THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE SECURITIES LAWS AND NO PROSPECTUS
HAS BEEN  FILED  UNDER ANY  CANADIAN  SECURITIES  LAWS IN RESPECT  THERETO.  THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE  OF  SUCH A  PROSPECTUS  OR AN
EFFECTIVE  REGISTRATION  STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE  SECURITIES  LAWS, OR AN OPINION OF COUNSEL,  IN A GENERALLY
ACCEPTABLE FORM, THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
STATE  SECURITIES  LAWS OR UNLESS SOLD  PURSUANT TO RULE 144 UNDER SAID ACT. THE
SECURITIES  REPRESENTED  HEREBY MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED
TO ANY PERSON RESIDENT IN THE PROVINCE OF ONTARIO WITHIN ONE YEAR OF THE DATE OF
ISSUANCE  HEREOF.  ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS
OF THIS NOTE,  INCLUDING  SECTION 2(e)(vi) HEREOF.  THE PRINCIPAL AMOUNT AND THE
INTEREST THEREON REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNTS SET FORTH
ON THE FACE HEREOF PURSUANT TO SECTION 2(e)(vi) OF THIS NOTE.

                       ASSET-BACKED EXCHANGEABLE TERM NOTE
                       -----------------------------------

Chicago, Illinois

December 15, 2000                                    $7,000,000

FOR VALUE RECEIVED,  Altair  International,  Inc., an Ontario  corporation  (the
"Company"),  Altair Technologies,  Inc., a Nevada corporation,  Mineral Recovery
Systems,  Inc., a Nevada  corporation  and Fine Gold Recovery  Systems,  Inc., a
Nevada corporation (collectively,  the "Consolidated Companies"), hereby jointly
and  severally  promises to pay to the order of Doral 18, LLC, a Cayman  Islands
limited liability  company,  or registered assigns in accordance with Section 20
hereof ("Holder") the principal amount of Seven Million Dollars ($7,000,000), on
December  15,  2003 (the  "Maturity  Date"),  and to pay  interest on the unpaid
principal balance hereof until payment in full thereof as described in Section 2
hereof,  at the rate of 10% per annum from the date hereof (the "Issuance Date")
until the same becomes due and payable, whether at maturity or upon acceleration
or by exchange or redemption  in accordance  with the terms hereof or otherwise.
Interest on this Note shall commence  accruing on the Issuance Date and shall be
computed  on the basis of a 365-day  year and actual  days  elapsed and shall be
payable in cash,  at the  Company's  option,  on each Due Date or at the time of
optional or mandatory  redemption  or exchange of principal in  accordance  with
Section 1 hereof; as applicable; provided, that until the Registration Statement
contemplated  by the Securities  Purchase  Agreement dated as of the date hereof
between  the  Company  and Holder  (the  "Securities  Purchase  Agreement")  and
Registration  Rights Agreement (as defined in the Securities Purchase Agreement)
is declared effective by the Securities and Exchange  Commission,  such interest
shall be payable in accordance  with the last sentence of Section 1 hereof.  Any
amount of this Note which is not paid when due shall bear  interest  at the rate
of 1.5% per month  (prorated  for partial  months)  (rather than at the rate set
forth above) until the same is paid in full (the amount of such interest payment
may be referred to in this Note as "Default Interest").  Any amount with respect
to which Holder has a conversion  right pursuant to Section 2(b)(i) hereof shall
be deemed to have been paid when due for purposes of the preceding sentence.

<PAGE>

1.       PAYMENTS OF PRINCIPAL AND INTEREST.

         All payments of principal and interest on this Note (to the extent such
principal  and/or interest is not converted into Common Stock in accordance with
the terms  hereof) shall be made in lawful money of the United States of America
by wire transfer of immediately  available funds as follows:  American  National
Bank and Trust, 120 South LaSalle Street, Chicago, IL 60603, ABA 071000770,  FBO
Doral 18, LLC, A/C  5330299586  or to such other account as Holder may from time
to time  designate by not less than 10 days prior  written  notice in accordance
with the provisions of this Note. Whenever any amount expressed to be due by the
terms of this Note is due on any day  which is not a  Business  Day (as  defined
below),  the same  shall  instead be due on the next  succeeding  day which is a
Business Day and, in the case of any interest payment date which is not the date
on which this Note is paid in full,  the extension of the due date thereof shall
not be taken into account for purposes of determining the amount of interest due
on such date. For purposes of this Note, "Business Day" shall mean any day other
than a  Saturday,  Sunday  or a day on  which  commercial  banks  in the City of
Chicago, Illinois are authorized or required by law or executive order to remain
closed. Each capitalized term used herein, and not otherwise defined, shall have
the   meaning   ascribed   thereto  in  the   Securities   Purchase   Agreement.
Notwithstanding  anything to the contrary set forth  herein,  interest  shall be
payable on a monthly  basis in cash by wire  transfer of  immediately  available
funds to the account  designated  above in this Section 1 until such time as the
Registration  Statement  contemplated by the Securities  Purchase  Agreement and
Registration  Rights  Agreement  is declared  effective  by the  Securities  and
Exchange Commission.

2.       EXCHANGE OF NOTE.

         This Note shall be exchangeable into the Company's shares,  without par
value  (the  "Common  Stock"),  on the  terms and  conditions  set forth in this
Section 2.

(a)      Certain  Defined Terms.  For purposes of this Note, the following terms
shall have the following meanings:

(i)    "Exchange  Amount" means the sum of (A) the principal amount of this Note
       to be  converted,  redeemed  or  otherwise  with  respect  to which  this
       determination  is being made  including  any Monthly  Payment  Amount (as
       defined in Section 2(b)(i) below, and (B) all accrued and unpaid interest
       (other than Default  Interest),  calculated as the outstanding  principal
       amount of the Note times .10 times (N/365) and (C) Default  Interest,  if
       any.

(ii)   "Exchange  Price" means,  as of any Exchange  Date (as defined  below) or
       other date of determination and subject to adjustment as provided herein,
       a price equal to the lesser of (A) the Fixed  Exchange  Price (as defined
       below) and (B) the Variable Exchange Price (as defined below).

                                        2

<PAGE>

(iii)  "Due Date" means the Issuance Date and each monthly  anniversary  thereof
       after the Issuance Date.

(iv)   "Fixed  Exchange  Price"  means  a price  equal  to $  3.00,  subject  to
       adjustment as provided herein.

(v)    "Initial  Exchange  Price"  means a price  equal  to  $8.00,  subject  to
       adjustment as provided herein.

(vi)   "Interest  Date" means the day on which the  outstanding  interest on the
       Note is effected  either  through cash  payment,  redemption  or exchange
       (Exchange Date) as appropriate.

(vii)  "N" means  the  number  of days  from,  but  excluding,  the most  recent
       Interest  Date through and including the Exchange Date for any portion of
       this Note for which exchange is being elected.

(viii) "Person" means a natural person, a partnership,  a corporation, a limited
       liability  company,  an  association,  a joint stock company,  a trust, a
       joint venture,  an  unincorporated  organization or a governmental or any
       department, agency or political subdivision thereof.

(ix)   "Principal Market" means Nasdaq National Market.

(x)    "Variable  Exchange  Price" means a price equal to 100% of the average of
       the three lowest daily trading prices of the Common Stock (as reported by
       Bloomberg)  for the fifteen (15)  consecutive  trading days ending on the
       trading day  immediately  preceding  the date of submission of a Exchange
       Notice by Holder.

(b)      Monthly Payment Amount;  Exchange Upon Special Event.  The Consolidated
Companies shall be obligated to pay to the Holder the Monthly Payment Amount (as
defined below) on the following terms and conditions:

(i) Monthly  Payment  Amount.  Subject to the  provisions  of  Section  2(d) and
    Section 4 below,  commencing on January 15, 2001, and continuing on each Due
    Date thereafter, the Consolidated Companies shall be obligated to pay to the
    Holder the principal  amount of $291,667 plus accrued interest (the "Monthly
    Payment Amount"). Notwithstanding the foregoing, commencing on the first Due
    Date  subsequent  to the  Effective  Date,  and  continuing on each Due Date
    thereafter,  subject to the  existence  of any  Mandatory  Redemption  Event
    described  in Section  4(a) below  and/or any Event of Default  described in
    Section  11(a)  below,  the Company  shall  notify  Holder as to whether the
    Consolidated  Companies will satisfy all or a portion of the Monthly Payment
    Amount  through  redemption,  as described in the  following  sentences  (an
    "Optional  Monthly  Redemption").  If the  Consolidated  Companies  elect to
    satisfy a Monthly Payment Amount through an Optional Monthly Redemption, the
    Consolidated  Companies  shall pay to the Holder that portion of the Monthly
    Payment  Amount that the  Consolidated  Companies  have elected to redeem in
    cash as described in Section 4(c) below. If the Consolidated Companies elect
    not to redeem an entire Monthly  Payment Amount through an Optional  Monthly
    Redemption,  the Exchange Amount (or portion thereof that is not redeemed by
    the  Company)   applicable  to  such  Due  Date  shall  become   immediately
    convertible at the Exchange Price then in effect. Thereafter, so long as the
    Registration Statement remains effective and the exchange is permitted under
    all applicable laws and regulations, the Holder shall be entitled to convert
    the  Exchange  Amount  (or  portion  thereof  that  is not  redeemed  by the
    Consolidated  Companies) into fully paid and nonassessable  shares of Common
    Stock at the  Exchange  Rate.  Delivery  of such shares in  accordance  with
    Section 2(e)(ii) shall be considered  payment in full of that portion of the
    Note.  The  exchange  rights of the Holder,  as  described  in this  Section
    2(b)(i),  (A)  shall  relate to all or any  portion  of any  unpaid  Monthly
    Payment Amount and (B) shall be cumulative.  Further,  such exchange  rights
    shall be  exercisable in whole or in part, at any time prior to repayment in
    full of the Note, at the Holder's discretion.

                                        3

<PAGE>

(ii    Exchanges Upon Special Event.  Notwithstanding Holder's option to convert
       the Monthly Payment Amount described in item (i) above and in addition to
       all other rights of Holder contained  herein,  upon the occurrence of any
       Special  Event (as  described  below),  100% of the  remaining  principal
       balance hereunder, plus accrued and unpaid interest thereon, shall become
       subject to exchange at the applicable  Exchange  Price,  at the option of
       Holder, upon delivery of a Exchange Notice (as defined below) without any
       restriction  or  limitation.  A "Special  Event"  shall be deemed to have
       occurred at such time as any of the following events:

         (A) the Closing Price of the Common Stock closing at or above $8.00 for
a period of 10  consecutive  trading days. In this instance only, the applicable
Exchange Price shall be the Initial Exchange Price;

         (B) the  consolidation,  merger or other  business  combination  of the
Company with or into another  Person (other than solely  pursuant to a migratory
merger  effected  solely  for  the  purpose  of  changing  the  jurisdiction  of
incorporation of the Company and except for a merger in which the Company is the
surviving entity);

         (C) the sale or transfer of 50% or more of the Company's assets;

         (D) a purchase,  tender or exchange  offer made to holders of more than
30% of the outstanding shares of Common Stock; or

         (E) any event constituting an Event of Default pursuant to Section 9(a)
hereof.

(iii)  Fractional Shares. The Company shall not issue any fraction of a share of
       Common Stock upon any  exchange.  All shares of Common  Stock  (including
       fractions  thereof)  issuable  upon  exchange  of this  Note by a  holder
       thereof  shall be  aggregated  for  purposes of  determining  whether the
       exchange  would result in the issuance of a fraction of a share of Common
       Stock.  If, after the  aforementioned  aggregation,  the  issuance  would
       result in the  issuance  of a fraction  of a share of Common  Stock,  the
       Company  shall round such  fraction of a share of Common Stock up or down
       to the nearest whole share.

                                        4

<PAGE>

(iv)   Accrual.  Notwithstanding the foregoing  provisions of this Section 2(b),
       from the  period  beginning  on the date the  Holder no  longer  owns any
       shares of Common  Stock  subject  to the call  right set forth in Section
       7.13 of the  Securities  Purchase  Agreement  and  ending on the first to
       occur  of (A)  the  Effective  Date  and (B) the  date  that is 180  days
       subsequent  to  the  Issuance  Date  (the   "Announcement   Date"),   the
       Consolidated  Companies  shall  have the  right to  accrue  the  Exchange
       Amounts due to Holder.  If such an  election is made by the  Consolidated
       Companies,   no  later  than  the  Announcement  Date,  the  Consolidated
       Companies  shall  notify  Holder as to an  election  by the  Consolidated
       Companies to satisfy the accrued  Exchange  Amounts in the same manner as
       an Optional Monthly  Redemption.  If the Company elects not to redeem the
       accrued Exchange Amounts,  such Exchange Amounts shall become immediately
       convertible at the Exchange Price then in effect.

(c) Exchange  Rate.  The number of shares of Common Stock issuable upon exchange
    of a  Exchange  Amount  of this  Note  pursuant  to  Section  2(b)  shall be
    determined according to the following formula (the "Exchange Rate"):

                           Exchange Rate  = Exchange Amount

                                                     Exchange Price

(d) Limitation on Beneficial Ownership.

       (i) The  Company  shall not effect any  exchange  of this Note and Holder
       shall not have the right to convert any portion of this Note  pursuant to
       Section  2(b)(i) to the extent that after giving  effect to such exchange
       such Person (together with such Person's  affiliates) would  beneficially
       own in excess of 4.99% of the  outstanding  shares  of the  Common  Stock
       following  such  exchange.  For purposes of the foregoing  sentence,  the
       number of shares of Common Stock  beneficially  owned by a Person and its
       affiliates  or acquired by a Person and its  affiliates,  as the case may
       be,  shall  include the number of shares of Common  Stock  issuable  upon
       exchange  of this Note with  respect to which the  determination  of such
       sentence is being made,  but shall exclude the number of shares of Common
       Stock  which  would be  issuable  upon  (i)  exchange  of the  remaining,
       nonconverted  portion of this Note beneficially  owned by such Person and
       its  affiliates  and (ii)  exercise  or exchange  of the  unexercised  or
       unconverted  portion of any other  securities of the Company  (including,
       without limitation,  any warrants) subject to a limitation on exchange or
       exercise analogous to the limitation  contained herein beneficially owned
       by such Person and its  affiliates.  Except as set forth in the preceding
       sentence,  for purposes of this Section 2(d),  beneficial ownership shall
       be calculated in accordance with Section 13(d) of the Securities Exchange
       Act of  1934,  as  amended.  Notwithstanding  anything  to  the  contrary
       contained   herein,   each  Exchange  Notice  (as  defined  below)  shall
       constitute a  representation  by Holder that, after giving effect to such
       Exchange  Notice,  Holder will not  beneficially  own (as  determined  in
       accordance  with this Section 2(d)) a number of shares of Common Stock in
       excess  of  4.99%  of the  outstanding  shares  of  Common  Stock  (1) as
       reflected in the Company's most recent shareholder list, which list shall
       be provided to Holder by the Company on a quarterly  basis and  certified
       by the Company as true,  complete and accurate as of the date thereof, or
       (2) at  such  time  as the  Company  is a  Reporting  Company  under  the
       Securities  Exchange  Act of 1934,  as reflected  in the  Company's  most
       recent Form 10-Q or Form 10-K,  as the case may be, or more recent public
       press  release by the  Company or other  notice by the  Company to Holder
       setting forth the number of shares of Common Stock outstanding, but after
       giving  effect to exchanges  of this Note  (including  the exchange  with
       respect this  determination is being made) by Holder since the date as of
       which such number of outstanding shares of Common Stock was disclosed.

                                        5

<PAGE>

       (ii)Notwithstanding  the  foregoing,  upon the  occurrence of an Event of
       Default,  the Holder  shall have the right to exchange all or any portion
       of the Note and Warrant  pursuant to the terms of the  Agreement,  in its
       sole discretion and at such time or times as it deems appropriate.

(e)      Mechanics of Exchange.  The exchange of this Note shall be conducted in
    the following manner:

       (i) Holder's Delivery  Requirements.  To convert this Note into shares of
       Common Stock on any date (an  "Exchange  Date"),  Holder hereof shall (A)
       transmit by facsimile (or otherwise deliver),  for receipt on or prior to
       11:59 p.m.,  Eastern Time on such date, a copy of a fully executed notice
       of  exchange  in the form  attached  hereto as  Exhibit  A (an  "Exchange
       Notice") to the Company and (B), subject to Section  2(e)(vi),  surrender
       to a  common  carrier  for  delivery  to the  Transfer  Agent  as soon as
       practicable  following such date the original Note being converted (or an
       indemnification  undertaking with respect to such Note in the case of its
       loss, theft or destruction).

       (ii)Company's  Response.  Upon  receipt  by the  Company  of a copy  of a
       Exchange  Notice,  the Company  shall as soon as  practicable,  but in no
       event  later than one (1)  Business  Day after  receipt of such  Exchange
       Notice,  send, via facsimile,  a confirmation of receipt of such Exchange
       Notice  to  Holder  and the  Transfer  Agent,  which  confirmation  shall
       constitute an  instruction to the Transfer Agent to process such Exchange
       Notice in accordance with the terms hereof.  Upon receipt by the Transfer
       Agent of a copy of the  executed  Exchange  Notice,  the  Transfer  Agent
       shall,  no  later  than the 2nd  trading  day  following  the date of the
       Company's  receipt by it of the Exchange Notice,  (A) issue and surrender
       to a common carrier for overnight  delivery to Holder's brokerage account
       #70357 (the "Doral  Brokerage  Account")  with Credit Suisse First Boston
       (the  "Broker"),  a certificate,  registered in the name of Holder or its
       designee,  for the number of shares of Common Stock to which Holder shall
       be entitled,  or (B) in the event the Transfer Agent is  participating in
       The Depository Trust Company ("DTC") Fast Automated  Securities  Transfer
       Program,  upon the  request of Holder,  credit such  aggregate  number of
       shares of Common  Stock to which Holder shall be entitled to the Broker's
       balance account with DTC through its Deposit  Withdrawal Agent Commission
       system to be  further  credited  to the Doral  Brokerage  Account  by the
       Broker. Subject to Section 2(e)(vi), if less than the principal amount of
       this Note is submitted for exchange,  then the Company shall,  as soon as
       practicable  and in no event later than three Business Days after receipt
       of this Note and at its own  expense,  issue and deliver to Holder or its
       designee a new Note for the outstanding principal amount not converted.

                                        6

<PAGE>

       (iii)  Dispute   Resolution.   In  the  case  of  a  dispute  as  to  the
       determination of the Exchange Price or the arithmetic  calculation of the
       Exchange  Rate, the Company shall instruct the Transfer Agent to issue to
       Holder the  number of shares of Common  Stock  that is not  disputed  and
       shall submit the disputed  determinations  or arithmetic  calculations to
       Holder via  facsimile  within one (1) Business Day of receipt of Holder's
       Exchange  Notice.  If Holder and the Company are unable to agree upon the
       determination  of the Exchange  Price or  arithmetic  calculation  of the
       Exchange Rate within one (1) Business Day of such disputed  determination
       or arithmetic  calculation  being  submitted to Holder,  then the Company
       shall within one (1) Business Day submit via  facsimile  (A) the disputed
       determination  of  the  Exchange  Price  to  an  independent,   reputable
       investment bank selected by the Company and approved by Holder or (B) the
       disputed  arithmetic  calculation  of the Exchange  Rate to the Company's
       independent,  outside accountant.  The Company shall cause the investment
       bank or the accountant, as the case may be, to perform the determinations
       or calculations and notify the Company and Holder of the results no later
       than the  third  (3rd)  day  after  the  date it  receives  the  disputed
       determinations  or calculations.  Such investment  bank's or accountant's
       determination  or calculation,  as the case may be, shall be binding upon
       all parties absent manifest error.

       (iv)Record  Holder.  The person or persons entitled to receive the shares
       of Common Stock  issuable  upon an exchange of this Note shall be treated
       for all purposes as the record holder or holders of such shares of Common
       Stock on the Exchange Date.

       (v) Company's Failure to Timely Convert.

                  (A) Cash  Damages.  If within  five (5)  Business  Days  after
         Holder's  delivery of the  Exchange  Notice  (subject to  extension  in
         accordance  with  Section  2(e)(iii)  for a good faith  dispute made in
         accordance  with the terms of Section  2(e)(iii))  (the "Share Delivery
         Period") the Transfer Agent shall fail to issue a certificate to Holder
         or credit Holder's  balance  account with The Depository  Trust Company
         for the number of shares of Common  Stock to which  Holder is  entitled
         upon Holder's exchange of this Note (a "Exchange Failure"), in addition
         to all other available  remedies which Holder may pursue  hereunder and
         under the  Securities  Purchase  Agreement  (including  indemnification
         pursuant  to  Article 8  thereof),  the  Company  shall pay  additional
         damages to Holder on each day after such fifth (5th)  Business Day such
         exchange is not timely effected and/or such Note is not delivered in an
         amount equal to 2.0% of such  principal  amount of this Note  submitted
         for exchange by Holder.

                  (B) Void Exchange Notice; Adjustment to Exchange Price. If for
         any reason  Holder has not  received  all of the shares of Common Stock
         prior to the tenth  (10th)  Business  Day after the  expiration  of the
         Share  Delivery  Period  with  respect to a an  Exchange  Notice,  then
         Holder, upon written notice to the Company, with a copy to the Transfer
         Agent, may void the Exchange Notice with respect to, and retain or have
         returned,  as the case may be, any  principal  amount of this Note that
         has not been converted pursuant to Holder's Exchange Notice;  provided,
         that  the  voiding  of  the  Exchange   Notice  shall  not  affect  the
         obligations  of the  Consolidated  Companies to make any payments which
         have  accrued  prior to the date of such  notice  pursuant  to  Section
         2(e)(v)(A) or otherwise.  Thereafter,  the Fixed  Exchange Price of the
         principal  amount of this  Note  returned  or  retained  by Holder  for
         failure to timely  convert  shall be  adjusted to the lesser of (I) the
         Exchange  Price as in effect on the date on which Holder  submitted the
         Exchange  Notice and (II) the lowest  trade price for the Common  Stock
         during the period beginning on the Exchange Date and ending on the date
         Holder voided the Exchange Notice.

                                        7

<PAGE>

       (vi)  Book-Entry.  Notwithstanding  anything  to the  contrary  set forth
       herein,  upon exchange of any portion of this Note in accordance with the
       terms hereof,  Holder shall not be required to physically  surrender this
       Note to the Company unless the full Exchange  Amount  represented by this
       Note is being  converted.  Holder and the Company shall maintain  records
       showing the Exchange  Amount so converted and the dates of such exchanges
       or shall use such other method, reasonably satisfactory to Holder and the
       Company,  so as not to require physical  surrender of this Note upon each
       such exchange.  In the event of any dispute or discrepancy,  such records
       of the Company shall be controlling and  determinative  in the absence of
       manifest error.  Notwithstanding the foregoing, if this Note is converted
       as  aforesaid,  Holder may not  transfer  this Note unless  Holder  first
       physically  surrenders  this Note to the Company,  whereupon  the Company
       will  forthwith  issue and deliver upon the order of Holder a new Note of
       like  tenor,  registered  as  Holder  may  request,  representing  in the
       aggregate the remaining  Exchange Amount represented by this Note. Holder
       and  any  assignee,  by  acceptance  of  this  Note  or  such  new  Note,
       acknowledge  and  agree  that,  by  reason  of  the  provisions  of  this
       paragraph,  following  exchange of any portion of this Note, the Exchange
       Amount  (including  the principal of this Note)  represented by this Note
       may be less than the principal  amount and the accrued interest set forth
       on the face hereof.

       (vii) Notwithstanding the foregoing provisions of this Section 2(e), upon
       Holder's  exercise of its exchange right in accordance  with Section 2(b)
       hereof  (the  "Exchange  Right"),  the  number of shares of Common  Stock
       subject  to the call right set forth in  Section  7.13 of the  Securities
       Purchase Agreement (the "Call Right") shall be reduced by an amount equal
       to the  number  of  shares of Common  Stock  calculated  pursuant  to the
       Exchange  Rate  formula  set forth in Section  2(c) hereof for so long as
       there are shares of Common Stock subject to the Call Right.  In the event
       that at any time  there is an  insufficient  number  of  shares of Common
       Stock  subject to the Call Right to satisfy the Holder's  exercise of its
       Exchange  Right,  the Company  shall deliver to the Holder that number of
       shares of Common Stock  necessary  to satisfy the  Exchange  Right in the
       manner set forth in this Section 2(e).

                  (f) Taxes.  The Company  shall pay any and all transfer  taxes
         (but not income taxes) that may be payable with respect to the issuance
         and delivery of Common Stock upon the exchange of this Note.

                                        8

<PAGE>

3.       ANTI-DILUTION.

         (a) Certain Defined Terms. For purposes of this Section,  the following
terms shall have the following meanings:

                  (i) "Common Stock" shall mean the Common Stock,  no par value,
         of the  Company as  constituted  on the date of this Note and any stock
         into  which such  Common  Stock  shall  have been  changed or any stock
         resulting from any reclassification of such Common Stock.

                  (ii)   "Exchangeable   Securities"  shall  mean  evidences  of
         indebtedness,  shares (including, without limitation, Preferred Shares)
         of  stock  or  other  securities   which  are   exchangeable   into  or
         exchangeable for, with or without payment of additional  consideration,
         shares of Common  Stock,  either  immediately  or upon the arrival of a
         specified date or the happening of a specified event.

                  (iii) "Preferred Shares," as applied to any Person, shall mean
         shares  of such  Person,  which  shall be  entitled  to  preference  or
         priority  over any other shares of such Person in respect of either the
         payment of dividends or the distribution of assets upon liquidation.

                  (iv) "Stock Purchase Rights" shall mean any warrants,  options
         or other rights to  subscribe  for,  purchase or otherwise  acquire any
         shares  of  Common  Stock  or  any  Exchangeable   Securities,   either
         immediately or upon the arrival of a specified date or the happening of
         a specified event.

         (b) Except as otherwise provided in Section 3(b)(vii)) below, the Fixed
Exchange Price shall be subject to adjustment  from time to time as set forth in
this Section 3.

                  (i) Issuance of Additional  Common Stock.  If and whenever the
         Company  shall  issue or sell any  shares  of its  Common  Stock  for a
         consideration  per share less than the Fixed  Exchange  Price in effect
         immediately prior to the time of such issuance or sale, then, upon such
         issuance or sale,  the Fixed  Exchange  Price shall be adjusted to that
         price equal to the fraction  (i) the  numerator of which shall be equal
         to (A) (x) the Fixed Exchange Price in effect immediately prior to such
         event  multiplied  by (y) the  total  number of  outstanding  shares of
         Common Stock immediately prior to such event plus (B) the consideration
         received by the Company upon such issuance, and (ii) the denominator of
         which shall be the total number of  outstanding  shares of Common Stock
         immediately  after such event,  treating as  outstanding  all shares of
         Common Stock  issuable  upon  exchanges  or  exchanges of  Exchangeable
         Securities  (including any Notes held by Holder) and exercises of Stock
         Purchase Rights  (including any Warrants held by Holder) provided that,
         no  adjustment  shall be made with respect to the issuance of shares of
         Common  Stock  issued  (1)  upon  exchange  or  conversion  of Notes or
         preferred shares or the exercise of warrants or options  outstanding on
         the date hereof and  disclosed to Holder in a Schedule  attached to the
         Securities Purchase  Agreement,  (2) in connection with the exercise of
         options granted under the 1998 Altair  International  Inc. Stock Option
         Plan and the Altair International Inc. Stock Option Plan (collectively,
         the  "Company  Plans"),  subject to the maximum  reservation  of shares
         defined in Section 3.3(i) of the Securities Purchase Agreement,  (3) as
         consideration in connection with arms-length transactions involving the
         acquisition  of other  companies  or lines of  business  in the mining,
         minerals or technology  (including technology relating to nanoparticles
         or other related activities) industries,  including  non-competition or
         (4) the  acquisition  of  assets  to be used  in the  operation  of the
         Company's business.

                                        9

<PAGE>

                  (ii) Stock Dividends,  Subdivisions and  Combinations.  If and
         whenever the Company subsequent to the date hereof:

                      (A) declares a dividend upon, or makes any distribution in
         respect  of,  any of its  capital  stock,  payable  in shares of Common
         Stock, Exchangeable Securities or Stock Purchase Rights,

                      (B) subdivides its outstanding shares of Common Stock into
         a larger number of shares of Common Stock, or

                      (C) combines its outstanding shares of Common Stock into a
         smaller number of shares of Common Stock,

then the Fixed  Exchange  Price shall be adjusted  to that price  determined  by
multiplying the Fixed Exchange Price in effect  immediately  prior to such event
by a  fraction  (A)  the  numerator  of  which  shall  be the  total  number  of
outstanding  shares of Common Stock immediately prior to such event, and (B) the
denominator of which shall be the total number of  outstanding  shares of Common
Stock immediately after such event, treating as outstanding all shares of Common
Stock issuable upon exchanges or exchanges of Exchangeable Securities (including
any Notes held by Holder) and exercises of Stock Purchase Rights  (including any
Warrants held by Holder).

                  (iii)  Issuance of  Exchangeable  Securities or Stock Purchase
         Rights.   If  and  whenever  the  Company   shall  issue  or  sell  any
         Exchangeable  Securities  or  Stock  Purchase  Rights  (other  than the
         granting of Stock Purchase Rights to officers, employees, directors and
         consultants of the Company  pursuant to any qualified or  non-qualified
         stock  option  plan  (including  the Company  Plans) or employee  stock
         ownership plan (ESOP)) under which a consideration  per share for which
         shares of Common  Stock may at any time  thereafter  be  issuable  upon
         exercise thereof (or, in the case of Stock Purchase Rights  exercisable
         for the  purchase  of  Exchangeable  Securities,  upon  the  subsequent
         exchange  or exchange of such  Exchangeable  Securities)  shall be less
         than the Exchange Price in effect immediately prior to the time of such
         issuance or sale,  then upon such  issuance or sale the Exchange  Price
         shall be adjusted  as  provided  in Section  4(a) on the basis that the
         maximum number of shares of Common Stock ever issuable upon exercise of
         such Exchangeable Securities or Stock Purchase Rights (or upon exchange
         or exchange of such  Exchangeable  Securities  following such exercise)
         shall be deemed to have been issued as of the date of the determination
         of the Fixed Exchange Price, provided that, no adjustment shall be made
         with  respect  to the  issuance  of  shares  of  Common  Stock (1) upon
         exchange or conversion of Notes or preferred  shares or the exercise of
         warrants or options  outstanding  on the date hereof and  disclosed  to
         Holder in a Schedule attached to the Securities Purchase Agreement, (2)
         in  connection  with the  exercise  of options  granted  under the 1998
         Altair   International   Inc.   Stock   Option   Plan  and  the  Altair
         International  Inc.  Stock  Option  Plan  (collectively,  the  "Company
         Plans"),  subject  to the  maximum  reservation  of shares  defined  in
         Section  3.3(i)  of  the   Securities   Purchase   Agreement,   (3)  as
         consideration in connection with arms-length transactions involving the
         acquisition  of other  companies  or lines of  business  in the mining,
         minerals or technology  (including technology relating to nanoparticles
         or other  related  activities)  industries,  including  non-competition
         covenants or (4) the  acquisition of assets to be used in the operation
         of the Company's business.

                                       10

<PAGE>

                  (iv)  Readjustment of Exchange Price.  Upon (i) each change in
         the  purchase   price  payable  for  any  Stock   Purchase   Rights  or
         Exchangeable Securities referred to in Section 3(b)(iii) each change in
         the consideration, if any, payable upon exercise of such Stock Purchase
         Rights  or  upon  the   exchange  or  exchange  of  such   Exchangeable
         Securities,  (iii) each change in the number of shares of Common  Stock
         issuable upon the exercise of such Stock Purchase Rights or the rate at
         which  such   Exchangeable   Securities   are   exchangeable   into  or
         exchangeable  for shares of Common Stock or (iv) the  expiration of any
         Stock  Purchase  Rights  not  exercised  or of any right to  convert or
         exchange under any  Exchangeable  Securities  not exercised,  the Fixed
         Exchange  Price in effect at the time of such event shall  forthwith be
         readjusted to the Fixed  Exchange Price which would have been in effect
         at such time had such Stock Purchase Rights or Exchangeable  Securities
         provided for such change or expiration, as applicable.

                  (v)  Reorganization,  Reclassification  or Recapitalization of
         the   Company.   In  the  event  that  the  Company   effects  (i)  any
         reorganization or  reclassification  or recapitalization of the capital
         stock of the Company  (other  than in the cases  referred to in Section
         3(b)),  (ii) any  consolidation  or merger of the Company  with or into
         another Person,  (iii) the sale,  transfer or other  disposition of the
         property,  assets  or  business  of  the  Company  as  an  entirety  or
         substantially as an entirety or (iv) any other  transaction or event as
         a result of which  holders of Common Stock  become  entitled to receive
         any shares of stock or other  securities  and/or  property  (including,
         without limitation,  cash, but excluding any cash dividend that is paid
         out  of the  earnings  or  surplus  of the  Company  legally  available
         therefor)  with  respect to or in exchange  for the Common Stock of the
         Company,  there shall  thereafter be  deliverable  upon the exchange of
         this Note or any  portion  thereof  (in lieu of or in  addition  to the
         Common  Stock  theretofore  deliverable,  as  appropriate)  the highest
         number of  shares  of stock or other  securities  and/or  the  greatest
         amount of property (including,  without limitation,  cash) to which the
         holder of the number of shares of Common  Stock which  would  otherwise
         have been  deliverable  upon the  exchange  of this Note or any portion
         thereof at the time would have been entitled upon such  transaction  or
         event.

                  (vi) Other  Dilutive  Events.  If the Company  takes any other
         action,  or if any other event occurs to which the other  provisions of
         this Section 3 are not strictly  applicable,  but which could result in
         an adjustment  the Exchange  Price or to any of the other terms of this
         Note that would not fairly protect the exchange rights and other rights
         represented  by this Note in accordance  with the essential  intent and
         principles  hereof,  an appropriate  adjustment in such purchase rights
         comparable to the  adjustments  described in (a) and (b) above shall be
         made by the Company.

                                       11

<PAGE>

                  (vii)  Maximum  Exchange  Price.  At no time  shall  the Fixed
         Exchange  Price exceed the initial  Exchange Price set forth in Section
         2(a) hereof  except as a result of an  adjustment  thereto  pursuant to
         Section 3(b).

                  (viii)  Application.  All  subdivisions  of this Section 3 are
         intended to operate  independently of one another.  If a transaction or
         an  event  occurs  that  requires  the  application  of more  than  one
         subsection,  all  applicable  subdivisions  shall be given  independent
         effect.

                  (ix) Waiver.  In the event that Holder  consents in writing to
         limit, or waive in its entirety, any anti-dilution  adjustment to which
         it would  otherwise  be entitled  hereunder,  the Company  shall not be
         required to make any adjustment whatsoever with respect to this Note in
         excess  of such  limit  or at all,  as the  terms of such  consent  may
         dictate.

                  (x) Notice of Adjustments to Fixed Exchange Price. As promptly
         as  practicable  after  the  occurrence  of  any  event  requiring  any
         adjustment under this Section 3 to the Exchange Price (or to the number
         or kind of securities or other property  deliverable  upon the exchange
         of this Note),  the Company  shall,  at its  expense,  mail to Holder a
         certificate  of an officer of the Company  setting  forth in reasonable
         detail the events requiring the adjustment and the method by which such
         adjustment  was  calculated  and specifying the adjusted Fixed Exchange
         Price and the number of shares of Common Stock  issuable  upon exchange
         of this Note after giving effect to such adjustment.

                  (xi)  Anti-Dilution  Provisions  in Other  Securities.  If the
         Company issues any Stock Purchase Rights or Exchangeable  Securities or
         other securities containing provisions protecting the holder or holders
         thereof against dilution in any manner more favorable to such holder or
         holders  thereof than those set forth in this Note, such provisions (or
         any more favorable  portion thereof) shall be deemed to be incorporated
         herein  as if  fully  set  forth  in  this  Note  and,  to  the  extent
         inconsistent  with any  provision  of this Note,  shall be deemed to be
         substituted therefor.

4.       REDEMPTION.

         This Note shall be subject to mandatory  redemption upon the occurrence
of certain events and optional redemption at the option of the Company,  each as
discussed below.

                  (a) Mandatory  Monthly  Redemption.  Upon the  occurrence of a
         Mandatory  Redemption Event, and on each month  anniversary  thereafter
         until such Mandatory  Redemption  Event shall have been cured,  if any,
         the Company will be required to redeem the Monthly  Payment  Amount for
         such month,  on the Due Date,  at a price equal to 120% of such Monthly
         Payment  Amount,  including all accrued and unpaid interest on the Note
         (the  "Mandatory   Redemption  Price").  For  purposes  of  this  Note,
         "Mandatory Redemption Event" means any of the following events:

                                       12

<PAGE>

                  (i) the failure of the Company to satisfy any listing criteria
         of its Principal Market necessary to maintain the continued  listing of
         the Common  Stock,  without  regard to any grace period or other timing
         issues,

                  (ii) the  suspension of the Common Stock from trading for four
         (4)  consecutive  trading  days or for a total of ten (10) trading days
         out of the preceding 365 days;

                  (iii) if for any reason pursuant to the registration statement
         (the "Registration  Statement") covering the resale of shares of Common
         Stock  issuable  upon  exchange  of this Note and the  exercise  of the
         Warrants   required  to  be  filed  by  the  Company  pursuant  to  the
         Registration  Rights  Agreement  between  the  Company  and Holder (the
         "Registration  Rights  Agreement")  sales cannot be made  following the
         date such Registration Statement has been declared effective by the SEC
         (whether  because  of a  failure  to keep  the  Registration  Statement
         effective, to disclose such information as is necessary for sales to be
         made pursuant to the  Registration  Statement,  to register  sufficient
         shares of Common Stock, or otherwise) for four (4) consecutive  trading
         days or for a total of ten (10) trading days out of the  preceding  365
         days unless due to the failure for a  Registration  Statement to become
         effective,  or the  suspension of an effective  Registration  Statement
         (provided such suspension is required by applicable law) if the Company
         is required  under the  Securities  Exchange of 1934 to file  financial
         statements of the acquired business and proforma  financial  statements
         and such financial statements are not readily available at the time the
         Company would have otherwise  been  obligated to file the  Registration
         Statement,  but only for up to  thirty  days  with  respect  to any one
         acquisition  and an  aggregate  of  forty-five  days in a twelve  month
         period.  The Company shall use all commercially  reasonable  efforts to
         file such financial statements at the earliest practicable date.

                  (iv) If, without prior shareholder  approval,  the issuance of
         the Exchange  Shares that would result form the exchange of the Monthly
         Payment Amount,  would result in the issuance of more than 19.9% of the
         aggregate number of outstanding shares upon the Closing Date shares.

         (b)  Optional  Monthly  Redemption.  At any  time  during  the five (5)
trading  days prior to each Due Date  (other  than the  Issuance  Date),  if the
Closing Bid Price of the Common  Stock on each such trading day is less than the
Fixed  Exchange  Price on such day then the  Company  shall  have the  option to
redeem (the "Optional Monthly  Redemption Right") the Monthly Payment Amount for
such month at a price equal to 100% of the Monthly Payment Amount, including all
accrued and unpaid interest.

         (c)  Mechanics  of  Company  Redemption.  Within  one (1) day after the
occurrence  of a Mandatory  Redemption  Event,  or upon a  determination  by the
Company to exercise its Optional  Monthly  Redemption  Right,  the Company shall
deliver a written notice thereof via facsimile and overnight courier ("Notice of
Redemption")  to Holder,  which notice shall specify the type of redemption (and
the nature of the Mandatory Redemption Event, if any). The Company shall pay the
Redemption  Price to Holder in cash on or before the  relevant  Due Date by wire
transfer  delivered to Holder as follows:  American National Bank and Trust, 120
South LaSalle Street,  Chicago, IL 60603, ABA 071000770,  FBO Doral 18, LLC, A/C
5330299586,  or to such other  account or  accounts as Holder may  designate  in
writing to the Company from time to time.

                                       13

<PAGE>

         (d) Void  Redemption.  In the event that the  Company  does not pay the
Mandatory Full Redemption Price to Holder on a timely basis as described in this
Section 4, in addition to any remedy otherwise  available to Holder hereunder or
under the Securities Purchase Agreement,  such unpaid amount shall bear interest
at the Default  Rate until paid in full.  In the event that the Company does not
pay the Applicable Optional Redemption Price within the time period set forth in
Section  4(c),  at any time  thereafter  and until the Company  pays such unpaid
Applicable  Optional Redemption Price in full, Holder shall have the option (the
"Void  Optional  Redemption  Option")  to, in lieu of  redemption,  require  the
Company to rescind  the Notice of  Redemption  for that  portion of the Note for
which the  Applicable  Optional  Redemption  Price  (together  with any interest
thereon) has not been paid, by sending written notice thereof to the Company via
facsimile (the "Void Optional Redemption Notice"). Upon the Company's receipt of
such Void Optional  Redemption Notice, (i) the Notice of Redemption  pursuant to
the Company's optional  redemption rights as described in Section 4(c), shall be
null and void with  respect  to that  portion  of the Note  subject  to the Void
Optional  Redemption  Notice,  (ii) the Company shall  immediately  rescind such
Redemption  Notice,  and (iii) the  Exchange  Price of that  portion of the Note
returned  shall be adjusted to the lesser of (A) the Exchange Price as in effect
on the date on which the Void  Optional  Redemption  Notice is  delivered to the
Company  and (B) the lowest  trade  price for the Common  Stock (as  reported by
Bloomberg)  during  the  period  beginning  on the date on which  the  Notice of
Redemption  is  delivered  to  Holder  and  ending on the date on which the Void
Optional Redemption Notice is delivered to the Company.

         (e)  Disputes;  Miscellaneous.  In the  event  of a  dispute  as to the
determination  of the lowest trade price or the  arithmetic  calculation  of the
Redemption  Price,  such dispute shall be resolved pursuant to Section 2(e)(iii)
above  with  the  term  "lowest  trade  price"  being  substituted  for the term
"Exchange Price" and the term "Redemption  Price" being substituted for the term
"Exchange  Rate."  Holder's  delivery of a Void Optional  Redemption  Notice and
exercise  of its rights  following  such notice  shall not affect the  Company's
obligations  to make any payments  which have accrued  prior to the date of such
notice. In the event of a redemption pursuant to this Section 3 of less than all
of the  principal  amount  and  interest  of this Note and  subject  to  Section
2(e)(vi),  the Company shall promptly cause to be issued and delivered to Holder
a new Note representing the remaining unpaid principal amount which has not been
redeemed.

5.       APPLICATION OF PAYMENTS/PREPAYMENT.

Upon the exercise by the Holder of its Exchange  Right or upon the redemption of
all or a portion of this  Note,  the  amounts  received  by the Holder  upon the
exercise  of the  Exchange  Right or upon the  redemption  of the Note  shall be
applied first to pay accrued interest on the Note through and including the date
of the  exercise  of the  Exchange  Right  or the  redemption  of the  Note,  as
applicable,  second to pay any  penalties  due the Holder  from the  Company and
third to reduce the  principal  balance of the Note. At any time during the term
of this Note, the Company may prepay the Note, in $250,000 increments at a price
equal to (A) (x) the outstanding  principal balance on the Note plus (y) accrued
interest and (B) 115%.

                                       14

<PAGE>

6.       OTHER RIGHTS OF HOLDER.

         (a) Reorganization,  Reclassification,  Consolidation,  Merger or Sale.
Any recapitalization,  reorganization, reclassification,  consolidation, merger,
sale of all or  substantially  all of the Company's  assets to another Person or
other  transaction  which is effected in such a way that holders of Common Stock
are entitled to receive (either directly or upon subsequent  liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Organic  Change." Prior to the consummation of any (i) sale of all
or  substantially  all of the  Company's  assets to an acquiring  Person or (ii)
other Organic Change following which the Company is not a surviving entity,  the
Company  will secure  from the Person  purchasing  such assets or the  successor
resulting  from such Organic  Change (in each case,  the  "Acquiring  Entity") a
written  agreement (in form and substance  satisfactory to Holder) to deliver to
Holder in exchange for this Note, a security of the Acquiring  Entity  evidenced
by a written  instrument  substantially  similar in form and  substance  to this
Note, and satisfactory to Holder. Prior to the consummation of any other Organic
Change,  the Company  shall make  appropriate  provision  (in form and substance
satisfactory  to Holder) to insure that Holder will thereafter have the right to
acquire and receive in lieu of or in addition to (as the case may be) the shares
of Common Stock  immediately  theretofore  acquirable  and  receivable  upon the
exchange of Holder's Note such shares of stock,  securities or assets that would
have been  issued or  payable  in such  Organic  Change  with  respect  to or in
exchange  for the  number  of  shares  of Common  Stock  which  would  have been
acquirable and  receivable  upon the exchange of Holder's Note as of the date of
such Organic Change (without taking into account any limitations or restrictions
on the convertibility of the Note).

         (b) Purchase Rights. If at any time the Company grants, issues or sells
any options,  exchangeable  securities  or rights to purchase  stock,  warrants,
securities  or other  property  pro rata to the  record  holders of any class of
Common Stock (the "Purchase  Rights"),  then Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which  Holder  could  have  acquired  if Holder had held the number of shares of
Common Stock acquirable upon complete  exchange of the Note (without taking into
account any  limitations  or  restrictions  on the  convertibility  of the Note)
immediately  before the date on which a record is taken for the grant,  issuance
or sale of such Purchase Rights,  or, if no such record is taken, the date as of
which the record  holders of Common  Stock are to be  determined  for the grant,
issue or sale of such Purchase Rights.

7.       RESERVATION OF SHARES.

         The  Company  shall,  so long as any  principal  amount  of the Note is
outstanding,  reserve and keep  available  out of its  authorized  and  unissued
Common Stock, solely for the purpose of effecting the exchange of the Note, such
number of shares of Common  Stock as shall  from time to time be  sufficient  to
effect the exchange of all of the principal amount of the Note then outstanding;
provided that the number of shares of Common Stock so reserved  shall at no time
be less  than  140% of the  number  of  shares  of  Common  Stock  for which the
principal amount of the Note are at any time exchangeable.

                                       15

<PAGE>

8.       VOTING RIGHTS.

         Holder  shall  have  no  voting  rights,  except  as  required  by law,
including but not limited to the Business  Corporations  Act  (Ontario),  and as
expressly provided in this Note.

9.       RESTRICTION ON REDEMPTION AND CASH DIVIDENDS.

         Until  all of the  outstanding  principal  amount of this Note has been
converted, redeemed or otherwise satisfied as provided herein, the Company shall
not,  directly or  indirectly,  redeem,  or declare or pay any cash  dividend or
distribution  on, the Common Stock without the prior express  written consent of
Holder.

10.      REISSUANCE OF NOTE.

         Subject to Section  2(e)(vi) in the event of a exchange  or  redemption
pursuant to this Note of less than all of the  Exchange  Amount  represented  by
this Note,  the  Company  shall  promptly  cause to be issued and  delivered  to
Holder,  upon tender by Holder of the Note converted or redeemed,  a new Note of
like tenor  representing  the remaining  principal amount of this Note which has
not been so converted or redeemed.

11.      DEFAULTS AND REMEDIES.


         (a) Events of  Default.  An "Event of  Default"  is: (i) failure of the
Company's  Registration  Statement  to be  declared  effective  within  180 days
following the Issuance  Date,  (ii) failure of the Company to file with the SEC,
on Form S-3, the  Registration  Statement  covering the Exchange  Shares and the
Warrant Shares on or before the Filing  Deadline (as such term is defined in the
Registration Rights Agreement), (iii) default in payment of principal,  interest
or Default  Interest on this Note when and as due;  (iv)  failure by the Company
(A) for thirty (30) days after  notice to it to comply  with any other  material
provision of this Note except for delivery of a replacement Note within four (4)
Business Days as described in Section 2(e)(ii); or (B) for six (6) Business Days
after notice to it to comply with the replacement Note delivery  requirement set
forth in  Section  2(e)(ii);  (v) any  default  under or  acceleration  prior to
maturity  of any  mortgage,  indenture  or  instrument  under which there may be
issued or by which there may be secured or evidenced any  indebtedness for money
borrowed  by the  Company  or for  money  borrowed  the  repayment  of  which is
guaranteed by the Company,  whether such indebtedness or guarantee now exists or
shall be created  hereafter in principal  amount greater than $10,000;  (vi) any
representations  or  warranty  made by the  Company in the  Securities  Purchase
Agreement  proves untrue in any material  respect as of the date of the issuance
or making thereof;  (vii) any failure to observe or perform any of the covenants
set forth in the  Securities  Purchase  Agreement  which is not  remedied by the
Company within 30 days after notice thereof to the Company by the Holder; (viii)
any event occurs or  condition  exists which is specified as an event of default
under  that  certain  Security  Agreement  by  and  among  the  Company,  Altair
Technologies,  Inc.  and the  Holder  dated as of an even date  herewith  or the
Intellectual  Property  Security  Agreement by and between Altair  Technologies,
Inc.  and the  Holder  dated as of an even date  herewith;  (ix) if the  Company
pursuant  to or within the  meaning  of any  Bankruptcy  Law:  (A)  commences  a
voluntary  case;  (B) consents to the entry of an order for relief against it in
an involuntary case; (C) consents to the appointment of a Custodian of it or for
all or substantially all of its property; (D) makes a general assignment for the
benefit of its creditors;  or (E) admits in writing that it is generally  unable
to  pay  its  debts  as  the  same  become  due;  or (x) a  court  of  competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (1) is for
relief against the Company in an  involuntary  case; (2) appoints a Custodian of
the Company or for all or substantially  all of its property;  or (3) orders the
liquidation  of the Company or any  subsidiary,  and the order or decree remains
unstayed and in effect for ninety (90) days. The term "Bankruptcy Law" means the
Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act
(Canada) and Title 11, U.S. Code, and any similar Federal,  Provincial. or State
Law for the relief of debtors. The term "Custodian" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.

                                       16

<PAGE>

         (b) Remedies.  If an Event of Default occurs and is continuing,  Holder
may notify the Company  that it is  declaring  all of this Note,  including  any
interest and Default  Interest and other amounts due or to become due, to be due
and payable immediately,  except that in the case of an Event of Default arising
from events described in clauses (iv), (ix) and (x) of Section 11(a),  this Note
shall become due and payable  without  further  action or notice by Holder.  The
Holder may not enforce the agreements  contained in this Note except as provided
herein.  In  addition  to any  remedy  Holder  may have  under this Note and the
Securities  Purchase  Agreement,  such unpaid  amount shall bear interest at the
Default Rate until paid in full.

12.      VOTE TO CHANGE THE TERMS OF THIS NOTE.

         This Note and any provision hereof may only be amended by an instrument
in writing  signed by the Company and Holder.  The term "Note" and all reference
thereto,  as used  throughout  this  instrument,  shall mean this  instrument as
originally executed, or if later amended or supplemented,  then as so amended or
supplemented.

13.      LOST OR STOLEN NOTE.

         Upon receipt by the Company of evidence  satisfactory to the Company of
the loss,  theft,  destruction  or mutilation  of any Note,  and, in the case of
loss, theft or destruction,  of an indemnification  undertaking by the holder to
the Company in a form  reasonably  acceptable to the Company and, in the case of
mutilation,  upon  surrender  and  cancellation  of the Note,  the Company shall
execute and deliver a new Note of like tenor and date;  provided,  however,  the
Company shall not be obligated to re-issue the Note if Holder  contemporaneously
requests  the Company to convert  such  remaining  principal  amount into Common
Stock.

14.      PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS.

         If: (i) this Note is placed in the hands of an attorney for  collection
or enforcement or is collected or enforced through any legal proceeding; or (ii)
an  attorney is retained  to  represent  Holder of this Note in any  bankruptcy,
reorganization,  receivership or other proceedings  affecting  creditors' rights
and  involving  a claim  under this Note;  or (iii) an  attorney  is retained to
represent Holder of this Note in any other proceedings  whatsoever in connection
with this Note,  then the Company shall pay to Holder all reasonable  attorneys'
fees, costs and expenses  incurred in connection  therewith,  in addition to all
other amounts due hereunder.

                                       17

<PAGE>

15.      CANCELLATION.

         After all principal and accrued  interest at any time owed on this Note
has been paid in full, this Note shall  automatically be deemed canceled,  shall
be surrendered to the Company for cancellation and shall not be reissued.

16.      NOTE EXCHANGEABLE FOR DIFFERENT DENOMINATIONS.

         This Note is  exchangeable,  upon the surrender hereof by Holder at the
principal office of the Company, for a new Note or Note (in principal amounts of
at least $1,000)  containing the same terms and conditions and  representing  in
the  aggregate the  principal  amount of this Note,  and each such new Note will
represent  such portion of such  principal  amount as is designated by Holder at
the time of such surrender. The date the Company initially issues this Note will
be deemed to be the "Issuance  Date" hereof  regardless of the number of times a
new Note shall be issued.

17.      WAIVER OF NOTICE.

         To the extent  permitted  by law,  the Company  hereby  waives  demand,
notice,  protest  and all other  demands  and  notices  in  connection  with the
delivery, acceptance,  performance,  default or enforcement of this Note and the
Securities Purchase Agreement.

18.      GOVERNING LAW.

         This Note shall be construed and enforced in accordance  with,  and all
questions concerning the construction,  validity, interpretation and performance
of this Note shall be  governed  by the laws of the State of  Illinois,  without
giving effect to provisions thereof regarding conflict of laws.

19.      REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
         RELIEF.

                                       18

<PAGE>

         The remedies  provided in this Note shall be cumulative and in addition
to all other remedies  available under this Note, at law or in equity (including
a decree of specific  performance  and/or other  injunctive  relief),  no remedy
contained  herein  shall be deemed a waiver of  compliance  with the  provisions
giving rise to such  remedy and nothing  herein  shall limit  Holder's  right to
pursue actual damages for any failure by the Company to comply with the terms of
this  Note.   The   Company   covenants   to  Holder  that  there  shall  be  no
characterization  concerning  this instrument  other than as expressly  provided
herein.  Amounts set forth or  provided  for herein  with  respect to  payments,
exchange and the like (and the  computation  thereof) shall be the amounts to be
received  by the holder  thereof  and shall not,  except as  expressly  provided
herein,  be subject to any other  obligation of the Company (or the  performance
thereof).  The  Company  acknowledges  that a  breach  by it of its  obligations
hereunder will cause  irreparable  harm to Holder and that the remedy at law for
any such breach may be  inadequate.  The Company  therefore  agrees that, in the
event of any such breach or  threatened  breach,  Holder shall be  entitled,  in
addition to all other  available  remedies,  to an  injunction  restraining  any
breach,  without the necessity of showing  economic loss and without any bond or
other security being required.

20.      SPECIFIC SHALL NOT LIMIT GENERAL; CONSTRUCTION.

         No specific provision  contained in this Note shall limit or modify any
more general provision contained herein. This Note shall be deemed to be jointly
drafted by the Company and Holder and shall not be construed  against any person
as the drafter hereof.

21.      FAILURE OR INDULGENCE NOT WAIVER.

         No  failure  or delay on the part of this Note in the  exercise  of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial  exercise of any such power,  right or privilege  preclude
other or further exercise thereof or of any other right, power or privilege.

22.      JUDGMENT CURRENCY.

         (a) If, for the purpose of obtaining or enforcing  judgment against the
Company in any court in any  jurisdiction,  it becomes necessary to convert into
any other currency  (such other  currency  being  hereinafter in this Section 22
referred to as the "Judgment Currency") an amount due under any this Note in any
currency  (the  "Obligation  Currency")  other than the Judgment  Currency,  the
conversion shall be made at the rate of exchange  prevailing on the business day
immediately  preceding (i) the date of actual  payment of the amount due, in the
case of any proceeding in the courts of the Province of Ontario or in the courts
of any other jurisdiction that will give effect to such conversion being made on
such date,  or (ii) the date on which the judgment is given,  in the case of any
proceeding in the courts of any other  jurisdiction  (the  applicable date as of
which such  conversion is made pursuant to this Section 19 being  hereinafter in
this Section 22 referred to as the "Judgment Conversion Date").

                                       19

<PAGE>

         (b) If, in the case of any proceeding in the court of any  jurisdiction
referred  to in  Section  22(a),  there  is a  change  in the  rate of  exchange
prevailing  between the Judgment  Conversion Date and the date of actual receipt
of the amount due in  immediately  available  funds,  the Company shall pay such
additional  amount  (if any,  but in any  event not a lesser  amount)  as may be
necessary to ensure that the amount actually received in the Judgment  Currency,
when converted at the rate of exchange  prevailing on the date of payment,  will
produce the amount of the  Obligation  Currency  which could have been purchased
with the amount of the Judgment Currency  stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date.

Any amount due from the Company  under  Section 22(b) shall be due as a separate
debt and shall not be affected by judgment  being obtained for any other amounts
due under or in respect of this Note.

         (c) The term "rate of  exchange"  in this  Section 22 means the rate of
exchange at which the Holder would,  on the relevant date at or about 12:00 noon
(Toronto time), be prepared to sell Canadian Dollars or US Dollars,  as the case
may be, against the Judgment Currency.

23.      INTEREST ACT

         For purposes of disclosure  pursuant to the Interest Act (Canada),  the
annual rates of interest or fees to which the rates of interest or fees provided
in this Note (and stated  herein as  applicable to be computed on the basis of a
365 day  year or any  other  period  of time  less  than a  calendar  year)  are
equivalent  are the rates so determined  multiplied by the actual number of days
in the applicable calendar year and divided by 365 or such other period of time.

24.      CRIMINAL RATES OF INTEREST

         If any  provision  of this Note would  obligate the Company to make any
payment  of  interest  or other  amount  payable  to any  Holder in an amount or
calculated  at a rate  which  would be  prohibited  by law or would  result in a
receipt  by that  Holder  of  interest  at a  criminal  rate (as such  terms are
construed  under the Criminal Code (Canada) or in such other similar  applicable
legislation) then,  notwithstanding such provision, such amount or rate shall be
deemed to have been adjusted with  retroactive  effect to the maximum  amount or
rate of interest, as the case may be, as would not be so prohibited by law or so
result  in a receipt  by that  Holder  of  interest  at a  criminal  rate,  such
adjustment to be effected, to the extent necessary,  as follows: (i) firstly, by
reducing the amount or rate of interest  required to be paid to the Holder under
this  Section  24;  and (ii)  thereafter,  by  reducing  any fees,  commissions,
premiums  and  other  amounts  required  to be paid to the  Holder  which  would
constitute interest for purposes of Section 347 of the Criminal Code (Canada) or
in such other similar applicable legislation. Notwithstanding the foregoing, and
after giving effect to all adjustments contemplated thereby, if any Holder shall
have  received an amount in excess of the maximum  permitted  by that section of
the Criminal Code (Canada) or in such other similar applicable legislation, then
the Company  shall be  entitled,  by notice in writing to the Holder,  to obtain
reimbursement  from the Holder in an amount  equal to such  excess,  and pending
such  reimbursement,  such amount shall be deemed to be an amount payable by the
Holder to the  Company.  Any  amount  or rate of  interest  referred  to in this
Section 24 shall be determined in accordance with generally  accepted  actuarial
practices and  principles as an effective  annual rate of interest over the term
that the Note.

                                       20

<PAGE>

25.      Taxes

         (a)  Any and all  payments  by the  Company  hereunder,  including  the
issuance of Common  Stock of the Company in lieu of any such  payment,  shall be
made,  in  accordance  with  this  Section  25,  free and  clear of and  without
deduction for any and all present or future Taxes, excluding Taxes imposed on or
measured  by the net income or capital  of the Holder by the  jurisdictions  the
laws of which are applicable to the Holder.  If the Company shall be required by
law to deduct  any Taxes  (excluding  Taxes  imposed on or  measured  by the net
income  or  capital  of the  Holder by the  jurisdictions  the laws of which are
applicable  to the  Holder)  from or in  respect of any sum  payable  hereunder,
including  the  issuance of Common Stock of the Company in lieu of any such sum,
(i) the sum payable  shall be  increased  as much as shall be  necessary so that
after  making  all  required  deductions  (including  deductions  applicable  to
additional  sums payable  under this  Section 25) the Holder  receives an amount
equal to the sum it would have received had no such  deductions  been made, (ii)
the Company shall make such deductions, and (iii) the Company shall pay the full
amount  deducted to the relevant  taxing or other  authority in accordance  with
applicable  law. Within thirty (30) days after the date of any payment of Taxes,
the Company  shall  furnish to the Holder the original or a certified  copy of a
receipt evidencing payment thereof.

         (b) In addition,  the Company agrees to pay any present or future Taxes
that arise from any  payment  made under this Note,  including  the  issuance of
Common Stock of the Company in lieu of any such payment,  or from the execution,
sale, transfer,  delivery or registration of, or otherwise with respect to, this
Note and any other  agreements and  instruments  contemplated  hereby or thereby
(except  for Taxes  imposed on or  measured  by the net income or capital of the
Holder by the jurisdictions the laws of which are applicable to the Holder).

         (c) The Company  shall  indemnify the Holder for the full amount of the
Taxes referred to in this Section 25 (except for Taxes imposed on or measured by
the net income or capital of the Holder by the  jurisdictions  the laws of which
are applicable to the Holder),  but  including,  without  limitation,  any Taxes
imposed by any jurisdiction on amounts payable by the Company under this Section
25) that are not  deducted  and paid by the Company in  accordance  with Section
25(a) and that are paid by the Holder and any  liability  (including  penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally  asserted.  This  indemnification  shall be
made  within  ten (10)  days  after the date the  Holder  makes  written  demand
therefor.

         (d) Without  prejudice  to the  survival of any other  agreement of the
Company under this Note, the agreements and obligations of the Company contained
in this Section 25 shall survive the termination of this Note

         (e) Tax and Taxes  includes  all  present and future  taxes,  surtaxes,
duties,  levies,  imposts,  rates,  fees,  assessments,  withholdings  and other
charges of any nature net worth, sales,  consumption,  use, transfer,  goods and
services, value-added,  stamp, registration,  franchise,  withholding,  payroll,
employment,   health,  education,   employment  insurance,   pension,  exercise,
business, school, property,  occupation,  customs,  anti-dumping and countervail
taxes, surtaxes, duties, levies, imports, rates, fees, assessments, withholdings
and other  charges)  imposed by any  governmental  authority,  together with any
fines,  interest,  penalties  or  other  additions  on,  to,  in  lieu  of,  for
non-collection  of or in  respect  of those  taxes,  surtaxes,  duties,  levies,
imposts, rates, fees, assessments, withholdings and other charges.

                                       21

<PAGE>

26.      TRANSFER.

         This Note and the rights granted to Holder are transferable without the
consent of the Company in whole or in part,  upon notice and  surrender  of this
Note to the  Company.  The Company  shall  maintain at its  principal  executive
offices (or such other  office or agency of the Company as it may  designate  by
notice to Holder),  a register for this Note,  in which the Company shall record
the name and address of the person in whose name this Note has been  issued,  as
well as the name and  address  of each  transferee.  The  Company  may treat the
person in whose name the Note is  registered  on the  register  as the owner and
Holder for all purposes,  notwithstanding any notice to the contrary, but in all
events recognizing any transfers made in accordance with the terms of this Note.

                                       22

<PAGE>

         IN  WITNESS  WHEREOF,  the  Company  has  caused  this  Note to be duly
executed and delivered as of the 15th day of December, 2000.

                ALTAIR INTERNATIONAL, INC.


                By: /s/ William P. Long
                -----------------------
                       [Name]  William P. Long
                       [Title] President

                ALTAIR TECHNOLOGIES, INC.


                By: /s/ C. Patrick Costin
                -------------------------
                       [Name]  C. Patrick Costin
                       [Title] Vice President

                MINERAL RECOVERY SYSTEMS, INC.


                By: /s/ C. Patrick Costin
                -------------------------
                       [Name]  C. Patrick Costin
                       [Title] President


                FINE GOLD RECOVERY SYSTEMS, INC.


                By: /s/ C. Patrick Costin
                -------------------------
                       [Name]  C. Patrick Costin
                       [Title] Vice President


                                       23

<PAGE>

                                                                       EXHIBIT A

                                     ISSUER

                                 EXCHANGE NOTICE

Reference is made to the Note issued by Altair International, Inc. (the "Note").
In accordance  with and pursuant to the Note, the  undersigned  hereby elects to
convert the principal amount of the Note,  indicated below into shares of common
stock, no par value per share (the "Common Stock"), of the Company, by tendering
the Note amount specified below as of the date specified below.

--------------------------------------------------------------------------------
DATE

--------------------------------------------------------------------------------
CURRENTLY OUTSTANDING PRINCIPAL
--------------------------------------------------------------------------------
CURRENT VALUE OF LETTER OF CREDIT
--------------------------------------------------------------------------------
ACCRUED BUT UNPAID INTEREST
--------------------------------------------------------------------------------
EXCHANGE AMOUNT
--------------------------------------------------------------------------------
(divided by)
EXCHANGE PRICE
--------------------------------------------------------------------------------
(equals)
EXCHANGE SHARES
Less:  Call Shares
Equals:  Newly Issued Exchange Shares

--------------------------------------------------------------------------------
ACCRUED INTEREST CONVERTED
--------------------------------------------------------------------------------
PRINCIPAL CONVERTED
--------------------------------------------------------------------------------
(times) LETTER OF CREDIT RATIO
--------------------------------------------------------------------------------
(equals) LETTER OF CREDIT REDUCTION
--------------------------------------------------------------------------------
NEW OUTSTANDING PRINCIPAL
--------------------------------------------------------------------------------
NEW LETTER OF CREDIT AMOUNT
--------------------------------------------------------------------------------


AGREED TO:

ALTAIR INTERNATIONAL, INC.                                      DORAL 18, LLC
--------------------------------------------------------------------------------