Document:

Exhibit 10.9

	
  
Annual Incentive Plan
  
	
  
2006-2007 Plan Year
  
	
  

  

Participant: (____________________)

Target Bonus:  (____________________)

	
  
Annual Incentive Plan
  
	
  

  

Table of Contents

	
  
Introduction
  	
  
 
  
	
  
•
  	
  
Purpose
  	
  
3
  
	
  •
  	
  
Plan Year
  	
  
3
  
	
  
•
  	
  
Important Notes
  	
  
3
  
	
   
 	
  
 
  	
   
 
	
  
How the   Plan Works
  	
   
 
	
  
•
  	
  
Eligibility
  	
  
4
  
	
  
•
  	
  
Target Bonus Amounts
  	
  
4
  
	
  
•
  	
  
Bonus Components
  	
  
5
  
	
  
•
  	
  
Participant Personal Performance
  	
  
5
  
	
  •
  	
  
AIP Award Calculation
  	
  
5
  
	
  
 
  	
  
 
  	
   
 
	
  
Plan   Administration
  	
   
 
	
  
•
  	
  
Adding New Participants
  	
  
7
  
	
  
•
  	
  
Changes to Target Bonus
  	
  
7
  
	
  
•
  	
  
Temporary Absence
  	
  
7
  
	
  
•
  	
  
Retirement, Death, or Permanent Disability
  	
  
8
  
	
  
•
  	
  
Voluntary Termination
  	
  
8
  
	
  •
  	
  
Involuntary Termination
  	
  
8
  

Page 2

	
  
Introduction
  
	
  

  

Purpose

The Annual Incentive Plan (the “Plan”) is an integral part of an executive’s total compensation package that recognizes the executive’s yearly contributions to the success of Kaiser Federal.  The Plan is designed to:

	
  
•
  	
  
support a business change to community-based   banking;
  
	
  
•
  	
  
support a culture change to pay-for-performance;
  
	
  
•
  	
  
focus the executive team on annual goals to meet   long-term goals;
  
	
  •
  	
  
reward executives for their effort; and
  
	
  
•
  	
  
align compensation with the goals of the   organization and marketplace practices.
  

All awards under the Plan are based on the understanding and condition that each Participant will act in strict compliance with all applicable laws and Kaiser Federal’s policies and core values.

Plan Year

This Plan applies to Participant and company performance during the fiscal year (July 1 through June 30).  Bonus payments generated from this Plan, if any, will be made in July following the end of the Plan year.

Important Notes

While Kaiser Federal intends to maintain the Plan on an ongoing basis, Kaiser Federal’s Board of Directors reserves the right to modify the Plan’s provisions or its application to specific individuals, or terminate the Plan, at any time for any reason.

Plan benefits represent taxable income to Participants, and all applicable federal, state, FICA and local taxes will be withheld at lump sum rates prescribed by law.  These withholding rates may differ from the Participant’s normal withholding elections.

Kaiser Federal encourages Participants to consult a tax advisor to determine the Plan’s impact on their financial situation.

Each Participant will be required to name a beneficiary to receive Plan awards in the event the Participant dies while covered by the Plan.

AIP awards are not considered income for employee benefits purposes (life insurance, 401(k), LTD, etc.).

Page 3

	
  
Plan Features
  
	
  

  

Eligibility

Senior Managers who are responsible for one or more unique functions, whose decisions and actions are deemed to have a measurable impact on Kaiser Federal’s earnings are eligible to participate in the Plan. This typically includes direct reports to the Chief Executive Officer (CEO).

Nevertheless, no position is automatically eligible; each individual must be approved for AIP participation by the CEO and Board of Directors.

Newly hired executives are eligible for Plan participation if they are employed during the first three quarters of the Plan year. 

Target Bonus Amounts

Each Participant has an annual target bonus that is expressed as a specific dollar amount.  This target is individually determined for each Participant based on competitive market rates and an internal comparison of targets for Participants in other positions.  The target is the bonus amount that would be paid if the Participant fully achieves all of his/her personal performance goals and Kaiser Federal fully achieves its financial goals.

Guidelines for setting AIP targets are as follows:

	
  Position Level
  	
  
 
  	
  
AIP Target Bonus
  
	
  

  	
  
 
  	
  

  
	
  
CEO
  	
  
 
  	
  
30% of Base Salary
  
	
  
Senior Manager 2
  	
  
 
  	
  
20% of Base Salary
  
	
  
Senior Manager 1
  	
  
 
  	
  
10% of Base Salary
  

The target is rounded to the nearest even $100.  For example, a 20% target applied to a base salary of $105,650 results in a target of $21,130 which rounds to $21,100.

Each Participant’s annual bonus target must be approved by the CEO and Board of Directors.  The AIP target award remains fixed for a given plan year.  When the Participant’s salary increases or decreases, the AIP target award dollar amount will change effective on the first of the plan year following the base salary change, subject to approval by the CEO and Board of Directors.

The actual bonus awarded may be more or less than the target if the Participant and/or the company exceeds or falls short on performance goals.  There is no minimum payout.

Page 4

	
  
Plan Features
  
	
  

  

Bonus Components

The AIP bonus award depends on the following two components:

	
  
•
  	
  
Kaiser   Federal’s financial performance - based on Kaiser Federal’s   Return on Assets (ROA) compared to its annual goals for the Plan year.  Target ROA must be achieved or exceeded in   order for an AIP award to be made.    The Board of Directors and the CEO may adjust this number up or down   to reflect any extraordinary events or conditions which may have affected   financial performance during the year.
  
	
   
 	
  
 
  
	
   
 	
  
Return   on Assets is defined as annualized net income divided by the year’s average   assets.
  
	
   
 	
   
  
	
  
•
  	
  
Participant   personal performance - based on achieving individual goals   set by the Participant and the CEO.
  

Participant Personal Performance

The Participant and the CEO will set one to five objectives for the Participant to achieve by the end of the Plan year:

	
  
•
  	
  
One or more of these objectives must address expense   management, where keeping expenses at budget is the goal, a favorable   variance is exceeding expectations, and an unfavorable variance is below   expectations.
  
	
   
 	
  
 
  
	
  
•
  	
  
All other personal objectives should address   nonroutine job goals—e.g., a new initiative or a substantial enhancement to   an existing performance standard.    Each objective should be assigned a percentage weight to reflect its   relative importance and/or difficulty.    The sum of the weights must equal 100%.
  

The goals are set at the beginning of the Plan year using the Personal Goals form (see attached). Throughout the year, the Participant and the CEO should meet to ensure that the goals are still relevant and properly weighted in light of changing circumstances.  If the Participant’s objectives change substantially during the year (e.g. an objective is deleted and/or a new one is added), the changes must be documented.

AIP Award Calculation

Kaiser Federal must achieve or exceed its Target ROA in order for an AIP award to be made.  If the company falls short of its target, no award is made.

At the end of the Plan year, the Participant’s performance on each objective will be evaluated by the CEO and given a rating on the scale on the next page.  This rating is a multiplier that is applied to the AIP target for payout purposes.  The Participant is rated on his/her achievement of specific and quantitative objectives. If the Participant does not fully meet the personal objectives, a reduced or zero AIP award will be paid per the table below:

Page 5

	
  
Plan Features
  
	
  

  

AIP Award Calculation (Cont’d.)

	
  
AIP Multiplier
  	
   
 	
  
Performance Results
  
	
  

  	
   
 	
  

  
	
  101-120%
  	
  
 
  	
  
Outcome significantly exceeded all expectations and   made a contribution well beyond what was originally envisioned.
  
	
  
100%
  	
  
 
  	
  
Objective fully attained; nothing short of complete   success.
  
	
  
25-99%
  	
  
 
  	
  
Objective partially attained or significant progress   made, but fell short of goal.
  
	
  
0%
  	
  
 
  	
  
Failed to achieve objective or to make reasonable   progress.
  

	
  
 
  	
  
For   example, assume an AIP target award of $20,000 and personal performance that   exceeded expectations.  The   calculation is:
  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
$20,000 x 1.20 = $24,000
  	
  
 
  

The CEO will determine the multiplier for his/her direct reports, and the Board will determine the CEO’s multiplier.

The AIP award is subject to all normal federal, state and local tax withholding, and is not considered income for employee benefits purposes (life insurance, 401(k), LTD, etc.).

Page 6

	
  
Plan Administration
  
	
  

  

Adding New Participants

The CEO may add newly hired eligible employees to the Plan during the first three quarters of the Plan year.  An employee is not automatically eligible—the CEO must approve participation.  The target in the first year will be prorated to reflect the number of months in which the Participant worked during the year, and payout after the plan year will be based on the prorated target (rounded to the nearest even $100).

	
   
  	
  
For   example, a Participant is hired on September 20 with a target of   $20,000.  The Participant is given   credit for working in 10 months of the plan year (September through   June).  The prorated target is:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
($20,000 x 10 months)   = $16,667 ($16,700 rounded)
  	
  
 
  
	
  
 
  	
  
                              12   months
  	
  
 
  

Changes to Target Bonus

The CEO and Board of Directors may adjust a Participant’s AIP target during the year if there is a material change in the Participant’s job responsibility or scope.  The new AIP target is prorated with the original target for payout purposes at the end of the Plan year.

	
   
  	
  
For   example, if a $20,000 AIP target is adjusted to $26,000 after nine months in   the Plan year, the prorated award for payout purposes is:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
($20,000 x 9 months) + ($26,000 x   3 months) = $21,500
  	
  
 
  
	
  
 
  	
  
12 months
  	
  
 
  

Temporary Absence

If a Participant is temporarily disabled or is absent for any other reason for more than thirty calendar days during the Plan year, any award that might otherwise be payable under the Plan will be prorated.

For example, a Participant has a $20,000 target, was on leave of absence for 3 months, but still managed to exceed expectations for the nine months worked.  The AIP award calculation is:

$20,000 x 1.20  x 9/12 = $18,000

Page 7

	
  
Plan Administration
  
	
  

  

Retirement, Death, or Permanent Disability

If employment is terminated because of total and permanent disability, normal or late retirement, early retirement approved by the Company, or death, the Participant will be granted an AIP award that will be prorated based on the number of full weeks the Participant was employed during the year.

Voluntary Termination

	
  
•
  	
  
Before   the end of the Plan year – the AIP award will not be paid.
  
	
  
•
  	
  
After   the end of the Plan year – the AIP award will be paid at   the same time as to other Participants.
  

Involuntary Termination

	
  
•
  	
  
For Cause - If the Participant is terminated by Kaiser   Federal for cause, the AIP award will not be paid.
  
	
   
  	
   
  
	
  •
  	
  Not For Cause -   If the Participant is terminated by Kaiser Federal because the Participant’s   job has been eliminated as a result of an organizational restructuring or a   reduction in the workforce, the Participant will be granted an AIP award, if   such an award is otherwise payable.    The award will be prorated based on the number of full weeks the   Participant was employed during the Plan year.
  

Kaiser Federal reserves the right to review, alter, amend or terminate the Plan at any time.  This Plan does not constitute a contract of employment and cannot be relied on as such.

Page 8Development Services Agreement

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
      ***.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ***
      Development Services Agreement

    

    
      
        

      

    

    INTRODUCTION
      AND SCOPE

    
      
        

      

    

     

    
      	1    	
              Parties

            

    

     

    
      
        
          1.1    Elanco
            is

        

      

    

     

                                     
      1.1.1    ElancoAnimal
      Health, a division of Eli Lilly and Company 

     

                                     
      1.1.2    an
      Indiana corporation.

     

    1.2    Altairnano
      is

     

                                     
      1.2.1    Altair
      Nanotechnologies, Inc.

     

                                     
      1.2.2    a
      Nevada
      corporation. 

     

    2    Term

     

                  
      2.1    The
      Effective Date (this and other capitalized terms are defined in Exhibit
      A)
      is
      retroactive to June 15, 2007. 

     

                  
      2.2    The
      Expiration Date is December 31, 2010. 

     

    
      3    Background
        

    

     

    
      	3.1         
                	
              Elanco
                is a global research-based corporation that develops, manufactures
                and
                sells animal health products. 

            

    

     

    
      	3.2            	
              Altairnano
                is an innovator and supplier of advanced novel, ceramic Nanotechnologies
                which are used in products that exhibit ground-breaking performance
                and
                maintains a staff that are knowledgeable, experienced and skilled
                at
                development of Nanotechnologies for the alternative energy, life
                sciences
                and performance materials markets based on its proprietary manufacturing
                process.

            

    

     

    
      	3.3            	
              Elanco
                wishes to engage Altairnano to develop a manufacturing process for
                ***.
                

            

    

     

    
      	3.4         
                	
              Altairnano
                wishes to accept the engagement.

            

    

     

    
      4    Scope
        of Agreement 

    

     

    
      	4.1            	
              This
                Agreement applies to the Services and Products set forth in Exhibit
                B.
                

            

    

     

    
      	4.2         
                	
              Altairnano’s
                Compensation is set forth in Exhibit
                B.

            

    

     

    
      
        

      

    

    ALTAIRNANO’S
      RIGHTS AND OBLIGATIONS

    
      
        

      

    

     

    
      5    Altairnano’s
        General Rights and Obligations

    

     

    
      	5.1             	
              Altairnano
                will furnish Elanco all Services, Deliverables and/or Products described
                by the Project Specifications.

            

    

     

    
      	5.2             	
              Altairnano
                will provide everything it needs to furnish such Services, Deliverables
                and Products except for items or responsibilities the Project
                Specifications expressly assign to
                Elanco.

            

    

     

    
      
        
        

      

      
        Page
          1 of 26

        
          

        

      

      
        
        

      

    

     

    
      	5.3             	
              The
                Compensation is the entire compensation Altairnano will receive for
                full
                performance of all its obligations under the Agreement, including
                all
                labor, materials, expenses, overhead, taxes and
                profit.

            

    

     

    
      6    Development
        Services

    

     

    
      	6.1          
               	
              Altairnano
                will manufacture Product at an Altairnano FDA approvable facility
                in
                accordance with cGMP, the Product Specifications, the Quality Agreement
                and Applicable Law.

            

    

     

    
      	6.2          
               	
              Altairnano
                will complete the Services and deliver product on the delivery date(s)
                specified by Elanco in accordance with Exhibit
                B.
                

            

    

     

    
      	6.3          
               	
              Altairnano
                will comply with any exposure guidelines set forth in any material
                safety
                data sheets. Altairnano will promptly inform Elanco of any adverse
                environmental, health or safety events related to the manufacture
                of the
                Product.

            

    

     

    
      	6.4          
               	
              Altairnano
                will not, without Elanco’s prior written consent, (i) make any changes to
                the Product Specifications or process used to manufacture the Product
                (including the manufacturing batch records incorporated into the
                Product
                Specifications or processes) or (ii) manufacture the Product in any
                facility other than any manufacturing facility specified in Exhibit
                B.

            

    

     

    
      	6.5          
               	
              Altairnano
                will not rework or remanufacture lots of Product without approval
                in
                advance from Elanco and will only be acceptable if the procedures
                for
                reworking and remanufacturing the lots are validated as part of the
                registered process for manufacturing the Products and approved by
                Elanco.
                

            

    

     

    
      	6.6            	
              Altairnano
                will not change raw material vendors without the prior written consent
                of
                Elanco.

            

    

     

    
      	6.7          
               	
              Altairnano
                will develop and document contingency plans to ensure continuous
                supply of
                Product to Elanco. Such contingency plan will include, without limitation,
                Altairnano’s plans for the maintenance of adequate raw materials to meet
                demand, equipment preventative maintenance plans, and inventory safety
                stock to cover line down
                situations.

            

    

     

    
      	6.8         
                	
              Altairnano
                will file a Drug Master File (DMF) and Active Substance Master File
                (ASMF)
                for the API specified Exhibit
                D.
                Altairnano will provide Elanco with a Letter of Authorization and
                Letter
                of Access for Regulatory submissions. Altairnano will provide copies
                of
                the DMF and ASMF to Elanco. Altairnano will allow Elanco to review
                and
                approve the DMF and ASMF before the initial filing and before any
                subsequent changes and updates after the initial filings. Elanco
                will
                provide written consent.

            

    

     

    
      7    
        Allocation
        of Resources 

       

    

    In
      addition to whatever remedies are available to Elanco at law, in equity or
      under
      this Agreement, if for any reason Altairnano’s supply of Product at any time,
      including during a Force Majeure condition, is insufficient to meet its
      obligation to Elanco under this Agreement and to other customers under other
      agreements, purchase orders or arrangements, Altairnano will allocate the
      available resources to Elanco and its other customers on a pro rata basis,
      with
      Elanco’s pro rata share being based on the most recent forecast provided by
      Elanco to Altairnano.

     

    
      
        
        

      

      
        Page
          2 of 26

        
          

        

      

      
        
        

      

       

    

    
      8    
        Altairnano’s
        Representations and Warranties 

    

     

    
      	8.1           	
              Altairnano
                represents and warrants that: 

            

    

     

    
      	8.1.1       	
              Altairnano
                is duly organized and in good standing under the laws of the jurisdiction
                of its formation, and any authorization necessary for making and
                performing under this Agreement have been
                given.

            

    

     

    
      	8.1.2     
               	
              The
                making and performance of this Agreement do not conflict with Altairnano’s
                governing documents or any contractual obligation to
                another.

            

    

     

    
      	8.1.3     
               	
              Altairnano’s
                performance under this Agreement (including, without limitation,
                performance of Services, manufacture of Product, and Altairnano’s
                employment practices) complies with all Applicable
                Law.

            

    

     

    
      	8.1.4     
               	
              All
                Product supplied by Altairnano under this Agreement is or was manufactured
                in accordance with the Product Specifications, cGMP, the Quality
                Agreement
                and Applicable Law.

            

    

     

    
      	8.1.5     
               	
              All
                Product supplied by Altairnano under this Agreement conforms to the
                Product Specifications.

            

    

     

    
      	8.1.6     
               	
              Altairnano
                has obtained all permits, licenses and other authorizations which
                are
                required under Applicable Law to manufacture the Product, perform
                the
                Services, and deliver the Products and/or Deliverables. Altairnano
                is in
                compliance, and during the term of this Agreement will take all actions
                necessary to comply, with all terms and conditions of any and all
                required
                permits, licenses and authorizations applicable to the manufacture
                and
                supply of Product.

            

    

     

    
      	8.1.7     
               	
              No
                Product delivered to Elanco pursuant to this Agreement will be
                manufactured or processed in any equipment that has been used to
                process
                animal or human tissue.

            

    

     

    
      	8.1.8       	
              All
                Products are free from defects in material and
                workmanship.

            

    

     

    
      	8.1.9     
               	
              The
                Products are free from all liens, Claims and
                encumbrances.

            

    

     

    
      	8.1.10   
               	
              Services
                will be rendered with that degree of skill and knowledge normally
                possessed and employed by members of the relevant trade or profession
                in
                good standing in the United States of America.

            

    

     

    
      	8.1.11   
               	
              Altairnano
                will not infringe any rights (including trademark rights, copyrights,
                patents, trade secrets, privacy rights, or contractual rights) of
                any
                other Person in providing the Services or manufacturing the Product
                and no
                use of the Product, Work Product or Deliverables by Elanco consistent
                with
                this Agreement infringes such rights. This representation and warranty
                does not apply to infringement arising solely from Elanco’s use of the
                Products, Work Product or Deliverables in a manner that is contrary
                to
                Altairnano’s recommendations, or in combination with other materials, if
                Altairnano was not aware of and could not reasonably anticipate such
                combined use.
                Altairnano Intellectual Property used to provide the Services or
                manufacture the Products, or incorporated into the Products does
                not not
                infringe any rights (including trademark rights, copyrights, patents,
                trade secrets, privacy rights, or contractual rights) of any other
                Person.
                

            

    

     

    
      
        
        

      

      
        Page
          3 of 26

        
          

        

      

      
        
        

      

    

     

    
      	8.2          
                	
              Without
                limiting any other representations or warranties in this Agreement,
                ALTAIRNANO
                DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND OF
                FITNESS
                FOR A PARTICULAR PURPOSE.
                

            

    

     

    
      9    Non-Compete

    

     

    
      	9.1         
                	
              For
                and during the period this Agreement is in effect, neither Altairnano
                nor
                any of its Affiliates will manufacture any product, whether for itself
                or
                for any other third party, containing the API of any Product manufactured
                under this Agreement without obtaining Elanco’s prior written consent,
                with express exception of API made for human use in accordance with
                Altairnano’s agreement with ***.
                In the event Altairnano acquires or otherwise enters into a business
                which
                manufactures, markets or sells any product containing the API of
                any
                Product manufactured under this Agreement, Elanco will have the right
                to
                terminate this Agreement with ninety (90) days written notice.
                

            

    

     

    
      
        	10           
                	
                Manufacturing
                  Reporting.
                  Upon
                  request, Altairnano will, on a timely basis, provide Elanco with
                  all
                  information reasonably necessary for Elanco to comply with its
                  regulatory
                  requirements, including, without limitation, stability data, any
                  changes
                  to the master batch record or production or quality control procedures
                  referenced in the master batch record and the detailed reason for
                  such
                  change. 

              

      

    

     

    
      
        	11           
                	
                Adverse
                  Event Reporting.
                  Altairnano will report to Elanco any adverse drug experiences,
                  medical
                  inquiries, or quality complaints of which Altairnano becomes aware
                  involving the Product within twenty-four (24) hours of receipt.
                  Elanco is
                  responsible for responding to and/or reporting Product complaints,
                  adverse
                  drug experiences and medical inquiries. When requested by Elanco,
                  Altairnano will provide reasonable assistance in responding to
                  any
                  complaints, adverse drug experiences, or medical inquiries, including
                  reviews of retained samples and batch records, Product testing,
                  and
                  retaining samples. Elanco will report to Altairnano any Elanco
                  Pharmaceutical complaints, adverse drug experiences and medical
                  inquiries
                  potentially related to Altairnano’s manufacturing of the
                  Product.

              

      

    

     

    
      
        	12           
                	
                Regulatory
                  Inspections.
                  Altairnano agrees to inform Elanco within twenty-four (24) hours
                  of any
                  regulatory inquiry, communication or inspection which directly
                  or
                  indirectly affects the production of the Products. In the event
                  of an
                  inspection by any Government Authority which involves a Product,
                  Elanco
                  will be notified within twenty-four(24) hours of the issuance of
                  the
                  notice of inspection or the presence of an
                  inspector. In the event there are written observations (or any
                  other
                  written communication) by a Governmental Authority which involve
                  a
                  Product, or any proposed written response by Altairnano to any
                  such
                  inspection, Elanco will be informed within twenty-four (24) hours
                  and be
                  provided with copies of all documentation within forty-eight (48)
                  hours,
                  and will have the opportunity to review and provide
                  input to the response. If Elanco elects to provide input to the
                  response,
                  such input will be provided by Elanco to Altairnano as promptly
                  as
                  practicable.

              

      

    

     

    
      
        	13           
                	
                Recalls

              

      

    

     

    
      	13.1         	
              If
                Altairnano determines there is a defect, impurity, contamination
                or
                non-conformity in Product previously delivered pursuant to this Agreement,
                or for any other reason decides to recall Product, Altairnano will
                immediately notify Elanco, and will reimburse Elanco for the purchase
                price paid by Elanco for the recalled Product.

            

    

     

    
      
        
        

      

      
        Page
          4 of 26

        
          

        

      

      
        
        

      

    

     

    
      	13.2      
                	
              In
                the event that Elanco is required or requested by any regulatory
                authority, or voluntarily decides to recall a Elanco pharmaceutical
                because of a defect in the Product due to any Fault of Altairnano,
                Altairnano will, in addition to the other remedies set forth in this
                Agreement, reimburse Elanco for (a) any cost expended by Elanco to
                effect
                the recall, (b) the purchase price and any related costs paid by
                Elanco
                for the Product effected by the recall, and (c) Elanco’s cost of other
                materials contained in the recalled Elanco pharmaceutical and any
                Elanco
                pharmaceutical or work-in-progress that cannot be shipped or finished
                due
                to the condition requiring the
                recall.

            

    

     

    
      
        	14            
                	
                Altairnano’s
                  Invoices

              

      

    

     

    
      	14.1     
                	
              Timing.
                Altairnano will submit invoices as follows. 

            

    

     

    
      	14.1.1   
                	
              Invoices
                for the percentage of work completed during the billing period..
                

            

    

     

    
      	14.1.2   
                	
              Product
                invoices will be submitted upon shipment.

            

    

     

    
      	14.2     
               	
              Invoices.
                Each invoice must comply with Elanco’s standard forms and procedures (as
                changed from time to time) and published on the internet at and
                with any specific requirements in this Agreement. Each invoice will
                be
                accompanied by:

            

    

     

    
      	14.2.1      	
              Any
                additional information as Elanco may reasonably request in writing.
                

            

    

     

    
      	14.3      	
              Currency.
                Invoices will be in United States dollars and payment will be in
                United
                States dollars. 

            

    

     

    
      
        	15              
                	
                Supplier
                  Diversity
                  Development

              

      

    

     

    
      	15.1      	
              Altairnano
                agrees to endeavor to purchase annually from businesses that fall
                within
                one or more of the categories listed below. Within fifteen (15) days
                of
                the end of each calendar quarter, Altairnano will report to Lilly
                the
                amount (in United States dollars) of such purchases for the calendar
                quarter that just ended, itemized among such categories. Altairrnano
                will
                deliver the report to the address designated by
                Lilly.

            

    

     

    
      	
              MBE

            	
              Minority
                business enterprises certified as such by an affiliate of the National
                Minority Supplier Development Council, Inc. Certification requirements
                can
                be found at www.nmsdc.org.
                

            
	
              WBE

            	
              Women
                business enterprises meeting the requirements for certification as
                such by
                the Women's Business Enterprise National Council. See www.wbenc.org
                for requirements. Actual certification desirable but not
                required.

            
	
              WOSB

            	
              Women-owned
                small business concerns as defined in 48 CFR 2.101 (at least 51%
                owned by
                women with management and daily business operations controlled by
                one or
                more women).

            
	
              SDB

            	
              Small
                disadvantaged business concerns as defined in 48 CFR 2.101 (which
                requires
                certification by the Small Business Administration under 13 CFR part
                124
                subpart B).

            

    

     

    
      
        
        

      

      
        Page
          5 of 26

        
          

        

      

      
        
        

      

    

     

    
      	
              VBE

            	
              Veteran-owned
                small business concerns as defined in 48 CFR 2.101 (at least 51%
                owned by
                veterans with management and daily business operations controlled
                by one
                or more veterans). Self-certification is acceptable..

            
	
              DVBE

            	
              Service-disabled
                veteran-owned small business concerns as defined in 48 CFR 2.101
                (veterans
                with service-connected disability own at least 51% and control management
                and daily business operations). Self-certification is
                acceptable.

            
	
              HUB

            	
              HUBZONE
                small business concerns as defined in 48 CFR 2.101 (based on census
                tract
                information, economic data, and unemployment rates in a particular
                geographic area).

            
	
              8A
                Participants

            	
              Participants,
                as defined in 13 CFR 124.3, in the Small Business Administration's
                Section
                8(a) business development program of 13 CFR part 124 subpart
                A.

            
	
              HBCU/MI

            	
              Historically
                black colleges and universities or minority institutions, each as
                defined
                in 48 CFR 2.101.

            

    

    
       

    

    
      
        	16              
                	
                Safety
                  and Security 

              

      

    

     

    
      	16.1   
                	
              Altairnano
                will comply with, and will cause its Employees to comply with, policies
                and procedures that Elanco establishes to enhance the safety and
                security
                of its facilities and of Persons at or near its
                facilities.

            

    

     

    
      
        	17              	
                Debarment 

              

      

    

     

    
      	17.1      	
              Altairnano
                certifies that it has not and will not use in any capacity the services
                of
                any Person debarred under 21 USC 335a(a) (as amended) (mandatory
                debarment) or 21 USC 335a(b) (as amended) (permissive debarment)
                in
                connection with this Agreement. Altairnano will require the same
                certification of its
                Subcontractors.

            

    

     

    
      	17.2    
                	
              Altairnano
                will immediately notify Elanco in writing (with a copy to Elanco’s legal
                counsel) of any actions taken or proceeding pending that threatens
                or
                confirms a debarment under this section. Altairnano will require
                its
                Subcontractors to notify it of any action taken or proceeding pending
                that
                threatens or confirms a debarment under this section, and Altairnano
                will
                immediately notify Elanco in writing (with a copy to Elanco’s legal
                counsel) of any notifications from its Subcontractors.
                

            

    

     

    
      
        	18              
                	
                Altairnano’s
                  Obligations at End of
                  Term

              

      

    

     

    
      	18.1      
              	
              Upon
                expiration, notice of termination or notice of cancellation of this
                Agreement, Altairnano will cooperate with Elanco to wind down and
                close
                this Agreement smoothly including, as reasonably required by Elanco,
                the
                completion of work in progress and the transfer of its obligations
                to
                another supplier, if applicable. Altairnano will also, at its sole
                expense; (i) promptly effect the removal of Elanco’s Confidential
                Information from its systems and files and those of its Subcontractors
                (ii) deliver to Elanco any of Elanco’s Property in Altairnano’s possession
                or control, and (iii) promptly deliver to Elanco any Records of Elanco’s
                Confidential Information in Altairnano’s possession or control that are
                not Elanco’s Property. 

            

    

     

    
      	18.2    
               	
              As
                an alternative to delivery of Elanco’s Property or Records of Elanco’s
                Confidential Information to Elanco, Elanco may direct Altairnano
                to
                destroy them or deliver them to another destination of Elanco’s choosing.
                Elanco’s exercise of this alternative must be in
                writing.

            

    

     

    
      
        
        

      

      
        Page
          6 of 26

        
          

        

      

      
        
        

      

    

     

      
        

      

    

    
      ELANCO’S
        RIGHTS AND OBLIGATIONS

    

    
      
        

      

       

    

    
      
        	19              
                	
                Elanco’s
                  General Rights and Obligations 

              

      

    

     

    
      	19.1      	
              Elanco
                will pay Altairnano the Compensation in accordance with the terms
                of this
                Agreement.

            

    

     

    
      	19.2    
               	
              Elanco
                will perform any obligations expressly assigned to it in the Project
                Specifications or elsewhere in the
                Agreement.

            

    

     

    
      
        	20              
                	
                Payment 

              

      

    

     

    
      	20.1      	
              Payment
                terms.
                Payment will be due forty-five (45) days after Elanco’s accounts payable
                department receives an invoice that complies with the requirements
                of this
                Agreement, except that Elanco may withhold payment of any amount
                that it
                may reasonably dispute in good faith until such dispute is resolved.
                

            

    

     

    
      	20.2   
                	
              Discounts.
                Should Elanco make payments within twenty (20) days after it receives
                an
                invoice, Elanco will receive a discount of two percent (2%) off the
                invoiced amount. 

            

    

     

    
      
        	21              
                	
                Changes
                  to Product
                  Specifications

              

      

    

     

    
      
        
          	                   
                                
                  	
                  Elanco,
                    at its option from time to time, may request a change in the
                    Product
                    Specifications by notifying Altairnano in writing. The parties
                    will work
                    together in good faith to determine whether to implement the
                    proposed
                    change. As soon as possible, but in any event within thirty (30)
                    days,
                    after the change request is received by Altairnano, Altairnano
                    will notify
                    Elanco of any adjustments in compensation or delivery timing
                    necessary to
                    accommodate the changed Product Specifications. The revised Product
                    Specifications will become applicable as of the date mutually
                    agreed to by
                    Elanco and Altairnano, and all references thereafter to the “Product
                    Specifications” will refer to the Product Specifications as modified. The
                    new Product Specifications will be attached to Exhibit
                    D.

                

        

      

       

    

    
      
        	
                22              

              	
                Access
                  to Elanco’s Facilities and Information
                  Systems

              

      

    

     

    
      	22.1      	
              Elanco
                retains its right to restrict or refuse any Person, including Altairnano’s
                Employees and representatives, access to its facilities, computers,
                or
                other information systems. 

            

    

     

    
      	22.2   
                	
              Such
                restriction or refusal excuses Altairnano’s performance under this
                Agreement only if it renders Altairnano’s performance impracticable, does
                not comport with Elanco’s written procedures, and is manifestly
                unreasonable. 

            

    

     

    
      
        	23              
                	
                Elanco’s
                  Right to Cancel

              

      

    

     

    
      	23.1   
                	
              Elanco
                may cancel this Agreement for any reason including convenience by
                written
                notice to Altairnano. Cancellation will be effective ninety (90)
                days
                after Altairnano receives the notice or on a later date if the notice
                so
                specifies.

            

    

     

    
      
        
        

      

      
        Page
          7 of 26

        
          

        

      

      
        
        

      

    

     

    
      
        	24              
                	
                Elanco’s
                  Obligations at End of Term 

              

      

    

     

    
      	24.1.1    
                	
              In
                the event of any termination or cancellation of this Agreement before
                it
                expires Elanco’s obligation to compensate Altairnano is reduced to the
                portion of the Compensation corresponding to Services and Products
                properly furnished prior to cancellation or termination, with the
                calculation of the amount of the reduction consistent with the provisions
                of this Agreement establishing the amount of
                Compensation

            

    

     

    
      

    

    INFORMATION
      AND PROPERTY RIGHTS AND OBLIGATIONS

    
      
        

      

    

    
       

    

    
      
        	25              
                	
                Property
                  Rights

              

      

    

     

    
      	25.1      	
              Specified
                property and intellectual property rights.
                All property and intellectual property rights are defined in the
                Collaborative Research, License & Commercialization Agreement between
                Altair Nanomaterials, Inc. and Elanco Animal Health, Articles II,
                VI and
                VII and hereby incorporated by reference, executed by Altairnano
                on Apri
                28, 2006. 

            

    

     

    
      	25.2      	
              Altairnano’s
                possession of Elanco’s Property.
                In Course of their relationship under this Agreement, Altairnano
                may have
                Elanco’s Property in its possession. Altairnano will exercise appropriate
                care with respect to Elanco’s Property, but in no event will Altairnano
                exercise a lower degree of care in safeguarding Elanco’s Property from
                damage, destruction, loss or unathorizeddisclosure than Altairnano
                uses in
                safeguarding its own property of a similar nature. Altairnano may
                not
                encumber Elanco’s Property, transfer possession of Elanco’s Property to
                anyone else, or use Elanco’s Property for any purpose other than the
                performance of its obligations under this Agreement. Altairnano will
                dispose of Elanco’s Property only in accordance with written instructions
                from Elanco. Without limiting the generality of the previous sentence,
                Altairnano acknowledges that it may not make unauthorized copies
                of
                Records that belong to Elanco and that all copies of Elanco’s Records made
                in contravention of this provision are Elanco’s property. Upon written
                instructions, Altairnano will deliver Elanco’s Property to Elanco or its
                designee.

            

    

    
       

    

    
      
        	26              
                	
                Confidentiality 

              

      

    

     

    
      	26.1  
                	
              Because
                of this Agreement, Altairnano may have access to Elanco’s Confidential
                Information. Elanco’s Confidential Information includes, but is not
                limited to information regarding research and development plans and
                results, new compounds and processes, evaluation procedures (including
                clinical and field testing), product formulations, manufacturing
                methods,
                applications to Government Authorities for product clearance, pricing
                and
                cost figures, construction plans, marketing and advertising studies
                and
                plans, customer lists, computer information and software, special
                techniques unique to Elanco’s business, and information Elanco includes in
                any system of information protection. Altairnano will hold Elanco’s
                Confidential Information in strict confidence and will not use it
                for
                purposes other than those set forth in this Agreement. Altairnano
                will
                reveal Elanco’s Confidential Information only to those Employees and
                Employees of Subcontractors who need to know the information to provide
                Services under this Agreement and who have executed a confidentiality
                and
                non-use undertaking consistent with this section. Altairnano will
                inform
                its Employees who have access to Elanco’s Confidential Information of its
                confidential nature. Altairnano is responsible for any unauthorized
                use or
                disclosure of Elanco’s Confidential Information by its Employees, its
                Subcontractors, or its Subcontractors’
                Employees.

            

    

     

    
      
        
        

      

      
        Page
          8 of 26

        
          

        

      

      
        
        

      

    

     

    
      	26.2  
                	
              Altairnano
                may disclose Elanco’s Confidential Information to the extent required by
                Applicable Law, but only if Altairnano gives Elanco prior notice
                in order
                to allow Elanco a reasonable opportunity to prevent disclosure or
                to seek
                entry of a protective order.

            

    

     

    
      	26.3  
                	
              Nothing
                in this section gives Altairnano any right or license in any patent,
                trade
                secret, copyright, trademark or other Intellectual Property of Elanco,
                other than to use Elanco’s Confidential Information for purposes of this
                Agreement.

            

    

     

    
      	26.4  
                	
              Upon
                written instruction from Elanco, Altairnano will promptly effect
                the
                removal of all copies and instances of Elanco’s Confidential Information
                from its systems and files and those of its Subcontractors and deliver
                to
                Elanco or otherwise dispose of all Records containing Elanco’s
                Confidential Information in Altairnano’s possession or control.
                

            

    

     

    
      	26.5     	
              Altairnano’s
                obligations under this section last until the relevant information
                no
                longer meets the definition of Elanco’s Confidential Information or until
                five (5) years after cancellation, termination, or expiration of
                the
                Agreement, whichever occurs first.  Provided
                however, that Altairnano’s obligations under this section with regard to
                Elanco trade secrets is perpetual. 

            

    

     

    
      
        	
                27              
                  

              	
                Records
                  and Audits
                  

              

      

    

     

    
      	27.1    
               	
              Records
                that must be created and maintained.
                At its own expense, Altairnano will create and maintain all Records:
                (i)
                required by this Agreement and Applicable Law that relate to this
                Agreement and to Altairnano’s performance under this Agreement, (ii)
                sufficient to demonstrate that any and all amounts invoiced to Elanco
                under this Agreement are accurate and proper in both kind and amount,
                (iii) sufficient to demonstrate the accuracy of any representations
                or
                reports submitted to Elanco under this Agreement, and (iv) sufficient
                to
                enable Elanco to comply with Applicable Laws and other legal obligations,
                to the extent that Altairnano has or reasonably should have knowledge
                of
                those Applicable Laws and other legal
                obligations.

            

    

     

    
      	27.2    
               	
              Record
                retention periods.
                Altairnano will maintain all of the Records listed above for the
                longest
                of the following retention periods that applies: (i) any period prescribed
                by Applicable law or stated expressly in this Agreement, (ii) for
                Records
                related to invoices, for three (3) years after payment of the invoice
                by
                Elanco, (iii) for Records related to reports submitted to Elanco,
                for
                three (3) years after the report is submitted, and (iv) for all Records
                not addressed by one of the above, for three (3) years after the
                term of
                this Agreement.

            

    

     

    
      	27.3    
               	
              Access
                to Records.
                At no additional cost to Elanco, Altairnano will allow Elanco to
                inspect
                (and, upon request, Altairnano will furnish copies of) Records Altairnano
                is required to create or maintain under this Agreement for the purposes
                of
                evaluating and verifying: (i) compliance with the requirements of
                this
                Agreement, (ii) compliance with Applicable Law related to this Agreement
                or to Altairnano’s performance under this Agreement, (iii) the accuracy
                and propriety of any invoice submitted to Elanco, and (iv) the accuracy
                of
                any representations or reports submitted to
                Elanco.

            

    

     

    
      
        
        

      

      
        Page
          9 of 26

        
          

        

      

      
        
        

      

    

     

    
      	27.4    
               	
              Access
                to facilities.
                At reasonable times and with reasonable advance notice, Elanco may
                enter
                and inspect any premises where Records are maintained or Services
                are
                performed as Elanco deems necessary for the purposes described in
                the
                preceding subsection, Access to Records. Altairnano will cooperate
                with
                Elanco and provide reasonable assistance to Elanco to facilitate
                the
                evaluation and inspection, and Elanco will reasonably cooperate with
                Altairnano to mitigate disruption to Altairnano’s operations. In
                addition to the right to audit pursuant to this subsection, Elanco
                will
                have the right to have representatives in the facility where Product
                is
                being manufactured during operations related to process transfer,
                scale-up, development and manufacture of Product. In
                the event that Records are maintained, Services are performed, or
                Elanco’s
                Property is kept at premises that Altairnano does not control, Altairnano
                will secure rights of entry and inspection sufficient to allow Elanco
                to
                exercise its rights under this
                section.

            

    

     

    
      	27.5   
               	
              Quality
                Audit Findings.
                Altairnano agrees to cooperate with Elanco and take such other actions
                as
                may be reasonably necessary to carry out the purpose and intent of
                this
                Agreement with respect to manufacturing quality and capability, including
                without limitation, developing action plans to address any deficiencies
                noticed and appropriate pursuit of such issues in a timely manner.
                

            

    

     

    
      	27.6   
               	
              Elanco
                employees and designees.
                Elanco, its employees, or designees may exercise Elanco’s rights of
                entrance and inspection under this section. Examples of Persons that
                Elanco may designate include Elanco’s independent auditors and
                representatives of Government Authorities having jurisdiction over
                Elanco
                or its activities related to this
                Agreement.

            

    

     

    
      	27.7   
               	
              Records
                generated electronically.
                For Records generated by Electronic databases, spreadsheets, programs
                or
                the like, Elanco’s rights to access and inspection under this section
                extend to the database, spreadsheet or program that generated the
                Record
                as well as the Record itself.

            

    

     

    
      	27.8   
               	
              Records
                subject to other provisions of this Agreement.
                Some Records required by this section may also fall within the definition
                of Work Product, Deliverables, or Altairnano’s Intellectual Capital.
                Altairnano’s obligations under this section do not diminish Altairnano’s
                other obligations toward, or Elanco’s property rights to, such Records.
                Altairnano’s obligations to maintain Records under this section are
                extinguished to the extent that Altairnano properly satisfies another
                obligation in this Agreement to deliver or to dispose of such
                Records.

            

    

     

    
      	27.9   
               	
              Audit
                Expenses.
                Elanco
                will pay its own expenses for any inspection of the Records or
                Altairnano’s premises. However, if in any audit, Elanco determines that
                material issues exist that result, resulted or will result in an
                overcharge of two percent (2%) or more of the invoiced amount for
                the
                audited period, Altairnano will, within thirty (30) days, reimburse
                Elanco
                for its out-of-pocket costs incurred in conducting the audit, in
                addition
                to any remedies that Elanco may have for the overcharge (such as
                a
                refund). This subsection is intended as a fair allocation of audit
                expenses, not as damages or a
                penalty.

            

    

     

    
      
        
        

      

      
        Page
          10 of
          26

        
          

        

      

      
        
        

      

    

     

    
      
        	
                28              
                  

              	
                Nondisclosure,
                  Publicity, and
                  Use of Elanco Name or
                  Trademarks

              

      

    

     

    
      	28.1   
                	
              Altairnano
                will not disclose any information about this Agreement, including
                its
                existence, without Elanco’s
                consent.

            

    

     

    
      	28.2   
                	
              Altairnano
                will not use the name of Elanco, any Elanco employee or any Elanco
                product
                or service in any press release, advertising or materials distributed
                to
                prospective or existing customers, annual reports or any other public
                disclosure, except with Elanco’s prior written authorization or as
                required by Applicable Law. To the extent allowed by Applicable Law,
                Altairnano will provide copies of any proposed disclosure for prior
                review
                and comment by Elanco’s external corporate communications (public
                relations) department no less than ten (10) days prior to disclosure.
                Under no circumstances will Altairnano use the Elanco logo or other
                trademark in any such materials or disclosures.

            

    

     

    
      	28.3     	
              In
                no event will Altairnano:

            

    

     

    
      	28.3.1   
                	
              represent,
                directly or indirectly, that any Altairnano product or service has
                been
                approved, recommended, certified or endorsed by
                Elanco;

            

    

     

    
      	28.3.2   
                	
              use
                Elanco’s name, logo, or other trademarks on any business cards,
                letterhead, or similar materials.

            

    

     

    
      	28.4  
               	
              Elanco
                may, in its sole discretion, revoke any authorization or consent
                given
                under this section. 

            

    

     

    
      
        

      

    

    RISK
      ALLOCATION 

    
      
        

      

    

    
       

    

    
      
        	
                29              
                  

              	
                Delivery
                  and Risk of Loss

              

      

    

    
       

      
        
          	
                                     
                    

                	
                  Product
                    will be delivered FOB from any Altairnano facility designated
                    in Exhibit
                    B.
                    (unless otherwise specifically stated in that Supplemental
                    Agreement).

                

        

      

       

    

    
      
        	
                30              

              	
                Breach
                  and Remedies 

              

      

    

     

    
      	30.1   
                	
              Remedies
                are cumulative.
                Except to the extent that remedies are expressly limited in this
                Agreement, each party is entitled to all the remedies available to
                it in
                law and in equity. The parties do not intend the identification of
                a
                particular remedy to limit a party to that remedy unless the language
                clearly states that the remedy is the sole or exclusive remedy.
                

            

    

     

    
      	30.2  
                	
              Termination
                for material breach.
                Either party may terminate this Agreement for material breach by
                written
                notice to the breaching party (with a copy to the breaching party’s legal
                counsel). Termination will be effective twenty-four (24) months after
                receipt of notice unless the breach is cured before that effective
                date.
                

            

    

     

    
      	30.3  
                	
              Late
                or Non-delivery of Product.
                In the event that Altairnano fails to deliver Product on or before
                the
                delivery date specified under Exhibit
                B,
                Elanco may cancel all or a portion of the affected order. The delivery
                date specified under Exhibit B may change as the result of agreement
                by
                the Steering Committee. 

            

    

     

    
      	30.4  
                	
              Non-conforming
                Product.
                Elanco reserves the right to reject Product that does not conform
                to the
                Product Specifications. Elanco will provide notice that Product has
                been
                rejected within thirty (30) days of receipt of the Product, or thirty
                (30)
                days of discovery of the non-conformity, should it not be evident
                upon
                reasonable inspection at the time of delivery. Upon notice of rejection,
                Altairnano will accept return of the Product and, at Elanco’s discretion,
                either replace the non-conforming Product with new Product meeting
                the
                Product Specifications as quickly as possible, or refund the purchase
                price paid
                by Elanco, plus Elanco’s shipping costs, within thirty (30) days of the
                rejection notice. Any Product for which Elanco elects to receive
                a refund
                will reduce the quantities of Product (if any) Elanco is required
                to
                purchase from Altairnano under Exhibit
                B.
                In addition, Altairnano will reimburse Elanco for the difference
                between
                Elanco’s contract price with Altairnano set forth in Exhibit
                B
                and the actual cost of any cover product purchased by Elanco to replace
                the non-conforming Product.

            

    

     

    
      
        
        

      

      
        Page
          11 of
          26

        
          

        

      

      
        
        

      

    

     

    
      	30.5 
                 	
              Breach
                of warranty of non-infringement.
                In the event Altairnano breaches any warranty of non-infringement
                for a
                Service or Product, Elanco may elect one of the following remedies,
                in
                addition to recovering any other damages or indemnification under
                this
                Agreement:

            

    

     

    
      	30.5.1      	
              Require
                Altairnano to obtain for Elanco’s benefit a license or assignment of
                rights sufficient to afford Elanco the full benefits of the Products
                and
                Services, both alternatives being at Altairnano’s
                expense.

            

    

     

    
      	30.5.2   
                	
              Recover
                (or withhold) from Altairnano the portion of Altairnano’s compensation
                attributable to the infringing Services or Products, as well as the
                value
                of the API used to manufacture any such
                Product.

            

    

     

    
      	30.6 
                 	
              Equitable
                relief.
                Altairnano acknowledges that, due to the nature of Elanco’s business,
                monetary damages are inadequate to protect Elanco from any threatened
                or
                actual breach of Altairnano’s duty to protect Elanco’s Confidential
                Information and that any breach will cause irreparable harm to Elanco.
                Accordingly, Altairnano agrees that Elanco is entitled to an injunction
                restraining any breach or threatened breach without having to prove
                the
                inadequacy of monetary damages or irreparable
                harm.

            

    

     

    
      
        	31              	
                Insurance 

              

      

    

     

    
      	31.1   
                	
              Altairnano
                will maintain all the insurance policies listed in the
                attached Exhibit
                C.
                

            

    

     

    
      
        	32              
                	
                Indemnification 

              

      

    

     

    
      	32.1   
                	
              Altairnano
                will indemnify Elanco and its Affiliates for any and all Losses (including
                Elanco’s own Losses and those owed under third-party Claims) to the extent
                arising from any Fault related to this Agreement on the part of
                Altairnano, its Affiliates, its Subcontractors, or their respective
                Employees.
                Altairnano will not indeminify Elanco and/or its Affiliates for any
                and
                all Losses resulting from any Fault related to this Agreement on
                the part
                of Elanco or its Affiliates, its Subcontractors, or their respective
                Employees.

            

    

     

    
      	32.2  
                	
              If
                an Indemnitee becomes aware of a third-party Claim that (if successful)
                will result in a Loss to be indemnified under this section, the Indemnitee
                will promptly notify the Indemnitor in writing (with a copy of the
                notice
                to the Indemnitor’s legal counsel). Failure or delay in giving such notice
                will not affect the right to be indemnified except to the extent
                that it
                prejudices the defense of the Claim. If the Indemnitor acknowledges
                that
                the Claim (if successful) will result in Loss within its obligation
                to
                indemnify under this section, it may assume the defense within fifteen
                (15) days after receiving the notice of the Claim. In the meantime,
                the
                Indemnitee may take any action that it deems appropriate to protect
                its
                interests or those of the Indemnitor, provided it is not prejudicial
                to
                the Indemnitor.

            

    

     

    
      
        
        

      

      
        Page
          12 of
          26

        
          

        

      

      
        
        

      

    

     

    
      	32.3  
                	
              If
                the Indemnitor acknowledges its obligation to indemnify and assumes
                the
                defense, it will have both the duty to defend and the right to control
                the
                defense. The Indemnitor will conduct the defense in a prudent manner
                and
                will keep the Indemnitee reasonably informed as to the status of
                the
                defense. The Indemnitee will cooperate with the defense and may retain
                separate counsel at its own expense to participate in, but not control,
                the defense. Neither party may settle a Claim without the consent
                of the
                other, and that consent may not be unreasonably withheld or
                delayed.

            

    

     

    
      	32.4  
                	
              If
                the Indemnitor does not timely assume the defense, the Indemnitee
                will
                have the right (but no duty) to defend or settle the Claim at the
                risk of
                the Indemnitor. The Indemnitor will reimburse the Indemnitee for
                its
                expenses (including reasonable attorney’s fees) of defending or settling
                the Claim.

            

    

     

    
      
        	
                33              
                  

              	
                Force
                  Majeure  

              

      

    

     

    
      	33.1     	
              A
                party will be excused from performing its obligations under this
                Agreement
                to the extent that its performance is delayed or prevented by an
                event
                that the party could not control, could not reasonably anticipate
                when the
                obligation was undertaken, and could not avoid through the exercise
                of due
                diligence (“force majeure”). To be excused, the party claiming force
                majeure must promptly notify the other and exercise due diligence
                to
                avoid, remove or overcome the force majeure. In the event that
                Altairnano’s performance is excused because of a force majeure, Elanco may
                replace the part of Altairnano’s performance that is delayed or prevented
                from another source. Altairnano’s compensation will be equitably adjusted.
                The following is a non-exclusive list of examples that may qualify
                as a
                force majeure: fire, explosion, general labor strikes, acts of God,
                natural disasters, war, insurrection, civil strife, government acts,
                and
                acts of terrorism. 

            

    

     

    
      
        

      

    

    GENERAL
      TERMS AND CONDITIONS

    
      
        

      

    

    
       

    

    
      
        	34              
                	
                Independent
                  Contractor

              

      

    

     

    
      	34.1     	
              In
                performing its obligations under this Agreement, Altairnano will
                be acting
                solely as an independent contractor and not in the capacity of an
                agent,
                partner, joint-venturer or other such capacity. Neither Altairnano
                nor
                Elanco will have the authority to bind, commit or incur any liability
                on
                behalf of the other or to otherwise act in any way as agent or
                representative of the other party.

            

    

     

    
      	34.2   
               	
              Neither
                Altairnano, its Employees, its Subcontractors nor its Subcontractors’
                Employees will be considered employees of Elanco for any purpose.
                Elanco
                will not withhold any taxes, pay any Social Security, pay unemployment
                compensation, or furnish worker’s compensation for any of them, and Elanco
                will not provide any employment benefits to any of
                them.

            

    

    
       

    

    
      
        	35              
                	
                Succession,
                  Assignment and Delegation 

              

      

    

     

    
      	35.1   
                	
              Altairnano
                will not, in whole or in part, delegate obligations or duties of
                performance, or assign rights under this Agreement (other than assignment
                of Altairnano’s right to receive money) without Elanco’s prior written
                consent, which consent Elanco may withhold or condition in its absolute
                discretion. Any such attempted delegation or assignment without Elanco’s
                written consent will be void. 

            

    

     

    
      
        
        

      

      
        Page
          13 of
          26

        
          

        

      

      
        
        

      

    

     

    
      	35.2   
                	
              Should
                Elanco consent to Altairnano’s use of a Subcontractor, Altairnano will be
                fully responsible to Elanco for any portion of the performance of
                this
                Agreement by Altairnano’s Subcontractors, to the same extent as if that
                performance was rendered directly by Altairnano.
                

            

    

     

    
      
        	36              
                	
                Severability 

              

      

    

     

    
      	36.1     	
              If
                a provision of this Agreement is held to be unenforceable, the other
                provisions will remain in effect. If possible, the offending provision
                will be modified to the slightest degree necessary to make it enforceable,
                remaining as close as possible to the parties’ original intent for the
                provision. If not possible, the offending provision will be stricken.
                

            

    

     

    
      
        	37              
                	
                Contract
                  Interpretation

              

      

    

     

    
      	37.1   
                	
              The
                meaning of a provision of this Agreement will be considered in context
                with other provisions of the Agreement.

            

    

     

    
      	37.2   
                	
              The
                following principles apply to the construction of this Agreement
                unless
                the construction is plainly contrary to the intent of the
                parties:

            

    

     

    
      	37.2.1   
                	
              Where
                language has a generally prevailing meaning, it is interpreted in
                accord
                with that meaning;

            

    

     

    
      	37.2.2   
                	
              Technical
                terms and terms of art are given their technical meaning when used
                in a
                transaction within their technical
                field;

            

    

     

    
      	37.2.3   
                	
              Singular
                words may be treated as plural and plural words may be treated as
                singular; and

            

    

     

    
      	37.2.4   
                	
              Masculine
                gender words may be treated in the feminine and feminine gender words
                may
                be treated as masculine.

            

    

     

    
      	37.3  
                	
              In
                computing any period of time under this Agreement, the day of the
                act,
                event, or default from which the designated period of time begins
                to run
                is not included. The last day of the period so computed is included,
                unless it is a Saturday, a Sunday, or a Business
                Holiday.

            

    

     

    
      
        	
                38              
                  

              	
                Choice
                  of Law 

              

      

    

     

    
      	38.1   
                	
              This
                Agreement will be governed in all respects by the laws of New York,
                excluding its rules on conflict of
                law.

            

    

     

    
      
        	39              	
                Choice
                  of Forum 

              

      

    

     

    
      	39.1   
                	
              Any
                action related to this Agreement will be brought and maintained
                exclusively in Marion County, Indiana.

            

    

     

    
      
        	40              
                	
                Survival

              

      

    

     

    
      	40.1     	
              The
                expiration, termination or cancellation of this Agreement will not
                extinguish the rights of either party that accrue prior to expiration,
                termination or cancellation or any obligations that extend beyond
                termination, expiration or cancellation, either by their inherent
                nature
                or by their express terms. 

            

    

     

    
      
        
        

      

      
        Page
          14 of
          26

        
          

        

      

      
        
        

      

    

     

    
      
        	41               
                	
                No
                  Waiver 

              

      

    

     

    
      	41.1  
                	
              No
                provision of this Agreement is waived unless the waiver is in writing
                and
                signed by an authorized representative of the party granting the
                waiver.

            

    

     

    
      	41.2  
                	
              No
                delay in exercising any right, power or privilege under this Agreement
                will operate to waive completely or partially any present or future
                exercise of that right, power or
                privilege.

            

    

     

    
      
        	42               
                	
                Notice 

              

      

    

     

    
      	42.1  
                	
              Unless
                specifically directed otherwise in the Agreement, whenever written
                notice
                is required by this Agreement, it must be delivered to the attention
                of
                the individual indicated below by:

            

    

     

    
      	42.1.1     	
              certified
                mail, postage pre-paid, return receipt
                requested,

            

    

     

    
      	42.1.2  
                	
              hand
                delivery, 

            

    

     

    
      	42.1.3  
                	
              commercial
                overnight delivery service such as Federal Express or United Parcel
                Service, or

            

    

     

    
      	42.1.4  
                	
              facsimile.

            

    

     

    
      	42.2    	
              Either
                party may change its address for notices by written notice to the
                other.

            

    

     

    
      	42.3  
               	
              Notice
                is effective when received. If delivery of any written notice under
                this
                Agreement cannot be made despite the exercise of diligent efforts,
                the
                requirement to give notice is
                excused.

            

    

     

    
      	42.4  
               	
              For
                notice to Elanco:

            

    

     

    
      	
              Deliver
                notices to:

            	
              Send
                a copy to:

            	
              If
                the Agreement calls for a copy to Lilly’ legal counsel, send it
                to:

            
	
              Address:

              Elanco
                Animal Health

              A
                Division of Eli Lilly and Company

              2001
                West Main Street 

              P.O.
                Box 708

              Greenfield,
                IN 46140

            	
              Address:
                

              Eli
                Lilly and Company

              Elanco
                Corporate Center

              Indianapolis,
                IN 46285

            	
              Address:
                

              Eli
                Lilly and Company

              Elanco
                Corporate Center

              Indianapolis,
                IN 46285

            
	
              Attention:
                

              CMC
                Project Leader

            	
              Attention:
                

              Global
                Sourcing Manager

            	
              Attention:
                Legal - Commercial Transactions

            
	
              Facsimile:
                (317) 277-4993

            	
              Facsimile:
                (317) 276-8508

            	
              Facsimile:
                (317) 433-6610

            

    

     

    
      	42.4.1   
               	
              For
                notice to Altairnano:

            

    

     

    
      
        
        

      

      
        Page
          15 of
          26

        
          

        

      

      
        
        

      

    

     

    
      	
              Deliver
                notices to:

            	
              Send
                a copy to:

            	
              If
                the Agreement calls for a copy to Altairnano’s legal counsel, send it
                to:

            
	
              Address:

              Altairnano,
                Inc.

              204
                Edison Way

              Reno,
                NV 89502

            	
              Address:

              Altairnano,
                Inc.

              204
                Edison Way

              Reno,
                NV 89502

            	
              Address:
                

              Altairnano,
                Inc.

              204
                Edison Way

              Reno,
                NV 89502

            
	
              Attention:
                

              Doug
                Ellsworth

            	
              Attention:
                

              Toni
                Bondi

            	
              Attention:
                

              Jeff
                McKinney

            
	
              Facsimile:(775)856
                -1619____

            	
              Facsimile:
                :(775)856 -1619

            	
              Facsimile:
                :(775)856 -1619

            

    

     

    
      
        	43               
                	
                Integrated
                  Agreement and Amendments

              

      

    

     

    
      	43.1   
               	
              This
                Agreement (including any documents referenced by it) is the final,
                complete and exclusive expression of all the statements, promised,
                terms
                and conditions within its scope for ***.
                It supersedes all prior agreements or promises, whether written or
                oral,
                within its scope. Neither party relies upon any representation whatsoever
                by the other party, other than representations in this Agreement.
                

            

    

     

    
      	43.2   
                	
              No
                amendment to this Agreement will be binding on either party unless
                it is
                in writing and signed by an authorized representative of each party
                or
                executed in another manner expressly provided b this Agreement. Such
                an
                amendment does not require the consent or agreement of any third
                party,
                even if the third party is beneficiary of this Agreement.
                

            

    

     

    
      
        	
                44               
                  

              	
                Execution
                  

              

      

    

     

    
      	44.1     	
              This
                document represents a binding contract when, and only when, it is
                signed
                below by authorized representatives of both
                parties.

            

    

     

    
      	44.2   
               	
              This
                document may be executed in separate identical copies (counterparts),
                each
                of which is considered an original, but all of which, when taken
                together,
                are one agreement. Delivery of an executed counterpart by Electronic
                or
                facsimile transmission is as effective as delivery of an original
                written
                counterpart.

            

    

     

     

    
      	
              On
                behalf of Altair
                Nanotechnologies, Inc.:

            	
              On
                behalf of Eli Lilly and Company

            
	
               

              Signed:
                /s/

            	
               

              Signed:
                /s/

            
	
               

              Name:

            	
               

              Name:
                

            
	
               

              Title:
                

            	
               

              Title:
                

            
	
               

              Date:
                September 25, 2007

            	
               

              Date:
                September 24, 2007

            

    

     

    
      
        
        

      

      
        Page
          16 of
          26

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A 

    Definitions

     

    
      
        	A.1          	
                Capitalized
                  Terms

              

      

    

     

    
      	A.1.1  
                	
              Affiliate
                of
                a party means any entity that controls, is controlled by, or is under
                common control with that party. One entity is deemed to control the
                other
                if and only if it directly or indirectly

            

    

     

    
      	A.1.1.1        
                	
              owns
                more than fifty percent (50%) of the equity in the other; or
                

            

    

     

    
      	A.1.1.2        
                	
              controls
                more than fifty percent (50%) of the voting rights of the
                other.

            

    

     

    
      	A.1.2   
               	
              Agreement
                means the document this exhibit is attached to and all of its exhibits.
                

            

    

     

    
      	A.1.3   
               	
              API
                or Active Pharmaceutical Ingredient
                means the active pharmaceutical ingredient provided by Altairnano
                to
                Elanco to be incorporated into finished therapeutic pharmaceutical
                Products. The API for a particular project is identified in Exhibit
                D.
                

            

    

     

    
      	A.1.4   
               	
              Applicable
                Law means
                any statute, law, treaty, rule, code, ordinance, regulation, permit,
                interpretation, certificate or order of a Government Authority, or
                any
                judgment, decision, decree, injunction, writ, order subpoena, or
                like
                action of any court, arbitrator or other government
                entity.

            

    

     

    
      	A.1.5   
               	
              cGMP
                (current Good Manufacturing Practises) means the current good
                manufacturing practices described in U.S. 21 CFR, Parts 210 et seq.,
                as
                amended and any similar requirement of other
                jurisdictions.

            

    

     

    
      	A.1.6   
               	
              Claim
                includes claims, demands, lawsuits, administrative proceedings or
                similar
                actions.

            

    

     

    
      	A.1.7   
               	
              Compensation
                means Altairnano’s compensation for performance under this Agreement
                established in Exhibit
                B.
                

            

    

     

    
      	A.1.8   
               	
              Deliverables
                means
                any materials, articles, substances, models, samples, software, data,
                records, reports, notices, documents, photographs, video recordings,
                audio
                recordings, drawings, designs, specifications, information and the
                like
                (whether physical, Electronic, magnetic or other form) that Altairnano
                is
                specifically obligated to furnish Elanco or that are identified as
                Deliverables in this Agreement.

            

    

     

    
      	A.1.9   
               	
              Effective
                Date
                is
                the first day the Agreement is in
                effect.

            

    

     

    
      	A.1.10 
               	
              Electronic
                relates
                to technology having electrical, digital, magnetic, wireless, optical,
                electromagnetic, or similar
                capabilities.

            

    

     

    
      	A.1.11 
               	
              Employee
                means an employee, officer, director, or Temporary Contract Worker
                of
                Altairnano. 

            

    

     

    
      	A.1.12 
               	
              Expiration
                Date
                is
                the day the term of the Agreement expires if it is not cancelled
                or
                terminated sooner.

            

    

     

    
      	A.1.13 
               	
              Fault
                means any breach of a covenant, representation or warranty under
                this
                Agreement; negligence or gross negligence; and any willful, wanton,
                or
                intentional misconduct, whether by act or
                omission.

            

    

     

    
      
        
        

      

      
        Page
          17 of
          26

        
          

        

      

      
        
        

      

       

    

    
      	A.1.14 
               	
              Government
                Authority
                means any state, local or foreign government entity, authority, agency,
                instrumentality, court, tribunal, regulatory commission or other
                body,
                whether legislative, judicial, administrative or executive (or a
                combination or permutation thereof), and any arbitrator to whom a
                dispute
                has been presented under government rule or by agreement of the parties
                with an interest in such dispute.

            

    

     

    
      	A.1.15 
               	
              Indemnitee
                is
                a Person with a right to be
                indemnified.

            

    

     

    
      	A.1.16 
               	
              Indemnitor
                is
                a Person with an obligation to indemnify another
                Person.

            

    

     

    
      	A.1.17 
               	
              Intellectual
                Property
                means all inventions, know-how, original expressions of ideas embodied
                in
                a tangible form, trademarks, trade secrets, and the like that are
                afforded
                (or may be afforded upon action by a Government Authority, such as
                the
                United States Patent Office) property rights (or quasi-property rights)
                including patents, copyrights, trademarks, trade secrets, publicity
                rights, privacy rights, and moral rights (such as rights of attribution
                and integrity).

            

    

     

    
      	A.1.18  	
              Elanco’s
                Confidential Information
                means information that Altairnano receives from Elanco or develops
                in
                performing this Agreement that is nonpublic, confidential, or proprietary
                in nature to Elanco and includes third party information that Elanco
                is
                obligated to maintain in confidence. The confidential nature of
                information is not affected by the manner of its communication to
                or
                acquisition by Altairnano, whether by oral, visual, written, Electronic
                or
                other means. Elanco’s Confidential Information does not include
                information that Altairnano can show

            

    

     

    
      	A.1.18.1         	
              it
                already lawfully knew prior to receiving it from Elanco,
                

            

    

     

    
      	A.1.18.2      
                	
              it
                lawfully obtained from a third party that was under no obligation
                to
                another party to this Agreement to maintain the information in confidence,
                

            

    

     

    
      	A.1.18.3     
                	
              it
                developed independently, or 

            

    

     

    
      	A.1.18.4     
                	
              became
                known to the general public through no Fault of Altairnano.
                

            

    

     

    
      	A.1.19  	
              Elanco’s
                Property
                means any Intellectual Property and other personal property, both
                tangible
                and intangible, owned solely or jointly by Elanco, whether such ownership
                arises under this Agreement or
                otherwise.

            

    

     

    
      	A.1.20  	
              Loss
                includes losses, damages, costs, or expenses (including interest,
                penalties, attorney fees, accounting fees, and expert witness fees)
                recoverable at law or in equity, whether sounding in contract, tort,
                strict liability or other theory.

            

    

     

    
      	A.1.21  	
              Minimum
                Yield
                means the minimum yield, if any, specified in Exhibit
                B.

            

    

     

    
      	A.1.22  	
              Person
                includes an individual, partnership, corporation and
                association.

            

    

     

    
      	A.1.23  	
              Product
                means the product specified in Exhibit
                D.
                

            

    

     

    
      	A.1.24  	
              Product
                Specifications
                means the product specifications identified in Exhibit
                D.

            

    

     

    
      	A.1.25  	
              Project
                means the Services and Deliverables specified in Exhibit
                B.
                

            

    

     

    
      	A.1.26  	
              Project
                Specifications
                means the specifications of the Services and
                Deliverables.

            

    

     

    
      	A.1.27  	
              Quality
                Agreement means
                the document attached Exhibit
                E
                and which sets out the parties respective responsibilities for Product
                quality.

            

    

     

    
      
        
        

      

      
        Page
          18 of
          26

        
          

        

      

      
        
        

      

    

     

    
      	A.1.28
                	
              Record
                means without limitation, all information, data, text, images, sounds
                codes, source codes, computer programs, software, data bases or the
                like,
                used, created or obtained in the performance of this Agreement, inscribed
                in tangible medium or stored in an Electronic or other medium and
                that is
                retrievable in perceivable form.

            

    

     

    
      	A.1.29
                	
              Services
                means that particular services that Altairnano is to provide on a
                Project.

            

    

     

    
      	A.1.30
                	
              Subcontractor
                means any individual, partnership, corporation, association or other
                entity that performs any of the obligations of Altairnano under this
                Agreement, whether in privity to Altairnano or in privity to another
                Subcontractor.

            

    

     

    
      	A.1.31
                	
              Temporary
                Contract Worker
                means an individual other than an employee engaged by Altairnano
                to
                fulfill any of its obligations under this Agreement at the direction
                of
                Altairnano. The term includes self-employed individuals such as
                “freelancers”, employees of other “leased” to Altairnano, and individuals
                made available to Altairnano by temporary employment agencies and
                the
                like.

            

    

     

    
      	A.1.32
                	
              Work
                Product means
                all information works of authorship, trademarks, articles, materials,
                artwork, drawings, text, specifications, calculations reports in
                versions,
                discoveries, processes, improvements software and other documentation
                and
                material created, developed, conceived or first reduced to practice
                by
                Altairnano, alone or with others related to Services rendered for
                Elanco
                under this Agreement or which derive from information or materials
                Altairnano has received from
                Elanco.

            

    

     

    
      
        	A.2          
                	
                Names
                  of segments of the
                  Agreement

              

      

    

     

    
      	A.2.1  
                	
              Segments
                of this Agreement with headings in bold type and numbered either
                as 1 or
                A.1 are called sections.

            

    

     

    
      	A.2.2  
                	
              Segments
                of this Agreement numbered as either 1.1 or A.1.1 are called
                subsections.

            

    

     

    
      	A.2.3  
                	
              Segments
                of this Agreement numbered as either 1.1.1 or A.1.1.1 are called
                clauses.

            

    

     

    
      
        
        

      

      
        Page
          19 of
          26

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B 

    Project
      Specifications 

     

    
      

    

    PROJECT
      SPECIFICATIONS

    
      
        

      

       

    

    
      
        	B.1               
                	
                Project
                  Description

              

      

    

     

    
      
        	
                Tasks
                  and Milestones

              	 	
                Due
                  Date

              	 

      

       

      
        	
                Analytical
                  Methods Development

              	 	 	
              	 
	
                Reference
                  Standard Program

              	 	 	
                ***

              	 
	
                Analytical
                  and Microbial Method Development Report

              	 	 	
                ***

              	 
	
                VICH
                  Residual Solvent Profile

              	 	 	
                ***

              	 
	
                VICH
                  Impurity Profile

              	 	 	
                ***

              	 
	
                Drug
                  Substance Characterization including Structural
                  Confirmation

              	 	 	
                ***

              	 
	
                VICH
                  Forced Degradation Studies

              	 	 	
                ***

              	 
	
                Analytical
                  and Microbial Method Validation protocols and Reports

              	 	 	
                ***

              	 
	
                Analytical
                  and Microbial method Transfer to Altairnano Facility

              	 	 	
                ***

              	 

      

       

      
        	
                Process
                  Development

              	 	 	
                ***

              	 
	
                Demonstration
                  Batch at Scale with VICH Stability

              	 	 	
                ***

              	 
	
                Development
                  History Report / Development Pharmaceutics Report

              	 	 	
                ***

              	 
	
                Process
                  Flow Document

              	 	 	
                ***

              	 
	
                Master
                  Batch Record

              	 	 	
                ***

              	 
	
                Specification
                  Justification Document

              	 	 	
                ***

              	 
	
                MSDS

              	 	 	
                ***

              	 
	
                Product
                  Specification Document (Revise as necessary)

              	 	 	
                ***

              	 
	
                Cleaning
                  Protocol

              	 	 	
                ***

              	 
	
                Documents
                  Required for Elanco Manufacturability Review 2/3

              	 	 	
                ***

              	 
	
                CMC
                  Common Technical Document/DMF/ASMF for Submissions

              	 	 	
                ***

              	 
	
                 

              	 	 	
                ***

              	 
	
                Validation
                  Master Plan and Protocols

              	 	 	
                ***

              	 
	
                Cleaning
                  Validation protocols

              	 	 	
                ***

              	 
	
                Development
                  History Report

              	 	 	
                ***

              	 
	
                Documents
                  Required for Elanco Manufacturability Review 4

              	 	 	
                ***

              	 
	
                Validation
                  Reports

              	 	 	
                ***

              	 
	
                Documents
                  Required for Elanco Manufacturability Review 5

              	 	 	
                ***

              	 

      

       

      
        	
                Product

              	 	 	 	 
	
                Clinical
                  Trial (CT) / Registration Batches

              	 	 	
                ***

              	 
	
                Validation
                  Batches

              	 	 	
                ***

              	 

      

       

      
        	
                Manufacturing
                  Services

              	 	 	 	 
	
                CT
                  Production Build out

              	 	 	
                ***

              	 
	
                CT
                  Facility Lease

              	 	 	
                ***

              	 
	
                CT
                  Registration Batch VICH Stability

              	 	 	
                ***

              	 
	
                Validation
                  Batch Stability

              	 	 	
                ***

              	 
	
                ***
                  Manufacturing Reservation

              	 	 	
                ***

              	 
	
                ***
                  Manufacturing Reservation

              	 	 	
                ***

              	 

      

       

      
        	
                Supplier
                  Qualification

              	 	 	 	 
	
                Quality
                  Agreement

              	 	 	
                ***

              	 
	
                Quality
                  Audit by Elanco Development QA

              	 	 	
                ***

              	 
	
                cGMP
                  Compliant CT manufacturing Facility Qualification by Elanco Dev.
                  QA

              	 	 	
                ***

              	 
	
                cGMP
                  Compliant Commercial manufacturing Qualification by Elanco Commercial
                  QA

              	 	 	
                ***

              	 
	
                Regulatory
                  Pre-Approved Inspections

              	 	 	
                ***

              	 

      

       

      
        	
                International
                  Cooperation on Harmonization of Technical Requirements for
                  Registration

              
	
                of
                  Veterinary Medicinal Products (VICH)

              	 	 	 	 

      

    

     

    
      
        
        

      

      
        Page
          20 of
          26

        
          

        

      

      
        
        

      

    

     

    
      
        	B.2               
                	
                Product
                  Information

              

      

    

     

    
      
        
          
            	                      
                                   
                    	
                    
                      Altairnano
                        will manufacture and supply Product which meets the Product
                        Specifications
                        attached to the Agreement as Exhibit
                        D.
                        Altairnano will manufacutre Product for Elanco at its qualified
                        facility(ies).

                       

                      Altairnano
                        will manufacture and supply Product to Elanco as described
                        in and the
                        Quality Agreement. The Quality Agreement is attached to the
                        Agreement as
                        Exhibit
                        E.

                    

                  

          

        

      

    

     

    
      
        	B.3                
                	
                Shipping

                 

                
                  Shipping
                    instructions, including conditions, will be communicated at the
                    time of
                    Product manufacture.

                

              

      

    

     

    
      
        

      

    

    COMPENSATION
      

    
      
        

      

    

     

    
      
        	
                B.4               
                  

              	
                Products

              

      

    

    
       

      
        
          	
                  Tasks
                    and Milestones

                	 	
                  Compensation

                	 

        

         

        
          	
                  Analytical
                    Methods Development

                	 	
                  $

                	
                  187,400

                	 
	
                  Reference
                    Standard Program

                	 	 	
                	 
	
                  Analytical
                    and Microbial Method Development Report

                	 	 	
                	 
	
                  VICH
                    Residual Solvent Profile

                	 	 	
                	 
	
                  VICH
                    Impurity Profile

                	 	 	
                	 
	
                  Drug
                    Substance Characterization including Structural
                    Confirmation

                	 	 	
                	 
	
                  VICH
                    Forced Degradation Studies

                	 	 	
                	 
	
                  Analytical
                    and Microbial Method Validation protocols and Reports

                	 	 	
                	 
	
                  Analytical
                    and Microbial method Transfer to Altairnano Facility

                	 	 	
                	 

        

         

        
          	
                  Process
                    Development

                	 	
                  $

                	
                  1,073,000

                	 
	
                  Demonstration
                    Batch at Scale with VICH Stability

                	 	 	
                	 
	
                  Development
                    History Report / Development Pharmaceutics Report

                	 	 	
                	 
	
                  Process
                    Flow Document

                	 	 	
                	 
	
                  Master
                    Batch Record

                	 	 	
                	 
	
                  Specification
                    Justification Document

                	 	 	
                	 
	
                  MSDS

                	 	 	
                	 
	
                  Product
                    Specification Document (Revise as necessary)

                	 	 	
                	 
	
                  Cleaning
                    Protocol

                	 	 	
                	 
	
                  Documents
                    Required for Elanco Manufacturability Review 2/3

                	 	 	
                	 
	
                  CMC
                    Common Technical Document/DMF/ASMF for Submissions

                	 	 	
                	 
	
                   

                	 	 	
                	 
	
                  Validation
                    Master Plan and Protocols

                	 	 	
                	 
	
                  Cleaning
                    Validation protocols

                	 	 	
                	 
	
                  Development
                    History Report

                	 	 	
                	 
	
                  Documents
                    Required for Elanco Manufacturability Review 4

                	 	 	
                	 
	
                  Validation
                    Reports

                	 	 	
                	 
	
                  Documents
                    Required for Elanco Manufacturability Review 5

                	 	 	
                	 

        

         

        
          	
                  Product

                	 	 	
                	 
	
                  Clinical
                    Trial (CT) / Registration Batches

                	 	
                  $

                	
                  ***/kilogram

                	 
	
                  Validation
                    Batches

                	 	
                  $

                	
                  ***/kilogram

                	 

        

         

        
          
            
            

          

          
            Page
              21 of
              26

            
              

            

          

          
            
            

          

        

         

        
          	
                  Manufacturing
                    Services

                	 	 	
                	 
	
                  CT
                    Production Build out

                	 	
                  $

                	
                  320,000

                	 
	
                  CT
                    Facility Lease

                	 	
                  $

                	
                  122,400

                	 
	
                  CT
                    Registration Batch VICH Stability

                	 	
                  $

                	
                  88,000

                	 
	
                  Validation
                    Batch Stability

                	 	
                  $

                	
                  162,200

                	 
	
                  ***
                    Manufacturing Reservation

                	 	
                  $

                	
                  277,000

                	 
	
                  ****Manufacturing
                    Reservation

                	 	
                  $

                	
                  277,000

                	 

        

      

       

    

    
      
        
        

      

      
        Page
          22 of
          26

        
          

        

      

      
        
        

      

    

    

    Exhibit
      C  

    Insurance 

    
      
         

      

    

    
      
        	
                C.1               
                  

              	
                Policies

              

      

    

     

    
      	C.1.1  	
              Altairnano
                will maintain insurance policies described in the table below that
                cover
                all relevant acts (i.e., occurrences, or accidents, or errors and
                omissions, as appropriate to the policy) rel this Agreement on the
                part of
                Altairnano and anyone for whose acts Altairnano may be
                liable.

            

    

     

    
      	C.1.2  	
              To
                the extent that Altairnano’s policies do not cover acts of its
                Subcontractors, Altairnano will cause each of its Subcontractors
                to carry
                policies satisfying this Exhibit. 

            

    

     

    
      	C.1.3  	
              Each
                policy will have limits no less than those listed in the
                table.

            

    

     

    
      	C.1.4  	
              Each
                policy (other than any umbrella liability policy) will furnish
                first-dollar coverage (i.e., zero deductible or self-insured retention).
                

            

    

     

    
      	C.1.5  	
              Each
                policy other than workers’ compensation will name Elanco as an additional
                isured. 

            

    

     

    
      	C.1.6  	
              Each
                policy will contain a waiver of subrogation in favor of Elanco.
                

            

    

     

    
      
        	
                C.2               
                  

              	
                Insurers

              

      

    

     

    
      	C.2.1  	
              Each
                of the policies will be underwritten by insurers having a Best rating
                of
                A, XV or better.

            

    

     

    
      
        	
                C.3               
                  

              	
                Certificates

              

      

       

    

    
      	C.3.1  	
              Before
                beginning work under this Agreement, Altairnano will furnish Elanco
                a
                certificate of insurance for each policy, which states that the insurer
                will (at a minimum) endeavor to notify Elanco at least thirty (30)
                days in
                advance of any cancellation. 

            

    

     

    
      
        
        

      

      
        Page
          23 of
          26

        
          

        

      

      
        
        

      

    

     

    
      	
              Policy

            	
              Limits
                

            
	
              Commercial
                general liability 

            	
              $2,000,000
                general aggregate (other than products-completed operations)

              $2,000,000
                products-completed operations aggregate

              $1,000,000
                personal and advertisers injury

              $1,000,000
                each occurrence

              $1,000,000
                Damage to rented premises

            
	
              Worker’s
                compensation 

            	
              As
                required by Applicable Law

            
	
              Employer’s
                liability 

            	
              $500,000
                for accident coverage, each accident

              $500,000
                for disease coverage, per employee

              $500,000
                for disease coverage, aggregate

            
	
              Automobile
                liability 

            	
              For
                split-limit policies: 

              $1,000,000
                bodily injury, per individual

              $1,00,000
                bodily injury, per accident

              $1,000,000
                property damage

              or

              For
                combined single-limit policies: 

              $1,000,000
                per accident

            
	 	 
	
              Umbrella
                liability following from the above policies (excluding worker’s
                compensation in Indiana and Nevada)

            	
              $10,000,000
                

            

    

    

     

    
      
        
        

      

      
        Page
          24 of
          26

        
          

        

      

      
        
        

      

    

     

    Exhibit
      D  

    Product
      Specifications 

     

    ***

     

    
      
        
        

      

      
        Page
          25 of
          26

        
          

        

      

      
        
        

      

    

     

    Exhibit
      E  

    Quality
      Agreement 

     

     

    
      
        	E.1             
                	
                Currently,
                  at the time of this Development Services Agreement approval, Altairnao’s
                  facitilities and Quality Systems are in development. As a component
                  of
                  Elanco’s supplier qualification program a Quality Agreement must be
                  established. A Quality Agreement must be established according
                  to the
                  schedule in Exhibit B. Below is a common table of contents for
                  a Quality
                  Agreement.

              

      

    

     

    
 

     

     

    Page
      26 of
      26

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