Document:

AMENDMENT NO. 1
                                       TO
                             STOCK PURCHASE WARRANTS

         This Amendment No. 1 to Stock Purchase  Warrants (this  "Amendment") is
entered  into as of December  28, 2001 (the  "Effective  Date"),  by and between
Altair  International Inc., an Ontario corporation (the "Company") and Doral 18,
LLC ("Holder").

                                   Background

         A. During the period between December 15, 2000 and the day prior to the
Effective  Date,  the Company has issued to Holder to the warrants  described on
Exhibit A hereto (each, a "Warrant"; collectively, the "Warrants").

         B. The  Company,  certain  affiliates  of the  Company  and  Holder are
entering  into a Note  Termination  and  Issuance  Agreement  (the  "Termination
Agreement")  as of the  Effective  Date.  In  connection  with  the  Termination
Agreement,  the  Company  and Holder  desire to amend the  Warrants as set forth
herein.

                                    Agreement

         NOW  THEREFORE,  in  consideration  of the mutual  covenants  set forth
herein,  in the  Termination  Agreement and in the Warrants,  and other good and
valuable   consideration,   the  receipt   and   adequacy  of  which  is  hereby
acknowledged, the Company and Holder hereby agree as follows:

         1.  Definitions.  Capitalized  terms used but not defined  herein shall
have the meaning set forth in the Warrants.

         2.  Amendment  of Exercise  Price.  Section  1(b)(xiii)  of each of the
Warrants is hereby  deleted and replaced with the following:  "Warrant  Exercise
Price" means $1.50, subject to adjustment as provided in Section 3.

         3.  Deletion of Rounddown Provisions. The following Sections of each of
the Warrants are hereby deleted in their entirety:  Section 2(f),  Section 3(a),
Section 3(c), Section 3(d), Section 3(g) and Section 3(k).

         4.  Ratification  of  Warrants.  Except as  expressly  amended  by this
Amendment,  the terms and conditions of each of Warrants are hereby ratified and
confirmed by the parties hereto and thereto.

         5.  Counterparts. This Amendment may be signed in counterparts,  all of
which taken together shall constitute a single integrated agreement. A facsimile
copy of this Amendment or any counterpart thereto shall be valid as an original.

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         IN WITNESS  WHEREOF,  the Company and Holder have caused this Amendment
No. 1 to Stock Purchase  Warrants to be executed  effective as of the date first
set forth above.

                      The Company

                               Altair International, Inc.

                               By: /s/ William P. Long
                                        _________________, its ___________

                      Holder

                               Doral 18, LLC

                               By: /s/ David White
                                        _________________, its ___________

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                                    Exhibit A
                                       to
                      Amendment to Stock Purchase Warrants

                                    WARRANTS

         ------------------ ------------------------- -------------------------
         Name of Holder     Date of Issuance          Number of Warrants
         ------------------ ------------------------- -------------------------
         Doral 18, LLC      December 15, 2000         350,000
         ------------------ ------------------------- -------------------------
         Doral 18, LLC      June 7, 2001              150,000
         ------------------ ------------------------- -------------------------
         Doral 18, LLC      June 7, 2001              150,000
         ------------------ ------------------------- -------------------------

                                       3This Secured  Term Note and any  securities  to which Holder  hereof is
entitled  upon  exercise  of exchange  rights  arising  hereunder  have not been
registered under the Securities Act of 1933, as amended, or any applicable state
securities acts and may not be offered sold, pledged or otherwise disposed of in
the  absence  of  an  effective  registration  statement  or an  exemption  from
registration under such acts.

                                Secured Term Note

Chicago, Illinois
December 28, 2001                                            $2,000,000 (U.S.D.)

         FOR VALUE RECEIVED, Altair International,  Inc., an Ontario corporation
(the  "Company"),  Altair  Nanomaterials,  Inc., a Nevada  corporation,  Mineral
Recovery Systems,  Inc., a Nevada  corporation,  and Fine Gold Recovery Systems,
Inc., a Nevada corporation (collectively,  the "Consolidated Companies"), hereby
jointly  and  severally  promise to pay to the order of Doral 18,  LLC, a Cayman
Islands limited liability company or registered assigns ("Holder") the principal
amount  of Two  Million  (U.S.)  Dollars  ($2,000,000)  on March  31,  2003 (the
"Maturity Date"),  and to pay interest on the unpaid principal balance hereof as
described  in Section 2 hereof,  at the rate of Eleven  Percent  (11%) per annum
from the date hereof (the "Issuance  Date") until the unpaid  principal  balance
becomes due and payable, whether at maturity, upon acceleration, upon prepayment
in accordance  with the terms hereof.  Interest on unpaid  principal  under this
Secured Term Note (this "Note") shall be computed on the basis of a 365-day year
and actual  days  elapsed  and shall be payable as provided in Section 2 hereof.
Any amount of this Note which is not paid when due shall  bear  interest  at the
rate of 18% per annum (prorated for partial months) (rather than at the rate set
forth above) until the same is paid in full (the amount of such interest payment
may be referred to in this Note as "Default Interest").  Any amount with respect
to which an "Exchange  Right"  pursuant to Section 2(B) hereof has accrued shall
be deemed to have been paid when due.

         1.  Payment Terms.

             A.  Method of Payment. All  payments of  principal  and interest on
this Note (to the extent such  principal  and/or  interest is not  exchanged for
common  shares of the  Company  ("Common  Stock") in  accordance  with the terms
hereof),  shall be made in lawful money of the United  States of America by wire
transfer of immediately  available funds as follows:  American National Bank and
Trust, 120 South LaSalle Street, Chicago, IL 60603, ABA 071000770, FBO Doral 18,
LLC,  A/C  5330299586  or to such other  account as Holder may from time to time
designate by not less than 10 days prior written  notice in accordance  with the
provisions of this Note. Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a Business Day (as defined below),  the
same shall  instead be due on the next  succeeding  day which is a Business  Day
and,  in the case of any  interest  payment  date which is not the date on which
this Note is paid in full,  the  extension of the due date thereof  shall not be
taken into  account for  purposes of  determining  the amount of interest due on
such date.  For purposes of this Note,  "Business  Day" shall mean any day other
than a  Saturday,  Sunday  or a day on  which  commercial  banks  in the City of
Chicago, Illinois are authorized or required by law or executive order to remain
closed.

             B.  Prepayments.  This  Note  may be  prepaid  at any  time  by the
Consolidated  Companies but shall be subject to a prepayment penalty equal to 5%
of the  principal  amount  of the Note  being  prepaid.  Any  prepayment  by the

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Consolidated  Companies  shall be made in cash  and  shall  be  applied  against
amounts  due and payable in the manner as  determined  by the Holder in its sole
and absolute discretion.

         2.  Redemption or Exchange of Accruing Interest.

             A.  Monthly  Interest  Payment.  Commencing  on the  first  monthly
anniversary of the Issuance Date and  continuing on each monthly  anniversary of
the Issuance Date thereafter (each such monthly anniversary,  a "Due Date"), the
Consolidated  Companies shall be obligated to pay to Holder, as provided in this
Section 2(A) or Section 2(B) below,  an amount equal to all unpaid interest that
has accrued and since the immediately  preceding Due Date (the "Monthly  Payment
Amount").  Notwithstanding  the  foregoing,  commencing  on the  first  Due Date
subsequent to the Issuance  Date,  and  continuing on each Due Date  thereafter,
subject to the  existence  of a Cash Payment  Event  described in Section 4, the
Company  shall  notify  Holder as to whether  the  Consolidated  Companies  will
satisfy all or a portion of the Monthly  Payment Amount through  redemption,  as
described in the following sentence (an "Optional Monthly  Redemption").  If the
Consolidated  Companies elect to satisfy all or part of a Monthly Payment Amount
through an Optional Monthly Redemption,  the Consolidated Companies shall pay to
Holder  that  portion  of the  Monthly  Payment  Amount  that  the  Consolidated
Companies have elected to redeem in cash on or before the respective Due Date.

             B.  Accrual of Exchange Right.  Subject to the  existence of a Cash
Payment Event described in Section 4, if the Consolidated Companies elect not to
redeem an entire Monthly Payment Amount through an Optional  Monthly  Redemption
as provided in Section 2(A),  the portion of the Monthly  Payment Amount that is
not redeemed through an Optional Monthly  Redemption on or before the respective
Due Date (the "Exchange  Amount")  shall become  immediately  exchangeable  into
shares of Common  Stock at a price  equal to 75% of the  average of the  closing
price of the Common  Stock (as reported by  Bloomberg)  for the five (5) trading
days ending on the trading day immediately  preceding the respective Due Date or
(the "Exchange Price").  Thereafter,  so long as the exchange is permitted under
all  applicable  laws and  regulations,  Holder shall be entitled to convert the
Exchange Amount into fully paid and nonassessable  shares of Common Stock at the
Exchange Rate applicable to such Exchange Amount. The Exchange Rate with respect
to any Exchange  Amount shall be a number of shares of Common Stock equal to the
Exchange  Amount  divided by the  Exchange  Price  applicable  to such  Exchange
Amount.  The  exchange  rights of Holder  described  in this  Section  2(B) (the
"Exchange  Rights") shall be cumulative and,  subject to Section 2(C),  shall be
exercisable  in whole or in part at any time prior to  repayment  in full of the
Note.

             C.  Redemption  of  Exchange  Right.  At any time the  Consolidated
Companies have paid, or intend to pay, all outstanding  principal under the Note
in full, the Company may give Holder written  notice (the  "Redemption  Notice")
stating  that the  Consolidated  Companies  have  paid,  or intend  to pay,  all
outstanding  principal  under the Note in full and specifying the portion of any
accumulated and unexercised Exchange Rights the Consolidated Companies intend to
redeem in  connection  therewith.  Upon receipt of a Redemption  Notice,  Holder
shall have a period of three  Business  Days during which to exercise any or all
Exchange Rights that may be subject to such Redemption  Notice,  after which the
Consolidated  Companies  may redeem the number of  accumulated  and  unexercised
Exchange  Rights  designated in the Exchange Notice (or a lesser amount equal to
all accumulated and unexercised  Exchange Rights if such number is less than the
number  specified  in the  Redemption  Notice)  in  exchange  for the  "Exchange
Redemption  Price." The Exchange  Redemption Price shall be equal to the product
of 1.05  multiplied by the aggregate  Exchange  Amounts for all Exchange  Rights
being redeemed.

             D.  Exercise of Exchange  Right.  The  exchange  or  conversion  of
Exchange Rights under this Note shall be conducted in the following manner:

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<PAGE>

                 (i) Holder's Delivery Requirements. To exercise any accumulated
Exchange  Rights  on any date (an  "Exchange  Date"),  Holder  hereof  shall (A)
transmit by facsimile (or otherwise  deliver),  for receipt on or prior to 11:59
p.m.,  Eastern Time on such date, a copy of a fully executed  Notice of Exchange
in the form attached hereto as Exhibit A (an "Exchange Notice") to the Company.

                 (ii) Company's Response.  Upon receipt by the Company of a copy
of a Exchange Notice, the Company shall as soon as practicable,  but in no event
later than one (1) Business Day after receipt of such Exchange Notice, send, via
facsimile,  a confirmation  of receipt of such Exchange Notice to Holder and the
transfer agent of the Company, as the same may be designated by the Company from
time to time (the "Transfer  Agent"),  which  confirmation  shall  constitute an
instruction to the Transfer Agent to process such Exchange  Notice in accordance
with the terms  hereof.  Upon  receipt  by the  Transfer  Agent of a copy of the
executed  Exchange  Notice,  the  Transfer  Agent  shall,  no later than the 2nd
trading day following  the date of the  Company's  receipt by it of the Exchange
Notice,  (A) issue and surrender to a common  carrier for overnight  delivery to
Holder's  brokerage  account #70357 (the "Doral Brokerage  Account") with Credit
Suisse First Boston (the  "Broker"),  a  certificate,  registered in the name of
Holder,  for the  number  of shares of  Common  Stock to which  Holder  shall be
entitled,  or (B) in the  event  the  Transfer  Agent  is  participating  in The
Depository  Trust Company ("DTC") Fast Automated  Securities  Transfer  Program,
upon the  request of Holder,  credit such  aggregate  number of shares of Common
Stock to which Holder shall be entitled to the Broker's balance account with DTC
through its Deposit Withdrawal Agent Commission system to be further credited to
the Doral Brokerage Account by the Broker. Delivery of shares in accordance with
Section  2(D)(ii)  shall be  considered  payment in full of the Exchange  Amount
designated in the Exchange Notice.

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

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

                 (v)  Book-Entry.  Upon  exercise  of any  accumulated  Exchange
Rights  hereunder  in  accordance  with the terms  hereof,  Holder  shall not be
required  to  physically  surrender  this Note to the  Company.  Holder  and the
Company shall maintain records showing the respective Exchange Amounts that have
been accumulated, the Exchange Rates applicable to such Exchange Amounts and the
Exchange Amounts  exchanged from time to time and the dates of such exchanges or
shall use such other method,  reasonably satisfactory to Holder and the Company,
so as not to require physical surrender of this Note upon each such exchange. In
the event of any dispute or  discrepancy,  such records of the Company  shall be
controlling and determinative in the absence of manifest error.

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<PAGE>

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

                 (vii)  Fractional  Shares.  The  Company  shall  not  issue any
fraction of a share of Common  Stock upon any exercise of Exchange  Rights.  All
shares of Common Stock (including  fractions  thereof) issuable upon exchange of
this Note by a holder  thereof shall be aggregated  for purposes of  determining
whether the  exchange  would  result in the issuance of a fraction of a share of
Common  Stock.  If, after the  aforementioned  aggregation,  the issuance  would
result in the  issuance  of a fraction of a share of Common  Stock,  the Company
shall  round such  fraction of a share of Common  Stock up (if  greater  than or
equal to .50) or down (if less than .50)to the nearest whole share.

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

             F.  Reservation  of  Shares.  The  Company  shall,  so  long as any
principal  amount of the Note is outstanding,  reserve and keep available out of
its  authorized and unissued  Common Stock,  solely for the purpose of effecting
the exchange of Exchange Rights,  such number of shares of Common Stock as shall
from  time to time be  sufficient  to effect  the  exchange  of all  accumulated
Exchange Rights.

         3.  Anti-Dilution.

             A.  Certain   Definitions.   For  purposes  of  this  Section,  the
following terms shall have the following meanings:

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

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

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

             B.  Stock Dividends, Subdivisions and Combinations. If and whenever
the Company  subsequent  to the date hereof:  (A) declares a dividend  upon,  or
makes any  distribution  in respect  of, any of its  capital  stock,  payable in
shares of Common Stock,  Exchangeable  Securities or Stock Purchase Rights;  (B)
subdivides its outstanding shares of Common Stock into a larger number of shares
of Common Stock, or (C) combines its  outstanding  shares of Common Stock into a
smaller number of shares of Common Stock,  then the Exchange Price applicable to
all accumulated  Exchange  Amounts shall be adjusted to that price determined by
multiplying  the Exchange Price in effect  immediately  prior to such event by a
fraction (A) the  numerator  of which shall be the total  number of  outstanding
shares of Common Stock  immediately prior to such event, and (B) the denominator
of which  shall be the total  number  of  outstanding  shares  of  Common  Stock
immediately after such event, treating as outstanding all shares of Common Stock
issuable upon exchanges or exchanges of Exchangeable  Securities  (including any
Notes held by Holder) and  exercises of Stock  Purchase  Rights  (including  any
Warrants held by Holder).

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

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

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         4.  Mandatory Payment of Monthly Payment in Cash.

             A.  Mandatory  Cash  Payment  Events.  On the Due Date  immediately
following the occurrence of a Cash Payment Event (as defined below), and on each
Due Date thereafter until the Due Date following the "cure" of such Cash Payment
Event, the Consolidated Companies will be required to redeem the Monthly Payment
Amount for such  month,  on or before the Due Date,  at a price equal to 100% of
such Monthly  Payment  Amount.  On each Due Date  following the "cure" of a Cash
Payment  Event,  the  Consolidated  Companies  shall  be  permitted,   at  their
discretion,  to effect an Option Monthly  Redemption as described in Section 2.A
or  to  permit   Exchange   Rights  to  accrue  as  described  in  Section  2.B.
(Notwithstanding  a subsequent  "cure" of a Cash Payment Event, the Consolidated
Companies  shall not be permitted to request a refund of Monthly Payment Amounts
paid in cash or to cause Exchange  Rights to accrue with respect  thereto).  For
purposes of this Note, "Cash Payment Event" means any of the following events or
time periods:

                 (i)  the suspension  of the Common  Stock from trading for four
(4) consecutive  trading days or for a total of ten (10) trading days out of the
preceding  120 days  (until  such event has been cured by the  completion  of 20
consecutive trading days without a suspension of the Common Stock from trading);

                 (ii) if for any reason  following  January 7, 2002 sales cannot
be made for four (4) consecutive trading days or for a total of ten (10) trading
days  out of the  preceding  120 days  pursuant  to the  Company's  registration
statement,  file no. 333-54092 (the "Existing  Registration  Statement") because
the  Company  has  filed one or more  post-effective  amendments  thereto,  (the
"Existing  Registration  Statement  Amendment") and such amendment or amendments
have not been  declared  effective,  provided,  however,  that such Cash Payment
event  shall  be  cured  at any  time  sales  can be  made  under  the  Existing
Registration Statement for 20 consecutive trading days;

                 (iii)if,  without  shareholder  approval,   the issuance of all
shares of Common Stock issuable upon exercise of Exchange Rights,  together with
the shares of Common Stock issued to date upon exercise,  conversion or exchange
of all exchange  rights and warrants issued to Holder pursuant to the Securities
Purchase  Agreement  dated December 15, 2000 between the Company and Holder (the
"Purchase  Agreement") and the Note Termination and Issuance  Agreement dated as
of  even  date  herewith  among  the   Consolidated   Parties  and  Holder  (the
"Termination Agreement"), would result in the issuance of more than 19.9% of the
aggregate number of outstanding shares of Common Stock on December 15, 2000;

                 (iv) if the  closing  price  of a share  of  Common  Stock  (as
reported by  Bloomberg)  has been below $1.00 for ten  consecutive  trading days
(until such event has been cured by the closing price of a share of Common Stock
(as reported by  Bloomberg)  subsequently  equaling or  exceeding  $1.00 for ten
consecutive trading days thereafter); or

                 (v)  if for any reason following the effective  date of the New
Registration  Statement (as defined in the Registration Rights Agreement entered
into between Lender and the Company on even date herewith)  sales cannot be made
for four (4)  consecutive  trading  days or for a total of ten (10) trading days
out of the preceding 120 days pursuant to the New Registration Statement because
the Company  has filed one or more  post-effective  amendments  thereto and such
amendments have not yet been declared effective;  provided,  however,  that such
Cash  Payment  event  shall be cured at any time  sales  can be made  under  the
Registration  Statement for 20 consecutive  trading days.

             B.  Mechanics  of  Cash  Payment.  Within  one (1)  day  after  the
occurrence of a Cash Payment  Event,  the Company shall deliver a written notice
thereof via facsimile and overnight  courier ("Notice of Redemption") to Holder.

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Until such Cash Payment Event has been cured, the Company shall pay each Monthly
Payment Amount in cash on or before the relevant Due Date as provided in Section
1(A).  As long as the Company  pays each  Monthly  Payment  Amount in cash on or
before the  relevant  Due Date prior to the cure of a Cash  Payment  Event,  the
occurrence of such Cash Payment Event shall not be an Event of Default under the
Note.

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

         7.  Security  for  Note.   Notwithstanding   the   termination  of  the
$7,000,000  Asset Backed  Exchangeable  Term Note dated December 15, 2000 as the
same was amended on August 31, 2001 described  therein (the "Prior Note"),  this
Note shall be secured by the Security  Agreement  dated December 15, 2000 as the
same was amended on August 31, 2000 between Altair Nanomaterials, Inc. and Doral
18, LLC (including the Intellectual Property Security Agreement attached thereto
as  Exhibit  A as the same  was  amended  on  August  31,  2000  (the  "Security
Agreement"),  the Stock Pledge  Agreement  dated December 15, 2000 between Doral
and Altair,  and the Stock  Pledge  Agreement  dated  December  15, 2000 between
Mineral Recovery  Systems,  Inc. and Doral 18, LLC as the same was amended as of
the date hereof (the "Stock  Pledge  Agreements")  to the same extent and in the
same  manner  as the Prior  Note and all  references  to the  Prior  Note in the
Security  Agreement and the Stock Pledge  Agreements shall be deemed to refer to
this Note.

         8.  Defaults and Remedies.

             A.  Events of  Default.  An "Event of  Default"  is (i)  default in
payment of principal, interest or Default Interest on this Note when and as due;
(ii) failure by the Consolidated  Companies for thirty (30) days after notice to
it to comply with any other material  provision of this Note;  (iii) any default
under or acceleration prior to maturity of any mortgage, indenture or instrument
under which  there may be issued or by which  there may be secured or  evidenced
any  indebtedness  for money  borrowed by the Company or for money  borrowed the
repayment of which is guaranteed by the Company,  whether such  indebtedness  or
guarantee now exists or shall be created  hereafter in principal  amount greater
than $200,000;  (iv) if any representation made by the Consolidated Companies in
the Termination Agreement was untrue as of the date it was made; (v) any failure
to  observe  or  perform  any of the  covenants  set  forth  in the  Termination
Agreement  which is not remedied by the  Consolidated  Companies  within 30 days
after  notice  thereof  to the  Company  by  Holder;  (vi) any  event  occurs or

                                       7
<PAGE>

condition  exists which is  specified as an event of default  under the Security
Agreement  or the Stock Pledge  Agreements  or the failure to observe or perform
any of the  covenants  set  forth in the  Security  Agreement  or  Stock  Pledge
Agreements  which is not remedied  within the  applicable  cure period,  if any;
(vii) if any of the Consolidated  Companies pursuant to or within the meaning of
any  Bankruptcy  Law (as defined  below):  (A) commences a voluntary  case;  (B)
consents to the entry of an order for relief against it in an involuntary  case;
(C) consents to the  appointment  of a Custodian (as defined below) of it or for
all or substantially all of its property; (D) makes a general assignment for the
benefit of its creditors;  or (E) admits in writing that it is generally  unable
to pay its debts as the same become due; (vii) a court of competent jurisdiction
enters  an order or decree  under any  Bankruptcy  Law that:  (A) is for  relief
against any of the Consolidated Companies in an involuntary case; (B) appoints a
Custodian for any of the Consolidated  Companies or for all or substantially all
of their  properties;  or (C) orders the liquidation of any of the  Consolidated
Companies or any subsidiary  thereof,  and the order or decree remains  unstayed
and in effect for ninety  (90)  days;  (viii) if the "cash or cash  equivalents"
item reflected on the balance sheet of the Consolidated  Companies included in a
Quarterly  Report on Form 10-Q or an Annual  Report on Form 10-K  filed with the
Securities  and Exchange  Commission is less than  $250,000;  or (ix) if, at any
time the closing price of the Common Stock (as reported by  Bloomberg)  has been
below $1.00 for three  consecutive  trading  days and Holder  requests a current
balance sheet and/or copies of cash or cash equivalent account statements of the
Consolidated  Companies  as of the  date  of such  request,  the  "cash  or cash
equivalents" item reflected on such balance sheet of the Consolidated  Companies
is less than  $250,000.  The term  "Bankruptcy  Law"  means the  Bankruptcy  and
Insolvency Act (Canada),  the  Companies'  Creditors  Arrangement  Act (Canada),
Title 11, U.S. Code, or any similar  Federal,  Provincial.  or State Law for the
relief of debtors. The term "Custodian" means any receiver,  trustee,  assignee,
liquidator or similar official under any Bankruptcy Law.

             B.  Remedies.  If an Event of  Default  occurs  and is  continuing,
Holder may notify the Company that it is declaring  all of this Note,  including
any interest and Default  Interest and other amounts due or to become due, to be
due and  payable  immediately,  except  that in the case of an Event of  Default
arising from events  described in clauses (vi) or (vii),  this Note shall become
due and payable without further action or notice by Holder.

         9.  Miscellaneous Provisions.

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

             B. Termination of Previous Note. Upon the execution of this Note by
Holder, the Prior Note shall immediately and  automatically,  without any action
on the part of any  person,  be deemed to be  canceled,  terminated  and paid in
full.

             C. Lost or Stolen  Note.  Upon  receipt by the  Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note,  and, in the case of loss,  theft or  destruction,  of an  indemnification
undertaking  by Holder to the  Company in a form  reasonably  acceptable  to the
Company and, in the case of mutilation,  upon surrender and  cancellation of the
Note, the  Consolidated  Companies  shall execute and deliver a new Note of like
tenor and date.

             D. Payment of Collection, Enforcement and Other Costs. If: (i) this
Note is placed in the hands of an attorney for  collection or  enforcement or is
collected  or  enforced  through  any legal  proceeding;  or (ii) an attorney is
retained to  represent  Holder of this Note in any  bankruptcy,  reorganization,

                                       8
<PAGE>

receivership or other  proceedings  affecting  creditors' rights and involving a
claim  under  this Note;  then the  Company  shall pay to Holder all  reasonable
attorneys'  fees,  costs and  expenses  incurred  in  connection  therewith,  in
addition to all other amounts due hereunder.

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

             F. Note  Exchangeable  for  Different  Denominations.  This Note is
exchangeable, upon the surrender hereof by Holder at the principal office of the
Company,  for a new Note or Notes (in  principal  amounts of at least  $100,000)
containing the same terms and conditions and  representing  in the aggregate the
principal  amount  of this  Note,  and each such new Note  will  represent  such
portion of such principal  amount as is designated by Holder at the time of such
surrender. The date the Consolidated Companies initially issue this Note will be
deemed to be the "Issuance Date" hereof  regardless of the number of times a new
Note shall be issued.

             G. Waiver  of  Notice.    To  the  extent  permitted  by  law,  the
Consolidated  Companies  hereby  waive  demand,  notice,  protest  and all other
demands and notices in connection  with the delivery,  acceptance,  performance,
default or enforcement of this Note.

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

             I. Remedies. The remedies provided in this Note shall be cumulative
and in addition to all other  remedies  available  under this Note, at law or in
equity  (including  a decree of specific  performance  and/or  other  injunctive
relief),  no remedy contained herein shall be deemed a waiver of compliance with
the  provisions  giving  rise to such  remedy and  nothing  herein  shall  limit
Holder's  right  to  pursue  actual  damages  for any  failure  by  Consolidated
Companies to comply with the terms of this Note.

             J. Construction. This Note shall be deemed to be jointly drafted by
the  Company  and Holder and shall not be  construed  against  any person as the
drafter hereof.

             K. Failure or  Indulgence  Not Waiver.   No failure or delay on the
part of this Note in the  exercise of any power,  right or  privilege  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.

             L. Restrictions on Transfer.   Holder,  by acceptance of this Note,
agrees that it will not, absent any effective  registration  statement under the
1933 Act and any applicable  state  securities  acts covering the disposition of
this Note or the Common  Stock  issued in  connection  with this  Note,  sell or
transfer this Note or such shares of Common Stock,  as the case may be,  without
first providing the Company with any opinion of counsel reasonably acceptable to
the Company  (which may be counsel for the Company) to the effect that such sale
or  transfer  will be  exempt  from  registration  under  the  1933  Act and any
applicable  state  securities  acts.  Holder  consents to the  Company  making a
notation on its records or giving appropriate instructions to any transfer agent
in order to implement such restrictions on transferability.

             M. Transfer  Restriction  Legend.   Each  certificate,  if any, for
shares of Common Stock issued in connection with this Note shall,  unless at the
time of such issuance the re-sale of such shares of Common Stock, are registered
under the 1933 Act and any applicable state  securities acts, bear a legend,  in

                                       9
<PAGE>

addition to other  legends as may be required by applicable  securities  laws of
the  Province  of  Ontario,  in  substantially  the  following  form on the face
thereof:

                           THESE  SECURITIES HAVE NOT BEEN REGISTERED  UNDER THE
                  SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES ACTS
                  AND MAY NOT BE  TRANSFERRED  OR  RESOLD  WITHOUT  REGISTRATION
                  UNDER SUCH ACTS,  UNLESS IN THE OPINION OF COUNSEL  REASONABLY
                  ACCEPTABLE  TO THE  CORPORATION  (WHICH  MAY BE COUNSEL TO THE
                  CORPORATION) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACTS IS
                  AVAILABLE.

         Any certificate  issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a  public  distribution  under a  registration  statement  of the  securities
represented  thereby)  shall also bear such  legend  unless,  in the  opinion of
counsel to the Company, the securities represented thereby may be transferred as
contemplated by such holder without  violation of the registration  requirements
of the 1933 Act and any applicable state securities acts.

             N. Notices. All notices and other communications  required under or
contemplated by this Note shall be provided in the manner, and be subject to the
other terms of, Section 7(F) of the Termination Agreement.

             O. Judgment Currency.

                (i)   If, for the  purpose of  obtaining or  enforcing  judgment
against the Consolidated Companies in any court in any jurisdiction,  it becomes
necessary  to  convert  into any  other  currency  (such  other  currency  being
hereinafter  in this Section 9(O)  referred to as the  "Judgment  Currency")  an
amount due under any this Note in any currency (the "Obligation Currency") other
than the Judgment Currency, the conversion shall be made at the rate of exchange
prevailing  on the Business  Day  immediately  preceding  (A) the date of actual
payment of the amount  due, in the case of any  proceeding  in the courts of the
Province  of Ontario or in the courts of any other  jurisdiction  that will give
effect to such conversion  being made on such date, or (B) the date on which the
judgment  is given,  in the case of any  proceeding  in the  courts of any other
jurisdiction  (the  applicable date as of which such conversion is made pursuant
to this Section 9(O) being  hereinafter  in this Section 9(O) referred to as the
"Judgment Conversion Date").

                (ii)  If,  in the  case of any  proceeding  in the  court of any
jurisdiction  referred to in Section  9(O)(i),  there is a change in the rate of
exchange  prevailing between the Judgment Conversion Date and the date of actual
receipt of the amount  due in  immediately  available  funds,  the  Consolidated
Companies  shall  pay such  additional  amount  (if any,  but in any event not a
lesser amount) as may be necessary to ensure that the amount  actually  received
in the Judgment Currency,  when converted at the rate of exchange  prevailing on
the date of payment,  will produce the amount of the  Obligation  Currency which
could have been purchased with the amount of the Judgment Currency stipulated in
the  judgment  or  judicial  order at the  rate of  exchange  prevailing  on the
Judgment  Conversion Date. Any amount due from the Consolidated  Companies under
Section  9(O)(ii)  shall be due as a separate  debt and shall not be affected by
judgment  being  obtained for any other  amounts due under or in respect of this
Note.  The term  "rate of  exchange"  in this  Section  9(O)  means  the rate of
exchange at which  Holder  would,  on the  relevant  date at or about 12:00 noon
(Toronto time), be prepared to sell Canadian Dollars or US Dollars,  as the case
may be, against the Judgment Currency.

                                       10
<PAGE>

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

             Q. Criminal Rates of Interest.  If any provision of this Note would
obligate  the  Consolidated  Companies  to make any payment of interest or other
amount payable to any Holder in an amount or calculated at a rate which would be
prohibited  by law or would  result in a receipt by that Holder of interest at a
criminal rate (as such terms are  construed  under the Criminal Code (Canada) or
in  such  other  similar  applicable  legislation)  then,  notwithstanding  such
provision,  such  amount or rate  shall be deemed  to have  been  adjusted  with
retroactive  effect to the maximum  amount or rate of interest,  as the case may
be, as would  not be so  prohibited  by law or so  result  in a receipt  by that
Holder of interest at a criminal rate,  such  adjustment to be effected,  to the
extent  necessary,  as follows:  (i) firstly,  by reducing the amount or rate of
interest  required  to be paid to  Holder  under  this  Section  9(Q);  and (ii)
thereafter,  by  reducing  any fees,  commissions,  premiums  and other  amounts
required to be paid to Holder  which would  constitute  interest for purposes of
Section 347 of the Criminal Code  (Canada) or in such other  similar  applicable
legislation.  Notwithstanding  the  foregoing,  and after  giving  effect to all
adjustments contemplated thereby, if any Holder shall have received an amount in
excess of the maximum permitted by that section of the Criminal Code (Canada) or
in such  other  similar  applicable  legislation,  then  the  Company  shall  be
entitled, by notice in writing to Holder, to obtain reimbursement from Holder in
an amount equal to such  excess,  and pending  such  reimbursement,  such amount
shall be deemed to be an amount payable by Holder to the Consolidated Companies.
Any  amount  or rate of  interest  referred  to in this  Section  9(Q)  shall be
determined  in  accordance  with  generally  accepted  actuarial  practices  and
principles as an effective annual rate of interest over the term that the Note.

                                       11
<PAGE>

         IN WITNESS  WHEREOF,  the  Consolidated  Parties and Lender have caused
this Secured Term Note to be duly  executed and  delivered as of the 28th day of
December, 2001.

The "Consolidated Parties"

         ALTAIR INTERNATIONAL, INC.

         By:/s/ William P. Long
            -----------------------------------------
         Its:
              ---------------------------------------

         MINERAL RECOVERY SYSTEMS, INC.

         By:/s/ William P. Long
            -----------------------------------------
         Its:
              ---------------------------------------

         FINE GOLD RECOVERY SYSTEMS, INC.

         By:/s/ William P. Long
            -----------------------------------------
         Its:
              ---------------------------------------

         ALTAIR NANOMATERIALS, INC.

         By:/s/ C. Patrick Costin
            -----------------------------------------
         Its:
              ---------------------------------------

"Lender"

         Doral 18, LLC

         By:_______________________________
                  David White, authorized signatory

                                       12
<PAGE>

                                    EXHIBIT A

                             ISSUER EXCHANGE NOTICE

Reference is made to the  $2,000,000  Secured Term Note dated  December 28, 2001
issued  by  Altair  International,  Inc.  and  certain  subsidiaries  of  Altair
International Inc. (the "Note").  Capitalized terms used in this Issuer Exchange
Notice  shall have the meaning  set forth in the Note.  In  accordance  with and
pursuant to the Note,  the  undersigned  hereby  elects to convert the  Exchange
Amount(s)  designated  below into shares of Common  Stock at the  Exchange  Rate
applicable thereto:
<TABLE>
<CAPTION>

------------------------- -------------- -------------------------- --------------------- --------------------------
<S>                        <C>            <C>                          <C>                   <C>
 Total Monthly Payment     Applicable     Monthly Payment Amount         Applicable             Common Shares
         Amount             Due Date             Exchanged             Exchange Price        Issuable to Holder
------------------------- -------------- -------------------------- --------------------- --------------------------

------------------------- -------------- -------------------------- --------------------- --------------------------

------------------------- -------------- -------------------------- --------------------- --------------------------

------------------------- -------------- -------------------------- --------------------- --------------------------

------------------------- -------------- -------------------------- --------------------- --------------------------
</TABLE>

Acknowledged and Agreed to:

         Altair International, Inc.

         By:__________________________
         Its:__________________________

         Doral 18, LLC

         By:__________________________
         Its:__________________________

                                       13

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