AGREEMENT

Party A:

Wu'an Municipal People's Government, Hebei Province

(hereinafter referred to as Party A)

Party B:

Altair Nanotechnologies (China) Co., Ltd.

 

a.

LTO material production line: annual capacity of up to 3,000 tons in the first phase of the project, and up to *** tons in later phases;

 

b.

Li-ion energy storage system production line: annual capacity of up to ***MW.

 

a.

Party A should finish registration of the subsidiary company in Wuan, Hebei before April 20, 2012, and Party A should assist Party B to finish the land use rights transfer procedure before July 30, 2012.

 

b.

Party B should build a project team and enter Wu’an industrial park within 5 days after signing of this agreement.

 

Party B will seek to finish the first phase of construction and commence LTO material and energy storage system production before October 31, 2013.

 

a.

As per the attached sales and purchase agreement between Party A and Party B, Party A shall purchase *** EV buses from Party B and specially issue the operational licenses for *** EV taxis for Party B, which will be a demonstration for promotion of Green, Environmental protection and new energy, in which, ***EV bus should be purchased and *** operation licenses should be issued before end of 2012.

 

b.

In order to apply for the national “Ten city one thousand electric vehicles” demonstration city, Party C decides to apply clean energy and strongly promote public transportation and change gasoline engine taxis to electric Taxi. Party C will purchase *** EV buses and ***EV Taxis from Party B within 5 years ( the sales and purchase agreement between Party C and Party B will be signed later and is the indivisible part of this agreement.)

 

c.

For the purpose of urban energy management safety, energy saving and emission reduction and peak shaving, Party C will promulgate supporting policies for energy storage system market before the launch of Party B's project as follows:

 

(a)

The area under Party C’s administration (including each district, town, or city), ***% of the total gross installed capacity of the new wind power projects must be equipped with Party B’s advanced energy storage system;

 

(b)

The emergency power supply system for newly constructed commercial or residential building, public places and government divisions should be installed by international advanced LTO energy storage system produced by companies within Party C’s administration area beginning in January 1, 2013. The purchased products should have national and international legal intellectual property and technology with patent. Infringing products cannot be purchased or applied.

 

6.

Party A shall carry out the tender, auction or listing procedures for land granting related to the Land within three months of the establishment of the Hebei company of Party B.  Party A will provide to Party B the Land use right certificate which shall conform to the requirements of the laws of the State. The relevant issues shall be implemented according to the memorandum of understanding between Party A and Party B. The Land granted by Party A shall satisfy the standard of “nine availabilities and land leveling” (e.g., nine availabilities shall mean that water, electricity, heat, gas, sewage, post, telecommunications, and TV signals are connected and available on the Land; and leveling shall mean that the Land has leveled ground and is accessible to paved roads). Party A shall guarantee that there are no disputes in connection with such Land.

7.

In order to encourage Party B to commence the construction as soon as possible, Party A shall support Party B to commence the construction while at the same time handling the relevant formalities for commencement of project construction.

8.

The Parties will jointly establish a project office (no less than 3 persons from each party), which shall be responsible for all the daily work of the construction of the project until the commencement of the production.

9.

For the new energy project built by Party B in Party A’s industrial park, the associated infrastructure package fee and all of the administrative charges will be waived for Party B. To encourage the development of the industry, the previously agreed revenue policy of “Three free and Three half” has been changed to that, for the revenue from local retained part, in the first three years, will be awarded to the enterprise; for the fourth till sixth year, half of the revenue will be awarded to the enterprise for technical innovation, new products development, technology introduction, setting up research and development center, etc. Party A will provide necessary supporting policies; help with setting up a financing platform; support to provide loans and financing guarantees for an eligible entity; and provide government interest subsidies through the Wu’an New Energy Industry Development Fund (the “Fund”) that has been incorporated into the annual financial plan. Subsidies from the Fund shall include loan interest payments of no less than ***RMB for three years starting from 2012, which shall be awarded to companies who are engaged in the research and development and large scale production of world advanced nano LTO material, LTO batteries, energy storage systems within the industrial park.

10.

In order to improve the research and development, production and operation, introduction of talents and smooth operation of the enterprises at the locality, prior to March 2013, Party A must provide Party B with no less than ***of commercial-residential land to the extent permitted by law.

11.

The office room and accommodation of the project preparation office of Party B and the exhibition hall for the plans of investment attraction and invitation shall be provided by Party A free of charge; the accommodation of the management personnel and high level talents of the Hebei company of Party B enjoy the relevant preferential policies of Handan Municipality (Wu'an) for foreign investment.

12.

Party A shall be responsible for the connection of the necessary facilities of water, electricity, gas to the boundary lines of the project land of Party B, and guarantee the sufficient supply of water, electricity, gas, etc as demanded by the project. The prices of the water, electricity, gas consumed will be calculated at the local favorable price.

13.

Subject to the documents provided by Party B for obtaining relevant approvals being timely provided, complete and accurate, Party A will be fully responsible for the relevant formalities for Party B's establishing of the company, the obtaining of approval for the project and the obtaining of the approval for the commencement of construction.

14.

If Party B needs to expand the production capacity of the project within 3 years, Party A will provide the land for the second stage of the project which is adjacent to the land of the first stage. The specific size of the land will be provided according to the need of the capacity expansion, and Party B will enjoy all the preferential policies applicable to the first stage investment.

15.

Party A is responsible to facilitate Party B's personnel to purchase apartments locally and enjoy the policies available to the local people. Party A is responsible to help the Party B's high level talents and the children of the key technical persons to complete the process for registering residential domicile (hukou) and enrolling in nearby schools and will exempt any temporary schooling fees.

16.

Based on the principal spirit of this agreement, the exact implementation plan for the three core points, i.e. land, market and funds, will be further defined before May 20, 2012.

17.

The Parties shall strictly fulfill the confidentiality obligations, and shall not disclose the relevant information of this Agreement to the public and any third party (except for market promotion order).

18.

Any dispute should be solved by friendly discussion and negotiation between both parties.

19.

Issues not included in this Agreement can be stipulated in a separately signed supplementary agreement, which shall have the equal legal effect as this Agreement.

20.

This Agreement shall be written in Chinese and executed in eight   copies, with each Party holding three copies and the Verifying and Witnessing Party holding two copies.