Purchase and Supply Agreement, dated January 8, 2007


    
      

        Exhibit
          10.1

        


        Certain
          portions of this exhibit have been omitted pursuant to Rule 24b-2 and are
          subject to a confidential treatment request. Copies of this exhibit containing
          the omitted information have been filed separately with the Securities
          and
          Exchange Commission. The omitted portions of this document are marked with
          a
          ***.

        


        


        PURCHASE
          AND SUPPLY AGREEMENT

        


        


        AGREEMENT
          made
          this 8th
          day of
          January, 2007 (the “Commencement Date”), between Altairnano,
          Inc.,
          a
          Nevada corporation, with its principal place of business at 204 Edison
          Way,
          Reno, Nevada 89502 ("Altairnano") and Phoenix
          Motorcars, Inc.,
          a
          California corporation, with its principal place of business at 1175 North
          Del
          Rio Place, Ontario, California 91764 ("Phoenix"). 

        


        WHEREAS,
          Phoenix
          is engaged in the manufacture of electric vehicles; and

        


        WHEREAS,
          Altairnano is the sole and exclusive developer and manufacturer of nano
          titanate
          batteries; and

        


        WHEREAS,
          the
          parties desire to enter into an agreement pursuant to which Altairnano
          will
          supply Phoenix with Altairnano nano titanate batteries; and 

        


        NOW
          THEREFORE,
          it is
          agreed as follows:

        


        
          	 	
                  1.

                	
                  Definitions:
                    For purposes of this agreement, the following terms shall have
                    the
                    meanings set forth below:

                


        

        


        
          	 	
                  (a)

                	
                  “Affiliate”
                    shall mean, with respect to a specified Person, a Person that
                    directly or
                    indirectly through one or more intermediaries, controls, or is
                    controlled
                    by, or is under common control with, the Person
                    specified.

                


        

        


        
          	 	
                  (b)

                	
                  “Annual
                    Period” shall mean each twelve-month period commencing on January 1 of
                    each Contract Year. 

                


        

        


        
          	 	
                  (c)

                	
                  “Blanket
                    Purchase Order” shall mean the number of Products Phoenix is required to
                    order during the upcoming Annual Period.


                


        

        


        
          	 	
                  (d)

                	
                  “CARB
                    type III BEV” shall mean a full function battery electric vehicle as
                    defined by California Air Resources Board regulation.
                    

                


        

        


        
          	 	
                  (e)

                	
                  “Commencement
                    Date” shall have the meaning set forth in the Preamble of this Agreement.
                    

                


        

        


        
          	 	
                  (f)

                	
                  “Contract
                    Year” shall mean each calendar year during the term of this Agreement
                    beginning with the Commencement
                    Date.

                


        

        


        
          	 	
                  (g)

                	
                  “Down
                    Payment” with respect to any Purchase Order shall mean ***% of the
                    Purchase Price for the entire Purchase
                    Order.

                


        

        


        
          	 	
                  (h)

                	
                  “Estimated
                    Range” shall mean Phoenix’s nonbinding good faith estimate of the number
                    of Products it expects to order during the second Annual Period
                    following
                    the Blanket Purchase Order. 

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        


        
          	 	
                  (i)

                	
                  “Field”
                    shall mean the Permitted Use of the Products for on-road battery
                    electric
                    passenger vehicles with a gross weight of less than 6,000 pounds
                    and 4
                    wheels (and shall not include hybrid electric vehicles or plug-in
                    hybrid
                    electric vehicles).  

                


        

        


        
          	 	
                  (j)

                	
                  “Initial
                    Term” shall mean the period commencing on the date first set forth
                    above
                    and terminating on December 31, 2009.


                


        

        


        
          	 	
                  (k)

                	
                  "Permitted
                    Use" shall mean the incorporation and use of the Product in CARB
                    type II
                    BEV and CARB type III BEV electric motorcars manufactured by
                    or for
                    Phoenix. For purposes of clarification, Permitted Use does not
                    extend to
                    use in hybrid electric vehicles of any kind.


                


        

        


        
          	 	
                  (l)

                	
                  "Person"
                    shall mean any individual, entity, corporation, partnership,
                    limited
                    liability company, association, trust or
                    organization.

                


        

        


        
          	 	
                  (m)

                	
                  “Product”
                    or “Products” shall mean a battery pack(s) manufactured by Altairnano for
                    use in CARB type II BEV and CARB type III BEV electric vehicles,
                    using
                    Altairnano titanate battery materials and incorporating Altairnano
                    technology and know-how, together with developments, modifications,
                    improvements, enhancements and implementations of the application
                    and
                    technology in future battery pack
                    design.

                


        

        


        
          	 	
                  (n)

                	
                  “Release
                    Notice” shall mean the written notification by Phoenix to Altairnano
                    providing non-cancelable delivery orders for the number of products
                    identified in the Release Notice subject to terms contained in
                    the then
                    applicable Blanket Purchase Order. 

                


        

        


        
          	 	
                  (o)

                	
                  “Subsequent
                    Term” shall mean any one-year (1-year) renewal term of this Agreement
                    following the Initial Term. 

                


        

        


        
          	 	
                  (p)

                	
                  “Territory”
                    shall mean the United States of America.


                


        

        


        
          	 	
                  (q)

                	
                  “Term”
                    shall mean the Initial Term and any Subsequent Term, subject
                    to early
                    termination pursuant to Section 25.


                


        

        


        
          	 	
                  (r)

                	
                  “Zero
                    Emission Credits” or “ZEV Credits” shall mean credits for zero emission
                    vehicles as defined by California Air Resources Board
                    regulation.

                


        

        


        
          	 	
                  2.

                	
                  Sales:

                


        

        


        
          	 	
                  (a)

                	
                  During
                    the Term, Altairnano hereby agrees to sell and Phoenix hereby
                    agrees to
                    purchase from Altairnano the Product solely for the Permitted
                    Use.
                    

                


        

        


        
          	 	
                  3.

                	
                  Purchases
                    and Ordering:

                


        

        


        
          	 	
                  (a)

                	
                  Subject
                    to the terms and conditions of this Agreement, during each Annual
                    Period
                    during the Term, Phoenix shall submit Blanket Purchase Orders
                    for and
                    purchase, and Altairnano shall supply and sell, a number of Products
                    as
                    set forth on Schedule
                    B
                    attached hereto. Commencing with the Annual Period commencing
                    on January
                    1, 2007, no later than 45 days prior to the end of each Annual
                    Period
                    during the Term:

                


        

        


        (i)
           Phoenix
          shall provide Altairnano with written notice of (a) its Blanket Purchase
          Order
          and Estimate Range for the next Annual Period, and (b) its Forecast Release
          Order and Delivery Schedule dates, expressed on a monthly basis, for each
          of the
          Blanket Purchase Order and the Estimated Range. By way of example, Schedule
          B
          with
          respect to the Annual Period commencing on January 1, 2007, is attached
          hereto.
          Commencing with the Annual Period commencing on January 1, 2007, no later
          than
          45 days prior to the end of each Annual Period during the Term Phoenix
          and
          Altairnano shall revise Schedule B.



        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

          

        


        (ii)
           In
          the
          event Altairnano cannot deliver the Blanket Purchase Order or Delivery
          Schedule
          dates noticed by Phoenix, within 15 days of receiving the Phoenix notice,
          Altairnano shall provide a written estimate of the Blanket Purchase Order
          and
          Delivery Schedule Altairnano is capable of delivering. Altairnano shall
          then be
          restricted from sales of Product to any party other than Phoenix for the
          remainder of that Annual Period.

        


        (iii) Altairnano
          shall provide Phoenix written notice of: (i) its Firm Pricing for the next
          Annual Period for Release Orders within the Blanket Purchase Order; and,
          (ii)
          its estimated price range for the next Annual Period for Purchase Orders
          within
          the Estimated Range.

        


        (iv) Commencing
          on February 15, 2007, and continuing on or about each May 15, August 15
          and
          February 15 during the Term, Phoenix and Altairnano shall review Schedule
          B
          together in order to discuss proposed modifications to Schedule B. If Altairnano
          and Phoenix mutually agree to changes in Schedule B affecting current Blanket
          Purchase Order or Release Order amounts, or delivery schedule, such changes
          will
          be effective only if mutually agreed in writing.

        


        
          	 	
                  (b)

                	
                  If
                    Phoenix has not submitted Release Orders during any Annual Period
                    for a
                    number of Products equal to its Blanket Purchase Order, in lieu
                    of
                    submitting Release Orders for the number of Products equal to
                    its Blanket
                    Purchase Order , Phoenix shall have the right to pay to Altairnano
                    the
                    amount of fifty percent (50%) of the Purchase Price for the number
                    of
                    Products equal to the number by which such Blanket Purchase Order
                    exceeds
                    the number of Products subject to Release Orders submitted during
                    such
                    Annual Period (the “Extension Payment”). Upon payment of the Extension
                    Payment, Phoenix shall be deemed to have purchased the Blanket
                    Order
                    Amount with respect to such Annual Period, and Phoenix shall
                    have the
                    option to extend the Term as provided in Section 25
                    below.

                


        

        


        4. Price:
          The
“Purchase Price” with respect to any Purchase Order, shall be equal to the
          number of Products subject to such Purchase Order multiplied by the price
          per
          unit of Product set forth in the applicable pricing notice from Altairnano.
          In
          addition, during calendar years 2007 and 2008 Altairnano shall receive
          a
          Technology Fee equal to the monetized value of *** ZEV Credits per Product,
          provided such Products meet the CARB type III BEV criteria. 

        


        5. Altairnano
          Equity Investment in Phoenix.
          As
          partial compensation for entering into this Agreement, Phoenix shall issue
          within five days of the date hereof *** (***) shares of common stock of
          Phoenix
          (the “Shares”). Phoenix represents and warrants that it has *** shares
          outstanding on the date hereof and that the Shares, when issued, will be
          fully
          paid, validly issued and nonassessable. Altairnano shall be responsible
          for all
          tax consequences associated with the issuance of the Shares. In connection
          therewith, Altairnano represents and warrants as follows to Phoenix:


         

        
          	 	
                  (a)
                    

                	
                  The
                    Shares to be acquired by Altairnano will be acquired for investment
                    for an
                    indefinite period for its own account and not with a view to
                    the sale or
                    distribution of any part thereof. Altairnano has no present intention
                    of
                    selling or otherwise distributing the same. By executing this
                    Agreement,
                    Altairnano further represents that it does not have any contract,
                    undertaking, agreement or arrangement with any person to sell
                    or transfer
                    any of the Shares.

                


        

         

        
          
            
            

          

          
            -3-

            
              

            

          

          
            
            

          

        


        
          	 	
                  (b)

                	
                  Altairnano,
                    its agents or representatives (i) have been given a reasonable
                    opportunity
                    to review information pertaining to the Shares and (ii) have
                    had a
                    reasonable opportunity to ask questions of and receive answers
                    from
                    Phoenix or its representatives concerning this investment, and
                    that all
                    such questions have been answered to the full satisfaction of
                    Altairnano.
                    As a result of the foregoing, and Altairnano’s education, business
                    experience and prior investments, Altairnano has such knowledge
                    and
                    sophistication, generally and with respect to Phoenix, as are
                    necessary in
                    order to permit Altairnano to evaluate and understand the merits
                    and risks
                    associated with an investment in the Shares. Without limiting
                    the
                    generality of the foregoing, Altairnano is an “accredited investor,” as
                    defined in Rule 501 under the Securities Act of 1933, as amended
                    (the
                    “Act”).
                    

                


        

        


        
          	 	
                  (c)
                    

                	
                  Altairnano
                    understands that (i) it must bear the economic risk of the investment
                    in
                    the Shares for an indefinite period of time because the Shares
                    have not
                    been registered under the Act, or qualified under the Act or
                    the
                    securities laws of any other jurisdiction and (ii) its investment
                    in
                    Phoenix represented by the Shares is highly speculative in nature
                    and is
                    subject to a high degree of risk of loss in whole or in part.
                    Altairnano
                    has adequate means of providing for its current needs and possible
                    contingencies, and is able to bear the high degree of economic
                    risk of
                    this investment, including, but not limited to, the possibility
                    of the
                    complete loss of Altairnano’s entire investment and the limited
                    transferability of the Shares, which may make the liquidation
                    of this
                    investment impossible for the indefinite future.
                    

                


        

        


        
          	 	
                  (d)
                    

                	
                  Altairnano
                    understands that the Shares are not and may never be registered
                    under the
                    Act or any other state securities laws. Altairnano understands
                    that the
                    Shares or any interest therein may not be resold or otherwise
                    disposed of
                    by Altairnano unless (i) the Shares are subsequently registered
                    under the
                    Act and under appropriate state securities laws or (ii) such
                    disposition
                    is made in reliance upon exemptions from registration for non-public
                    secondary transfers of Phoenix’s securities; provided that Phoenix shall
                    cooperate with Altairnano as requested in connection with any
                    secondary
                    placements under the so-called 4(1)(1/2) re-sale exemption. Altairnano
                    understands that certificates representing the shares will contain
                    a
                    standard restrictive legend consistent with this subsection (d).
                    

                


        

        


        6. Terms
          of Sale:
          All
          prices are FOB Altairnano plant, initially Anderson, Indiana. Altairnano
          agrees
          to properly pack all items for shipment in accordance with the packing
          specifications as mutually agreed periodically. Risk of loss due to damage
          or
          destruction of Products shall be borne by Phoenix after delivery to the
          carrier
          for shipment. Altairnano will ship Product using only the carrier selected
          by
          Phoenix. 

         

        7. Payment:
          Altairnano shall invoice Phoenix upon delivery of the Product to the carrier
          designated by Phoenix pursuant to Section 6 above. Payment with respect
          to
          Release Orders for Product to be delivered during 2007 shall be made as
          follows:
          the Down Payment shall be transmitted to Altairnano upon placement of the
          Release Order; the remainder of the difference between *** percent (***%)
          of the
          Purchase Price and the Down Payment shall be transmitted to Altairnano
          within
          thirty (30) days of Phoenix’s receipt of the invoice therefor and the remaining
          *** percent (***%) shall be evidenced
          by a Note Payable substantially in the form attached hereto as Schedule
          C. The
          Note Payable shall provide for payment within three-hundred and sixty (360)
          days
          of the delivery date but require full or partial payments upon the sale
          by
          Phoenix of Zero Emission Credits associated with the sale of the motorcar
          containing the delivered Product. The Note Payable shall carry interest
          in an
          amount equal to the prime lending rate plus 1% set forth in the Wall Street
          Journal with respect to the week the applicable invoice was received.
          

        


        
          	 	
                  (a)

                	
                  Payment
                    with respect to Release Orders for Products to be delivered subsequent
                    to
                    2007 shall be paid as follows: the Down Payment upon placement
                    of the
                    Release Order and all remaining amounts within thirty (30) days
                    of
                    Phoenix’s receipt of the invoice therefor. All invoices shall be
                    transmitted to Phoenix in accordance with Section 17 below.
                    

                


        

         

        
          
            
            

          

          
            -4-

            
              

            

          

          
            
            

          

        


        
          	 	
                  (b)

                	
                  Altairnano
                    shall invoice Phoenix with respect to Technology Fee upon delivery
                    of the
                    Product. Phoenix shall maintain a record of ZEV Credits earned,
                    sold
                    (monetized) and transferred; such record to contain adequate
                    detail to
                    determine details of each transaction and status of remaining
                    inventory of
                    unsold ZEV Credits. At least monthly, Phoenix shall report to
                    Altairnano
                    regarding the status of ZEV Credits sales activities and Altairnano
                    shall,
                    at its discretion, participate in the ZEV Credits sales activities.
                    

                


        

        


        
          	 	
                  (c)

                	
                  Altairnano
                    shall have the right, at its sole expense, to audit and review,
                    after
                    reasonable notice and during business hours at Phoenix’s notice for
                    address specified herein, Phoenix’s records relating to the sale of the
                    Zero Emission Credits (including items to which the Product has
                    been
                    applied or into which the Product has been incorporated) in order
                    to
                    verify Zero Emission Credit sales.

                


        

        


        
          	 	
                  8.

                	
                  Exclusivity:

                


        

        


        (a) Subject
          to the terms of the Agreement, and provided that Phoenix issues Release
          Orders
          for at least *** vehicles by April 30, 2007, Altairnano hereby grants to
          Phoenix
          the sole and exclusive right to purchase, incorporate into Phoenix final
          products and sell as a part of the Phoenix final products, the Products,
          in the
          Field and for delivery to end-customers located within the Territory until
          December 31, 2009. Phoenix shall have the right but not the obligation
          to grant
          exceptions to this exclusivity back to Altairnano; any exception must be
          agreed
          in writing by both parties. Notwithstanding the Phoenix exclusive right
          to
          purchase set forth in this Section 8, Altairnano shall have the right to
          enter
          into agreements for assessment of the Product and engineering and design
          associated with incorporating the Product into other final motorcar products
          in
          the Field and Territory, and during the period December 31, 2007 through
          December 31, 2009, Altairnano may supply Products in the Field and Territory
          for
          demonstration and prototype purposes only. Following December 31, 2009,
          there
          shall be no restrictions on Altairnano’s marketing, sale or productions of the
          Products.

        


        (b) Subject
          to the terms of the Agreement, Phoenix hereby agrees that Altairnano shall
          be
          the sole and exclusive supplier to Phoenix (including any affiliates or
          joint
          ventures partially owned by Phoenix) of batteries and battery
          pack(s) for use in the Field until December 31, 2009. Altairnano shall
          have the right but not the obligation to grant exceptions to this exclusivity
          back to Phoenix; any exception must be agreed in writing by both parties.
           

        


        
          	 	
                  9.

                	
                  Indemnification:

                


        

        


        
          	 	
                  (a)

                	
                  Subject
                    to any limitations set forth in Section 12 hereof, Altairnano
                    agrees to
                    protect Phoenix and hold Phoenix harmless from any loss or claim
                    arising
                    out of each breach or violation of or default under any representation,
                    warranty, covenant or obligation of Altairnano under this Agreement
                    by
                    Altairnano, or any of its agents, employees or representatives;
                    provided
                    that Phoenix gives Altairnano notice of any such loss or claim
                    promptly
                    upon Phoenix’s discovery of such loss or claim and cooperates fully with
                    Altairnano in the handling thereof.

                


        

        


        
          	 	
                  (b)

                	
                  Subject
                    to any limitations set forth in Section 12 hereof, Phoenix agrees
                    to
                    protect Altairnano and hold Altairnano harmless from any loss
                    or claim
                    arising out of the negligence of Phoenix, Phoenix's agents, employees
                    or
                    representatives in the installation, application, use or sale
                    of the
                    Products or arising out of the breach of any representation,
                    warranty or
                    covenant made by Phoenix, its agents, employees or representatives
                    with
                    respect to the products that exceeds Altairnano's limited warranty;
                    provided that Altairnano gives Phoenix notice of any such loss
                    or claim
                    promptly upon Altairnano's discovery of such loss of
                    claim.

                


        

        



        
          
            
            

          

          
            -5-

            
              

            

          

          
            
            

          

        


        
          	 	
                  10.

                	
                  Order
                    Processing and Returns:

                


        

        


        
          	 	
                  (a)

                	
                  All
                    Product provided by Altairnano shall conform to the Product functional
                    specifications set forth on Schedule D attached hereto and incorporated
                    herein by this reference (the "Functional Specifications") at
                    the time
                    such Product is delivered to Phoenix pursuant to Section 6 above.
                    The
                    Product's conformity to the Functional Specifications as set
                    forth herein
                    is a material term of this Agreement. Except for Altairnano's
                    products
                    that do not conform to the Functional Specifications, Altairnano
                    shall not
                    be obligated to accept any of Altairnano's products that are
                    returned. In
                    the event the return of Product that conforms to the Functional
                    Specification is accepted, Altairnano may impose a reasonable
                    restocking
                    charge.

                


        

        


        
          	 	
                  11.

                	
                  Financial
                    Policies: 

                


        

        


        
          	 	 	
                  (a)

                	
                  Phoenix
                    acknowledges the importance to Altairnano of Phoenix's sound
                    financial
                    operation and Phoenix expressly agrees that it
                    will:

                


        

        


        
          	 	
                  (i)

                	
                  Pay
                    promptly all amounts due Altairnano in accordance with terms
                    of sale set
                    forth in this Agreement; 

                


        

        


        
          	 	
                  (ii)

                	
                  Furnish
                    Altairnano with annual audited financial statements of Phoenix
                    and with
                    quarterly financial statements certified as complete and correct
                    by
                    Phoenix, each of such statements to be furnished without delay
                    upon
                    completion of such statements;

                


        

        


        In
          addition to any other right or remedy to which Altairnano may be entitled,
          shipments may be suspended at Altairnano's discretion in the event that
          Phoenix
          fails to discharge Phoenix’s obligations under Section 11(a) above.

        


        
          	 	 	
                  (b)

                	
                  Altairnano
                    acknowledges the importance to Phoenix of Altairnano's sound
                    financial
                    operation and Altairnano expressly agrees that it will furnish
                    Phoenix
                    with financial statements filed by Altairnano with the Securities
                    and
                    Exchange Commission pursuant to the quarterly and annual filing
                    requirements of the Securities Exchange Act of 1934, as
                    amended.

                


        

        


        
          	 	
                  12.

                	
                  Warranties:

                


        

        


        
          	 	
                  (a)

                	
                  Altairnano
                    hereby represents and warrants to Phoenix the
                    following:

                


        

        


        (i) Product
          Warranties. In addition to the other provisions of this Agreement, Altairnano
          warrants that for a period of *** following the earlier of (A) the Product
          being
          placed into service by the customers of Phoenix, and (B) six months follow
          delivery to Phoenix:

        


        1)
          the
          Product does and shall conform to the Functional Specifications; 

        


        2)
          the
          Product shall be free of defects in material and workmanship;

         

        
          	 	 	
                  3)
                    the Product shall comply with shelf life, charging cycle, stability
                    and
                    other performance guarantees set forth in Schedule D, subject
                    to the
                    usages assumptions and limitations set forth in Schedule D and
                    in this
                    Agreement. 

                


        

        



        
          
            
            

          

          
            -6-

            
              

            

          

          
            
            

          

        


        (ii) Neither
          the execution nor delivery of this Agreement, nor the consummation of the
          transactions provided for herein, will violate any agreement, lien, instrument,
          decree, order or judgment to which Altairnano or any of its officers or
          directors is a party or by which it or they are bound. Altairnano has the
          authority to enter into this Agreement and consummate the transactions
          contemplated hereby. The Person executing this Agreement on behalf of Altairnano
          is duly authorized to execute and deliver this Agreement on Altairnano's
          behalf
          and to consummate the transactions contemplated hereby. This Agreement
          and all
          of the agreements and obligations contemplated hereby are and shall be
          the
          legal, valid and binding obligations of Altairnano, enforceable in accordance
          with their terms.

        


        (iii) Altairnano
          will transfer all Product hereunder to Phoenix free and clear of all liens,
          pledges, charges, security interests, restrictions or encumbrances of any
          nature
          whatsoever arising by, through or under Altairnano. Neither the sale of
          Product
          under this Agreement nor the use of the Product by Phoenix as contemplated
          by
          this Agreement will violate the intellectual property rights or other rights
          of
          any third party.

        


        (iv) Altairnano
          is, and during the Term hereof shall remain, in compliance with applicable
          federal, state and local governmental laws, regulations and ordinances
          relating
          to its production and sale of the Product. 


        


        
          	
                	(b)	
                  Limitations
                    on Warranties. Notwithstanding any representation, warranty,
                    covenant or
                    remedy set forth in this Agreement, all remedies shall be subject
                    to the
                    following limitations: 

                


        

        


        (i) Product
          Warranty Remedies. If at any time during the *** warranty period any Product
          does not meet any of the product warranties specified herein, Phoenix may
          require Altairnano to promptly replace or correct at no cost to Phoenix
          any
          Product in breach of warranty. [Subject to normal product use and deterioration,
          to be determined when Schedule D is completed, with the parties agreeing
          to use
          commercially reasonable efforts to finalize Schedule D within 30 days of
          the
          Commencement Date.] This shall be Phoenix’s exclusive remedy for the delivery of
          nonconforming Product. 

        


        (ii) ALTAIRNANO'S
          WARRANTY SET FORTH IN SECTION 12(A) ABOVE IS EXPRESSLY IN LIEU OF ANY OTHER
          WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
          MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ALTAIRNANO NEITHER
          ASSUMES
          NOR AUTHORIZES ANY PERSON TO ASSUME FOR IT ANY OTHER LIABILITY IN CONNECTION
          WITH THE SALE OR USE OF THE MATERIALS SOLD HEREUNDER, AND THERE ARE NO
          OTHER
          AGREEMENTS OR WARRANTIES, EITHER ORAL OR WRITTEN, COLLATERAL TO OR AFFECTING
          THIS AGREEMENT.

        


        (iii) Neither
          party to this Agreement shall be liable to the other for special, consequential
          or punitive damages of any kind, whether or not such damages were
          foreseeable.
          

        


        
          	 	
                  13.

                	
                  Trademarks
                    and Trade Names: Phoenix
                    hereby confirms that, as between Phoenix and Altairnano, Altairnano
                    has
                    and shall retain sole right, title and interest in each Product,
                    including
                    all patents, patent applications, copyrights, trademarks, trade
                    secrets,
                    know-how or other proprietary rights of Altairnano relating to
                    or embodied
                    therein and all improvements, modifications and upgrades
                    thereto.

                


        

        
          	 	 	 


        

        
          	 	 	
                  Altairnano
                    hereby appoints Phoenix as an authorized user of the Product
                    for the
                    Permitted Use in the Field in the Territory. Phoenix is hereby
                    authorized
                    to identify itself as such and use the trademarks, trade names,
                    service
                    marks and trade dress in connection with the Permitted Use, subject
                    to
                    Altairnano's consent to such use. 

                


        

         

        
          
            
            

          

          
            -7-

            
              

            

          

          
            
            

          

        


        Phoenix
          shall provide copies of a form of all marketing materials to be used by
          Phoenix
          and/or its Affiliates in connection with Product to Altairnano for Altairnano’s
          review. Altairnano may require modifications to such marketing
          materials.

        


        Phoenix
          shall not register or, except as expressly authorized by this Agreement,
          use any
          trademark or trade name for the Product or any other Altairnano product
          or any
          articles made there from owned by Altairnano without Altairnano's prior
          written
          approval or except in accordance with the terms and conditions of this
          Agreement. Except as provided in the License, upon the expiration or termination
          of this Agreement, Phoenix shall immediately cease using such trademarks
          and
          trade names for any purpose and Phoenix shall not operate or do business
          under a
          name which gives or tends to give the impression that Phoenix is the
          manufacturer, seller or distributor of Altairnano products.

        


        
          	
                   

                	
                  14.

                	
                  Proprietary
                    Information:
                    The parties acknowledge and confirm the continuing validity and
                    effectiveness of the Mutual Nondisclosure Agreement dated June
                    23, 2006
                    between Altairnano and Phoenix. 

                


        

        


        
          	
                   

                	
                  15.

                	
                  Force
                    Majeure:
                    In
                    the event that the performance by either party hereto is rendered
                    impossible or impracticable, either directly or indirectly, under
                    this
                    Agreement due to causes not foreseen nor reasonably foreseeable
                    and beyond
                    its reasonable control, such as acts of God or public enemy,
                    governmental
                    authority, compliance with any governmental request, rule or
                    regulation,
                    accidents, fires, labor troubles, floods, epidemics, quarantine
                    restrictions, wars, riots, delays in transportation, then performance
                    by
                    that party shall be excused to the extent such performance is
                    impossible
                    or impracticable. The delayed party shall promptly notify the
                    other party,
                    indicating the nature of the delay and the anticipated duration
                    of the
                    delay. 

                


        

        


        
          	
                   

                	
                  16.

                	
                  Assignment
                    and Continuing Obligations:
                    Subject to provisions herein to the contrary, this Agreement
                    shall inure
                    to the benefit of and be binding upon the parties hereto and
                    their
                    respective legal representatives, successors and assigns; provided,
                    however, that no party may assign this Agreement without the
                    prior written
                    consent of the other party, which consent shall not be unreasonably
                    withheld. This Agreement is intended solely for the benefit of
                    the Parties
                    hereto and is not intended to, and shall not, create any enforceable
                    third
                    party beneficiary rights. In the event of a change of control
                    in the
                    ownership of Phoenix, Altairnano may terminate this agreement,
                    except that
                    Phoenix may seek consent from Altairnano to continue the agreement,
                    which
                    consent shall not be unreasonably withheld. Altairnano may not
                    unilaterally modify or terminate this Agreement in the event
                    of a change
                    in control in the ownership of any of its Affiliates or Altair
                    Nanotechnologies Inc. 

                


        

        


        
          	
                   

                	
                  17.

                	
                  Notices:
                    All notices hereunder to be effective (a) if related to an alleged
                    breach,
                    default, claim, arbitration or litigation, must be sent by certified
                    or
                    registered mail, return receipt requested and postage prepaid
                    to the names
                    and addresses set forth below, or (b) if not related to an alleged
                    breach,
                    default, claim, arbitration or litigation, may be sent by regular
                    mail,
                    express courier, certified or registered mail or facsimile, to
                    the names
                    and addresses set forth below. The names and addresses for any
                    notices
                    shall initially be as follows: 

                


        

        


        If
          to
          Altairnano:

        


        Alan
          Gotcher, CEO

        Altairnano,
          Inc.

        204
          Edison Way

        Reno,
          Nevada 89502

        Facsimile:
          (775) 856-1619 



        
          
            
            

          

          
            -8-

            
              

            

          

          
            
            

          

        


        If
          to
          Phoenix:

        


        Daniel
          Elliott, Chief Executive Officer

        Phoenix
          Motorcars, Inc.

        1175
          North Del Rio Place 

        Ontario,
          California 91764   

        Facsimile:
          (909) 466-4123

        


        Provided,
          however, each party may change the name or address for notice upon delivery
          of a
          notice specifying such change of address in accordance herewith. All notices
          shall be effective as of the date of arrival at the office of the receiving
          party; provided that notices sent via regular, registered or certified
          mail
          shall be effective on the fifth (5th) business day following the deposit
          of such
          notice in the U.S. mails.

        


        
          	
                   

                	
                  18.

                	
                  Waivers:
                    It
                    is mutually agreed that the failure of either party at any time
                    to enforce
                    any provision hereof shall in no way affect the right thereafter
                    to
                    require performance thereof, nor shall the waiver of any breach
                    of any
                    provision hereof be taken or held to be a waiver of any succeeding
                    breach
                    of any such provision or as a waiver of the provision
                    itself.

                


        

        


        
          	 	
                  19.

                	
                  Consumer
                    Issues:
                    Phoenix shall notify Altairnano in writing of any customer or
                    other
                    complaints, governmental inquires, quality issues or product
                    liability
                    issues relating to Product or any of components thereof, within
                    ten (10)
                    days following its becoming aware, after the ongoing exercise
                    of
                    reasonable diligence, of the same. 

                


        

        


        
          	 	
                  20.

                	
                  Governing
                    Laws:
                    This Agreement shall be governed by and construed in accordance
                    with the
                    laws of the State of Nevada governing contracts entered into
                    between
                    residents of the State of Nevada (without reference to conflicts
                    of law
                    provisions).

                


        

         

        
          	
                   

                	
                  21.

                	
                  Insurance: 

                


        

         

        (a) Altairnano
          represents and warrants that it is currently insured and covenants that
          at all
          times during the Term, it will maintain a comprehensive general liability
          insurance policy (including products liability coverage and payment of
          attorneys
          fees coverage) with a financially sound and reputable insurer which is
          sufficient to adequately protect against the risks associated with its
          ongoing
          business, including the risks which might possibly arise in connection
          with the
          transactions contemplated by this Agreement, and including without limitation,
          products liability insurance, with minimum coverage amounts of $2,000,000.00
          per
          occurrence and in the aggregate. Altairnano agrees to provide Phoenix a
          copy of
          its insurance policy upon request.

        


        (b) Additional
          Insured.
          Altairnano shall have Phoenix named as an additional insured beneficiary
          on
          Altairnano’s comprehensive general liability insurance. 

        


        (c) Notification
          to Supplier.
          Phoenix
          shall promptly notify Altairnano after Phoenix becomes aware of any liability
          claims regarding each Product and any customer complaints concerning each
          Product.

        


        
          	 	
                  22.

                	
                  Severability:
                    If
                    it is found that any provisions of this Agreement are contrary
                    to, or
                    inconsistent with, any applicable law, it shall remain in effect
                    as if
                    such invalid provisions were
                    omitted.

                


        

        


        
          	 	
                  23.

                	
                  General:
                    This document constitutes the entire Agreement between the parties
                    with
                    respect to the purchase and sale of the Product, and there are
                    no
                    understandings, representations or warranties of any kind, except
                    as
                    expressly set forth herein. No modifications of this Agreement
                    shall be of
                    any force and effect unless in writing and signed by both parties.
                    In
                    no event shall any modification be effected by the acknowledgement
                    or
                    acceptance of purchase order or invoice forms containing terms
                    or
                    conditions inconsistent, or in addition to, with those set forth
                    herein
                    (which additional and inconsistent terms shall be null and void).
                    This
                    Agreement cancels and supersedes any prior written contract between
                    the
                    parties covering the sale and purchase of the Product and, in
                    the event of
                    a conflict between this Agreement and the Affiliate Agreement
                    referenced
                    in the recitals above or any invoice or purchase order terms,
                    this
                    Agreement shall prevail. 

                


        

        



        
          
            
            

          

          
            -9-

            
              

            

          

          
            
            

          

        


        
          	 	
                  24.

                	
                  Arbitration:
                    Any controversy or claim arising out of or relating to this Agreement,
                    or
                    the breach thereof, shall be settled by arbitration in Reno,
                    Nevada in
                    accordance with the Commercial Dispute Resolution Procedures
                    of the
                    American Arbitration Association, and judgment upon the award
                    rendered by
                    the arbitrator(s), including without limitation an injunction
                    or any
                    direction to a Party, may be entered in any Nevada court having
                    jurisdiction thereof. The arbitrators, in their sole discretion,
                    may
                    include an injunction or a direction to any party in their
                    decision.

                


        

        


        
          	 	
                  25.

                	
                  Termination:
                    This Agreement shall be effective for the Initial Term. If the
                    Blanket
                    Purchase Order is satisfied, or deemed satisfied pursuant to
                    Section 3(b),
                    with respect to each Annual Period during the Initial Term and
                    any prior
                    Subsequent Term, Phoenix may renew this Agreement by giving written
                    notice
                    at least One Hundred and Twenty (120) days prior to the expiration
                    of the
                    Initial Term or Subsequent Term, as applicable, for an additional
                    one-year
                    Subsequent Term, subject to a maximum of seven (7) Subsequent
                    Terms in the
                    aggregate. Notwithstanding the foregoing, if Phoenix shall (a)
                    fail to pay
                    any amount when due and such failure continues for a period of
                    sixty (60)
                    days following written notice to Phoenix, (b) fail to place Blanket
                    Purchase Orders and Release Orders for at least *** Products
                    during the
                    Annual Period ending December 31, 2007, or (c) fail to place
                    Blanket
                    Purchase Orders and Release Orders for at least *** Products
                    during each
                    of the Annual Periods beginning on January 1, 2008, Altairnano
                    shall have
                    the right, in addition to any other remedies it may have under
                    this
                    Agreement or governing law, to terminate and cancel this Agreement
                    at any
                    time and refuse to deliver anymore Product hereunder, but Phoenix
                    shall
                    remain liable to Altairnano for all loss and damage sustained
                    by reason of
                    such default. Notwithstanding the foregoing, if due to the inclusion
                    of
                    the Product (and not other factors), vehicles produced using
                    the Products
                    do not satisfy the requirements for a CARB type III BEV, Phoenix
                    may by
                    notice delivered prior to December 31, 2007, terminate this Agreement
                    without further liability or obligation except as provided below.
                    If the
                    Agreement is terminated as provided in the prior sentence, Altairnano
                    shall return the Down Payment applicable to any Product not yet
                    manufactured, portions of outstanding Purchase Orders for Product
                    not yet
                    manufactured shall be canceled, and Phoenix shall be responsible
                    only for
                    amounts owed on Product already delivered or manufactured.
                    

                


        

        


        
          	 	 	
                  In
                    addition to the foregoing, either party shall have the right
                    to terminate
                    this Agreement upon the occurrence of any of the following events:
                    (a) if
                    the other party commits a material breach of this Agreement which
                    (in the
                    case of a breach capable of remedy) is not remedied within thirty
                    (30)
                    days after receipt by the breaching Party of written notice delivered
                    by
                    the non-breaching Party that identifies the breach and requires
                    its
                    remedy; or (b) upon the filing or institution of bankruptcy,
                    reorganization, liquidation or receivership proceedings by or
                    against the
                    other Party; provided, however, that in the event of any involuntary
                    bankruptcy or receivership proceeding, such right to terminate
                    shall only
                    become effective if the proceeding is not dismissed within sixty
                    (60) days
                    after the filing thereof; or (c) if the other party ceases for
                    any reason
                    to carry on its business, or makes an assignment for the benefit
                    of its
                    creditors, or is the subject of any proposal for a voluntary
                    arrangement.

                


        


        
          
            
            

          

          
            -10-

            
              

            

          

          
            
            

          

        

        


        IN
          WITNESS WHEREOF, the parties hereto have executed this Agreement, in duplicate,
          as of the date first above written.

        


        
          	
                  Altairnano,
                    Inc.

                	
                  Phoenix
                    Motorcars, Inc.

                
	
                  a
                    Nevada corporation

                	
                  a
                    California corporation 

                
	 	 
	 	 
	 	 
	
                  By:      /s/
                    Alan
                    Gotcher                                                                      

                	
                  By:         /s/
                    Daniel J.
                    Elliot                                                                   

                
	
                  Name:       Alan
                    Gotcher                                                                      

                	
                  Name:    Daniel
                    J.
                    Elliot                                                                         

                
	
                  Title:          President
                    &
                    CEO                                                               

                	
                  Title:      Chief
                    Executive
                    Officer                                                          

                


        


        
          
            
            

          

          
            -11-

            
              

            

          

          
            
            

          

        

        


        


        Schedule
          A

        Intentionally
          Deleted

         

         

        Schedule
          B

        Firm
          Commitment, Purchase Order and Delivery Schedule

         

         

        Schedule
          C

        Form
          of
          Note Payable

         

         

        Schedule
          D

        Functional
          Specifications

        



        
          
            
            

          

          
            -12-

            
              

            

          

          
            
            

          

        

        


        Schedule
          B - Firm Commitment, Purchase Order, & Pack Delivery
          Schedule

        


        


        ***

        



        
          
            
            

          

          
            -13-

            
              

            

          

          
            
            

          

        


        SCHEDULE
          C

        


        FORM
          OF
          NOTE PAYABLE

        


        


        To
          be
          supplied by Altairnano.

        


        


        



        
          
            
            

          

          
            -14-

            
              

            

          

          
            
            

          

        


        


        Schedule
          D

        


        Functional
          Specifications

        


        


        


        To
          be
          supplied by Altairnano.

        


        


        


        



        
          
            
            

          

          
            -15-

            
              

            

          

          
            
            

          

        

        


        
          	
                  Phoenix
                    Motorcars, Inc.

                  1175
                    N. Del Rio Place

                  Ontrario,
                    CA 91764

                  (909)
                    987-0815 fax (909) 466-4123

                  ___________________________________

                	
                  Purchase
                    Order No.
                    B080107

                   

                   

                   

                   

                  PURCHASE
                    ORDER

                


        

        

          
            	 	 
	                                                 
                    Vendor 
                    Name              Altair
                      Nanotechnologies, Inc.

                    Address         204
                      Edison Way

                    City             Reno
                      St          
                      NV            Zip
                      89502

                    Phone            
                      (775) 856-2500

                  	
                                                            
                      Ship To

                    Name             Phoenix
                      Motorcars, Inc. (c/o Boshart Engineering)

                    Address       
                      1175
                      N. Del Rio Place

                    City                Ontario   
                      St  
                      CA     
ZIP  
                      91764

                    Phone            (909)
                      987-0815

                  


          

        

        
          
            	 	 	 	 	 
	
                    Qty

                  	
                    Units

                  	
                    Description

                  	
                    Unit
                      Price

                  	
                    TOTAL

                  
	
                    500

                     

                     

                     

                     

                     

                  	
                    35kW/h

                     

                     

                     

                    l

                     

                     

                    l

                    
                       

                      l

                    

                  	
                    35kW/h
                      NanoSafe Battery Packs / 11ah cells

                    Terms:
                      Per 2007 Purchase and Supply
                      Agreement

                    ***%
                      Deposit required per release

                     

                    
                      This
                        Purchase Order has a guaranteed minimum value 

                      of
                        *** battery packs per the attached release schedule

                       

                      Minimum
                        guaranteed value of $16,250,000

                    

                     

                    This
                      Purchase Order requires a separate release order for Each monthly
                      volume
                      request

                     

                    This
                      purchase order is in reference to Altair / Phoenix

                    Purchase
                      and Supply Agreement dated January 8 ,2007

                     

                  	
                    $***

                  	
                    $***

                  
	
                    Payment
                      Details

                    ·  
                      Check

                     Cash

                     Account
                      No.

                                    
                      Credit
                      Card

                     

                    Name

                    CC#

                    Exp
                      Date

                  	
                    Sub
                      Total

                    Shipping
                      & Handling

                     

                    Taxes
                      ___________

                    ___________

                    TOTAL

                  	
                         $***

                    __________

                     

                     

                    __________

                        
                      $***

                  


          

          

            
              	 
	
                      Shipping
                        Date

                       

                      Per
                        Request

                    


            

          

          
            

          

          


          
            	 	 
	
                    Approval

                     

                  	
                    Date         
                      1/8/2007

                    Order
                      No. B080107

                    Sales
                      Rep A. Gotcher

                    Ship
                      Via    TBD

                  


          

           

          
            	 
	
                    Notes/Remarks

                     

                    Phoenix
                      Motorcars, Inc. Resale # SR AR 100-098502
                      California

                  


          


          
            
              
              

            

            
              -16-

              
                

              

            

            
              
              

            

          


          


          
            	
                    Phoenix
                      Motorcars, Inc.

                    1175
                      N. Del Rio Place

                    Ontrario,
                      CA 91764

                    (909)
                      987-0815 fax (909) 466-4123

                    ___________________________________

                  	
                    Release
                      Order No.
                      B080107.01

                     

                     

                     

                     

                     

                    RELEASE
                      ORDER

                  


          

          


          
            	 	 
	
                                                     
                      Vendor

                    Name              
                      Altair
                      Nanotechnologies, Inc.

                    Address         
                      204
                      Edison Way

                    City                 
                      Reno    
                      St  
                      NV    ZIP  
                      89502

                    Phone             
                      (775)
                      856-2500

                  	
                                                                 
                      Ship To

                    Name             
                      Phoenix
                      Motorcars, Inc. (c/o Boshart Engineering)

                    Address       
                      1175
                      N. Del Rio Place

                    City               
                      Ontario    
                      St  
                      CA    
ZIP  
                      91764

                    Phone           
                      (909)
                      987-0815

                  


          

           

          
            
              	 	 	 	 	 
	
                      Qty

                    	
                      Units

                    	
                      Description

                    	
                      Unit
                        Price

                    	
                      TOTAL

                    
	
                      ***

                       

                       

                       

                       

                       

                    	
                      35kW/h

                       

                       

                       

                      ***%

                       

                    	
                      35kW/h
                        NanoSafe Battery Packs / 11ah cells

                      Reference
                        Blanket Purchase Order # B080107

                       

                       

                      $***
                        Order Deposit

                       

                       

                      This
                        purchase order is in reference to Altair / Phoenix

                      Purchase
                        and Supply Agreement dated January 8 ,2007

                       

                    	
                      $***

                    	
                      $1,040,000

                    
	
                      Payment
                        Details

                      · 
Check

                        Cash

                       
                        Account No.

                                        Credit
                        Card

                       

                      Name

                      CC#

                      Exp
                        Date

                    	
                      Sub
                        Total

                      Shipping
                        & Handling

                       

                      Taxes
                        ___________

                      ___________

                      TOTAL

                    	
                          
                        $1,040,000

                      __________

                       

                       

                      __________

                          
                        $1,040,000

                    


            

          

           

          
            	 
	
                    Shipping
                      Date

                     

                    Per
                      Request

                  


          

           

          
            
              

            

          

          
            	 	 
	
                    Approval

                     

                  	
                    Date          1/8/2007

                    Order
                      No. B080107-01

                    Sales
                      Rep A. Gotcher

                    Ship
                      Via    TBD

                  


          

          


          
            	 
	
                    Notes/Remarks

                     

                    Phoenix
                      Motorcars, Inc. Resale # SR AR 100-098502
                      California

                  


          

           

          
-17-