Document:

Exhibit 10.1

                        CONFIDENTIAL TREATMENT REQUESTED

***Certain  portions of this  exhibit  have been  omitted and marked with "***".
Copies of this  exhibit  containing  the  omitted  information  have been  filed
separately with the SEC pursuant to the Company's  Application for  Confidential
Treatment under Rule 24b-2 under the Securities Exchange Act of 1934.

                         TECHNOLOGY INVESTMENT AGREEMENT

                                     BETWEEN

                           TITANIUM METALS CORPORATION
                            1999 BROADWAY, SUITE 4300
                                DENVER, CO 80202

                                       AND

                           ALTAIR NANOMATERIALS, INC.
                                 204 EDISON WAY
                                 RENO, NV 89502

<PAGE>

This   Agreement   is  entered   into   between   Altair   Nanomaterials,   Inc.
("Subcontractor")  and Titanium Metals Corporation ("TIMET") effective as of the
date of the last signature hereto.

ARTICLE I:        SCOPE OF THE AGREEMENT

A.       Background

         Titanium  Metals  Company  ("TIMET")  is  the  primary   contractor  on
Agreement  Number  MDA###-##-####  with the Defense Advanced  Research  Projects
Agency  ("DARPA") dated as of March 14, 2003 (the "Prime  Contract").  The Prime
Contract covers a research program designed to develop a new low cost method for
the extraction of titanium from a laboratory  scale to an  industrial-production
scale. This agreement (the  "Agreement") is a subcontract  between TIMET and the
party listed on the cover page hereto (the "Subcontractor").

B.       Scope

         1.  Subcontractor  will perform the work  described on the Statement of
Work incorporated in this Agreement as Attachment 1 (the "Statement of Work").

         2.  Subcontractor  agrees  that in  performing  under  this  Agreement,
Subcontractor  is acting as an  independent  contractor  and not as an employee,
partner,  joint venturer, or agent of TIMET. Further,  nothing in this Agreement
is to be construed  as granting  Subcontractor  the  authority to enter into any
agreement on behalf of Subcontractor or to bind TIMET in any manner.

ARTICLE II:   TERM

A.       Term of this Agreement

This Agreement  commences  upon the date of the last signature  hereon and shall
continue until the earlier to occur of (i) forty-eight (48) months from the date
of the Prime Contract or (ii)  Subcontractor's  receipt of written notice of the
termination  of the Prime  Contract.  The  parties  may  extend the term of this
Agreement by their mutual written agreement.

B.       Termination Provisions

Subject to a  reasonable  determination  that this  Agreement  will not  produce
beneficial results commensurate with the expenditure of resources,  either party
may terminate this Agreement by written notice to the other party, provided that
such written notice is preceded by consultation  between the parties in order to
mitigate the impact of such  termination  on the Prime Contract and each party's
business.  In the event of a  termination  of the  Agreement,  it is agreed that
disposition  of Data (as defined in Article V) developed  under this  Agreement,
shall be in accordance with the provisions set forth in Article V, Data Rights.

C.       Survival

Provisions  of this  Agreement  which,  by their  express  terms or by necessary
implication, apply for periods of time that go beyond the term or termination of
this Agreement, shall survive the termination or expiration of this Agreement in
accordance with their terms.

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ARTICLE III:   PAYMENT

Subcontractor shall submit invoices to TIMET in accordance with the schedule set
forth in the Statement of Work. All invoices shall be payable within  forty-five
(45) days of the date of the invoice. In the event this Agreement terminates for
any  reason,  TIMET  shall  only be  obligated  to pay  Subcontractor  for  work
performed up to the date of such  termination.  In the event that this Agreement
is terminated prior to TIMET's payment in full for the services and deliverables
contemplated  by the  Statement  of  Work,  TIMET  shall  pay  Subcontractor  an
equitable amount for the work performed by Subcontractor  under the Statement of
Work prior to such  termination.  The  equitable  amount shall be  determined by
multiplying the amount of time spent by  Subcontractor  and its personnel on the
project by  Subcontractor's  standard  hourly rate for the  performance  of such
services.

ARTICLE IV:   PATENT RIGHTS

A.       Definitions

         1.  "Background  Invention"  means any Invention  that is not a Subject
Invention as defined herein and was not conceived or first  actually  reduced to
practice under another Government contract.

         2. "Government" means the United States of America.

         3.  "Invention"  means any  invention or  discovery  which is or may be
patentable or otherwise protectable under Title 35 of the United States Code.

         4. "Made" when used in relation to any Invention  means the  conception
or first actual reduction to practice of such Invention.

         5.  "Practical  Application"  means  to  manufacture,  in the case of a
composition of product;  to practice,  in the case of a process or method, or to
operate,  in the case of a machine or  system;  and,  in each  case,  under such
conditions as to establish  that the Invention is capable of being  utilized and
that its benefits are, to the extent permitted by law or Government regulations,
available to the public on reasonable terms.

         6. "Subject  Invention" means any Invention conceived or first actually
reduced to practice in the performance of work under this Agreement.

B.       Allocation of Principal Rights

Unless  Subcontractor  shall have notified TIMET and DARPA (in  accordance  with
subparagraph  C.2 below)  that  Subcontractor  does not intend to retain  title,
Subcontractor  shall retain the entire right, title, and interest throughout the
world to each Subject Invention consistent with the provisions of this Agreement
and  35  U.S.C.  ss.  202.  With  respect  to any  Subject  Invention  in  which
Subcontractor  retains title, DARPA shall have a nonexclusive,  nontransferable,
irrevocable,  paid-up  license to  practice or have  practiced  on behalf of the
United  States for  government  purposes the Subject  Invention  throughout  the
world.  In addition,  TIMET shall,  for the term of the Prime  Contract,  have a
nonexclusive,   nontransferable,   paid-up   license  to  practice  the  Subject
Invention,  but only for the purpose of  fulfilling  its  obligations  under the
Prime Contract.
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Unless the parties shall have notified  DARPA (in accordance  with  subparagraph
C.2  below)  that  the  parties  do  not  intend  to  retain  title,  TIMET  and
Subcontractor shall jointly own the entire right, title, and interest throughout
the world to any Subject Invention that is developed by at least one employee of
each  party  as  part  of the  performance  of  work  under  this  Agreement  (a
"Jointly-Owned  Subject  Invention")  consistent  with  the  provisions  of this
Agreement and 35 U.S.C. ss. 202. TIMET and Subcontractor shall each own an equal
undivided interest in all Jointly-Owned  Subject Inventions and each party shall
have the  right to use,  practice,  pledge,  commercialize,  license,  assign or
otherwise  transfer  its  interest  in such  Jointly-Owned  Subject  Inventions;
provided, that, Subcontractor's right to use, practice,  pledge,  commercialize,
license,  assign or otherwise transfer its interest in any Jointly-Owned Subject
Invention  shall be subject  to the  consent  of TIMET,  not to be  unreasonably
withheld . With  respect to any  Subject  Invention  jointly  owned by TIMET and
Subcontractor,  DARPA shall have a nonexclusive,  nontransferable,  irrevocable,
paid-up license to practice or have practiced on behalf of the United States for
government purposes such Subject Invention throughout the world.

All of the rights and obligations applicable to Subcontractor under this Article
IV shall apply to both TIMET and Subcontractor with respect to any Jointly-Owned
Subject Inventions.

In the event that one party (the "Filing Party") chooses to file for a patent on
any Jointly-Owned  Subject  Inventions,  such party shall advise the other party
(the "Non-Filing Party") in writing.  The Non-Filing Party then shall advise the
Filing Party in writing within sixty (60) days if the Non-Filing Party agrees to
share the cost of the patent  prosecution  equally (i.e.  fifty percent (50%) of
the cost borne by each Party).  In the event that the Non-Filing  Party does not
provide the Filing Party with such  written  notice of agreement to so share the
cost of patent  prosecution,  the  Filing  Party  may  proceed  with the  patent
prosecution  at its own  expense and shall  thereafter  be the sole owner of any
resulting patent(s). In the event that any such resulting patent(s) that are not
deemed to be solely and  exclusively  owned by the Filing  Party for any reason,
the Non-Filing  Party hereby assigns,  transfers and conveys to the Filing Party
all of its right,  title and interest in and to such  resulting  patent(s).  The
Non-Filing  Party  further  agrees to assist  the  Filing  Party,  at the Filing
Party's expense, to further evidence, record and perfect such assignment, and to
perfect,  obtain,  maintain,  enforce,  and defend any rights so  assigned.  The
Non-Filing  Party shall also cooperate with the Filing Party in connection  with
the Filing Party's  efforts to obtain patent  protection for such  Jointly-Owned
Subject   Inventions   and  the   Non-Filing   Party  and  its   employees   and
representatives  shall, at the Filing Party's  request,  execute and deliver any
documents,  including,  without  limitation,  any  patent or other  intellectual
property  right  assignments  or  applications,  to permit the  Filing  Party to
exercise its rights under this  paragraph B.  Subsequently,  if the Filing Party
desires to cease prosecution and/or maintenance of any such patent  applications
or patents, then the Filing Party shall provide at least sixty (60) days written
notice to the Non-Filing Party, whereupon the Filing Party may assign its rights
in  such  patent  applications  or  patents  to the  Non-Filing  Party  and  the
Non-Filing  Party may take over the  prosecution  and/or  maintenance at its own
expense.  In the event that the  Non-Filing  Party does provide the Filing Party
with written notice of agreement to so share the cost of patent prosecution, the
parties shall file and manage the patent  prosecution  jointly and any resulting
patent(s) will be jointly owned by the parties.

C.       Invention   Disclosure,   Election  of  Title,  and  Filing  of  Patent
         Application

         1. Subcontractor  shall disclose each Subject Invention to DARPA with a
copy to TIMET within four (4) months after the inventor  discloses it in writing
to his company personnel responsible for patent matters. The disclosure to DARPA
shall be in the form of a written report and shall identify the Agreement  under

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which the  Invention was made and the identity of the  inventor(s).  It shall be
sufficiently complete in technical detail to convey a clear understanding to the
extent known at the time of the disclosure,  of the nature, purpose,  operation,
and the physical,  chemical,  biological,  or electrical  characteristics of the
Invention.  The disclosure shall also identify any publication,  sale, or public
use of the Invention and whether a manuscript  describing the Invention has been
submitted  for  publication  and,  if so,  whether  it  has  been  accepted  for
publication at the time of disclosure.  Subcontractor shall also submit to DARPA
an annual listing of Subject Inventions made under this Agreement.

         2. If Subcontractor  determines that it does not intend to retain title
to any such Invention,  Subcontractor shall notify DARPA, in writing,  (and copy
TIMET)  within eight (8) months of  disclosure  to DARPA.  However,  in any case
where publication,  sale, or public use has initiated the one (1)-year statutory
period  wherein  valid  patent  protection  can still be  obtained in the United
States,  the period for such notice may be  shortened by DARPA to a date that is
no more than sixty (60) calendar days prior to the end of the statutory period.

         3. Subcontractor shall file its initial patent application on a Subject
Invention to which it elects to retain title within one (1) year after  election
of title or, if earlier,  prior to the end of the statutory period wherein valid
patent  protection can be obtained in the United States after a publication,  or
sale,  or public use.  Subcontractor  may elect to file patent  applications  in
additional  countries  (including  the  European  Patent  Office  and the Patent
Cooperation  Treaty) within either ten (10) months of the corresponding  initial
patent  application or six (6) months from the date permission is granted by the
Commissioner  of Patents and  Trademarks  to file foreign  patent  applications,
where such filing has been prohibited by a Secrecy Order.

         4.  Requests for  extension of the time for  disclosure  election,  and
filing under Article IV, paragraph C, may, at the discretion of DARPA, and after
considering the position of  Subcontractor,  be granted.  D. Conditions When the
Government May Obtain Title

Upon DARPA's written  request,  Subcontractor  shall convey title to any Subject
Invention to DARPA under any of the following conditions:

         1. If Subcontractor  fails to disclose or elects not to retain title to
the Subject Invention within the times specified in paragraph C of this Article;
provided,  that DARPA may only request  title within  sixty (60)  calendar  days
after learning of the failure of  Subcontractor  to disclose or elect within the
specified times.

         2. In those  countries  in  which  Subcontractor  fails to file  patent
applications  within  the  times  specified  in  paragraph  C of  this  Article;
provided,  that if  Subcontractor  has filed a patent  application  in a country
after the times  specified  in  paragraph  C of this  Article,  but prior to its
receipt of the written request by DARPA,  Subcontractor shall continue to retain
title in that country; or

         3. In any country in which  Subcontractor  decides not to continue  the
prosecution of any application for, to pay the maintenance fees on, or defend in
reexamination or opposition proceedings on, a patent on a Subject Invention.

E.       Minimum Rights to Subcontractor and Protection of Subcontractor's Right
         to File

         1.  Subcontractor  shall retain a  nonexclusive,  royalty-free  license
throughout the world in each Subject  Invention to which the Government  obtains
title,  except if Subcontractor fails to disclose the Invention within the times
specified in paragraph C of this Article.  The Subcontractor  license extends to
the domestic (including Canada) subsidiaries and affiliates,  if any, within the

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corporate  structure of which Subcontractor is a party and includes the right to
grant  licenses of the same scope to the extent that  Subcontractor  was legally
obligated  to do so at the  time the  Agreement  was  awarded.  The  license  is
transferable  only with the approval of DARPA,  except when  transferred  to the
successor of that part of the business to which the  Invention  pertains.  DARPA
approval for license transfer shall not be unreasonably withheld.

         2. The  Subcontractor  domestic  license  may be revoked or modified by
DARPA to the extent necessary to achieve  expeditious  Practical  Application of
the  Subject  Invention  pursuant to an  application  for an  exclusive  license
submitted  consistent  with  appropriate  provisions  at 37 CFR Part  404.  This
license shall not be revoked in that field of use or the  geographical  areas in
which Subcontractor has achieved Practical Application and continues to make the
benefits of the Invention  reasonably  accessible to the public.  The license in
any foreign country may be revoked or modified at the discretion of DARPA to the
extent  Subcontractor,  its licensees,  or the  subsidiaries  or affiliates have
failed to achieve Practical Application in that foreign country.

         3.  Before  revocation  or  modification  of the  license,  DARPA shall
furnish to  Subcontractor  a written notice of its intention to revoke or modify
the license,  and  Subcontractor  shall be allowed thirty (30) calendar days (or
such other time as may be  authorized  for good cause shown) after the notice to
show cause why the license should not be revoked or modified.

F.       Action to Protect the Government's Interest

         1.  Subcontractor  agrees to execute or to have  executed  and promptly
deliver to DARPA all  instruments  necessary  to (i)  establish  or confirm  the
rights the Government  has  throughout the world in those Subject  Inventions to
which Subcontractor  elects to retain title, and (ii) convey title to DARPA when
requested  under  paragraph D of this  Article and to enable the  Government  to
obtain patent protection throughout the world in that Subject Invention.

         2.  Subcontractor   agrees  to  require,  by  written  agreement,   its
employees, other than clerical and non-technical employees, to disclose promptly
in writing to personnel  identified as  responsible  for the  administration  of
patent matters and in a format suggested by Subcontractor each Subject Invention
made  under  this  Agreement  in order that  Subcontractor  can comply  with the
disclosure  provisions  of  paragraph  C of this  Article.  Subcontractor  shall
instruct employees,  through employee  agreements or other suitable  educational
programs, on the importance of reporting Inventions in sufficient time to permit
the filing of patent applications prior to U. S. or foreign statutory bars.

         3.  Subcontractor  shall  notify  DARPA  with a copy  to  TIMET  of any
decisions  not  to  continue  the  prosecution  of  a  patent  application,  pay
maintenance  fees, or defend in a reexamination  or opposition  proceedings on a
patent,  in any  country,  not less than  thirty (30)  calendar  days before the
expiration of the response period required by the relevant patent office.

         4. Subcontractor shall include,  within the specification of any United
States patent  application  and any patent  issuing  thereon  covering a Subject
Invention,  the following  statement:  "This  invention was made with Government
support under Agreement No.  MDA972-03-3-0002  awarded by DARPA.  The Government
has certain rights in the invention."

G.       Identification of Background Inventions

1. All Background Inventions shall be clearly identified,  and, when required by
the  DARPA  Agreements   Officer,   detailed  and   substantiated  by  TIMET  or
Subcontractor  prior to  introducing  a Background  Invention  into the program.
Subcontractor's  Background  Inventions shall include,  without limitation,  the
patents, patent applications, know-how and other inventions listed on Attachment
2.
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2. The Government has no right to Background Inventions.  TIMET shall retain all
rights,  title  and  interest  in  and to  all  of  its  Background  Inventions.
Subcontractor  shall retain all rights,  title and interest in and to all of its
Background Inventions.

H. Third Party Beneficiary

DARPA and the United States Government are express third party  beneficiaries of
this Article,  and  Subcontractor  acknowledges that DARPA and the United States
Government  may enforce  the  obligations  of  Subcontractor  contained  in this
Article.

I.       Reporting on Utilization of Subject Inventions

Subcontractor  agrees to  submit,  during the term of the  Agreement,  an annual
report on the utilization of a Subject Invention or on efforts at obtaining such
utilization  that are being made by Subcontractor or its licensees or assignees.
Such reports shall include information regarding the status of development, date
of first commercial sale or use, gross royalties received by Subcontractor,  and
such  other  data  and  information  as  the  agency  may  reasonably   specify.
Subcontractor  also agrees to provide  additional reports as may be requested by
DARPA  in  connection  with  any  march-in  proceedings  undertaken  by DARPA in
accordance  with  paragraph K of this  Article.  Consistent  with 35 U.S.C.  ss.
202(c)(5),  DARPA  agrees it shall not  disclose  such  information  to  persons
outside the Government without permission of Subcontractor.

J.       Preference for American Industry

Notwithstanding any other provision of this clause, Subcontractor agrees that it
shall not grant to any person  the  exclusive  right to use or sell any  Subject
Invention  in the United  States or Canada  unless such  person  agrees that any
product  embodying  the Subject  Invention  or  produced  through the use of the
Subject  Invention shall be manufactured  substantially  in the United States or
Canada. However, in individual cases, the requirements for such an agreement may
be  waived  by  DARPA  upon a  showing  by  Subcontractor  that  reasonable  but
unsuccessful  efforts  have  been made to grant  licenses  on  similar  terms to
potential  licensees  that would be likely to manufacture  substantially  in the
United States or that,  under the  circumstances,  domestic  manufacture  is not
commercially feasible.

K.       March-in Rights

Subcontractor agrees that, with respect to any Subject Invention in which it has
retained title, DARPA has the right to require  Subcontractor,  an assignee,  or
exclusive licensee of a Subject Invention to grant a non-exclusive  license to a
responsible  applicant or applicants,  upon terms that are reasonable  under the
circumstances,  and if Subcontractor,  assignee,  or exclusive  licensee refuses
such a  request,  DARPA  has the right to grant  such a license  itself if DARPA
determines that:

         1. Such action is necessary  because  Subcontractor or assignee has not
taken effective steps,  consistent with the intent of this Agreement, to achieve
Practical Application of the Subject Invention;

         2. Such action is necessary  to alleviate  health or safety needs which
are not reasonably satisfied by Subcontractor, assignee, or their licensees;

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         3. Such action is  necessary  to meet  requirements  for public use and
such requirements are not reasonably  satisfied by Subcontractor,  assignee,  or
licensees; or

         4. Such action is necessary because the agreement required by paragraph
J of this  Article has not been  obtained or waived or because a licensee of the
exclusive right to use or sell any Subject  Invention in the United States is in
breach of such Agreement.

ARTICLE V:   DATA RIGHTS

A.       Definitions

         1. "Government Purpose Rights",  as used in this article,  means rights
to use, duplicate,  or disclose Data, in whole or in part and in any manner, for
Government  purposes only (not for commercial  purposes),  and to have or permit
others to do so for Government purposes only.

         2. "Unlimited  Rights",  as used in this article,  means rights to use,
duplicate, release, or disclose, Data in whole or in part, in any manner and for
any purposes whatsoever, and to have or permit others to do so.

3. "Data", as used in this article,  means recorded  information,  regardless of
form or method of  recording,  which  includes but is not limited to,  technical
data,  software,  trade  secrets,  and mask  works.  The term  does not  include
financial,  administrative, cost, pricing or management information and does not
include Subject Inventions or Background Inventions included under Article IV.

4. "Background  Data" means Data  demonstrated as being first created at private
expense,  is marked in accordance  with Article V.C.2 when first provided to the
Government,  and is clearly  segregable  from Data generated and developed under
this Agreement.

B.       Allocation of Principal Rights

         1. This  Agreement and the Prime Contract shall be performed with mixed
Government  and TIMET  funding.  The  parties  agree that in  consideration  for
Government  funding,  TIMET and  Subcontractor  intend  to  reduce to  Practical
Application items, components and processes developed under the Prime Contract.

         2. Subcontractor agrees to retain and maintain in good condition, until
three (3) years after  completion or  termination  of this  Agreement,  all Data
necessary  to achieve  Practical  Application.  In the event of  exercise of the
Government's March-in Rights as set forth under Article IV.K or subparagraph B.3
of this Article,  TIMET agrees,  upon written  request from the  Government,  to
deliver  with  Unlimited  Rights  (as  defined  in  paragraph  A above) all Data
necessary to achieve Practical  Application within sixty (60) calendar days from
the date of the written request as follows:

                  (a) All Data, other than Background Data, shall be provided at
         no additional cost to the Government;

                  (b)  Background  Data shall be  entitled  to the  payment of a
         license fee by the Government.  Such license fee shall be at a fair and
         reasonable  rate  to  be  determined  based  upon  the  value  of  such
         Background  Data to the  achievement of Practical  Application  and the
         potential  financial  consequences  that could  result from the loss of
         exclusivity of such  Background  Data for the owner of such  Background
         Data.

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         3. Subcontractor agrees that, with respect to Data necessary to achieve
Practical  Application,  DARPA has the right to require Subcontractor to deliver
all such Data to DARPA in  accordance  with its  reasonable  directions if DARPA
determines that:

                  (a) Such action is necessary because Subcontractor or assignee
         has not  taken  effective  steps,  consistent  with the  intent of this
         Agreement, to achieve Practical Application of the technology developed
         during the performance of this Agreement;

                  (b) Such action is  necessary  to  alleviate  health or safety
         needs which are not reasonably satisfied by Subcontractor, assignee, or
         their licensees; or

                  (c) Such action is necessary to meet  requirements  for public
         use  and   such   requirements   are  not   reasonably   satisfied   by
         Subcontractor, assignee, or licensees.

         4. With respect to Data  developed or generated  under this  Agreement,
the Government shall receive Government Purpose Rights.

C.       Marking of Data

         1. Pursuant to paragraph B of this Article, any Data delivered to DARPA
under this Agreement shall be marked with the following legend:

Use,  duplication,  or  disclosure is subject to the  restrictions  as stated in
Agreement   MDA972-03-3-0002  between  the  Government  and  TIMET  and  in  the
corresponding agreement between TIMET and Altair Nanomaterials, Inc.

         2. All  Background  Data must be marked  as  "Background  Data" and the
following legend:

             [company name] PROPRIETARY
             Copyright(C)[Year in which work is created] [company name]
             Unpublished Work. All Rights Reserved.

D.       Third Party Beneficiary

DARPA and the United States Government are express third party  beneficiaries of
this Article,  and  Subcontractor  acknowledges that DARPA and the United States
Government  may enforce  the  obligations  of  Subcontractor  contained  in this
Article.

ARTICLE VI:          FOREIGN ACCESS TO TECHNOLOGY

This Article  shall remain in effect  during the term of the  Agreement  and for
three (3) years thereafter.

A.       Definition

         1. "Foreign Firm or Institution" means a firm or institution  organized
or  existing  under the laws of a country  other  than the  United  States,  its
territories, or possessions.  The term includes, for purposes of this Agreement,
any agency or instrumentality of a foreign government;  and firms,  institutions
or business organizations which are owned or substantially controlled by foreign
governments, firms, institutions, or individuals.

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         2.  "Know-How"  means all  information  including,  but not  limited to
discoveries,  formulas,  materials,  inventions,  processes,  ideas, approaches,
concepts, techniques,  methods, software, programs,  documentation,  procedures,
firmware,  hardware,  technical  data,  specifications,  devices,  apparatus and
machines.

         3.   "Technology"   means   discoveries,   innovations,   Know-How  and
inventions,  whether patentable or not, including computer software,  recognized
under U.S. law as  intellectual  creations to which rights of ownership  accrue,
including, but not limited to, patents, trade secrets, maskworks, and copyrights
developed under this Agreement.

B.       General

The Parties agree that research  findings and  technology  developments  arising
under this  Agreement may  constitute a significant  enhancement to the national
defense, and to the economic vitality of the United States. Accordingly,  access
to important  technology  developments  under this Agreement by Foreign Firms or
Institutions  must be carefully  controlled.  The controls  contemplated in this
Article are in addition  to, and are not  intended to change or  supersede,  the
provisions of the  International  Traffic in Arms  Regulation (22 CFR pt. 121 et
seq.), the DoD Industrial Security Regulation (DoD 5220.22-R) and the Department
of Commerce Export Regulation (15 CFR pt. 770 et seq.)

C.  Restrictions  on  Sale  or  Transfer  of  Technology  to  Foreign  Firms  or
Institutions

         1. In order to promote the  national  security  interests of the United
States and to effectuate the policies that underlie the regulations cited above,
the procedures  stated in  subparagraphs  C.2, C.3, and C.4 below shall apply to
any transfer of Technology.  For purposes of this paragraph, a transfer includes
a sale of the  company  that  includes a transfer  of  Technology,  and sales or
licensing of Technology. Transfers do not include:

                  (a) sales of products or components, or

                  (b) licenses of software or documentation  related to sales of
         products or components, or

                  (c)  transfer to foreign  subsidiaries  of  Subcontractor  for
         purposes related to this Agreement, or

                  (d) transfer which provides  access to Technology to a Foreign
         Firm or Institution which is an approved source of supply or source for
         the  conduct  of  research  under  this  Agreement  provided  that such
         transfer  shall be  limited  to that  necessary  to  allow  the firm or
         institution to perform its approved role under this Agreement.

         2.  Subcontractor  shall provide timely notice to DARPA of any proposed
transfers from  Subcontractor  of Technology  developed  under this Agreement to
Foreign Firms or  Institutions.  If DARPA  determines that the transfer may have
adverse  consequences to the national  security  interests of the United States,
Subcontractor,   its  vendors,   and  DARPA  shall  jointly   endeavor  to  find
alternatives  to the  proposed  transfer  which  obviate or  mitigate  potential
adverse consequences of the transfer but which provide substantially  equivalent
benefits to Subcontractor.

         3. In any event, Subcontractor shall provide written notice to DARPA of
any  proposed  transfer  to a Foreign  Firm or  Institution  at least sixty (60)
calendar  days prior to the proposed  date of  transfer.  Such notice shall cite
this  Article and shall state  specifically  what is to be  transferred  and the
general  terms of the  transfer.  Within thirty (30) calendar days of receipt of

                                       10
<PAGE>

Subcontractor's  written notification,  DARPA shall advise Subcontractor whether
it consents to the  proposed  transfer.  In cases where DARPA does not concur or
sixty  (60)  calendar  days  after  receipt  and  DARPA  provides  no  decision,
Subcontractor  may require  TIMET to utilize the  procedures  under  Article VI,
Disputes,  of the Prime Contract.  No transfer shall take place until a decision
is rendered.

         4.  In  the  event  a  transfer  of  Technology  to  Foreign  Firms  or
Institutions which is NOT approved by DARPA takes place, Subcontractor shall (a)
refund to DARPA funds paid by it for the  development  of the Technology and (b)
the Government shall have a non-exclusive, nontransferable, irrevocable, paid-up
license  to  practice  or have  practiced  on behalf of the  United  States  the
Technology  throughout the world for Government and any and all other  purposes,
particularly  to effectuate  the intent of this  Agreement.  Upon request of the
Government, Subcontractor shall provide written confirmation of such licenses.

         5. The rights and  obligations of  Subcontractor  under this Article VI
shall  apply to both  Subcontractor  and TIMET  with  respect  to  Jointly-Owned
Subject Inventions.

D.       Third Party Beneficiary

DARPA and the United States Government are express third party  beneficiaries of
this Article,  and  Subcontractor  acknowledges that DARPA and the United States
Government  may enforce  the  obligations  of  Subcontractor  contained  in this
Article.

ARTICLE VII:   EXECUTION

This Agreement  constitutes  the entire  agreement of the parties and supersedes
all prior  and  contemporaneous  agreements,  understandings,  negotiations  and
discussions  among the  parties,  whether  oral or written,  with respect to the
subject matter hereof.  This Agreement may be revised only by written consent of
TIMET and  Subcontractor.  This  Agreement,  or  modifications  thereto,  may be
executed in counterparts  each of which shall be deemed as original,  but all of
which taken together shall constitute one and the same instrument.

ARTICLE VIII:   ORDER OF PRECEDENCE

In the  event of any  inconsistency  between  the  terms of this  Agreement  and
language set forth in the attachments,  the  inconsistency  shall be resolved by
giving  precedence in the following order:  (1) the Agreement,  and then (2) the
attachments to this Agreement.

ARTICLE IX:  NOTICES

Notices,  reports,  statements or the like required or permitted to be delivered
pursuant to this  Agreement  shall be in writing  and shall be deemed  given (a)
three  business days after deposit in the United States mail,  postage  prepaid,
(b) one business day after deposit with an overnight  delivery  service,  or (c)
when personally delivered or sent by telex,  telegram,  verified electronic mail
or verified facsimile. Notices shall be addressed as follows:

If to Subcontractor:
                                             Mr. Doug  Ellsworth  Altair
                                             Nanomaterials,   Inc.   204
                                             Edison  Way Reno,  NV 89502
                                             Phone:   775-858-3740  Fax:
                                             775-856-1619         email:
                                             dellsworth@altairinc.com

                                             with a copy to
                                       11
<PAGE>

                                             Brian G. Lloyd
                                             Stoel Rives LLP
                                             201 South Main Street, Suite 1100
                                             Salt Lake City, Utah  84111
                                             Telephone: (801) 328-3131
                                             Facsimile: (801) 578-6999

If to TIMET:
                                             Dr. Stephen P. Fox TIMET
                                             PO Box  2128
                                             Henderson,   NV
                                             89009  phone:  702-566-4423
                                             FAX:   702-564-9038  Email:
                                             Stephen.fox@timet.com

With a copy to:                              Titanium Metals Corporation
                                             1999 Broadway, Suite 4300
                                             Denver, CO 80202
                                             Attn:    General Counsel

                                             Facsimile No.:  303-291-2990

If to DARPA:                                 James B. Troutman
                                             DARPA/CMO
                                             3701 N. Fairfax Drive
                                             Arlington, VA  22203-1714
                                             phone:  (703) 696-2408
                                             FAX:  (571) 218-4670
                                             Email:  jtroutman@darpa.mil

With copies to:                              Dr. Leo Christodoulou
                                             DARPA/DSO
                                             3701 N. Fairfax Drive
                                             Arlington, VA  22203-1714
                                             phone:  (703) 696-2374
                                             FAX:  (571) 218-4553
                                             Email:  lchristodoulou@darpa.mil

                                             Dr. Patrick Martin
                                             AFRL/AFTL  Materials  and
                                             Manufacturing   Directorate
                                             2230 Tenth Street, Building 655
                                             Wright-Patterson  AFB,
                                             OH   45433
                                             phone:  (937) 255-1353
                                             FAX: 937)255-3007
                                             Email:
                                             patrick.martin@wpafb.af.mil

                                       12
<PAGE>
ARTICLE X:  CONFIDENTIALITY

Each party recognizes that during the term of this Agreement,  such party (each,
a "Receiving  Party") may have access to certain  confidential  and  proprietary
information  of the other party (each,  a "Disclosing  Party") the disclosure of
which could be harmful to the interests of the Disclosing  Party  ("Confidential
Information"). Notwithstanding the foregoing, Confidential Information shall not
include  information  that:  (i) was in the  possession of the  Receiving  Party
without confidentiality restriction prior to disclosure by the Disclosing Party;
(ii) at or  after  the  time  of  disclosure  by the  Disclosing  Party  becomes
generally  available to the public through no act or omission on the part of the
Receiving Party that is not expressly authorized hereunder;  (iii) has come into
the possession of the Receiving Party without confidentiality restriction from a
third  party  and  such  third  party is under no  obligation  to  maintain  the
confidentiality of such information;  or (iv) was independently  developed by or
for the Receiving Party without the use of any Confidential Information received
from the Disclosing  Party.  Each Receiving Party  acknowledges the confidential
and proprietary  nature of the Disclosing Party's  Confidential  Information and
agrees,  except as expressly  authorized or permitted under this Agreement or as
otherwise  required  by law,  (i) to hold the  Disclosing  Party's  Confidential
Information in confidence and to take all reasonable precautions to protect such
Confidential  Information  (including,  without limitation,  all precautions the
Receiving Party employs with respect to its own  confidential  materials),  (ii)
not to divulge any such Confidential  Information to any third person, and (iii)
not to make any use whatsoever of such Confidential Information.

Notwithstanding anything to the contrary in this Agreement, each party (and each
employee, representative, or other agent of the parties) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Agreement and all materials of any kind
(including  opinions or other tax  analyses)  that are  provided to either party
relating  to  such  tax  treatment  and  tax  structure,  except  to the  extent
confidentiality  of such tax treatment or tax structure is reasonably  necessary
to comply with securities laws.

ARTICLE XI:  DISCLAIMER OF WARRANTIES

EXCEPT AS  EXPRESSLY  PROVIDED IN THIS  AGREEMENT,  SUBCONTRACTOR  PROVIDES  THE
SERVICES AND ANY  INVENTIONS,  DATA OR OTHER  DELIVERABLES  PROVIDED  UNDER THIS
AGREEMENT ON AN "AS IS" AND "AS AVAILABLE" BASIS WITHOUT WARRANTIES OF ANY KIND.
SUBCONTRACTOR  EXPRESSLY  DISCLAIMS ALL OTHER  WARRANTIES,  EXPRESS,  IMPLIED OR
STATUTORY,   INCLUDING   BUT  NOT   LIMITED  TO  THE   IMPLIED   WARRANTIES   OF
MERCHANTABILITY,  NON-INFRINGEMENT  AND FITNESS FOR A PARTICULAR PURPOSE AND ANY
IMPLIED  WARRANTIES  ARISING OUT OF COURSE OF  PERFORMANCE OR COURSE OF DEALING.
MOREOVER, SUBCONTRACTOR MAKES NO WARRANTY OF ANY KIND AS TO THE RESULTS THAT MAY
BE OBTAINED FROM USE OF SUCH SERVICES,  INVENTIONS,  DATA OR OTHER DELIVERABLES,
OR AS TO THE  ACCURACY,  COMPLETENESS,  CURRENCY OR  RELIABILITY  OF ANY DATA OR
INFORMATION PROVIDED HEREUNDER.

ARTICLE XII:  LIMITATION OF LIABILITY

EXCEPT FOR ANY OBLIGATIONS ARISING UNDER ARTICLE X (CONFIDENTIALITY)  OR ACTIONS
OF  TIMET  BEYOND  THE  SCOPE  OF  THE  LICENSES  GRANTED  HEREUNDER,  UNDER  NO
CIRCUMSTANCES  SHALL EITHER  PARTY,  ITS  OFFICERS,  DIRECTORS OR  AFFILIATES BE
LIABLE  FOR ANY  SPECIAL,  INDIRECT,  INCIDENTAL,  CONSEQUENTIAL,  EXEMPLARY  OR
PUNITIVE  DAMAGES ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT,  EVEN
IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

EXCEPT FOR ANY OBLIGATIONS ARISING UNDER ARTICLE X (CONFIDENTIALITY)  OR ACTIONS
OF TIMET BEYOND THE SCOPE OF THE LICENSE  GRANTED  HEREUNDER,  IN NO EVENT SHALL
EITHER PARTY'S  AGGREGATE  LIABILITY UNDER THIS AGREEMENT EXCEED AN AMOUNT EQUAL
TO THE  TOTAL  AMOUNT  PAID BY  TIMET TO  SUBCONTRACTOR  UNDER  THIS  AGREEMENT,
REGARDLESS  OF THE FORM OF CLAIM OR  ACTION.  THIS  ARTICLE  XII SHALL NOT LIMIT
EITHER PARTY'S LIABILITY FOR THE DEATH OR BODILY INJURY OF A PERSON.

                                       13
<PAGE>
ARTICLE XIII:  GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the State of Nevada (without regard to the conflict of law principles  thereof).
The parties  hereby  submit  themselves to the  jurisdiction  of the federal and
state  courts  located in the State of Nevada.  In any action or  proceeding  to
enforce rights under this Agreement,  the prevailing  party shall be entitled to
recover its costs and attorneys' fees.

IN WITNESS WHEREOF, this Agreement has been executed in duplicate counterpart on
behalf of the parties hereto. .

FOR TITANIUM METALS CORPORATION            FOR ALTAIR NANOMATERIALS, INC.:

/s/ Stephen P. Fox                         /s/ D. K. Ellsworth
-------------------------------------      -------------------------------------
(Signature)                                (Signature)

Stephen P. Fox,
Director R&D                 1/8/04        Doug Ellsworth, President    1/7/04
-------------------------------------      -------------------------------------
(Name, Title)                (Date)        (Name, Title)                 (Date)

                                       14
<PAGE>

Attachment 1. Statement of Work
The Subcontractor will conduct the following activities.

Task 2.1.4 Development of Practical Cathode.

Task 2.1.4.1 Develop method for manufacture of Cathode

         o   Perform  matrix  study  of  properties  of oxide  discs  (porosity,
             strength)  through  variation of calcination  temperature,  forming
             pressure and chemical additions to the pre-calcination mix.
         o   Provide TIMET with  materials  having agreed  density and structure
             for reduction.
         o   Characterize the material (porosity, size, strength, crystal phase,
             purity)
         o   Model and predict an optimum  shape,  size,  density  based on this
             data
         o   Survey  and  select  economic  binding  system  (type,  aqueous  or
             organic)
         o   Produce a master batch recipe for optimized density, crystal size.
         o   Solicit   quotations   for   mixers   and   briquetting   equipment
             manufacturers to toll process

Task 2.1.4.2 Supply TiO2 Oxide Feedstock

         o   Manufacture  the precursor  titanium oxide  feedstock to produce 10
             batches of 50 pounds titanium metal.
         o   Prepare  chloride  feedstock to produce 1000 lbs of titanium  oxide
             amorphous precursor.
         o   Spray dry chloride solution (SDD)
         o   Develop large batch recipe for cathode shape formation
         o   Toll process the SDD to the agreed on shape
         o   Calcine to achieve the required porosity and particle size.
         o   Ship to TIMET. Delivery Commencing on or before April 1, 2004.

Task: 2.1.4.3 Alloy Oxide Development

         o   Prepare a  proposal  for an alloy  oxide  development  program  and
             supply of alloy oxide feedstock.

Task: 2.1.4.4 Demonstrate adaptation of the Altair Hydrochloride Pigment Process
              (AHPP) to FFC Cambridge Process

         o   Prepare a proposal to demonstrate adaptation of the AHPP to the FFC
             Cambridge process

Reporting Requirements

Commencing  on or before  January 15,  2004,  the  subcontractor  shall  provide
quarterly  progress reports detailing the key technical  progress issues against
plan,  an updated  project plan and an  assessment of major risks to the project
along with an abatement strategy.

                                       15
<PAGE>

Deliverables:

         o   Feedstock Optimization report
         o   Master batch recipes for titanium metal oxide feedstocks.
         o   10 x 100 lb batches of TiO2 feedstock commencing on or before April
             1, 2004.
         o   Proposals for Alloy oxide  development and for demonstration of the
             adaptation of Altair process to FFC Cambridge process
         o   Quarterly Progress reports

Commercial:

Subcontractor  is  prepared  to do the  above  outlined  scope  of  work  for an
estimated  cost of $150,000  including  labor,  overhead,  outside  contractors,
equipment purchase and travel.

TIMET shall pay Subcontractor for the services performed under this Statement of
Work in accordance with the following payable milestones:

         1.  $37,500 (25% of total) shall be due and payable upon the  execution
             of the Agreement.

         2.  $37,500   (25%  of   total)   shall   be  due  and   payable   upon
             Subcontractor's  completion  of Task  2.1.4.1  "Develop  method for
             manufacture of cathode."

         3.  $37,500   (25%  of   total)   shall   be  due  and   payable   upon
             Subcontractor's  delivery  of the  first  500 lbs of  TiO2  cathode
             structures.

         4.  $37,500   (25%  of   total)   shall   be  due  and   payable   upon
             Subcontractor's   delivery   of  last  500  lbs  of  TiO2   cathode
             structures.

Subcontractor  shall document the  accomplishments  of each Payable Milestone by
submitting or otherwise providing a Payable Milestones Report to TIMET.

                                       16
<PAGE>

ATTACHMENT 2
SUBCONTRACTOR BACKGROUND INVENTIONS
--------------------------------------------------------------------------------
Issued Patents:

US Patent 6,375,923,  April 23, 2002,  "Processing  Titaniferous Ore to Titanium
Dioxide Pigment"

U.S. Patent 6,440,383,  August 27, 2002,  "Processing  Aqueous Titanium Chloride
Solutions to Ultrafine Titanium Dioxide".

U.S. Patent 6,548,039, April 15, 2003, "Processing Aqueous Titanium Solutions to
Titanium Dioxide Pigment".

Patent Applications:

U.S. application number 09/982,599, "Method for Producing Catalyst Structures".

U.S. Application number 09/948,155, "Method to Make Mixed Metal Oxides and Metal
Oxide Compounds".

***

Trade Secrets and Know-How:

The Altair  Hydrochloride  Pigment  Process  (AHPP)  includes  the  intellectual
property and know-how used to make high quality  metal  oxides,  and mixed metal
oxides having prescribed size, morphology and crystal phase.

The Catalyst  Structure Process includes the intellectual  property and know-how
used to make metal oxide and mixed metal oxide  structures  having a  prescribed
porosity, crystal size, morphology and crystal phase.

***Portions  of  this  page  have  been  omitted   pursuant  to  a  request  for
confidential treatment filed separately with the SEC.

                                       17
<PAGE>CONFIDENTIAL TREATMENT REQUESTED

***Certain  portions of this  exhibit  have been  omitted and marked with "***".
Copies of this  exhibit  containing  the  omitted  information  have been  filed
separately with the SEC pursuant to the Company's  Application for  Confidential
Treatment under Rule 24b-2 under the Securities Exchange Act of 1934.

              LICENSE AGREEMENT FOR ALTAIR TiO2 PIGMENT TECHNOLOGY
                                     BETWEEN
            ALTAIR NANOTECHNOLOGIES, INC., ALTAIR NANOMATERIALS, INC.
                           AND WESTERN OIL SANDS INC.

         THIS LICENSE AGREEMENT (this  "Agreement") is entered into effective as
of this 23 day of January,  2004 (the "Effective  Date"),  by and between Altair
Nanotechnologies, Inc., a Canadian corporation and Altair Nanomaterials, Inc., a
Nevada  corporation  (collectively,  "Altair")  and Western  Oil Sands Inc.,  an
Alberta corporation ("Western").

         WHEREAS  Western  would  like  to  develop  business  opportunities  by
capitalising  on the  concentrations  of titanium and zirconium in certain heavy
mineral deposits;

         WHEREAS  Altair has a proprietary  process that extracts Ti values from
ilmenite  ore to produce  pigment  grade TiO2 and  currently  possesses  certain
hydrometallurgical,    mineral   processing,   mineralogical,   and   analytical
capabilities  required to optimise  heavy mineral  recoveries  from a variety of
mineral  resources  and to recover  titanium and other metals from heavy mineral
concentrates;

         WHEREAS  Western is interested in evaluating and licensing the AHPP for
the purpose of applying it to heavy minerals  contained in oil sands,  tar sands
and other heavy oil and mineral deposits;

         WHEREAS  Altair  would like to provide  certain  technical  services to
Western for the evaluation,  and possibly the development and  commercialisation
of, the AHPP; and

         WHEREAS  Western would like to take  licenses  from Altair,  and Altair
desires  to  grant  Western  licenses,  of  Altair's  intellectual  property  to
evaluate,  develop,  and  commercialise  the AHPP,  all in  accordance  with and
subject to the terms and conditions set forth herein.

         NOW THEREFORE the parties hereto agree as follows:

ARTICLE 1
                                   DEFINITIONS

1.1      In this Agreement,  the following terms shall have respective  meanings
ascribed thereto:

         (a)  "AHPP"  or  "Altair   Hydrochloric   Pigment  Process"  means  the
              proprietary  process that  extracts Ti values from ilmenite ore to
              produce  pigment  grade  and  other  high  quality  TiO2.  Various
              portions of the AHPP are disclosed in the Licensed  Patent Rights.
              The AHPP does not include any product or process  disclosed in any
              Altair patent or patent application not referenced on Exhibit B or
              any proprietary process related thereto.

         (b)  "Alberta  Licensed  Products" has the meaning  ascribed thereto in
              Section 3.1 of this Agreement.

         (c)  "Canada and Minnesota  Licensed Products" has the meaning ascribed
              thereto in Subsection 3.2(a) of this Agreement.

                                       1
<PAGE>

         (d)  "Commercial  Production"  means  production at a level equal to or
              greater  than  fifty  percent of the name  plate  capacity  of the
              relevant production facility.

         (e)  "Conceive"  means  contributing  to the conception of an invention
              within the meaning of U.S. patent laws under 35 U.S.C. et seq.

         (f)  "Develop" means substantial participation in, or providing funding
              to be  utilised  under  this  Agreement  for,  reducing  conceived
              subject  matter to practice or advancing the state of  development
              of such subject matter toward commercialisation or beyond.

         (g)  "Effective Date" means the date of this Agreement.

         (h)  "Improvement,"  with  respect to the AHPP,  means any  derivative,
              modification, improvement, alteration, or enhancement of the AHPP.

         (i)  "Intellectual Property" means intellectual property,  domestic and
              foreign, including, without limitation, trade secrets, proprietary
              confidential information,  copyrights,  trademark rights, patents,
              patent  applications,  industrial designs,  and utility models. In
              the case of Altair's Intellectual  Property,  the terms patent and
              patent applications include the Licensed Patent Rights.

         (j)  "Joint Intellectual  Property" has the meaning ascribed thereto in
              Subsection 6.1(a) of this Agreement.

         (k)  "License  #1"  means the  license  granted  by  Altair to  Western
              pursuant to Section 3.1 of this Agreement.

         (l)  "License  #2"  means the  license  granted  by  Altair to  Western
              pursuant to Subsection 3.2(a) of this Agreement.

         (m)  "License  #3"  means the  license  granted  by  Altair to  Western
              pursuant to Subsection 3.2(b) of this Agreement.

         (n)  "Licensed  Patent  Rights" shall mean the U.S.  patents and patent
              applications and the international patent applications  identified
              in  Exhibit  B,  any  Improvements   thereto  and  any  divisions,
              continuations or continuations-in-part  thereof, any international
              or foreign patent applications  corresponding thereto and any U.S.
              or foreign  patents or the equivalent  thereof  issuing thereon or
              any reissue or extension thereof.

         (o)  "Licensed  Products" means Pigment  Products and Titanium  Dioxide
              Products.  Notwithstanding  any other provision of this Agreement,
              in no event  shall  Nanomaterials  be  considered  to be  Licensed
              Products.

         (p)  "Nanomaterials" means materials that can be produced purposely and
              specifically,  using  the AHPP,  by  controlled  precipitation  or
              crystallization  of titanium dioxide using various  additives from

                                       2
<PAGE>

              an aqueous titanium chloride solution with the explicit  objective
              of limiting the primary TiO2 product  particle  dimensions to less
              than 100 nm.

         (q)  "Net Sales Revenue" means the price (plus the fair market value of
              all non-cash  consideration)  paid to Western (or a sublicensee of
              Western,   as  applicable)   for  any  sale,   transfer  or  other
              disposition of Licensed  Product less: (i) actual cost of shipping
              the  Licensed  Product to or for the  purchasers  of the  Licensed
              Product;  (ii)  credit or cash  discounts  for returns of Licensed
              Product;  (iii) any tax, duty, imposts, or other government charge
              on the sale, transportation, or delivery of Licensed Products; and
              (iv) allowances for damaged or defective Licensed Product.  In the
              case of any sale, transfer or disposition of Licensed Product to a
              subsidiary  or  affiliate  of  Western  or  its  sublicensees,  as
              applicable,  Net Sales  Revenue  shall be equal to the fair market
              value of such  Licensed  Product.  Net Sales  Revenue  shall  also
              include any revenue  (plus the fair market  value of all  non-cash
              consideration)   Western  (or  a   sublicensee   of  Western,   as
              applicable) receives for the performance of services involving the
              use of the  AHPP,  or an  Improvement  of the  AHPP  Conceived  or
              Developed  by Altair in the course of its  performance  under this
              Agreement  or under any other  agreement  to the extent  that such
              Improvement is owned by Altair,  to produce Licensed  Products for
              or on behalf of a third party.

         (r)  "Oil Sands  Resources" means the heavy mineral reserves that occur
              in oil sands, tar sands and other heavy oil resources.

         (s)  "Other  Licensed  Products"  has the meaning  ascribed  thereto in
              Subsection 3.2(b) of this Agreement.

         (t)  "Phase  "X""  means the  portion of the  Phased  Development  Plan
              identified as "Phase "X"" (e.g., "Phase I") in attached Exhibit A.

         (u)  "Phase II Commencement Option" has the meaning ascribed thereto in
              Section 2.1 of this Agreement.

         (v)  "Phase III  Commencement  Option" has the meaning ascribed thereto
              in Section 2.1 of this Agreement.

         (w)  "Phased  Development  Plan" means the Phased  Development Plan set
              out in  Exhibit A to this  Agreement,  as such plan may be amended
              from time to time.

         (x)  "Pigment  Products"  means  titanium  dioxide  pigment and related
              products  made  using  the  AHPP  or an  Improvement  of the  AHPP
              Conceived or Developed by Altair in the course of its  performance
              under this  Agreement  or under any other  agreement to the extent
              that such Improvement is owned by Altair; provided,  however, that
              in no event shall  Altair be  required to license or disclose  any
              Improvement  to Western  (i) that Altair is not allowed to license
              or  disclose  because of an  existing  confidentiality  agreement,
              license  agreement or other  agreement  between Altair and a third
              party,  the  existence of which has been  disclosed to Western and
              which is listed in Exhibit D, or (ii) which  relates to the use of
              AHPP for non-pigment related applications.

                                        3
<PAGE>

         (y)  "Primary Ore  Resources"  means  resources  derived from hard rock
              massive ilmenite deposits;  examples being the Minnesota resources
              like Longnose and Water Hen.

         (z)  "Solely  Owned  Intellectual  Property"  has the meaning  ascribed
              thereto in Subsection 6.1(d) of this Agreement.

         (aa) "Titanium  Dioxide  Products"  means high grade  titanium  dioxide
              (which can be used to make titanium  metal) made using the AHPP or
              an Improvement of the AHPP Conceived or Developed by Altair in the
              course of its performance  under this Agreement or under any other
              agreement to the extent that such  Improvement is owned by Altair;
              provided,  however,  that in no event shall  Altair be required to
              license or disclose any  Improvement to Western that Altair is not
              allowed  to  license  or  disclose  because  of a  confidentiality
              agreement, license agreement or other agreement between Altair and
              a third party with the intent of making titanium  metal.  The term
              Titanium  Dioxide  Products does not include any titanium  dioxide
              product  made using a process  disclosed  in any Altair  patent or
              patent  application not referenced on Exhibit B or any proprietary
              process related thereto.

         bb)  "Western's ERA director" means Western's Energy Research  Alliance
              director,  being  The  Technology  Store,  Inc.,  subject  to  the
              provisions of Section 2.2 of this Agreement.

1.2      The following  Exhibits,  as amended from time to time, are attached to
and form part of this Agreement:

         Exhibit A -Phased Development Plan
         Exhibit B - Altair Patents and Patent Applications
         Exhibit C - Public Announcement
         Exhibit D - List of Third  Party  Confidentiality  Agreements,  License
         Agreements and Other Agreements

                                   ARTICLE 2
                            DEVELOPMENT COLLABORATION

2.1 Project  Phases:  Altair and Western shall conduct  research and development
according  to the  Phased  Development  Plan.  Phase  I  shall  commence  on the
Effective  Date.  Phase II shall commence upon Western's  providing  Altair with
written notice of election to pursue Phase II ("Phase II Commencement  Option").
Phase III shall commence upon Western's  providing Altair with written notice of
election  to pursue  Phase III  ("Phase  III  Commencement  Option");  provided,
however,  that Phase III shall not  commence  unless  and until (i) the  parties
successfully  complete  Phase II within the Phase II Time  Period (as defined in
subsection 3.3(b) below), or (ii) Western spends at least US$25 million on goods
or  services  described  in Phase II of the Phased  Development  Plan during the
Phase II Time Period.  Altair shall devote its commercially  reasonable  efforts
toward  successful  evaluation,  development,  and  utilisation of technology as
contemplated for each such Phase when commenced  hereunder.  In the event of any
inconsistency  between  the  Phased  Development  Plan  and  the  terms  of this
Agreement, the terms of this Agreement shall prevail.

                                       4
<PAGE>

2.2 Western's ERA Director:  From the Effective Date and until Altair is advised
otherwise in writing by Western,  in its sole discretion,  Western shall utilise
The Technology Store, Inc. as Western's ERA director.  Western shall ensure that
Western's ERA director and any other agent or  subcontractor  used by Western or
Western's  ERA  director,  and any  sublicensee  of Western,  executes a binding
written  agreement  with  Western  that names  Altair as an express  third party
beneficiary   and  that   requires   Western's   ERA  director  or  such  agent,
subcontractor  or sublicensee,  as applicable,  to (a) protect the  Confidential
Information  of Altair to at least the same  extent as  Western is  required  to
protect such information pursuant to the terms of this Agreement, and (b) comply
with all other  obligations,  duties and  responsibilities  required  of Western
hereunder.  Western will enforce each such agreement with Western's ERA director
and such other agents,  subcontractors  and sublicensees  with at least the same
degree of  diligence  that it uses to  enforce  similar  agreements  for its own
products and/or technologies,  but in no event less than commercially reasonable
efforts.  Western will notify  Altair if Western  becomes  aware of any material
breach of any such agreement. Notwithstanding the foregoing, Western agrees that
it shall  remain  fully  responsible  for any breach of the  provisions  of this
Agreement by Western's ERA director or any of its (or Western's ERA  director's)
agents, subcontractors or sublicensees to the same extent as if such breach were
caused by the action or inaction of Western or its employees. Western shall also
be responsible to pay any and all fees of Western's ERA director.

2.3 Disclosure of Know-How and Information:  Promptly following the execution of
this Agreement,  Altair shall disclose in writing to Western's ERA director, all
information  known to, or in the  possession,  custody  or  control  of,  Altair
regarding any Licensed Product or the AHPP as would be reasonably  necessary for
a person skilled in the art to produce or manufacture the Licensed Products.  In
addition,  during each Phase commenced under the Phased Development Plan, Altair
shall promptly provide to Western's ERA director:

         (a)  any new  information  known to, or in the  possession,  custody or
              control of, Altair  regarding any Licensed  Product or the AHPP as
              would be reasonably  necessary for a person  skilled in the art to
              produce or manufacture the Licensed  Products that has not already
              been disclosed pursuant to the preceding paragraph;

         (b)  all  data  and  reports  generated  by or  for  Altair  either  in
              connection  with the Phased  Development  Plan or  relating to the
              AHPP or any Licensed Product; provided,  however, that in no event
              shall Altair be required to provide or disclose any information to
              Western that Altair is not allowed to provide or disclose  because
              of  a  confidentiality  agreement,   license  agreement  or  other
              agreement between Altair and a third party; and

         (c)  written progress summaries and technology  development  reports as
              reasonably  requested  by  Western's  ERA  director to achieve the
              purposes of the Phased Development Plan.

Notwithstanding  the foregoing or any other provision of this  Agreement,  in no
event shall Altair be required to license or disclose any information to Western
(i) that  Altair is not  allowed to license or  disclose  because of an existing
confidentiality  agreement,  license agreement or other agreement between Altair
and a third  party,  the  existence  of which has been  disclosed to Western and
which is listed in Exhibit D, or (ii) that  Altair is not  allowed to license or
disclose  because of a  confidentiality  agreement,  license  agreement or other
agreement  between  Altair and a third party with the intent of making  titanium
metal,  or  (iii)  which  relates  to the use of AHPP  for  non-pigment  related
applications.

2.4 Payment for Phase Development:  Western shall pay Altair for work under each
Phase as set forth in the Phased  Development  Plan and, in addition,  shall pay
Altair royalty payments for licenses as set forth in Article 4 below.

                                       6
<PAGE>

2.5 Independent Contractor:  Altair's work under this Agreement shall be only as
an  independent  contractor  and  licensor  to Western,  and the parties  hereby
disclaim  any  other  relationship  including  as  agent,   representative,   or
otherwise.

2.6 Changes to Scope of Work: The parties hereby  acknowledge  that Western may,
in its sole discretion,  reasonably revise the scope and nature of the tasks and
deliverables  to be  completed  under  Phase I of the Phased  Development  Plan;
provided  however that Western shall deliver to Altair a written  description of
any  substantial  revisions.  In the event that  Altair  believes  that any such
revision will affect the timing of its  performance of such tasks or delivery of
such  deliverables,  Altair may, in its sole discretion,  reasonably  revise any
applicable  time schedule or deadline to  accommodate  such  revisions,  and the
Phase I Time Period (as defined in  Subsection  3.3(a) below) shall be deemed to
be extended by a  corresponding  time period.  In the event that Altair believes
that the  requested  revisions  will  result in any  additional  fees,  costs or
expenses,  (i) Altair shall submit a proposal to Western  which shall  include a
statement of such additional fees, costs and expenses, and (ii) Altair shall not
begin  work  under the  revised  Phase I unless and until  Western  consents  in
writing to such additional fees, costs and expenses.

                                   ARTICLE 3
                                 LICENSE GRANTS

3.1 Initial License Grant: As of the Effective Date and subject to the terms and
conditions  of this  Agreement,  Altair  hereby  grants to Western an  exclusive
license,  with a right to grant  sublicenses to third parties  (provided that no
such sublicense  shall be further  sublicensable),  under Altair's  Intellectual
Property rights,  to make and have made Licensed Products derived from Oil Sands
Resources located in Alberta ("Alberta  Licensed  Products"),  and to use, sell,
offer for sale, and distribute  worldwide  Alberta Licensed  Products  ("License
#1").  License #1 is exclusive  with respect to Oil Sands  Resources  located in
Alberta only and Western shall have no right pursuant to License #1 to make, use
or sell Licensed  Products derived from materials of any kind located outside of
Alberta.  Moreover,  License  #1 shall  not be  deemed  to  restrict  in any way
Altair's right to fully exploit or license its Intellectual Property rights with
respect to any products not considered to be Alberta Licensed Products,  subject
however to the provisions of Section 3.2.

3.2 Additional  Licenses:  Subject to the terms and conditions of this Agreement
and provided that Western  elects to commence Phase II within ninety days of the
completion of Phase I, Altair shall grant to Western,  upon the  commencement of
Phase II:

         (a)  an exclusive  license,  with a right to grant sublicenses to third
              parties  (provided  that  no  such  sublicense  shall  be  further
              sublicensable),  under Altair's  Intellectual  Property rights, to
              make and have made  Licensed  Products  from Oil Sands  Resources,
              Primary Ore Resources or any other  titanium  resource  located in
              Canada  and  in   Minnesota   ("Canada  and   Minnesota   Licensed
              Products"),  and to  use,  offer  for  sale,  sell,  or  otherwise
              distribute  Canada  and  Minnesota   Licensed  Products  worldwide
              ("License #2").  License #2 is exclusive with respect to Oil Sands
              Resources,  Primary Ore  Resources  and other  titanium  resources
              located in Canada and  Minnesota  only and  Western  shall have no
              right  pursuant  to  License  #2 to  make,  use or  sell  Licensed
              Products  derived  from  resources  located  outside of Canada and
              Minnesota. Moreover, License #2 shall not be deemed to restrict in
              any  way   Altair's   right  to  fully   exploit  or  license  its
              Intellectual  Property  rights with  respect to any  products  not
              considered to be Canada and Minnesota  Licensed  Products (subject
              however to the provisions of Subsection 3.2(b) of this Agreement);
              and
                                       7
<PAGE>

         (b)  an exclusive  license,  with a right to grant sublicenses to third
              parties  (provided  that  no  such  sublicense  shall  be  further
              sublicensable),  under Altair's  Intellectual  Property rights, to
              make and have made  Licensed  Products  derived from any worldwide
              Oil Sands Resources ("Other Licensed Products"), and to use, offer
              for sale, sell, or otherwise  distribute  Other Licensed  Products
              worldwide  ("License #3"). License #3 is exclusive with respect to
              Oil Sands  Resources only and Western shall have no right pursuant
              to License #3 to make, use or sell Licensed  Products derived from
              any other materials.  Moreover,  License #3 shall not be deemed to
              restrict in any way Altair's right to fully exploit or license its
              Intellectual  Property  rights with  respect to any  products  not
              considered to be Other Licensed Products.

3.3      License Conversion/Termination:

         (a)  In the event that (i) the parties do not  complete  Phase I within
              eighteen  months of the Effective Date (the "Phase I Time Period",
              provided that the Phase I Time Period may be extended  pursuant to
              the terms of Section 2.6 above); or (ii) Western does not elect to
              commence Phase II within ninety days of the completion of Phase I,
              then,  notwithstanding any other provision of this Agreement,  all
              licenses  granted by Altair to Western under this Agreement  shall
              terminate immediately.

         (b)  In the event that (i) the parties fail to complete Phase II within
              the  time  period   established  by  the  parties  in  the  Phased
              Development  Plan (the "Phase II Time  Period"),  and (ii) Western
              fails  to  spend  at least  US$25  million  on  goods or  services
              described  in Phase II of the Phased  Development  Plan during the
              Phase  II  Time  Period,   then:  (x)  notwithstanding  any  other
              provision  of this  Agreement,  License  #2 and  License  #3 shall
              terminate  immediately at the end of the Phase II Time Period; (y)
              License #1 shall convert to a non-exclusive license immediately at
              the end of the  Phase II Time  Period  and  shall  continue,  on a
              non-exclusive  basis, until this Agreement (or License #1) expires
              or is terminated in accordance with its terms;  and (z) all of the
              other  terms of this  Agreement  applicable  to  License  #1 shall
              remain  unchanged,   including,   without  limitation,   Western's
              obligation  to pay  royalties  in  accordance  with  the  terms of
              Article 4.

         (c)  In the event that (i) the parties  successfully  complete Phase II
              within the Phase II Time Period,  or (ii) Western  spends at least
              US$25  million on goods or services  described  in Phase II of the
              Phased  Development  Plan  during the Phase II Time  Period,  then
              License  #1 shall  continue,  on an  exclusive  basis,  until this
              Agreement  (or License #1) expires or is  terminated in accordance
              with its terms.

         (d)  In the event that (i) Altair  grants  License #2 and License #3 to
              Western in accordance  with the  provisions of Section 3.2 of this
              Agreement;  (ii) the parties fail to complete Phase III within the
              time period  established by the parties in the Phased  Development
              Plan (the "Phase III Time  Period"),  and (iii)  Western  fails to
              spend at least US$5  million  on goods or  services  described  in
              Phase III of the Phased Development Plan during the Phase III Time
              Period,   then,   notwithstanding  any  other  provision  of  this
              Agreement,   License  #2  and  License  #3  shall  be   terminated
              immediately at the end of the Phase III Time Period.

                                       8
<PAGE>

         (e)  In the event that (i) Altair  grants  License #2 and License #3 to
              Western in accordance  with the  provisions of Section 3.2 of this
              Agreement;  (ii) the parties fail to complete Phase III within the
              Phase III Time  Period,  and (iii)  Western  spends at least  US$5
              million,  but less  than  US$50  million,  on  goods  or  services
              described in Phase III of the Phased  Development  Plan during the
              Phase III Time  Period,  then (x)  License #2 and License #3 shall
              convert to  non-exclusive  licenses  immediately at the end of the
              Phase III Time  Period  and  shall  continue,  on a  non-exclusive
              basis,  until this  Agreement  (or  License  #2 or License  #3, as
              applicable) expires or is terminated in accordance with its terms;
              and (y) all of the other  terms of this  Agreement  applicable  to
              License  #2 and  License  #3 shall  remain  unchanged,  including,
              without  limitation,  Western's  obligation  to pay  royalties  in
              accordance with the terms of Article 4.

         (f)  In the event that (i) Altair  grants  License #2 and License #3 to
              Western in accordance  with the  provisions of Section 3.2 of this
              Agreement, and (ii) Phase III is successfully completed or Western
              spends at least US$50  million on goods or services  described  in
              Phase III of the Phased Development Plan during the Phase III Time
              Period,  then  License  #2 and  License  #3 shall  continue  on an
              exclusive  basis until this  Agreement is terminated in accordance
              with its terms.

         (g)  For purposes of this  Agreement,  a Phase will be deemed  complete
              when (i) Altair and  Western  have  completed  all of the tasks as
              mutually agreed by Western and Altair and all of the  deliverables
              required  under the applicable  section of the Phased  Development
              Plan (as mutually agreed by the parties) have been delivered;  and
              (ii) Western has made all payments required in connection with the
              work performed by Altair  pursuant to such Phase.  The parties may
              also at any  time,  by  mutual  agreement,  declare  a Phase to be
              complete.

         (h)  The  parties  may at any time  extend  any of the time  periods or
              modify any of the dollar amounts referenced in this Section 3.3 by
              mutual agreement.

                                    ARTICLE 4
                                    ROYALTIES

4.1 Initial  Up-Front Fee: Upon execution of this  Agreement,  Western shall pay
Altair an  up-front  royalty of  US$100.00,  representing  partial  payment  for
License #1.

4.2 Up-Front Fee For License #2 and License #3: In the event that Altair  grants
License #2 and  License #3 to  Western in  accordance  with the terms of Section
3.2,   Western  shall  pay  Altair  a  second  lump-sum  royalty  of  US$100.00,
representing partial payment for License #2 and License #3.

4.3  Running  Royalties:  Western  shall pay Altair  running  royalties  for the
licenses granted hereunder as follows:

         (a)  General Royalty Rate

              (i)  Except as otherwise  provided in Subsection  4.3(b),  Western
                   shall  pay  Altair  running  royalties  in the  amount of two
                   percent  (2%) of  Western's  Net Sales  Revenue for  Licensed
                   Products produced under License #1, License #2 or License #3.

                                       9
<PAGE>

         (b) Resources Located In Minnesota

              (i)  Western shall pay Altair  running  royalties on Western's Net
                   Sales Revenue for Licensed Products produced under License #2
                   and derived from resources located in Minnesota in accordance
                   with the following schedule:

                   (A)  During   the   period   of  time   beginning   with  the
                        commencement  of  operations  through  the date  that is
                        three years  following  the  commencement  of Commercial
                        Production  for a  given  production  facility,  Western
                        shall pay Altair two percent (2%) of Western's Net Sales
                        Revenue from such production facility.

                   (B)  During the second three years following  commencement of
                        Commercial  Production from a given production facility,
                        Western shall pay Altair three percent (3%) of Western's
                        Net Sales Revenue from such production facility.

                   (C)  At any  time  following  the  sixth  anniversary  of the
                        commencement  of  Commercial  Production  from  a  given
                        production  facility,  Western  shall  pay  Altair  four
                        percent  (4%) of Western's  Net Sales  Revenue from such
                        production facility.

         (c) Sublicensees

         (i) Western shall pay Altair running royalties on the Net Sales Revenue
             of  Western's   sublicensees   in  accordance  with  the  following
             schedule:

                   (A)  During   the   period   of  time   beginning   with  the
                        commencement of operations  through the date that is ***
                        following the commencement of Commercial  Production for
                        a given  production  facility of a Western  sublicensee,
                        Western  shall pay Altair  *** of the Net Sales  Revenue
                        from such production facility, regardless of whether the
                        Licensed Products produced at such facility were derived
                        from Primary Ore Resources,  Oil Sands  Resources or any
                        other  resource and  regardless of where such  resources
                        are located.

                   (B)  During  the ***  following  commencement  of  Commercial
                        Production from a given production facility of a Western
                        sublicensee,  Western  shall pay  Altair  *** of the Net
                        Sales Revenue from such production facility,  regardless
                        of  whether  the  Licensed  Products  produced  at  such
                        facility  were derived from Primary Ore  Resources,  Oil
                        Sands  Resources or any other resource and regardless of
                        where such resources are located.

                   (C)  At  any  time  following  ***  of  the  commencement  of
                        Commercial  Production from a given production  facility
                        of a Western  sublicensee,  Western shall pay Altair ***
                        of the Net Sales Revenue from such production  facility,
                        regardless of whether the Licensed  Products produced at
                        such facility  were derived from Primary Ore  Resources,
                        Oil Sands Resources or any other resource and regardless
                        of where such resources are located.

***Portions  of  this  page  have  been  omitted   pursuant  to  a  request  for
confidential treatment filed separately with the SEC.

                                       10
<PAGE>
4.4  First  Production  Facility:  With  respect  to the first  commercial  TiO2
production  facility that either Western or a Western sublicensee owns, operates
or otherwise  participates  in for the production of Alberta  Licensed  Product,
Canada and Minnesota  Licensed Product or Other Licensed Product,  Western shall
only pay 50% (fifty percent) of the running royalty  otherwise due under Section
4.3 during the period of time  beginning  with the  commencement  of  operations
through the date that is three years  following the  commencement  of Commercial
Production for such production facility.  For purposes of clarity,  this Section
4.4 is only intended to apply to one production facility.

                                   ARTICLE 5
                           RECORDS, PAYMENT AND AUDIT

5.1 Records:  Each party hereunder  shall keep full and accurate  records of its
activities under this Agreement, including in the case of Western records of all
sales or  disposition of any Licensed  Product.  Records shall be maintained for
five years from the time of each such activity.

5.2 Payment and  Reporting:  Within  forty-five  days of the  conclusion of each
calendar quarter during which running royalties accrue to Altair under the terms
of Section 4.3 above, Western shall deliver to Altair:

         (a)  a written  report of all  royalties  accrued to Altair during such
              calendar quarter; and

         (b)  payment in full for such royalties.

5.3 Audit: Each party (the "Audited Party") shall permit auditors  designated by
the other party (the "Auditing  Party") to examine the Audited Party's books and
records at the Auditing  Party's  expense,  during normal  business  hours after
three days notice (but no more than four times per year),  for the sole  purpose
of verifying  compliance  with the terms of this  Agreement  or  enforcing  this
Agreement.  The auditors  shall agree in writing in advance of any such audit to
be bound as a party to the terms of Article 10 (Confidentiality)  and Article 13
(Miscellaneous),  and the auditors  shall deliver such written  agreement to the
Audited  Party in advance of  conducting  the audit.  The auditors  shall convey
information  learned  during any such audit to  employees  or  attorneys  of the
Auditing Party only on a need to know basis, solely for the purpose of reporting
the Audited Party's  compliance with this Agreement or enforcing this Agreement.
Each party's  auditor  shall consist of personnel  reasonably  acceptable to the
Audited Party,  provided that  Western's Vice President of Business  Development
(or an employee of Western  appointed  by Western's  Vice  President of Business
Development) is pre-approved herein as auditor on behalf of Western and Altair's
Chief  Financial  Officer (or an employee of Altair  appointed by Altair's Chief
Financial Officer) is pre-approved herein as auditor on behalf of Altair.

                                   ARTICLE 6
                        INTELLECTUAL PROPERTY DEVELOPMENT

6.1 Ownership of Intellectual  Property:  With regard to  Intellectual  Property
conceived or arising: (i) in conducting Phase I, Phase II, or Phase III; or (ii)
after the  Effective  Date and prior to the  conclusion  of the term of any such
Phase, by any party relating to Licensed Products or AHPP:

         (a)  Any  Intellectual  Property  (including  Improvements to the AHPP)
              Conceived  and  Developed  by both of the parties  hereto shall be
              owned   jointly  by  Altair  and  Western   ("Joint   Intellectual
              Property").  Except as otherwise  provided below, each party shall
              have the  royalty  free and  unrestricted  right  to  utilise  and
              license such Joint  Intellectual  Property and to make, have made,
              use,  sell,  offer for sale,  or  distribute  products or services
              under such  Joint  Intellectual  Property.  Neither  party  shall,
              however,   have  any  right  to   otherwise   license   any  Joint
              Intellectual  Property  until it  provides  written  notice to the
              other party of its intent to do so.
                                       11
<PAGE>
         (b)  Notwithstanding  the provisions of Subsection  6.1(a) or any other
              provision  of this  Agreement,  Altair shall not have the right to
              license or disclose any Joint  Intellectual  Property to any third
              party with whom Altair has a  confidentiality  agreement,  license
              agreement or other  agreement (a "Third Party  Agreement")  if the
              terms of such Third Party Agreement  prevent Altair from licensing
              any Intellectual  Property or Improvements  Conceived or Developed
              under such Third Party Agreement to Western.

         (c)  In the event that one party (the "Filing  Party")  chooses to file
              for a patent on any Joint Intellectual Property,  such party shall
              advise the other party (the  "Non-Filing  Party") in writing.  The
              Non-Filing  Party  then shall  advise the Filing  Party in writing
              within  thirty days if the  Non-Filing  Party  agrees to share the
              cost of the  patent  prosecution  50/50.  In the  event  that  the
              Non-Filing  Party  does not  provide  the  Filing  Party with such
              written  notice  of  agreement  to so  share  the  cost of  patent
              prosecution,   the  Filing  Party  may  proceed  with  the  patent
              prosecution  at its own expense and shall  thereafter  be the sole
              owner of any resulting  patent(s).  Any such  resulting  patent(s)
              shall be Solely Owned Intellectual Property as set forth below and
              in the event that any such  resulting  patent(s) are not deemed to
              be  solely  and  exclusively  owned by the  Filing  Party  for any
              reason, the Non-Filing Party hereby assigns, transfers and conveys
              to the Filing Party all of its right, title and interest in and to
              such resulting  patent(s).  The Non-Filing Party further agrees to
              assist the Filing Party, at the Filing Party's expense, to further
              evidence,  record and  perfect  such  assignment,  and to perfect,
              obtain, maintain,  enforce, and defend any rights so assigned. The
              Non-Filing  Party shall also  cooperate  with the Filing  Party in
              connection  with the  Filing  Party's  efforts  to  obtain  patent
              protection for such Joint Intellectual Property and the Non-Filing
              Party and its employees and  representatives  shall, at the Filing
              Party's  request,  execute and deliver any  documents,  including,
              without  limitation,  any  patent or other  Intellectual  Property
              right  assignments or applications,  to permit the Filing Party to
              exercise its rights under this Section 6.1.  Subsequently,  if the
              Filing Party desires to cease  prosecution  and/or  maintenance of
              any such patent  applications  or patents,  then the Filing  Party
              shall  provide at least 60 days written  notice to the  Non-Filing
              Party,  whereupon  the Filing  Party may assign its rights in such
              patent  applications  or patents to the  Non-Filing  Party and the
              Non-Filing Party may take over the prosecution  and/or maintenance
              at its own expense.  In the event that the  Non-Filing  Party does
              provide the Filing  Party with  written  notice of agreement to so
              share the cost of patent  prosecution,  the parties shall file and
              manage the patent prosecution  jointly and any resulting patent(s)
              will be jointly owned by the parties.

         (d)  Intellectual  Property Conceived and Developed solely by one party
              ("Solely Owned  Intellectual  Property")  shall be owned solely by
              the one party.

                                   ARTICLE 7
                         REPRESENTATIONS AND WARRANTIES

7.1 Mutual  Warranties:  Each party  represents  and warrants to the other party
that:

         (a)  it is  duly  organized  and  subsisting  under  the  laws  of  the
              jurisdiction of its incorporation as stated above;

                                       12
<PAGE>
         (b)  it has full  corporate  power  and  authority  to  enter  into and
              perform its obligations under this Agreement;

         (c)  to its knowledge,  no person has publicly  disclosed the nature of
              the    research,    evaluation,    development,    and    possible
              commercialisation contemplated by this Agreement;

         (d)  the  individual  executing this Agreement on its behalf has actual
              authority to bind the party to this Agreement; and

         (e)  it has not,  as of the date of this  Agreement,  entered  into any
              contracts, including any licenses, inconsistent with or that would
              interfere  with the  performance  of its  obligations  under  this
              Agreement.

7.2 Altair  Warranties:  Altair  represents  and  warrants to Western  that,  to
Altair's knowledge:

         (a)  Altair  owns  all  right,  title,  and  interest  in AHPP  and all
              technology  provided  by Altair or has the  right to  license  the
              Intellectual Property rights it is licensing to Western under this
              Agreement,  including  without  limitation in performing  Phase I,
              Phase II, and Phase III;

         (b)  as of the Effective Date of this Agreement, the patents and patent
              applications  identified in Exhibit B are the only patents  issued
              to  Altair  and the  only  patent  applications  filed  by  Altair
              relating to AHPP or the use of AHPP to make, use, sell,  offer for
              sale, or distribute any Licensed Product;

         (c)  the patent  claims  presently  set forth in the patents and patent
              applications  identified  in Exhibit B, have not been held invalid
              or unenforceable by any court or governmental  authority,  and are
              not  and  have  not  been  the  subject  of any  lawsuit,  reissue
              petition,   reexamination   petition,   or  similar   petition  or
              government action;

         (d)  Altair has the skill and staff  necessary to perform the tasks and
              provide the  deliverables to Western in accordance with the Phased
              Development  Plan,  within  the  time  periods  specified  in this
              Agreement and in the Phased  Development Plan, and that such tasks
              and  deliverables  shall be performed  and  delivered in a prompt,
              economical,   skilful  and  careful  manner  in  accordance   with
              professional standards and practices;

         (e)  any  deliverable  provided to Western by Altair in connection with
              the Phased Development Plan that contains third-party Intellectual
              Property  rights  will  be  properly  licensed  to  Western  at no
              additional cost or expense to Western;

         (f)  Altair does not know of any rule,  law, or  regulation  that would
              invalidate,  or interfere  with the intention of, any provision of
              this  Agreement  or  with  Altair's   ability  to  carry  out  its
              obligations hereunder; and

         (g)  EXCEPT AS  EXPRESSLY  PROVIDED IN THIS  ARTICLE 7, ALTAIR MAKES NO
              REPRESENTATIONS OR WARRANTIES,  EXPRESS OR IMPLIED,  REGARDING THE
              AHPP, THE LICENSED  PRODUCTS,  OR ANY RESULTS THAT MAY BE OBTAINED
              THROUGH THE WORK TO BE PERFORMED UNDER THE PHASED DEVELOPMENT PLAN
              AND ALTAIR  EXPRESSLY  DISCLAIMS  ALL OTHER  WARRANTIES,  EXPRESS,
              IMPLIED OR STATUTORY,  INCLUDING,  BUT NOT LIMITED TO, THE IMPLIED
              WARRANTIES OF MERCHANTABILITY,  NON-INFRINGEMENT AND FITNESS FOR A
              PARTICULAR  PURPOSE  AND ANY  IMPLIED  WARRANTIES  ARISING  OUT OF
              COURSE OF PERFORMANCE OR COURSE OF DEALING.

                                       13
<PAGE>
7.3 Western  Warranties:  Western  represents  and warrants to Altair  that,  to
Western's knowledge:

         (a)  Western  does  not   presently   contemplate   filing  any  patent
              applications  relating to AHPP or use of AHPP to make,  use, sell,
              offer for sale, or distribute  any Licensed  Products based on any
              subject  matter  Conceived  prior  to the  Effective  Date of this
              Agreement;

         (b)  Western  does not know of any  Intellectual  Property  or  license
              required  for Altair to perform its  obligations  or exercise  its
              rights  under  this  Agreement  other than  Intellectual  Property
              licenses  from  Altair  to  which  Western  is  expressly  granted
              licensing rights and options in Article 3 of this Agreement; and

         (c)  Western does not know of any rule,  law, or regulation  that would
              invalidate,  or interfere with the intention,  of any provision of
              this Agreement or Western's  ability to make,  have made,  use, or
              sell Licensed Product as contemplated by this Agreement.

                                    ARTICLE 8
                                 INDEMNIFICATION

8.1  Mutual  Indemnification:  Each  party  shall  defend,  indemnify,  and hold
harmless  the  other  party  and its  subsidiaries  and  affiliates,  and  their
respective  directors,  officers,  employees,  and agents,  from and against all
claims, causes of action,  demands,  losses,  damages,  liabilities,  settlement
amounts,  and costs and expenses of any type  whatsoever  (including  reasonable
attorneys'  fees  and  costs)  arising  from or  related  to any  breach  of any
representation  or  warranty  by the  indemnifying  party in  Article  7 of this
Agreement.

8.2 Altair Indemnification:  Altair shall defend,  indemnify,  and hold harmless
Western and its  subsidiaries and affiliates,  and their  respective  directors,
officers,  employees,  and agents (including  without  limitation  Western's ERA
director),  from and  against  all claims,  causes of action,  demands,  losses,
damages,  liabilities,  settlement  amounts,  and costs and expenses of any type
whatsoever  (including  reasonable  attorneys'  fees and costs)  arising from or
related to any claim,  action,  or proceeding  brought by a third party alleging
that the AHPP or any Improvement,  or any making, using,  selling,  offering for
sale  or  distribution  of any  Licensed  Product,  infringes  any  Intellectual
Property of any third party.

8.3 Western Indemnification:  Western shall defend, indemnify, and hold harmless
Altair and its affiliates, and their respective directors,  officers, employees,
and agents,  from and against all  claims,  causes of action,  demands,  losses,
damages,  liabilities,  settlement  amounts,  and costs and expenses of any type
whatsoever  (including  reasonable  attorneys'  fees and costs)  arising from or
related to any claim,  action,  or proceeding  brought by a third party alleging
that Altair's use of technology or information  provided by Western in order to,
and utilised by Altair solely in order to, perform  Altair's  obligations  under
this Agreement infringes any Intellectual Property of any third party.

8.4  Notice &  Defense:  Promptly  after an  indemnified  party  (including  its
indemnified affiliate,  director, officer, employee, or agent as applicable) has
received  notice of any claim or lawsuit for which the other party has  provided
indemnification  (the  "Indemnifying  Party") in this Article 8, the indemnified
party shall  advise the  Indemnifying  Party of the claim or lawsuit in writing.
The Indemnifying Party shall promptly assume  responsibility for handling of the
defense of such claim or suit on behalf of the indemnified party,  provided that
the indemnified party may, at its option, select its own counsel for the defense

                                       14
<PAGE>
of any matter so long as such  counsel and defense does not  interfere  with the
Indemnifying  Party's  defense  of  the  matter  and is at  the  expense  of the
indemnified  party. In such event,  the parties shall promptly inform each other
of all settlement  discussions and contemplated  making of any settlement offers
(prior to making  any such  offer),  and each  party  shall  consider  the other
party's  suggestions or requests with regard to any settlement prior to entering
into the settlement.  In no event, however,  shall an indemnified party have the
power or right to determine,  settle,  adjust,  or compromise  any aspect of the
defense in such a fashion as to impose any obligation on the Indemnifying  Party
without the written consent of the Indemnifying Party.

8.5 Modification at Indemnifying Party's Request: An indemnified party shall, at
the reasonable  request of the Indemnifying  Party made to avoid or mitigate any
claim of  infringement  for which the  Indemnifying  Party has  indemnified  the
indemnified  party  under  Section 8.2 or 8.3,  modify its  practice to avoid or
mitigate any such claim in such manner in the  Indemnifying  Party's judgment as
may avoid or materially limit such claim,  provided that such modification shall
not materially  increase the expense,  lower the efficacy,  output, or sales, or
interfere with the activities of the  indemnified  party as contemplated by this
Agreement.

                                   ARTICLE 9
                                  INFRINGEMENT

9.1 Third  Party  Infringement:  If  Western  becomes  aware of any  product  or
activity of any third party that may involve an infringement or violation of any
Altair patent or other Intellectual  Property right, then Western shall promptly
notify Altair in writing of such  infringement  or violation.  Altair may in its
discretion  take or not take  whatever  action it  believes is  appropriate;  if
Altair  elects to take  action,  and if the alleged  infringement  or  violation
relates to any  Intellectual  Property  which is the subject of this  Agreement,
Western will fully cooperate therewith at Altair's expense, including joining as
a party, if necessary. If, ninety days after receipt of notice from Western of a
third party  infringement of any Intellectual  Property licensed on an exclusive
basis to Western hereunder, Altair has not instituted suit against the infringer
seeking to terminate  the  infringement,  Western,  so long as such  exclusivity
remains in effect,  may  proceed in its own name (or,  if  required  by law,  in
Altair's  name) and at  Western's  expense to sue the  infringer,  but only with
respect to  infringements  within the scope of any exclusive  license granted to
Western.  In such  event,  Altair  shall  cooperate  with and assist  Western in
connection with any such suit. Western will indemnify Altair for any third-party
damages, as well as Altair's expenses,  costs and attorneys' fees, in connection
with  Western's  actions  under this  Section  9.1.  Nothing in this Section 9.1
allows  Western or  requires  Altair to  disclose  Confidential  Information  of
Altair.

9.2 Costs of  Enforcement:  If Altair  initiates and  prosecutes an action under
Section 9.1, all legal  expenses  (including  court costs and  attorneys'  fees)
shall be borne by Altair and Altair shall be entitled to all amounts  awarded by
way of judgment, settlement or compromise. Notwithstanding the foregoing, if the
action relates to any  Intellectual  Property  licensed on an exclusive basis to
Western,  all amounts  awarded to Altair  (excluding  court costs and attorneys'
fees incurred by Altair) shall be for Western's account.  Similarly,  if Western
initiates and prosecutes  such an action,  all legal expenses  (including  court
costs and  attorneys'  fees)  shall be borne by  Western  and  Western  shall be
entitled to all amounts awarded by way of judgment, settlement, or compromise.

9.3 Payment of Royalties on Amounts Recovered by Western: The parties agree that
any amounts collected by Western in connection with any action under Section 9.1
in excess of the parties'  legal  expenses shall be considered Net Sales Revenue
for which royalties shall be due under Article 4 hereof.

                                       15
<PAGE>

9.4 Survival: This Article 9 shall survive any termination or expiration of this
Agreement but only with respect to actions  commenced prior to such  termination
or expiration.

                                   ARTICLE 10
                                 CONFIDENTIALITY

10.1 Confidentiality:  All confidential,  secret or proprietary information,  in
whatever form, provided by one party (the "Disclosing Party") to the other party
(the  "Receiving  Party")  pertaining to the AHPP or to the  Disclosing  Party's
business, finances,  technology,  ideas, inventions (whether patentable or not),
marketing  strategies  and/or product  offerings  that is  identified,  or would
reasonably  be  understood  by the  Receiving  Party,  as being  proprietary  or
confidential (collectively,  "Confidential Information") shall be held in strict
confidence by the Receiving  Party and not disclosed to any third parties except
as  expressly  stated  in this  Agreement.  Notwithstanding  the  foregoing,  no
obligation  of  confidence  shall extend to  information  to the extent that the
information:

         (a)  is or  becomes  generally  known  in the  trade  or to the  public
              through no fault of the Receiving Party;

         (b)  as shown  by  verifiable  written  records,  was in the  Receiving
              Party's possession prior to disclosure by the Disclosing Party; or

         (c)  is  disclosed  to the  Receiving  Party by a third  party  without
              violation of any obligation of confidence.

In addition, to the extent any Confidential  Information is required by order of
court or  regulatory  body to be disclosed by a Receiving  Party,  the Receiving
Party shall advise the Disclosing Party prior to any such disclosure,  and shall
cooperate with the Disclosing Party at the Disclosing  Party's expense,  so that
the Disclosing Party may have a reasonable opportunity to limit the scope of the
disclosure.

10.2 Injunction:  Each party, as a Receiving Party,  acknowledges that the other
party, as a Disclosing Party, will suffer  irreparable  injury in the event of a
breach by the Receiving  Party of Section 10.1 above and that  monetary  damages
will be  inadequate  to  compensate  the  Disclosing  Party for the breach.  The
Receiving  Party agrees that, in the event of a breach or  threatened  breach of
Section  10.1 above,  the  Disclosing  Party  shall be entitled to a  temporary,
preliminary,  and  permanent  injunction  to prevent or restrain any breach,  in
addition  to any other  rights,  remedies,  or  damages  available  at law or in
equity.

10.3 Public Announcement:  Without the prior written consent of the other party,
neither party shall make any public  announcement  or press release or otherwise
disclose to any third party any terms or conditions of  discussions  between the
parties or any matter set forth  herein,  or the  existence of  discussions  and
negotiations between the parties on the matters set forth herein, except:

         (a)  to the  extent  necessary  to  comply  with,  or as  required  by,
              applicable  law   (including,   without   limitation,   applicable
              securities  laws) or  pursuant  to legal  process,  proceeding  or
              order;

         (b)  to  potential   investors   pursuant  to  written   non-disclosure
              agreements; or

         (c)  to  accountants,   attorneys,  financial  consultants,  and  other
              professional advisors who are bound by a duty of confidentiality.

                                       16
<PAGE>
Upon execution of this Agreement,  the parties shall issue a joint press release
in the form of Exhibit C. Notwithstanding the foregoing limitations, the parties
shall use  reasonable  efforts to promptly agree upon the text of any subsequent
public statements to be issued by the parties.

10.4 Tax Structure:  Notwithstanding anything to the contrary in this Agreement,
each party (and each  employee,  representative,  or other agent of the parties)
may disclose to any and all persons,  without  limitation  of any kind,  the tax
treatment and tax structure of the  transactions  contemplated by this Agreement
and all materials of any kind  (including  opinions or other tax analyses)  that
are provided to either party  relating to such tax treatment and tax  structure,
except to the extent  confidentiality  of such tax treatment or tax structure is
reasonably necessary to comply with securities laws.

10.5 Western Joint Venture Partners:  Notwithstanding anything contained in this
Agreement,  Altair  recognizes that Shell Canada Limited and  ChevronTexaco  are
joint venture partners of Western and that the joint venture is currently mining
oil sands and producing crude in the Athabasca region of Alberta,  Canada;  that
the joint  venture  partners  are also  involved  in many  businesses  worldwide
including  conventional  oil  and gas and  oil  sands  exploration,  production,
development,  refining,  marketing,  petrochemical  and  others;  that the joint
venture partners conduct  research,  studies,  analysis and carry on many varied
businesses and develop technologies, certain of which may be very similar to the
technology  developed  by Altair,  and they may use similar or like  technology,
know-how,  methodologies,  procedures, systems or processes (the "Technologies")
as those used or contemplated by Altair. In this regard,  Western,  Shell Canada
Limited, ChevronTexaco and their affiliates, share certain of their confidential
information relating to the foregoing with each other.  Provided that Western is
in compliance  in all material  respects  with its  confidentiality  obligations
hereunder,  Altair  agrees that nothing  contained in this  Agreement  shall (i)
impair,  restrict,  preclude,  inhibit,  limit or otherwise prevent Shell Canada
Limited, ChevronTexaco or Western or any of their affiliates from conducting any
of their businesses or developing or using any of the Technologies in any manner
whatsoever, or (ii) create any liability or obligation of any nature as a result
of the conduct of their businesses or use of the Technologies.

                                   ARTICLE 11
                                   TERMINATION

11.1 Termination of Agreement:  Unless sooner  terminated in accordance with the
terms of this Article 11, this  Agreement  shall remain in full force and effect
until the last claim of any patent covering the Licensed Products expires.

11.2 Termination of License:  Altair may terminate this Agreement or one or more
of License #1,  License #2 and License #3 by written  notice of  termination  of
this Agreement or such license(s) to Western in the event that Western:

         (a)  materially  breaches any term of this  Agreement,  and such breach
              remains uncured for a period of ninety days (or five business days
              notice in the case of a failure to pay any monies owed  hereunder)
              after receipt of written notice from Altair of such breach;

         (b)  commences  dissolution  proceedings  or  liquidation,   or  ceases
              conducting operations;

         (c)  is the subject of an  involuntary  petition in  bankruptcy,  or an
              insolvency  proceeding,  that is not dismissed  within ninety days
              after filing of the petition;

         (d)  voluntarily files a petition in bankruptcy; or

         (e)  makes an assignment  for the benefit of creditors or is subject to
              appointment of a receiver.

                                       17
<PAGE>
This Agreement shall also terminate upon the termination of all licenses granted
by Altair to Western hereunder.

11.3 Return of Confidential Information: Upon any termination of this Agreement,
each Receiving Party shall immediately return to the Disclosing Party or destroy
all  Confidential  Information  of the  Disclosing  Party in its  possession  or
control except for one archival copy and copies  reasonably  required to perform
post-termination  obligations  or exercise  post-termination  rights  under this
Agreement. In the latter event, all copies other than one strictly archival copy
shall be  immediately  returned to the  Disclosing  Party or  destroyed  when no
longer needed to so perform or exercise rights.  Any Receiving Party electing to
destroy rather than return  information  hereunder  shall have an officer of the
Receiving Party immediately certify the destruction, including the full scope of
the destruction, in writing to the Disclosing Party.

11.4 Not Sole Remedy:  Termination  is not the sole remedy under this  Agreement
and,  whether or not  termination  is effected,  all other  remedies will remain
available.

11.5  Survival:  Articles 1, 5, 6, 7, 8, 9, 10, 11, 12 and 13 shall  survive any
termination or expiration of this Agreement in accordance with their terms.

                                   ARTICLE 12
                             LIMITATION OF LIABILITY

EXCEPT  FOR ANY  OBLIGATIONS  ARISING  UNDER  SECTION 10  (CONFIDENTIALITY),  OR
ACTIONS OF WESTERN OR WESTERN'S  ERA  DIRECTOR  BEYOND THE SCOPE OF THE LICENSES
GRANTED  HEREUNDER,  UNDER NO CIRCUMSTANCES  SHALL EITHER PARTY, THEIR OFFICERS,
DIRECTORS OR  AFFILIATES  BE LIABLE FOR ANY  SPECIAL,  INDIRECT,  INCIDENTAL  OR
CONSEQUENTIAL  DAMAGES  ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

EXCEPT FOR ANY OBLIGATIONS ARISING UNDER SECTION 8 (INDEMNIFICATION)  OR SECTION
10  (CONFIDENTIALITY) OR ACTIONS OF WESTERN OR WESTERN'S ERA DIRECTOR BEYOND THE
SCOPE OF THE  LICENSES  GRANTED  HEREUNDER,  IN NO EVENT  SHALL  EITHER  PARTY'S
AGGREGATE  LIABILITY  UNDER  THIS  AGREEMENT  EXCEED THE LESSER OF (I) AN AMOUNT
EQUAL TO THE TOTAL AMOUNT OF MONEY SPENT BY WESTERN UNDER THE PHASED DEVELOPMENT
PLAN  BEFORE  THE  APPLICABLE  CAUSE OF  ACTION  AROSE,  AND  (II) $50  MILLION,
REGARDLESS OF THE FORM OF CLAIM OR ACTION.

THIS ARTICLE 12 SHALL NOT LIMIT EITHER PARTY'S LIABILITY FOR THE DEATH OR BODILY
INJURY OF A PERSON.

                                   ARTICLE 13
                                 MISCELLANEOUS

13.1  Headings:  Headings in this  Agreement are for  convenience  and shall not
affect construction or interpretation of this Agreement.

13.2 Neutral  Construction:  This Agreement  shall be construed and  interpreted
neutrally and without regard to the party that produced it or any part of it.

13.3 Notices:  Any written notice to a party under this Agreement  shall be made
by (i)  facsimile,  and (ii) by mail,  postage  prepaid or reputable  commercial
express delivery service,  to the party's address and facsimile number set forth
below or as amended by notice pursuant to this Section 13.3:

If to Altair:                       Mr. Douglas K. Ellsworth
                                    President Altair Nanomaterials, Inc
                                    204 Edison Way
                                    Reno, NV 89502, USA

                                    Phone:  775 858-3740
                                    Fax:    775 856-1619

                                       18
<PAGE>
                                    With a copy to:

                                    Brian G. Lloyd
                                    Stoel Rives LLP
                                    201 South Main Street, Suite 1100
                                    Salt Lake City, Utah  84111
                                    Telephone: (801) 328-3131
                                    Facsimile: (801) 578-6999

If to Western:                      Mr. Raymond L. Morley
                                    Vice President Business Development
                                    Western Oil Sands Inc.
                                    2400, 400 - 2nd Avenue S.W.
                                    Calgary, Alberta T2P 5E9
                                    Canada

                                    Phone:  (403) 233-1700
                                    Fax:    (403) 296-0122

                                    With a copy to:

                                    Corporate Secretary
                                    Western Oil Sands Inc.
                                    2400, 400 - 2nd Avenue S.W.
                                    Calgary, Alberta T2P 5E9
                                    Canada

                                    Phone:  (403) 233-1700
                                    Fax:    (403) 296-0122

13.4  Amendments:  This  Agreement  shall  not be  amended  except  by a written
instrument  executed  by  the  parties  hereto  or  their  respective  permitted
successors or assigns.

13.5  Non-waiver:  No waiver of any provision or obligation under this Agreement
shall  constitute  or  provide  a waiver of any other  provision  or  subsequent
obligation under this Agreement.

13.6 Force Majeure: No party shall be deemed to be in breach for non-performance
under this Agreement (except for  non-performance of obligations to pay money or
obligations  under  Section  10  hereof  (Confidentiality)),   so  long  as  its
non-performance is due to labour unrest,  natural disaster or Act of God, act of
war or  terrorism,  or other cause beyond the  reasonable  control of the party,
provided however that lack of financing shall in no event be deemed such a cause
and provided  further that, in the event any force majeure is not removed within
ninety days after its first interference with the party's performance, the other
party shall have the right to terminate  this Agreement upon thirty days written
notice in advance to the non-performing party.

13.7  Governing  Law: The  provisions  of this  Agreement  shall be governed and
construed  in  accordance  with the laws of the  province  of  Alberta,  Canada,
without  regard to rules  regarding  conflicts  of laws.  Any  dispute  under or
relating to this Agreement shall be settled by arbitration.

13.8 Arbitration:  Except that either party may seek injunctive or other similar
relief from a court of competent jurisdiction, any dispute, controversy or claim
arising out of or  relating to this  Agreement,  or the  negotiation  or breach,
termination or validity  thereof (a "Dispute"),  shall be settled by arbitration
pursuant to the rules of the  Arbitration  Act  (Alberta)  and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.  The  arbitration  shall be held in Calgary,  Alberta,  shall apply the

                                       19
<PAGE>

substantive  law of the  Province  of Alberta  and shall be  conducted  before a
single arbitrator  mutually  agreeable to the parties hereto, or if no agreement
can be reached on the selection of such arbitrator,  then any party may apply to
the courts of the Province of Alberta to appoint an arbitrator.  The cost of the
arbitration,  including the fees and expenses of the arbitrator, shall be shared
as to 50% by Western  and 50% by Altair.  Each party  shall bear its own cost of
preparing and presenting its case. The arbitration  award (the "Award") shall be
presented to the parties in writing, and upon request of any party hereto, shall
specify the factual  and legal bases for the Award.  The Award may be  confirmed
and  enforced  in  any  court  of  competent  jurisdiction.  Any  party  to  the
arbitration may, before the Award is rendered and/or complied with, apply to any
court  having  jurisdiction  to  enforce  any  interim  award of the  arbitrator
granting  provisional,  injunctive or other interim  equitable  relief ("Interim
Award").  Except as  required by law or as  necessary  in court  proceedings  to
enforce this  arbitration  provision or any Award or Interim Award,  none of the
parties to the arbitration nor an arbitrator may disclose the existence, content
or results of any arbitration hereunder without the prior written consent of the
other  parties  hereto.  There shall be no appeal to the court from any Award or
Interim Award.

13.9 Further  Assurances:  Each party shall promptly execute all documents,  and
perform such other acts, as may be reasonably  necessary or expedient to further
the purposes of this Agreement and the transactions contemplated hereby.

13.10 Time of Essence: Time shall be of the essence of this Agreement.

13.11 Entire  Agreement:  This Agreement  (together  with the Exhibits  attached
hereto)  constitutes  the entire  Agreement of the parties,  and  supersedes all
prior agreements,  promises, or understandings relating to the subject matter of
this Agreement.

13.12 Assignment:  Neither party may assign its rights or obligations under this
Agreement without the other party's prior written consent, except that:

         (a)  Western may assign this  Agreement to any  subsidiary or affiliate
              of  Western or any party that  acquires  substantially  the entire
              business of Western  involved in developing  and selling  Licensed
              Products; and

         (b)  Altair  may  assign  this  Agreement  to any party  that  acquires
              substantially the entire business of Altair involved in developing
              the technology or Intellectual Property rights licensed to Western
              under this Agreement.

Any assignment in violation of this Section 13.12 is void.

13.13 Counterparts:  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which taken  together shall
constitute one and the same instrument.

13.14 Severability:  If any provision of this Agreement is held illegal, invalid
or  unenforceable by a court of competent  jurisdiction,  that provision will be
limited or eliminated  to the minimum  extent  necessary so that this  Agreement
shall otherwise remain in full force and effect and enforceable.

13.15 Export Control.  Subject to Canadian law, each party shall comply with all
applicable  export laws,  restrictions,  and regulations of any United States or
foreign  agency or authority and will not export or re-export,  or authorize the
export or re-export  of any product,  technology  or  information  it obtains or
learns  pursuant to this Agreement (or any direct product  thereof) in violation
of any such laws, restrictions or regulations.

                                       20
<PAGE>

13.16 Currency:  Unless otherwise expressly provided herein, all money and other
financial  references  used  in  this  Agreement,  including  its  exhibits  and
appendices, shall be to U.S. dollars.

         IN WITNESS  WHEREOF the parties have executed this  Agreement as of the
date and year first written above by their authorized agents as set forth below.

Altair Nanotechnologies, Inc.            Western Oil Sands Inc.
By: /s/ William Long                     By: /s/ Guy J. Turcotte
    ---------------------------------       ------------------------------------
Name: William Long                       Name: Guy J. Turcotte
Office: Chief Executive Officer          Office: President & CEO

Altair Nanomaterials, Inc.
By: /s/ D. K. Ellsworth
    ---------------------------------
Name: Doug Ellsworth
Office: President

                                       21

<PAGE>
                                                                    Exhibit A
                                                      Phased Development Plan
--------------------------------------------------------------------------------

                                    Exhibit A

                             Phased Development Plan

This Phased  Development  Plan,  as from time to time may be amended,  modified,
supplemented or updated (the "Phased Development Plan") is incorporated into and
made a part of that certain License Agreement for Altair TiO2 Pigment Technology
between   Altair   Nanotechnologies,   Inc.  and  Altair   Nanomaterials,   Inc.
(collectively,  "ALTAIR")  and Western Oil Sands Inc.  ("WESTERN")  entered into
effective as of January ______,  2004 (the  "Agreement").  Any capitalized terms
used in this Phased  Development Plan which are not otherwise defined shall have
the meanings ascribed to such terms in the Agreement.

Western's  Heavy  Minerals  Upgrade  Project  -  Zircon,  Rutile,  Ilmenite  and
Leucoxene Mineral Resource

WESTERN would like to develop  business  opportunities  by  capitalising  on the
concentrations  of titanium and  zirconium in certain  heavy  mineral  deposits.
ALTAIR has a  proprietary  process that  extracts Ti values from ilmenite ore to
produce  pigment grade TiO2 (which is referred to herein as the AHPP (as defined
in the Agreement)).  In addition,  ALTAIR possesses certain  hydrometallurgical,
mineral  processing,  mineralogical  and  analytical  capabilities  required  to
optimize heavy mineral recoveries from a variety of mineral  resources.  WESTERN
is interested  in evaluating  and licensing the AHPP for the purpose of applying
it to various  heavy  mineral  concentrates.  Western's  ERA  director  has been
retained by WESTERN to direct WESTERN's Energy Research Alliance group that will
oversee this project.

A phased  approach is proposed  that will enable  WESTERN to evaluate  the AHPP,
make  informed  decisions  and,  subject  to the  terms  and  conditions  of the
Agreement,  earn technology  licenses.  The first phase of development will take
approximately  12-18  months and will  culminate  in a  preliminary  engineering
feasibility study.

Each phase will be used to improve the cost  estimates and operating  parameters
before moving on to the next stage of capital  investment risk. As each phase is
completed,  WESTERN will  evaluate the success and  determine  whether or not it
will continue the program.

The development phases include: 1) resource evaluation,  piloting,  TiO2 pigment
demonstration   and   engineering    feasibility   study;   2)   semi-commercial
demonstration  plant operating at 5,000-10,000 tons per year for market testing;
3)  single-line  plant  producing  about  25,000 tons per year of finished  TiO2
pigment  that  could be  expanded  to three  lines as soon as the first  line of
production proves feasible.

                                       22
<PAGE>

                                                                    Exhibit A
                                                      Phased Development Plan
--------------------------------------------------------------------------------

In order  to  reduce  the risk to  WESTERN,  a staged  development  plan for the
initial  phase is  proposed  to enable  WESTERN to make  informed  decisions  on
whether it can  successfully  enter the TiO2 pigment and/or titanium  containing
product business.  This phase consists of four development stages including:  1)
resource evaluation and mineral beneficiation to produce a product for leaching;
2) large batch preparation and digestion  efficiencies and evaluation;  3) large
batch  purification,  spray  hydrolysis,  calcination  and  milling;  and  4) an
engineering feasibility study.

The estimated  budgets listed in this Phased  Development Plan are all-inclusive
with overhead,  reagents,  expenses and equipment all built into the prices. The
parties  acknowledge  and agree that the estimated  budgets  provided herein are
merely  estimates,  that  neither  party  shall be bound to or  limited  by such
estimates,  and that the actual  invoice  amounts  to  WESTERN  will be based on
actual  hours  worked,  expenses  incurred  and  contractor's  direct  invoices;
notwithstanding  the foregoing,  to the extent that ALTAIR  determines  that its
actual costs will exceed those set out in the  estimated  budgets,  ALTAIR shall
obtain prior written  consent from WESTERN prior to incurring  such costs,  such
consent not to be unreasonably withheld.

WESTERN shall pay ALTAIR for all work  performed  under this Phased  Development
Plan in accordance with ALTAIR's  then-current  billing rates, as such rates may
be modified  by ALTAIR from time to time.  ALTAIR's  current  billing  rates are
listed in Appendix I. These  rates will  remain in force  during  Phase I of the
program. In addition,  WESTERN shall reimburse ALTAIR for any costs and expenses
incurred  by  ALTAIR  in  connection  with the work to be  performed  hereunder,
including,  without  limitation,  the costs of any  contractors  retained by the
parties. All compensation,  fees, expense reimbursements and other amounts owing
to ALTAIR from WESTERN  shall be due and payable  within  thirty (30) days after
the date of ALTAIR's  invoice  therefor.  ALTAIR shall have the right to invoice
WESTERN on a monthly basis.

ALTAIR shall not purchase any  equipment  with a value of more than $250 without
the prior written consent of WESTERN.

Characterization work will be conducted as required to determine the feasibility
of extracting commercial values from WESTERN process tailings.  Characterization
procedures and outcomes are outlined in Appendix II.

Every three months ALTAIR and WESTERN shall review budgets and recommend changes
wherever needed.  Notwithstanding the foregoing,  WESTERN may from time to time,
in its sole  discretion,  revise  the  scope  and the  nature  of the  tasks and
deliverables  to  be  completed  by  ALTAIR  under  each  Phase  of  the  Phased
Development Plan.

                                       23
<PAGE>

                                                                    Exhibit A
                                                      Phased Development Plan
--------------------------------------------------------------------------------

Phase I:

Resource evaluation, piloting, demonstration and engineering feasibility study ~
12-18 months

Objective: Prove processing technology for upgrading Western Oil Sands thickener
underflow  tailings  directly to produce zircon,  rutile and TiO2 pigment and/or
pigment  helper.  An  intermediate  centrifuge  tailings  material,  provided by
others,  that is already upgraded to approximately  10% TiO2 will be supplied to
accelerate our understanding of WESTERN's resource.  The outcome of Phase I will
be a preliminary engineering feasibility study.

Stage I: Resource Evaluation
Samples of both WESTERN thickener underflow and centrifuge tailings from another
source have been shipped or are being prepared for shipment. Centrifuge tailings
are the intermediate concentrate desired for the final beneficiation and upgrade
and will be compared to the WESTERN  tailings.  The following tasks are required
to support the economic evaluation of the mineral resources.

Tasks:
1.       Characterize materials as-received - SEM, XRD, OM, ICP suite, moisture,
         loss on ignition, carbon and sulfur.
2.       Roast  to  burn  off  residual   organic   bitumens  and   asphaltenes.
         Alternatively   WESTERN   could   use   third   party   technology   to
         remove/recover the asphaltene fraction.
3.       Characterize roasted residue - SEM, XRD, OM, ICP suite, moisture,  loss
         on ignition,  carbon and sulfur.  4. Perform Sieve  Fraction  analysis;
         determine weight percent of each fraction, mineral content, chemical
         analysis,  XRD and SEM. Determine fraction having highest heavy mineral
         concentrate  and perform  heavy  liquid  sink/  float  analysis of that
         fraction,  weight percent of each sink/float fraction,  mineral content
         of each sink/float fraction using OM, XRD and SEM, chemical analysis of
         each sink/float fraction.
5.       Perform  preliminary density and/or flotation tests to determine Ti and
         Zr  minerals  upgrade   feasibility,   chemically  and  mineralogically
         characterize density and flotation concentrates and tailings.
6.       Prepare report and assess  viability to process WESTERN  material using
         the  ALTAIR  hydrochloride  process.  Compare  and  contrast  Suncor to
         WESTERN materials.

Duration:  Approximately 4 months to complete from date of signing.
Estimated Cost: See Appendix III: US$104,600.

                                       24
<PAGE>
                                                                    Exhibit A
                                                      Phased Development Plan
--------------------------------------------------------------------------------
Stage 2: Centrifuge Tailings Resource preparation and Digestion

Evaluate the feasibility of beneficiating valuable heavy minerals and extracting
Ti from mineral concentrates  derived from third party centrifuge  tailings.  If
Stage 1 results are positive and a titanium concentrate can be produced, samples
from  WESTERN  resources  shall  follow after a large sample is produced in mini
circuit the same path below.

Tasks:
1.       Produce approximately 100 kgs of WESTERN resource sample for concurrent
         testing with the Centrifuge Tailings sample
2.       Perform  crucible tests to determine  minimum  temperature  required to
         remove organic phase. Characterize inorganic residue after roasting.
3.       Prepare  approximately 100 kilograms of centrifuge  tailing material by
         roasting in a 6" rotary calciner using criteria determined in #1.
4.       Beneficiate and recover heavy mineral concentrates  including ilmenite,
         leucoxene, rutile and zircon.
5.       Determine quantities of each fraction.
6.       Determine  quality of each  fraction by using XRD, SEM, OM and chemical
         analysis.
7.       Digest  approximately  30 kg of  the  ilmenite/leucoxene  concentrates.
         Perform  6  tests  in  different  leaching   conditions,   cleanup  and
         interpretation. Consider alternative filtration methods.
8.       Perform chemical analysis of the resulting digestates.
9.       Perform chemical and mineralogical analysis of the residue.
10.      Perform a material balance of the chemical components.
11.      Prepare  report and assess the viability of using the ALTAIR  digestion
         process on centrifuge tailings titanium mineral concentrates.

Duration: Approximately 4 months
Estimated Budget: See Appendix IV: US$192,600

Stage 3:  Large batch SX purification, spray hydrolysis, calcination and milling

Prove and refine purification/pigment  formation using digestion liquors derived
from Stage 2 testing.

Tasks:
1.       Reduce,  crystallize  and filter iron chloride from the leach solution.
         2.  Chemically   characterize   filtrate.  3.  Run  continuous  solvent
         extraction using SX1 standard conditions to separate Ti.
4.       Run  continuous  solvent  extraction  using SX2 standard  conditions to
         remove traces of iron from Ti aqueous solution.
5.       Spray hydrolyze using standard  pigment  conditions.

                                       25
<PAGE>

                                                                    Exhibit A
                                                      Phased Development Plan
--------------------------------------------------------------------------------

6.       Calcine using standard pigment conditions.
7.       Mill to primary pigmentary particles.
8.       Characterize pigment base.
9.       Prepare report and assess the viability of the purification  process to
         the Suncor titanium concentrates.

Duration: approximately 4 months
Estimated Budget:  See Appendix V - US$195,000

Stage 4:  Preliminary Engineering Feasibility Study

BHP Minerals  contracted Davy International in 1995 to perform a pre-feasibility
study on a technology that ultimately lead to the Ilmenite Upgrade Technology as
it is today and much of the information  derived from that study is still valid.
A 2003 feasibility study is required to update the information.  ALTAIR has been
presented  with  proposals  from two  international  engineering  companies that
provide an estimate of cost between $50,000 and $75,000. ALTAIR and WESTERN will
agree on a suitable  engineering  contractor to perform the work and ALTAIR will
provide all the engineering details and part time engineering assistance.

Duration: approximately 4 months
Feasibility Study Cost:  approximately US$100,000
Estimated Budget: See Appendix VI, US$138,200

Total Phase I Estimated Budget: US$630,400.

Phase II:

Semi-commercial  demonstration  plant operating at mutually agreed upon tons per
year for market testing ~ 2 years

To be constructed at any site of WESTERN's choosing, but preferably at an Albian
site near Fort McMurray. Examine the feasibility of purchasing and using the old
Kerr McGee Mobile  Alabama  plant  equipment.  Equipment  is standard,  "off-the
shelf" chemical  industry  equipment.  The parties shall agree upon the Phase II
Time Period and such other details of Phase II as they deem  necessary  prior to
commencing Phase II.

Approximate Cost: ~$25 million, or whatever lower amount is required to complete
the construction of a demonstration plant.
Duration: approximately 2 years

                                       26
<PAGE>
                                                                    Exhibit A
                                                      Phased Development Plan
--------------------------------------------------------------------------------

Phase III:

Single-line plant producing  mutually agreed upon tons per year of finished TiO2
pigment  that  could be  expanded  to three  lines as soon as the first  line of
production proves feasible ~ 2 years

Cost:  to be determined in the engineering feasibility study.
Duration: approximately 2 years

The parties shall agree upon the Phase III Time Period and such other details of
Phase III as they deem necessary prior to commencing Phase III.

                                       27
<PAGE>

                                    EXHIBIT B

                     Altair Patents and Patent Applications

Issued Patents:

US Patent  6,375,923,  titled  "Processing  Titaniferous Ore to Titanium Dioxide
Pigment," which was filed on February 7, 2000.

International  publication number WO 01/00531,  "Processing  Titaniferous Ore to
Titanium Dioxide Pigment."
PCT application filing date: June 14, 2000.
PCT application publication date: Jan 4, 2001.

U.S. Patent 6,548,039, titled "Processing Aqueous Titanium Solutions to Titanium
Dioxide Pigment," which was filed on February 14, 2000.

International  publication  number  WO  01/00530  "Processing  Aqueous  Titanium
Solutions to Titanium Dioxide  Pigment".  PCT application  filing date: June 14,
2000. PCT application publication date: Jan 4, 2001.

Patent Applications:

***
Contemplated Applications:

***

***Portions  of  this  page  have  been  omitted   pursuant  to  a  request  for
confidential treatment filed separately with the SEC.

                                       28
<PAGE>

EXHIBIT C

                               Public Announcement

                                       29
<PAGE>

                                    EXHIBIT D

List of Third Party  Confidentiality  Agreements,  License  Agreements and Other
Agreements

         o    Technology    Investment   Agreement   between   Titanium   Metals
              Corporation and Altair Nanomaterials, Inc. dated January 8, 2004.

                                       30
<PAGE>

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