products or materials furnished to it pursuant to this Agreement, to
any person or in any manner which would constitute a violation of the export
control regulations of the United States then in effect.

     7. Disputes. Any controversy, claim or dispute ("DISPUTE") arising out of
or relating to this Agreement shall be resolved by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. Before commencing any such arbitration, the Parties
agree to enter into negotiations to resolve the Dispute. If the Parties are
unable to resolve the Dispute within 30 days by good faith negotiation, either
Party may refer the matter to arbitration. The arbitration shall take place in
the County of New York, State of New York. The arbitrator(s) shall be bound to
follow the provisions of this Agreement in resolving the dispute, and may not
award any damages which are excluded by this Agreement. The decision of the
arbitrator(s) shall be final and binding on the Parties, and any award of the
arbitrator(s) may be entered or enforced in any court of competent jurisdiction.
Any request for arbitration of a claim by either Party against the other
relating to this Agreement must be filed no later than one year after the date
on which this Agreement expires or terminates, or such claim shall be time
barred.

     8. Notices. All notices, certificates, acknowledgments or other written
communications (hereinafter referred to as "NOTICES") required to be given under
this Agreement shall be in writing and shall be deemed to have been given and
properly delivered if duly mailed by certified mail to the other Party at its
address as follows, or to such other address as either Party may, by written
notice, designate to the other. Additionally, Notices sent by any other means
(i.e., facsimile, overnight delivery, courier, email and the like) are
acceptable subject to written confirmation of both the transmission and receipt
of the Notice:

Roger Berger                        Keith A. Blakely
President                           CEO
NanoDynamics, Inc.                  Epic Energy Solutions, LLC
901 Fuhrmann Blvd.                  901 Fuhrmann Blvd.

                                       -7-

<PAGE>

Buffalo, NY 14203                   Buffalo, NY 14203

Phone  716-853-4900                 Phone  716-853-4900
Fax    716-853-8996                 Fax    716-853-8996
e-mail rberger@nanodynamics.com     e-mail kblakely@nanodynamics.com

     With copies to:

Heather J. Meeker, Esq.             Epic Energy Solutions, LLC
Greenberg Traurig, LLP              Attn: Chairman of the Board of Managers
1900 University Avenue, 5th Floor   901 Fuhrmann Blvd.
East Palo Alto, CA 94303            Buffalo, NY 14203

     9. Assignment. Except as provided below, no Party may, directly or
indirectly, in whole or in part, whether by operation of law or otherwise,
assign or transfer this Agreement, without the other Party's prior written
consent, and any attempted assignment, transfer or delegation without such prior
written consent shall be void. Notwithstanding the foregoing, NanoDynamics (or
its permitted successive assignees or transferees hereunder), but not Company,
may assign or transfer this Agreement as a whole, without consent, in connection
with and as part of any Transfer (as defined in the LLC Agreement) of its
Membership Interests (as defined in the LLC Agreement) pursuant to Section
10.01(c) of the LLC Agreement, and Company may assign this Agreement under any
circumstance under which, and to the same extent, it may assign it rights under
the IP License Agreement, subject to the provisions therein respecting change of
control of Company. Without limiting the foregoing, this Agreement will be
binding upon and inure to the benefit of the Parties and their permitted
successors and assigns.

     10. Waiver or Modification. This Agreement may be modified, or part(s)
hereof waived, only by an instrument in writing specifically referencing this
Agreement and signed by an authorized representative of both Parties.

     11. Relationship of Parties. The Parties are acting as independent
contractors in all respects with regard to this Agreement. Nothing contained in
this Agreement shall be deemed or construed to create a partnership, joint
venture, agency or other relationship other than that expressly described
herein.

     12. Publicity. Except as required by law, neither Party may issue a press
release or make any disclosure to any other person or entity regarding the
existence of or the subject matter of this Agreement without the prior written
consent of the other Party.

     13. Applicable Law. This Agreement shall be governed by and construed under
the laws of the State of New York, without regard to its conflict or choice of
laws provisions.

     14. Entire Agreement. This Agreement, including any and all Exhibits and
Development Plans attached hereto, which are hereby incorporated by reference,
constitutes the entire agreement and understanding between the Parties and,
except as to the IP License Agreement to the extent this Agreement explicitly
states that the IP License Agreement controls,

                                       -8-

<PAGE>

supersedes and replaces any and all prior or contemporaneous proposals,
agreements, understandings, commitments or representations of any kind, whether
written or oral, relating to the subject matter hereof.

     15. Multiple Copies or Counterparts. This Agreement may be executed in one
or more counterparts, all of which, taken together, shall be considered to be
one and the same agreement.

     16. Headings. The headings and titles of the various sections of this
Agreement are intended solely for convenience of reference and are not intended
to define, limit, explain, expand, modify or place any construction on any of
the provisions of this Agreement.

     17. Severability. Any term or other provision of this Agreement is
determined by a nonappealable decision of a court, administrative agency or
arbitrator to be invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to either Party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
Parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the fullest extent possible.

     18. Failure or Indulgence Not Waiver; Remedies Cumulative. Failure or delay
on the part of either Party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

                            [Signature Page Follows]

                                       -9-

<PAGE>

     IN WITNESS WHEREOF, the Parties represent and warrant that this Agreement
is executed by duly authorized representatives of each Party as of the Effective
Date.

NANODYNAMICS, INC.                      EPIC ENERGY SOLUTIONS, LLC

By: /s/ KEITH BLAKELY                   By: /s/ KEITH BLAKELY
    ---------------------------------       ------------------------------------
Name: Keith Blakely                     Name: Keith Blakely
Title: Chief Executive Officer          Title: Chief Executive Officer

                 Signature Page to Master Development Agreement

<PAGE>

                                    EXHIBIT A

                                     SAMPLE
                            DEVELOPMENT PLAN NO. ___

PROJECT DESCRIPTION: ___________________________________________________________

TECHNOLOGIES UTILIZED: _________________________________________________________

PROJECT ACCEPTANCE CRITERIA: ___________________________________________________

PROSPECTIVE CUSTOMER APPLICATION: ______________________________________________

SCOPE OF EFFORT: _______________________________________________________________

ESTIMATED COST, LENGTH OF PROJECT: _____________________________________________

NANODYNAMICS, INC.                      EPIC ENERGY SOLUTIONS, LLC

By:                                     By:
    ---------------------------------       ------------------------------------
Name and Title:                         Name and Title:
                ---------------------                   ------------------------
Date:                                   Date:
      -------------------------------         ----------------------------------

                    Exhibit A to Master Development Agreement

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