Document:

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

                     SETTLEMENT AGREEMENT AND MUTUAL RELEASE

         This  Settlement  Agreement and Mutual  Release (this  "Agreement")  is
entered  into as of June 4, 2004 (the  "Effective  Date"),  by and among  Altair
Nanotechnologies,  Inc., a corporation  organized  under the laws of Canada with
principal offices in Reno, Nevada ("Altair"), on the one hand; and Louis Schnur,
a natural person who is a resident of Chicago,  Illinois ("Schnur");  and Toyota
on  Western,  Inc.,  a  corporation  organized  under  the laws of the  State of
Illinois ("Toyota"),  on the other hand. Schnur, Toyota and their affiliates (as
defined by Rule 405 of the Securities Act of 1933, as amended) are  collectively
referred to herein as the "Schnur Parties."

         For the purpose of resolving  the issues  between or among the parties,
Altair, Toyota and Schnur hereby agree as follows:

1.       Issuance of Additional Stock. Not later than 15 days following the date
         of this  Agreement,  Altair shall issue 100,000 shares of Altair common
         stock to Toyota (the "Settlement Shares").

2.       Registration  of Stock.  Not later than 30 days  following  the date of
         this  Agreement  and pursuant to the terms of the  Registration  Rights
         Agreement  attached  as Exhibit  A,  Altair  shall file a  registration
         statement  registering the re-sale of (1) the Settlement Shares and (2)
         the  1,750,000  shares of Altair  common  stock and also the  shares of
         Altair common stock underlying warrants (the "Warrants") represented by
         Warrant Certificate Nos. 2003B-1, 2003B-2 or 2003B-3 acquired by Toyota
         from Altair on March 31, 2003 in a private placement and currently held
         by Toyota or Toyota's transferees.

3.       Amendment of the Warrant.  Contemporaneously with the execution of this
         Agreement, the parties shall execute the First Amendment to the Warrant
         in substantially the form attached as Exhibit B with respect to each of
         the Warrants.

4.       ***

5.       Communications.  The Schnur Parties agree for a period of one year from
         the date of this Agreement as follows:

         5.1. Except as disclosure  shall be required by law, the Schnur Parties
              shall not, directly or indirectly,  issue any Public Communication
              (as  defined  below)  regarding  Altair or its  present  or former
              officers,    directors,    or   business    operations.    "Public
              Communication"  means (a) any press release,  Internet posting, or
              radio  or  television  announcement  or  (b)  any  other  written,
              recorded or verbal  communication  that is reasonably likely to be
              seen or heard by more than  five  individuals,  including  but not
              limited   to   mailings,   facsimile   distributions   and   email
              distributions.
<PAGE>

         5.2. The Schnur  Parties shall not,  directly or  indirectly,  take any
              steps to pursue a proxy contest for the election of any person not
              nominated by Altair to the Altair board of directors;

         5.3. Except as  disclosure  may be required by law, the Schnur  Parties
              shall not,  directly or indirectly,  submit any  communications or
              complaints to the SEC or any self regulatory organization relative
              to  Altair   unless  the  Schnur  Party   seeking  to  submit  the
              communication  or  complaint  to the SEC has  first  reported  the
              communication  or complaint to Altair's Audit  Committee and given
              Altair's Audit Committee 90 days to address the  communication  or
              complaint;

         5.4. Except as  disclosure  may be  required  by law and subject to the
              notice  requirement of Section 5.3 above, the Schnur Parties shall
              not,   directly  or  indirectly,   send  faxes  or  other  written
              communications  to Altair's  officers,  directors or legal counsel
              more frequently than once every 90 days.

6.       Confidentiality.  The  provisions  of Exhibit C to this  Agreement  are
         incorporated herein by reference.

7.       Release by Altair.

         7.1. Except as otherwise  provided in Section 7.4 below,  Altair hereby
              releases and forever discharges the "Schnur Releasees"  consisting
              of Schnur, Toyota and their current and former respective lenders,
              shareholders,   parents,  subsidiaries,   affiliates,   divisions,
              officers, directors, owners, associates, predecessors, successors,
              heirs,   assigns,   agents,   partners,    employees,    insurers,
              representatives,  lawyers,  and all  persons  acting by,  through,
              under,  or in concert with them,  or any of them,  of and from any
              and all manner of action or actions, cause or causes of action, in
              law  or  in  equity,  and  any  suits,  debts,  liens,  contracts,
              agreements,   promises,  liabilities,  claims,  demands,  damages,
              losses,  costs, or expenses,  of any nature  whatsoever,  known or
              unknown,  fixed or contingent (the "Claims"),  that Altair now has
              or may  hereafter  have  against the Schnur  Releasees,  or any of
              them, by reason of any matter, cause, or thing whatsoever from the
              beginning  of  time  to  the  date  hereof,   including,   without
              limitation,  any and all Claims  arising out of, based upon, or in
              any way relating to transactions with Altair, the Altair Releasees
              (as  defined  below),   Christopher   Dillow,   Irvine  Management
              Consulting  Inc.,  CMGI,  Equity Alert,  Market  Pathways,  C. Van
              Mussher, IR Image, or Patagon Securities Corp.

         7.2. Altair  represents  and warrants that there has been no assignment
              or other  transfer  of any  interest in any Claim that it may have
              against the Schnur Releasees, or any of them, and Altair agrees to
              indemnify  and  hold  the  Schnur  Releasees,  and  each of  them,
              harmless from any liabilities,  claims,  demands,  damages, costs,
              expenses, and attorneys' fees incurred by the Schnur Releasees, or
              any  of  them,  as a  result  of any  person  asserting  any  such
              assignment  or transfer.  It is the  intention of the parties that
              this indemnity does not require  payment as a condition  precedent
              to  recovery by the Schnur  Releasees  against  Altair  under this
              indemnity.

                                       2
<PAGE>

         7.3. Altair agrees that if it hereafter commences,  joins in, or in any
              manner seeks  relief  through any suit arising out of, based upon,
              or relating  to any of the Claims  released  hereunder,  or in any
              manner asserts against the Schnur  Releasees,  or any of them, any
              of the Claims  released  hereunder,  then Altair  shall pay to the
              Schnur  Releasees,  and each of them,  in  addition  to any  other
              damages  caused to the Schnur  Releasees  thereby,  all attorneys'
              fees and costs  incurred by the Schnur  Releasees  in defending or
              otherwise responding to that suit or Claim.

         7.4. Notwithstanding  any provision contained in Sections 7.1, 7.2, and
              7.3  above,  the  release  set  forth  herein  does not  extend to
              releasing  the  Schnur  Releasees,  or any  of  them,  from  their
              responsibilities,     representations,    warranties,    promises,
              obligations, covenants, and agreements contained in this Agreement
              or the responsibilities,  representations,  warranties,  promises,
              obligations,  covenants,  and agreements contained within the four
              corners of the  various  unexercised  warrants  held by the Schnur
              Parties.

8.       Release by Schnur Parties.

         8.1. Except as  otherwise  provided  in Section  8.4 below,  the Schnur
              Parties   hereby   release  and  forever   discharge  the  "Altair
              Releasees"  consisting  of  Altair  and  its  current  and  former
              respective   lenders,    shareholders,    parents,   subsidiaries,
              affiliates,  divisions,  officers,  directors, owners, associates,
              predecessors,   successors,   heirs,  assigns,  agents,  partners,
              employees,  insurers,  representatives,  lawyers,  and all persons
              acting by,  through,  under,  or in concert  with them,  or any of
              them,  of and from any Claims that the Schnur  Parties now have or
              may hereafter have against the Altair  Releasees,  or any of them,
              by reason  of any  matter,  cause,  or thing  whatsoever  from the
              beginning  of  time  to  the  date  hereof,   including,   without
              limitation,  any and all Claims  arising out of, based upon, or in
              any way  relating to  transactions  with the Schnur  Parties,  the
              Schnur Releasees, Christopher Dillow, Irvine Management Consulting
              Inc.,  CMGI,  Equity Alert,  Market Pathways,  C. Van Mussher,  IR
              Image, or Patagon Securities Corp.

         8.2. The Schnur  Parties  represent  and warrant that there has been no
              assignment or other  transfer of any interest in any Claim that it
              may have  against the Altair  Releasees,  or any of them,  and the
              Schnur  Parties agree to indemnify and hold the Altair  Releasees,
              and each of them, harmless from any liabilities,  claims, demands,
              damages,  costs,  expenses,  and  attorneys'  fees incurred by the
              Altair  Releasees,  or any of  them,  as a  result  of any  person
              asserting any such assignment or transfer.  It is the intention of
              the parties  that this  indemnity  does not  require  payment as a
              condition  precedent to recovery by the Altair  Releasees  against
              the Schnur Parties under this indemnity.

         8.3. The Schnur Parties agree that if they hereafter commence, join in,
              or in any manner  seek  relief  through  any suit  arising out of,
              based upon, or relating to any of the Claims  released  hereunder,

                                       3
<PAGE>

              or in any manner asserts against the Altair  Releasees,  or any of
              them,  any of the  Claims  released  hereunder,  then  the  Schnur
              Parties  shall pay to the Altair  Releasees,  and each of them, in
              addition  to any  other  damages  caused to the  Altair  Releasees
              thereby,  all  attorneys'  fees and costs  incurred  by the Altair
              Releasees in defending  or  otherwise  responding  to that suit or
              Claim.

         8.4. Notwithstanding  any provision contained in Sections 8.1, 8.2, and
              8.3  above,  the  release  set  forth  herein  does not  extend to
              releasing  the  Altair  Releasees,  or any  of  them,  from  their
              responsibilities,     representations,    warranties,    promises,
              obligations, covenants, and agreements contained in this Agreement
              or the responsibilities,  representations,  warranties,  promises,
              obligations,  covenants,  and agreements contained within the four
              corners of the  various  unexercised  warrants  held by the Schnur
              Parties.

9.       Representations, Warranties and Covenants.

         9.1. Schnur  and  Toyota,  jointly  and  severally,   hereby  covenant,
              represent,  and warrant to the other parties to this  Agreement as
              follows:

       9.1.1. Schnur  and  Toyota are  correctly  described  and named  in  this
              Agreement;

       9.1.2. Before executing this Agreement,  Schnur  and  Toyota became fully
              informed of the terms,  contents,  provisions,  and effect of this
              Agreement and the attached exhibits;

       9.1.3. This Agreement is fully and forever  binding on, and enforceable
              against Schnur and Toyota in accordance with its terms;

       9.1.4. The  execution  and  delivery  of  this  Agreement  and  any other
              documents,  agreements,  or  instruments  executed or delivered by
              Schnur and Toyota  pursuant  hereto  and the  consummation  of the
              transactions herein or therein contemplated does not conflict with
              or result in a breach  of any of the  terms or  provisions  of, or
              constitute a default under,  any material  agreement or instrument
              to which  Schnur  and Toyota is a party or any  provision  of law,
              statute,  rule, or  regulation  applicable to Schnur and Toyota or
              any judicial or administrative order or decree by which Schnur and
              Toyota is bound;

       9.1.5. In entering into  and signing this  Agreement,  Schnur  and Toyota
              have had the  benefit  of the  advice  of  attorneys  of their own
              choosing,  and they enter into this Agreement  freely by their own
              choosing and judgment, and without duress or other influence;

       9.1.6. Schnur  and  Toyota  have  made  an   investigation   to  their
              satisfaction  of all facts and  reasons  why it should  enter into
              this  Agreement  and  agree,  based  upon  Schnur's  and  Toyota's
              knowledge,  experience, and investigation,  that this Agreement is
              fair and just;

                                       4
<PAGE>

       9.1.7. Schnur and Toyota  represent that  they  have not relied upon, and
              will not rely upon any  statements,  acts,  or omissions by any of
              the other parties,  other than as set forth in this Agreement,  in
              making their decision to enter into this Agreement;

       9.1.8. This  Agreement  is duly  executed by  Schnur and Toyota with full
              knowledge and understanding of its terms and meaning,  on Schnur's
              and  Toyota's  own  judgment  and upon the advice of each of their
              attorneys and financial and tax advisors;

       9.1.9. This Agreement is  not and shall not be  construed as an admission
              of wrongdoing or liability by any party,  any of which  wrongdoing
              or liability is and has been specifically denied by each party. It
              is  expressly  understood  and  agreed  that  the  terms  of  this
              Agreement are  contractual and not merely  recitals,  and that the
              agreements  contained herein and the consideration  transferred is
              intended to  compromise  doubtful and disputed  claims,  avoid and
              terminate litigation, and buy peace, and that no payments made and
              no  release  or other  consideration  given by any party  shall be
              construed as an admission of wrongdoing or liability by any party,
              all wrongdoing or liability being expressly  denied by each party;
              and

      9.1.10. Schnur and Toyota acknowledge that their aforesaid representations
              are a material inducement to every other party to enter into this
              Agreement.

      9.1.11. Investment Representations.

                  a. Purchase for Own Account. Toyota is the sole and true party
         in interest, is acquiring the Settlement Shares for its own account for
         investment,  is not purchasing the Settlement Shares for the benefit of
         any other person,  and has no present  intention of holding or managing
         the  Settlement  Shares  with  others or of  selling,  distributing  or
         otherwise disposing of any portion of the Settlement Shares. Toyota has
         its principal place of business in the state of Illinois.

                  b. Disclosure and Review of Information.  Toyota  acknowledges
         and  represents  that it has received  and reviewed  copies of Altair's
         Annual  Report on Form 10-K for the year ended  December  31,  2003 and
         Altair  Quarterly  Report on Form 10-Q for the quarter  ended March 31,
         2004  (the  "SEC  Filings").  In  addition,   Toyota  acknowledges  and
         represents  that  Toyota has been  given a  reasonable  opportunity  to
         review all  documents,  books and records of Altair  pertaining to this
         investment,  and has  been  supplied  with all  additional  information
         concerning  Altair and the Settlement Shares that has been requested by
         Toyota,  has  had a  reasonable  opportunity  to ask  questions  of and
         receive  answers  from Altair or its  representatives  concerning  this
         investment,  and that all such questions have been answered to the full
         satisfaction of Toyota.  Toyota has received,  and acknowledges that it
         is receiving,  no representations,  written or oral, from Altair or its
         officers,  directors,  employees,  attorneys or agents other than those
         contained in this Agreement and the SEC Filings. In making its decision

                                       5
<PAGE>

         to purchase the Securities, Toyota has relied solely upon its review of
         the SEC Filings, this Agreement, and independent investigations made by
         it or its representatives without assistance of Altair.

                  c. Speculative Investment. Toyota understands that (i) it must
         bear the economic risk of the investment in the  Settlement  Shares for
         an  indefinite  period of time because the  Settlement  Shares have not
         been  registered  under the  Securities  Act of 1933,  as amended  (the
         "Securities  Act")  or  qualified  under  the  Securities  Act  or  the
         securities  laws of any other  jurisdiction  and (ii) its investment in
         Altair  represented by the Settlement  Shares is highly  speculative in
         nature and is  subject to a high  degree of risk of loss in whole or in
         part.  Toyota has adequate means of providing for its current needs and
         possible contingencies, and is able to bear the high degree of economic
         risk of this investment, including, but not limited to, the possibility
         of the  complete  loss of Toyota's  entire  investment  and the limited
         transferability   of  the  Settlement   Shares,   which  may  make  the
         liquidation of this investment impossible for the indefinite future.

                  d. Accredited Schnur Parties Status.  Toyota is an "accredited
         investor"  within the  meaning  of Rule  501(a)  promulgated  under the
         Securities  Act in that,  among  other  reasons,  all equity  owners of
         Toyota had individual income  (exclusive of any income  attributable to
         my spouse) in excess of  $200,000  in each of the most recent two years
         and  reasonably  expect  to have an  individual  income  in  excess  of
         $200,000  for the  current  year  and/or)  alimony  paid,  and  have an
         individual net worth, or my spouse and I have a combined individual net
         worth, in excess of $1,000,000.

                  e. Investment Experience. Toyota has experience as an investor
         in securities  and  acknowledges  that it can bear the economic risk of
         its  investment in the  Securities.  By reason of Toyota's  business or
         financial  experience  or the business or financial  experience  of its
         professional  advisors  who  are  unaffiliated  with  and  who  are not
         compensated  by Altair or any  affiliate  or  selling  agent of Altair,
         directly  or  indirectly,  Toyota has the  capacity  to protect its own
         interests in connection with its purchase of the Securities. Toyota has
         not been organized solely for the purpose of acquiring the Securities.

                  f.  Restricted   Securities.   Toyota   understands  that  the
         Settlement  Shares are and will be  "restricted  securities"  under the
         Securities  Act  inasmuch as they are being  acquired  from Altair in a
         transaction  not  involving  a public  offering,  and  that,  under the
         Securities Act and applicable regulations  thereunder,  such securities
         may be resold  without  registration  under the  Securities Act only in
         certain limited circumstances.

                  g.  Legends.   Toyota   understands   that  the   certificates
         evidencing the Settlement  Shares will bear the legend set forth below,
         together with any other legends required by the laws of the Province of
         Ontario and any other state or province with jurisdiction:

                                       6
<PAGE>

                  THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED,  OR QUALIFIED UNDER  APPLICABLE STATE
                  SECURITIES  LAWS AND HAVE BEEN TAKEN FOR  INVESTMENT  PURPOSES
                  ONLY AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY
                  DISTRIBUTION  THEREOF.  THESE  SECURITIES  MAY  NOT BE SOLD OR
                  OTHERWISE TRANSFERRED UNLESS A REGISTRATION STAEMENT UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED,  IS IN EFFECT WITH RESPECT
                  TO SUCH  SECURITIES  OR ALTAIR HAS RECEIVED AN OPINION IN FORM
                  AND  SUBSTANCE   SATISFACTORY  TO  ALTAIR  PROVIDING  THAT  AN
                  EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
                  ACT OF 1933, AS AMENDED, IS AVAILABLE.

                  h. The legend set forth  above shall be removed by Altair from
         any certificate  evidencing any of the Settlement  Shares only (i) upon
         receipt by Altair of an opinion in form and substance  satisfactory  to
         Altair that such legend may be removed pursuant to Rule 144 promulgated
         under the Securities Act, or (ii) upon confirmation that a registration
         statement  under the  Securities  Act is at that  time in  effect  with
         respect to the legended  Settlement  Share and that such  transfer will
         not jeopardize the exemption or exemptions from  registration  pursuant
         to which the respective Settlement Shares was issued.

         9.2. Altair  hereby  covenants,  represents,  and warrants to the other
              parties to this Agreement as follows:

              9.2.1.  Altair is correctly described and named in this Agreement;

              9.2.2.  Before  executing  this  Agreement,  Altair  became  fully
                      informed of the terms, contents, provisions, and effect of
                      this Agreement and the attached exhibits;

              9.2.3.  This  Agreement  is fully  and  forever  binding  on,  and
                      enforceable against Altair in accordance with its terms;

              9.2.4.  The execution and delivery of this Agreement and any other
                      documents,   agreements,   or   instruments   executed  or
                      delivered by Altair pursuant  hereto and the  consummation
                      of the transactions  herein or therein  contemplated  does
                      not  conflict  with or  result  in a breach  of any of the
                      terms or provisions of, or constitute a default under, any
                      material  agreement  or  instrument  to which  Altair is a
                      party  or  any  provision  of  law,   statute,   rule,  or
                      regulation   applicable  to  Altair  or  any  judicial  or
                      administrative order or decree by which Altair is bound;

              9.2.5.  In entering  into and signing this  Agreement,  Altair has
                      had the  benefit  of the  advice of  attorneys  of its own
                      choosing,  and enter into this  Agreement  freely by their
                      own choosing  and  judgment,  and without  duress or other
                      influence;

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<PAGE>

              9.2.6.  Altair has made an  investigation  to its  satisfaction of
                      all  facts  and  reasons  why it  should  enter  into this
                      Agreement  and  agree,  based  upon  Altair's   knowledge,
                      experience, and investigation, that this Agreement is fair
                      and just;

              9.2.7.  Altair  represents  that it has not relied upon,  and will
                      not rely upon any statements, acts, or omissions by any of
                      the  other  parties,  other  than  as set  forth  in  this
                      Agreement,  in  making  its  decision  to enter  into this
                      Agreement;

              9.2.8.  This  Agreement  is duly  executed  by  Altair  with  full
                      knowledge and  understanding of its terms and meaning,  on
                      Altair's own judgment and upon the advice of its attorneys
                      and financial and tax advisors;

              9.2.9.  This  Agreement  is not and shall not be  construed  as an
                      admission of wrongdoing or liability by any party,  any of
                      which wrongdoing or liability is and has been specifically
                      denied  by each  party.  It is  expressly  understood  and
                      agreed that the terms of this  Agreement  are  contractual
                      and not merely recitals, and that the agreements contained
                      herein and the  consideration  transferred  is intended to
                      compromise   doubtful  and  disputed  claims,   avoid  and
                      terminate litigation,  and buy peace, and that no payments
                      made and no  release or other  consideration  given by any
                      party shall be construed as an admission of  wrongdoing or
                      liability by any party,  all wrongdoing or liability being
                      expressly denied by each party; and

              9.2.10. Altair acknowledges that its aforesaid representations are
                      a material  inducement  to every other party to enter into
                      this Agreement.

10.      Successors and Assigns.  This Agreement  shall inure to the benefit of,
         and shall be binding upon, the successors and assigns of the parties to
         this  Agreement,  and each of  them.  This  Agreement  is  intended  to
         release,  and inure to the benefit of, each of the parties'  respective
         related parties.

11.      Miscellaneous  Terms.  Each of the  parties to this  Agreement  further
         agrees as follows:

              11.1.   Modifications. No modification, amendment or waiver of any
                      of the  provisions  contained  in this  Agreement,  or any
                      future   representations,   promise,   or   condition   in
                      connection  with the  subject  matter  of this  Agreement,
                      shall be binding upon any party to this  Agreement  unless
                      made in  writing  and  signed  by such  party or by a duly
                      authorized officer or agent of such party.

              11.2.   Severability.  In the event any non-material  provision of
                      this Agreement or the application of any such provision is
                      held to be  void,  voidable,  unlawful  or for any  reason
                      unenforceable in any  jurisdiction,  such provision shall,
                      as to such  jurisdiction,  be ineffective to the extent of
                      such prohibition or  unenforceability;  but, the remaining
                      provisions  of this  Agreement  shall remain in full force
                      and effect,  and any such prohibition or  unenforceability
                      in  any  jurisdiction   shall  not  invalidate  or  render
                      unenforceable  such  non-material  provision  in any other

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<PAGE>
                      jurisdiction.  In good faith,  the parties shall use their
                      best  efforts,  or if such efforts are  unsuccessful,  the
                      parties agree that a court or  arbitrator  may reform such
                      provision,  to replace the  provision  that is contrary to
                      law with a legal one  approximating to the extent possible
                      the original intent of the parties.

              11.3.   No  Representations.  Except for statements  expressly set
                      forth in this  Agreement,  no party has made any statement
                      or  representation to any other party regarding a material
                      fact relied upon by any other party in entering  into this
                      Agreement  and no party  has  relied  upon any  statement,
                      representation,  or promise of any other party,  or of any
                      representative   or  attorney  for  any  other  party,  in
                      executing  this  Agreement  or in  making  the  settlement
                      provided for in this Agreement.

              11.4.   Independent  Advice From Counsel.  Each of the parties has
                      received prior independent legal advice from legal counsel
                      of its choice with respect to the  advisability  of making
                      the  settlement  provided for in this  Agreement  and with
                      respect to the  advisability  of executing this Agreement.
                      All parties agree and  acknowledge  that,  with respect to
                      this Agreement and the agreements described herein, Altair
                      has been  represented  solely by Stoel Rives LLP,  and the
                      Schnur Parties have been  represented  solely by Jenkens &
                      Gilchrist,   A   Professional   Corporation.   Each  party
                      represents  and  warrants  that  his or its  attorney  has
                      reviewed the  Agreement,  and that his or its attorney has
                      approved the Agreement as to form and substance.

              11.5.   Knowing and  Voluntary  Consent;  Adequate  Investigation.
                      Each of the  parties  has read this  Agreement  carefully,
                      knows and  understands the  Agreement's  content,  and has
                      investigated  all  facts  and  matters  pertaining  to the
                      subject  matter  of this  Agreement  as such  party  deems
                      necessary or desirable.  This Agreement shall be final and
                      binding  upon the  parties  regardless  of any  claims  of
                      mistake  of  fact  or  law,  or  any  other  circumstances
                      whatsoever,  and  may  not be set  aside  for  any  reason
                      whatsoever.

              11.6.   Attorneys' Fees. In the event of any dispute, controversy,
                      litigation or other proceedings  (including proceedings in
                      bankruptcy) concerning or related to the enforcement of an
                      arbitration  award under this  Agreement,  the  prevailing
                      party  shall be entitled  to  reimbursement  of all of its
                      costs,  including reasonable attorney and expert witnesses
                      fees and costs, and court or arbitration fees and costs.

              11.7.   Governing  Law.  The  parties  agree  that the laws of the
                      State  of  Nevada  shall  govern  the  interpretation  and
                      enforcement  of this  Agreement,  without giving effect to
                      its choice of law rules.

              11.8.   Dispute  Resolution.  Any controversy or claim arising out
                      of or  relating  to this  Agreement  or the breach of this
                      Agreement  (other  than  claims in which  the sole  remedy
                      sought is specific  performance of one or more  provisions
                      set forth in this  Agreement,  which claims may be brought
                      in state or federal court  located in Reno,  Nevada) shall
                      be settled through an arbitration  proceeding Reno, Nevada
                      administered by the American Arbitration Association under
                      its Commercial Arbitration Rules. With respect to any such

                                        9
<PAGE>

                      arbitration,  within  15 days  after the  commencement  of
                      arbitration   as   given  in  the   American   Arbitration
                      Association's  Commercial  Arbitration  Rules,  each party
                      shall select one person to act as  arbitrator  and the two
                      selected shall select a third arbitrator within 10 days of
                      their  appointment.  Each party may  select an  arbitrator
                      from  the list of  arbitrators  provided  by the  American
                      Arbitration  Association  or either  party may appoint any
                      other qualified individual to serve as arbitrator.  If the
                      arbitrators  selected by the parties are unable or fail to
                      agree  upon the third  arbitrator,  the  third  arbitrator
                      shall be selected by the American Arbitration Association.
                      The  arbitrators  will have no authority to award punitive
                      or other  damages not measured by the  prevailing  party's
                      actual damages,  except as may be required by statute. The
                      arbitrators,  in their  sole  discretion,  may  include an
                      injunction or a direction to any party in their  decision.
                      The  arbitration  shall  be  governed  by  the  Commercial
                      Dispute Resolution  Procedures of the American Arbitration
                      Association in effect at the time the dispute is filed for
                      arbitration.  Any  party  to  an  arbitration  under  this
                      Section  may  commence  an action in a court of  competent
                      jurisdiction  to enforce an  arbitration  award  and/or to
                      remedy a refusal to arbitrate.

              11.9.   Authority.   Each  party  represents  that  all  necessary
                      corporate  proceedings  have been taken by it to authorize
                      the settlement and mutual  releases  contemplated  by this
                      Agreement and the agreements contemplated hereby, and that
                      this Agreement and the agreements contemplated hereby have
                      been executed by each party,  and shall  constitute  valid
                      and binding agreements.

              11.10.  Execution in Counterparts.  This Agreement may be executed
                      and delivered in any number of  counterparts  or copies by
                      the parties to this Agreement.  When each party has signed
                      and delivered at least one counterpart to each other party
                      to this  Agreement,  each  counterpart  shall be deemed an
                      original and, taken together, shall constitute one and the
                      same Agreement, which shall be binding and effective as to
                      the parties to this Agreement.

              11.11.  Notices.  All notices and other  communications under this
                      Agreement shall be in writing, shall specifically refer to
                      this  Agreement,  and shall be delivered or transmitted by
                      facsimile,  reliable  overnight  courier or other reliable
                      delivery service, and shall be addressed as follows:

                  If to the Schnur Parties:     Louis Schnur
                                                Toyota On Western
                                                6941 South Western Avenue
                                                Chicago, Illinois  60636
                                                Facsimile: (773) 776-4584

                  With a copy to:               Jenkens & Gilchrist,
                                                A Professional Corporation
                                                600 Congress Avenue, Suite 2200
                                                Austin, Texas 78701
                                                Attn:  J. Rowland Cook
                                                Facsimile: (512) 404-3520

                                       10
<PAGE>

                  If to Altair:                 Altair Nanotechnologies, Inc.
                                                204 Edison Way
                                                Reno, Nevada  89502
                                                Attn:  Corporate Secretary
                                                Facsimile: (775) 856-1619

                  With a copy to:               Stoel Rives LLP
                                                201 S. Main Street, Suite 1100
                                                Salt Lake City, Utah  84111
                                                Attn:  Bryan T. Allen
                                                Facsimile: (801) 578-6999

         Such notices and other  communications shall be deemed given on the day
on which  received.  Any party may  change  his or its  address  for  receipt of
notices  and  requests  hereunder  by notice  duly  given to the other  party in
accordance with these provisions.

      (Remainder of page intentionally left blank; signature page follows)

                                       11
<PAGE>

         IN WITNESS  WHEREOF,  the parties hereto have executed this  Settlement
Agreement and Mutual Release to be effective as of the date written above.

                                  ALTAIR NANOTECHNOLOGIES, INC.

                                  By:      /s/ Rudi E. Moerck
                                           -------------------------------------
                                  Name:    Rudi E. Moerck
                                           -------------------------------------
                                  Title:   President
                                           -------------------------------------

                                  /s/ Louis Schnur
                                  ----------------------------------------------
                                  LOUIS SCHNUR, Individually

                                  TOYOTA ON WESTERN, INC.

                                  By:      /s/ Louis Schnur
                                           -------------------------------------
                                  Name:    Louis Schnur
                                           -------------------------------------
                                  Title:   President
                                           -------------------------------------

                                       12
<PAGE>

                                    EXHIBIT A

                         (Registration Rights Agreement)

                                       13
<PAGE>

                                    EXHIBIT B

              (First Amendment to Warrant Certificate No. 2003B-1)

                                       14
<PAGE>

                                    EXHIBIT C

                                 Confidentiality

The  provisions  of this  Exhibit  C are  incorporated  by  reference  into  the
Settlement Agreement and Mutual Release dated June 4, 2004 among Altair,  Schnur
and Toyota (the  "Settlement  Agreement").  Terms not otherwise  defined in this
Exhibit C have the meanings given those terms in the Settlement Agreement.

***

Altair,  Schnur and Toyota shall keep the  provisions  of this Exhibit C and the
provisions of Section 4  confidential  to the maximum  extent allowed by law. If
the Settlement  Agreement is filed with the SEC, the party filing the Settlement
Agreement shall use its best reasonable efforts to obtain confidential treatment
from the SEC for Section 4 and this Exhibit C to the maximum  extent  allowed by
the SEC.

                                       15
<PAGE>REGISTRATION RIGHTS AGREEMENT

         This Registration  Rights Agreement (this  "Agreement") is entered into
as of  June  4,  2004  between  Altair  Nanotechnologies,  Inc.,  a  corporation
organized under the laws of Canada (the "Company"), and Toyota on Western, Inc.,
a Illinois  corporation  ("Toyota"),  in connection with that certain Settlement
and Mutual  Release  Agreement  dated as of June 4, 2004 among the  Company  and
Toyota and Louis Schnur (the "Settlement Agreement").

         The parties hereby agree as follows:

1. Certain Definitions.  As used in this Agreement, the following terms have the
following meanings:

         "Affiliate"  means,  with respect to any person,  any other person that
directly or indirectly  Controls,  is Controlled  by, or is under common Control
with, that person.

         "Business Day" means a day,  other than a Saturday or Sunday,  on which
banks in Reno, Nevada are open for the general transaction of business.

         "Common Stock" means the Company's common stock and any securities into
which those shares may subsequently be reclassified.

         "Control" (including the terms "controlling", "controlled by" or "under
common control with") means the possession,  direct or indirect, of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether through the ownership of voting securities, by contract or otherwise.

         "Investors"  means Toyota and any Affiliate or permitted  transferee of
Toyota  who is or  becomes  a party  to this  Agreement  and  holds  Registrable
Securities.

         "Prospectus"   means  the  prospectus   included  in  any  Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the  terms of the  offering  of any  portion  of the  Registrable  Securities
covered  by  such  Registration  Statement  and  by  all  other  amendments  and
supplements  to the  prospectus,  including  post-effective  amendments  and all
material incorporated by reference in that prospectus.

         "Register,"  "registered" and "registration"  means a registration made
by  preparing  and  filing a  Registration  Statement  or  similar  document  in
compliance  with the 1933 Act (as defined below) and the declaration or ordering
of effectiveness of the Registration Statement or document.

         "Registrable  Securities"  means (1) the Settlement  Shares and (2) the
1,750,000 shares of Common Stock issued to Toyota on March 31, 2003 in a private
placement and currently  held by Toyota or its  transferees  and (3) the Warrant
Shares.

         "Registration  Statement" means a registration statement of the Company
filed  under the 1933 Act that covers the resale of the  Registrable  Securities
pursuant to the provisions of this Agreement, amendments and supplements to that
Registration Statement,  including post-effective  amendments,  all exhibits and
all material incorporated by reference in that Registration Statement.

<PAGE>

         "Required  Investors"  means the  Investors  holding a majority  of the
Registrable Securities.

         "SEC" means the U.S. Securities and Exchange Commission.

         "Settlement  Shares" means the 100,000  shares of the Company's  common
stock issued to Toyota pursuant to the Settlement Agreement.

          "1933 Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

         "1934 Act" means the Securities  Exchange Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

         "Warrants" means the warrants  represented by Warrant  Certificate Nos.
2003B-1,  2003B-2 and 2003B-3  that were  acquired by Toyota from the Company on
March 31, 2003 in a private  placement and currently  held by Toyota or Toyota's
transferees.

         "Warrant  Shares"  means the shares of Common Stock  issuable  upon the
exercise of the Warrants.

         2. Registration.

                   (a) Registration Statement.  Not later than 30 days following
the date of the Settlement Agreement (the "Filing Deadline"),  the Company shall
prepare  and file with the SEC one  Registration  Statement  on Form S-3 (or, if
Form  S-3 is not  then  available  to the  Company,  on a form  of  registration
statement  that is then  available  to effect a  registration  for resale of the
Registrable  Securities) covering the resale of the Registrable Securities in an
amount at least equal to the number of Registrable Securities. That Registration
Statement will cover, to the extent allowable under the 1933 Act (including Rule
416), such  indeterminate  number of additional shares of Common Stock resulting
from stock splits,  stock dividends or similar  transactions with respect to the
Registrable Securities.  If the Registration Statement is not filed with the SEC
on or prior to the Filing  Deadline,  the  Company  will make  payments  to each
Investor  (pro  rata  based  upon the  number  of  Registrable  Securities),  as
liquidated  damages  and not as a  penalty,  525  shares  per day for  each  day
following the date by which the  Registration  Statement  should have been filed
for which no Registration Statement is filed. Those payments shall be in lieu of
any other  monetary  damages the Investors may seek or obtain as a result of the
respective delay; provided, however, nothing in this Agreement will prohibit the
Investors from seeking specific  performance of the Company's  obligations under
this Agreement.

                   (b) Expenses.  The Company shall pay all expenses  associated
with the  registration  of the  Registrable  Securities,  including  filing  and
printing fees, the Company's counsel and accounting fees and expenses,  fees and
expenses  (including  reasonable  counsel  fees)  associated  with  clearing the
Registrable  Securities for sale under applicable state securities or "blue sky"
laws, listing fees, transfer taxes, fees of transfer agents and registrars,  and
fees. The Company shall not be required to pay any other fees or expenses of the

                                        2
<PAGE>

Schnur  Parties  in  connection  with  the  registration,   including,   without
limitation,  discounts,  commissions,  fees of  counsel,  fees of  underwriters,
selling brokers,  dealer managers or similar securities  industry  professionals
with respect to the Registrable Securities being sold.

                   (c) Effectiveness.  The Company shall use its best efforts to
have the Registration  Statement declared effective as soon as practicable.  The
Company  shall  notify  the  Investors  by  facsimile  or email as  promptly  as
practicable  after any  Registration  Statement is declared  effective and shall
simultaneously  provide the Investors with copies of any related Prospectus.  If
(A) a Registration Statement covering the Registrable Securities is not declared
effective  by  the  SEC  within  120  days  after  the  Filing   Deadline   (the
"Effectiveness Deadline") then the Company shall make to each Investor (pro rata
based upon the  number of  Registrable  Securities  held by such  Investor),  as
liquidated  damages  and not as a  penalty,  525  shares  per day for  each  day
following  the  date by which  such  Registration  Statement  should  have  been
effective.  Those  payments  will be in lieu of any other  monetary  damages the
Investors  may seek or  obtain as a result of the  respective  delay;  provided,
however,  nothing in this  Agreement  will  prohibit  an Investor  from  seeking
specific performance of the Company's obligations under this Agreement.

                   (d)  Underwritten  Offering.  If the company  elects,  in its
discretion,  to engage an underwriter with respect to any offering pursuant to a
Registration  Statement,  the Company is entitled to select an investment banker
and manager to administer the offering,  which investment banker or manager will
be reasonably satisfactory to the Required Investors.

         3.  Company  Obligations.  The  Company  shall use its best  efforts to
effect the  registration  of the  Registrable  Securities in accordance with the
terms hereof, and the Company will, as expeditiously as possible,

                   (a) use its best efforts to cause the Registration  Statement
to become  effective  and to remain  continuously  effective  for a period  (the
"Effectiveness  Period") that will terminate upon the earlier of (i) the date on
which all  Registrable  Securities  covered by the  Registration  Statement,  as
amended  from  time to time,  have  been  sold  and  (ii) the date on which  the
Settlement Shares may be sold pursuant to Rule 144(k);

                   (b)  prepare  and  file  with  the  SEC  the  amendments  and
post-effective  amendments to the  Registration  Statement and the Prospectus as
may be necessary to keep the  Registration  Statement  effective  for the period
specified in Section 3(a) and to comply with the  provisions of the 1933 Act and
the  1934  Act  with  respect  to the  distribution  of  all of the  Registrable
Securities;

                   (c)  (i)  provide  copies  to and  permit  a  single  counsel
designated by the Investor holding the largest amount of Registrable  Securities
(which shall be Jenkens & Gilchrist unless the Company is otherwise notified) to
review the initial Registration Statement no fewer than four Business Days prior
to the  filing  of the  initial  Registration  Statement  with  the SEC and (ii)
provide to that  single  counsel  copies of all  post-effective  amendments  and
supplements to the Registration Statement.

                   (d) furnish to the Investors  and their legal counsel  (which
may be by email or  portable  document  format  (PDF)  file) (i) one copy of any
Registration Statement and any amendment thereto and each preliminary prospectus

                                        3
<PAGE>

and Prospectus and each amendment or supplement  thereto and (ii) the reasonably
requested number of copies of a Prospectus,  including a preliminary prospectus,
and all amendments and supplements thereto;

                   (e) in the event the Company  selects an underwriter  for the
offering,  the Company shall enter into and perform its  reasonable  obligations
under an underwriting agreement, in usual and customary form, including, without
limitation,  customary  indemnification and contribution  obligations,  with the
underwriter of the offering;

                   (f) use its  commercially  reasonable  efforts to (i) prevent
the issuance of any stop order or other suspension of effectiveness  and (ii) if
an order is issued,  obtain the withdrawal of the order at the earliest possible
moment;

                   (g) prior to any public  offering of Registrable  Securities,
use commercially reasonable efforts to register or qualify or cooperate with the
Investors and their counsel in connection with the registration or qualification
of the  Registrable  Securities  for offer and sale under the securities or blue
sky laws of the  jurisdictions  requested  by the  Investors  and do any and all
other acts or things  necessary or advisable to enable the distribution in those
jurisdictions  of  the  Registrable   Securities  covered  by  the  Registration
Statement; provided, however, that the Company is not required to (i) qualify to
do  business in any  jurisdiction  where it would not  otherwise  be required to
qualify but for this Section 3(g),  (ii) subject  itself to general  taxation in
any jurisdiction where it would not otherwise be so subject but for this Section
3(g), or (iii) file a general consent to service of process in any jurisdiction;

                   (h) if applicable, list all Registrable Securities covered by
a Registration  Statement to be listed on each securities exchange,  interdealer
quotation  system or other  market  on which  similar  securities  issued by the
Company are then listed;

                   (i)  immediately  notify  the  Investors,  at any time when a
Prospectus relating to Registrable  Securities is required to be delivered under
the 1933 Act,  upon  discovery  that,  or upon the  happening  of any event as a
result of which, the Prospectus included in a Registration Statement, as then in
effect,  includes an untrue  statement of a material  fact or omits to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading in light of the circumstances  then existing,  and at the
request  of any  Investor,  promptly  prepare  and  furnish  to that  Investor a
reasonable number of copies of a supplement to or an amendment of the Prospectus
as may be necessary so that,  as thereafter  delivered to the  purchasers of the
Registrable Securities,  that Prospectus does not include an untrue statement of
a material fact or omit to state a material  fact required to be stated  therein
or necessary to make the statements in the Registration Statement not misleading
in light of the circumstances then existing;

                   (j)  otherwise  use its  best  efforts  to  comply  with  all
applicable  rules and regulations of the SEC under the 1933 Act and the 1934 Act
and  take  other  actions  as may be  reasonably  necessary  to  facilitate  the
registration of the Registrable Securities hereunder; and

                   (k) with a view to  making  available  to the  Investors  the
benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the SEC that may at any time permit the Investors to sell shares of Common Stock

                                        4
<PAGE>

to the public without registration, the Company covenants and agrees to (i) make
and keep public information available, as those terms are understood and defined
in Rule 144,  until the earlier of (A) six months after the date that all of the
Settlement  Shares may be resold  pursuant  to Rule  144(k) or any other rule of
similar effect or (B) the date that the Registrable  Securities  shall have been
resold;  (ii)  file  with the SEC in a  timely  manner  all  reports  and  other
documents  required of the Company under the 1934 Act; and (iii) furnish to each
Investor upon request, as long as that Investor owns any Registrable Securities,
(A) a written  statement by the Company that it has complied  with the reporting
requirements  of the 1934 Act, (B) a copy of the  Company's  most recent  Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) other  information
as may be  reasonably  requested  in order to avail the  Investor of any rule or
regulation of the SEC that permits the selling of those  Registrable  Securities
without registration.

         4. Due Diligence Review; Information. The Company shall make available,
during  normal  business  hours,  for  inspection  and review by the  Investors,
advisors  to and  representatives  of the  Investors,  all  financial  and other
records, all SEC filings and all other corporate documents and properties of the
Company as may be reasonably  necessary for the purpose of the review, and cause
the  Company's  officers,  directors  and  employees,  within a reasonable  time
period, to supply all information  reasonably  requested by the Investors or any
representative,  advisor or  underwriter  in  connection  with the  Registration
Statement (including, without limitation, in response to all questions and other
inquiries  reasonably made or submitted by any of them),  prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling the  Investors  and the  representatives,  advisors and
underwriters and their  respective  accountants and attorneys to conduct initial
and ongoing due  diligence  with  respect to the Company and the accuracy of the
Registration Statement.

         Except  for  disclosures  to  any  Investor  whose   representative  or
Affiliate occupies a seat or has observation rights with respect to the board of
directors  of the  Company or any of its  subsidiaries,  the  Company  shall not
disclose material nonpublic  information to the Investors,  or to advisors to or
representatives of the Investors,  unless prior to disclosure of the information
the Company identifies the information as being material  nonpublic  information
and  provides  the  Investors,   the  advisors  and  representatives   with  the
opportunity  to accept or refuse to accept that material  nonpublic  information
for review and any Investor  wishing to obtain that  information  enters into an
appropriate confidentiality agreement with the Company with respect thereto.

         5. Obligations of the Investors.

                   (a) Each Investor shall furnish in writing to the Company the
information  regarding  itself,  the  Registrable  Securities held by it and the
intended  method of disposition  of the  Registrable  Securities  held by it, as
shall be  reasonably  required  to effect the  registration  of the  Registrable
Securities and shall execute the documents in connection  with the  registration
as the Company may reasonably request. At least seven Business Days prior to the
first anticipated filing date of any Registration  Statement,  the Company shall
notify each Investor of the information the Company  requires from that Investor
if that Investor  elects to have any of the Registrable  Securities  included in
the  Registration  Statement.  An Investor shall provide that information to the
Company at least five Business Days prior to the first anticipated filing date

                                        5
<PAGE>

of the  Registration  Statement  if that  Investor  elects  to  have  any of the
Registrable Securities included in the Registration Statement.

                   (b)  Each  Investor,  by its  acceptance  of the  Registrable
Securities,  agrees to cooperate with the Company as reasonably requested by the
Company  in  connection  with  the  preparation  and  filing  of a  Registration
Statement hereunder.

                   (c)  In  the  event  the  Company,  at  the  request  of  the
Investors,  decides to engage the  services  of an  underwriter,  each  Investor
agrees  to  enter  into  and  perform  its  obligations  under  an  underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution  obligations,  with the managing underwriter of
the  offering  and take other  actions as are  reasonably  required  in order to
expedite or facilitate the dispositions of the Registrable Securities. The scope
of any  indemnification  in favor of an underwriter shall be limited to the same
extent as the indemnity provided in Section 6(b) hereof.

                   (d) Each  Investor  agrees  that,  upon receipt of any notice
from the Company of the  happening  of an event  pursuant to Section  3(i),  the
Investor shall  immediately  discontinue  disposition of Registrable  Securities
pursuant to the  Registration  Statement  covering the  Registrable  Securities,
until the  Investor's  receipt  of the  copies of the  supplemented  or  amended
prospectus filed with the SEC and until any related post-effective  amendment is
declared  effective  and, if so  directed by the  Company,  the  Investor  shall
deliver to the Company (at the expense of the  Company) or destroy  (and deliver
to the  Company a  certificate  of  destruction)  all  copies in the  Investor's
possession of the Prospectus covering the Registrable  Securities current at the
time of receipt of that notice.

                   (e)  No  Investor   may   participate   in  any  third  party
underwritten registration hereunder unless it (i) agrees to sell the Registrable
Securities on the basis provided in any  underwriting  arrangements in usual and
customary  form  entered into by the Company,  (ii)  completes  and executes all
questionnaires,  powers of attorney,  indemnities,  underwriting  agreements and
other  documents  reasonably  required  under  the  terms  of  the  underwriting
arrangements,  and (iii)  agrees to pay its pro rata  share of all  underwriting
discounts and commissions.  Notwithstanding the foregoing,  no Investor shall be
required to make any  representations to the underwriter,  other than those with
respect to itself and the  Registrable  Securities  owned by it,  including  its
right to sell the Registrable  Securities,  and any  indemnification in favor of
the  underwriter by the Investors  shall be several and not joint.  The scope of
any  indemnification  in favor of an  underwriter  shall be  limited to the same
extent as the indemnity provided in Section 6(b) hereof.

        6. Indemnification.

                   (a)   Indemnification  by  the  Company.   The  Company  will
indemnify and hold harmless each Investor and its officers,  directors, members,
employees and agents, successors and assigns, and each other person, if any, who
controls that Investor  within the meaning of the 1933 Act,  against any losses,
claims,  damages  or  liabilities,  joint or  several,  to which they may become
subject  under  the 1933 Act or  otherwise,  insofar  as those  losses,  claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue  statement or alleged untrue  statement of any material fact
contained in any Registration Statement, any preliminary prospectus or final

                                        6
<PAGE>

prospectus  contained therein, or any amendment or supplement thereof;  (ii) any
blue sky application or other document executed by the Company  specifically for
that purpose or based upon written information furnished by the Company filed in
any  state  or  other  jurisdiction  in  order  to  qualify  any  or  all of the
Registrable  Securities under the securities laws thereof (any such application,
document  or  information  herein  called a "Blue Sky  Application");  (iii) the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements  therein not  misleading;  or
(iv) any  violation  by the  Company  or its  agents  of any rule or  regulation
promulgated  under the 1933 Act  applicable  to the  Company  or its  agents and
relating to action or inaction  required of the Company in  connection  with the
registration  and will  reimburse  the  Investor,  and each  officer,  director,
member,  employee  or agent and each  controlling  person for any legal or other
expenses  reasonably  incurred  by  them in  connection  with  investigating  or
defending any loss, claim, damage, liability or action; provided,  however, that
the  Company  will not be liable in any case if and to the extent that the loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue  statement or omission or alleged  omission so made in conformity
with information furnished by that Investor or the controlling person in writing
specifically for use in the Registration Statement or Prospectus.

                   (b) Indemnification by the Investors.  In connection with any
registration pursuant to the terms of this Agreement, each Investor will furnish
to the Company in writing the  information  as the Company  reasonably  requests
concerning  the holders of  Registrable  Securities  or the  proposed  manner of
distribution for use in connection with any Registration Statement or Prospectus
and agrees,  severally but not jointly,  to indemnify and hold harmless,  to the
fullest extent permitted by law, the Company, its directors, officers, employees
and each person who  controls  the Company  (within the meaning of the 1933 Act)
against  any  losses,  claims,  damages,   liabilities  and  expense  (including
reasonable attorney fees) resulting from any untrue statement of a material fact
or any  omission of a material  fact  required to be stated in the  Registration
Statement or  Prospectus  or  preliminary  prospectus or amendment or supplement
thereto or  necessary  to make the  statements  therein not  misleading,  to the
extent,  but only to the  extent  that  the  untrue  statement  or  omission  is
contained  in  any  information   furnished  by  the  Investor  to  the  Company
specifically  for  inclusion  in the  Registration  Statement or  Prospectus  or
amendment or supplement thereto.

                   (c)  Conduct  of  Indemnification   Proceedings.  Any  person
entitled  to  indemnification  hereunder  shall  (i) give  prompt  notice to the
indemnifying  party of any claim with respect to which it seeks  indemnification
and (ii) permit the  indemnifying  party to assume the defense of the claim with
counsel  reasonably  satisfactory  to the indemnified  party;  provided that any
person  entitled  to  indemnification  hereunder  shall have the right to employ
separate  counsel and to participate  in the defense of the claim,  but the fees
and expenses of that counsel  shall be at the expense of that person  unless (a)
the  indemnifying  party has  agreed to pay those fees or  expenses,  or (b) the
indemnifying  party  shall have  failed to assume  the  defense of the claim and
employ counsel  reasonably  satisfactory to that person or (c) in the reasonable
judgment of that person, based upon written advice of its counsel, a conflict of
interest exists between that person and the  indemnifying  party with respect to
the claims (in which case,  if the person  notifies  the  indemnifying  party in
writing that the person elects to employ separate  counsel at the expense of the
indemnifying  party, the  indemnifying  party shall not have the right to assume
the defense of the claim on behalf of that person); and provided, further, that

                                        7
<PAGE>

the failure of any indemnified  party to give notice promptly as provided herein
shall not relieve the indemnifying party of its obligations hereunder, except to
the extent that the failure to give notice promptly shall  materially  adversely
affect the indemnifying  party in the defense of the claim or litigation.  It is
understood  that the  indemnifying  party  shall  not,  in  connection  with any
proceeding in the same jurisdiction, be liable for fees or expenses of more than
one separate firm of attorneys at any time for all the indemnified  parties.  No
indemnifying  party will, except with the consent of the indemnified  party, not
to be unreasonably withheld,  consent to entry of any judgment or enter into any
settlement that does not include as an unconditional  term thereof the giving by
the  claimant  or  plaintiff  to the  indemnified  party of a  release  from all
liability in respect of the claim or litigation.

                   (d)  Contribution.  If for  any  reason  the  indemnification
provided  for in the  preceding  paragraphs  (a)  and (b) is  unavailable  to an
indemnified  party or insufficient to hold it harmless,  other than as expressly
specified  therein,  then the indemnifying  party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in that  proportion as is appropriate to reflect the relative fault
of the  indemnified  party  and the  indemnifying  party,  as well as any  other
relevant   equitable   considerations.    No   person   guilty   of   fraudulent
misrepresentation  within the meaning of Section  11(f) of the 1933 Act shall be
entitled  to  contribution   from  any  person  not  guilty  of  the  fraudulent
misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable  Securities  be greater in amount than the dollar  amount of the net
proceeds (net of all expenses  paid by that holder in connection  with any claim
relating  to this  Section  6 and the  amount  of any  damages  the  holder  has
otherwise  been  required  to pay by reason  of the  untrue  or  alleged  untrue
statement or omission or alleged  omission)  received by it upon the sale of the
Registrable Securities giving rise to the contribution obligation (or that could
be received by the Investor upon the sale of the Registrable Securities included
in the Registration  Statement at fair market value on the date of determination
of liability to the extent any Registrable Securities remain unsold).

         7. Miscellaneous.

                   (a)  Amendments  and Waivers.  This  Agreement may be amended
only by a writing signed by the Company and the Required Investors.  The Company
may take  any  action  herein  prohibited,  or omit to  perform  any act  herein
required to be  performed  by it, only if the Company  shall have  obtained  the
written  consent to the  amendment,  action or omission to act, of the  Required
Investors.

                   (b) Notices.  All notices and other  communications  provided
for or permitted hereunder shall be in writing, shall specifically refer to this
Agreement,  and shall be delivered or transmitted by reliable  overnight courier
or other reliable delivery  service,  and shall be addressed to the party at the
address set forth on the signature page hereof.

                   (c) Assignments and Transfers by Investors. The provisions of
this  Agreement  shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign,
in  whole  or from  time to time in  part,  to one or more  persons  its  rights
hereunder in  connection  with the transfer of  Registrable  Securities  by that
Investor to that person,  provided  that that  Investor  complies  with all laws
applicable  thereto,  provides  written  notice  of  assignment  to the  Company
promptly  after  the  assignment  is  effected  and  the  assignee   executes  a
counterpart to this Agreement assuming all rights and obligations of an Investor
hereunder.

                                        8
<PAGE>

                   (d) Assignments and Transfers by the Company.  This Agreement
may not be  assigned by the Company  without  the prior  written  consent of the
Required Investors,  provided,  however,  that the Company may assign its rights
and delegate its duties  hereunder to any surviving or successor  corporation in
connection  with  a  merger  or   consolidation  of  the  Company  with  another
corporation,  or a sale,  transfer or other  disposition of all or substantially
all of the Company's  assets to another  corporation,  without the prior written
consent of the  Required  Investors,  after  notice duly given by the Company to
each Investor;  provided that such successor  corporation  assumes the Company's
obligations hereunder.

                   (e) Benefits of the  Agreement.  The terms and  conditions of
this Agreement  shall inure to the benefit of and be binding upon the respective
permitted  successors  and assigns of the  parties.  Nothing in this  Agreement,
express or implied,  is intended to confer upon any party other than the parties
hereto  or  their  respective  successors  and  assigns  any  rights,  remedies,
obligations,  or  liabilities  under or by reason of this  Agreement,  except as
expressly provided in this Agreement.

                   (f)  Counterparts;  Faxes.  This Agreement may be executed in
two or more counterparts,  each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  This Agreement may
also be executed via facsimile, which shall be deemed an original.

                   (g) Titles and  Subtitles.  The titles and subtitles  used in
this  Agreement  are used for  convenience  only and are not to be considered in
construing or interpreting this Agreement.

                   (h)  Severability.  Any provision of this  Agreement  that is
prohibited or unenforceable in any jurisdiction  shall, as to that jurisdiction,
be ineffective to the extent of that  prohibition  or  unenforceability  without
invalidating the remaining  provisions  hereof but shall be interpreted as if it
were  written  so as to be  enforceable  to  the  maximum  extent  permitted  by
applicable  law, and the  prohibition or  unenforceability  in any  jurisdiction
shall  not  invalidate  or  render  unenforceable  that  provision  in any other
jurisdiction.  To the extent  permitted by  applicable  law, the parties  hereby
waive any  provision of law that renders any  provisions  hereof  prohibited  or
unenforceable in any respect.

                   (i) Further Assurances. The parties shall execute and deliver
all  further  instruments  and  documents  and take  all  other  actions  as may
reasonably be required to carry out the transactions  contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

                   (j) Entire  Agreement.  This  Agreement  is  intended  by the
parties as a final  expression of their  agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior  agreements  and  understandings  between the parties with respect to such
subject matter.

                                        9
<PAGE>

                   (k) Governing Law;  Consent to  Jurisdiction;  Waiver of Jury
Trial.  This Agreement  shall be governed by, and construed in accordance  with,
the  internal  laws of the State of Nevada  without  regard to the choice of law
principles  thereof.  Each of the  parties  hereto  irrevocably  submits  to the
exclusive  jurisdiction  of the state and federal  courts of the State of Nevada
for the  purpose of any suit,  action,  proceeding  or  judgment  relating to or
arising out of this Agreement and the transactions  contemplated hereby. Service
of process in connection with any such suit,  action or proceeding may be served
on each party hereto  anywhere in the world by the same methods as are specified
for the  giving of notices  under this  Agreement.  Each of the  parties  hereto
irrevocably  consents  to the  jurisdiction  of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding  brought in such courts and irrevocably  waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient  forum.  EACH OF THE PARTIES  HERETO  WAIVES ANY RIGHT TO REQUEST A
TRIAL BY JURY IN ANY  LITIGATION  WITH RESPECT TO THIS  AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

         [Remainder of page intentionally blank; signature page follows]

                                       10
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Registration Rights
Agreement or caused their duly authorized  officers to execute this Registration
Rights Agreement as of the date first above written.

                          ALTAIR NANOTECHNOLOGIES, INC.

                            By: /s/ Edward Dickinson
                                   ---------------------------------------------
                             Name: Edward Dickinson
                                   ---------------------------------------------
                         Title: Chief Financial Officer
                                   ---------------------------------------------

                          Address:         Altair Nanotechnologies, Inc.
                                           204 Edison Way
                                           Reno, Nevada  89502
                                           Attn:  Corporate Secretary
                            Facsimile: (775) 856-1619

                             TOYOTA ON WESTERN, INC.

                              By: /s/ Louis Schnur
                                   ---------------------------------------------
                          Name:    Louis Schnur
                                   ---------------------------------------------
                          Title:   President
                                   ---------------------------------------------

                          Address:          Toyota On Western
                                            6941 South Western Avenue
                                            Chicago, Illinois  60636
                            Facsimile: (773) 776-4584

                                       11

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