Deed of Trust

APN: ______________________


WHEN RECORDED, MAIL TO: ________________________________ ________________________________ ________________________________ ________________________________


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DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
WITH ASSIGNMENT OF LEASES AND RENTS


THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING WITH ASSIGNMENT OF LEASES AND RENTS ("Deed of Trust"), is made this 8th day of August, 2002, by Altair Nanotechnologies Inc., a Canada corporation, as trustor and debtor ("Trustor"), whose address is: 1725 Sheridan Avenue, Suite 140, Cody, Wyoming 82414; to First American Title Insurance Company, a California corporation, as trustee ("Trustee"), whose address is: 1850 Mt. Diablo Boulevard, Suite 300, Walnut Creek, CA 94596; for the benefit of BHP Minerals International Inc., a Delaware corporation, as beneficiary and secured party ("Beneficiary"), whose address is: 1360 Post Oak Blvd., Suite 150, Houston, Texas 77056-3020, Attention: Legal Department.


1. Grant and Assignment. For good and valuable consideration, Trustor hereby irrevocably and unconditionally grants, transfers and assigns to Trustee, in trust, with power of sale, all that certain real property located in Washoe County, Nevada, as more particularly described in Exhibit "A" attached hereto and incorporated herein ("the Land") together with all right, title and interest of Trustor in all buildings, fixtures and improvements now located or hereafter to be constructed thereon (collectively "Improvements"), the Appurtenant Rights and Easements and the Proceeds of the Land Improvements and Appurtenant Rights and Easements, all as more particularly described below, and further grants, assigns and transfers to Beneficiary a security interest in the Wastewater System and the Proceeds of the Wastewater System, as more particularly described below;


"Appurtenant Rights and Easements" are any and all interests, claims, or rights which Trustor may hereafter acquire in the Land and Improvements, and all right, title and interest of Trustor in the appurtenances, hereditaments, privileges, reversions, remainders, profits, easements, franchises and tenements thereof, including, but not limited to, all minerals, oil, gas and other hydrocarbon substances thereon or therein, air rights, waters and water rights, "will-serve" letters, and any land lying in the streets, roads or avenues, open or proposed, in front of or adjoining the Land and Improvements, and all contract rights, development and use rights, governmental approvals, permits, licenses, applications, architectural and engineering plans, specifications and


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drawings, architectural, engineering and construction contracts, chattel paper, instruments, documents, notes, drafts and letters of credit arising from or related to the Land and Improvements (herein "Appurtenant Rights and Easements");


"Wastewater System" is all right, title and interest of Trustor now held, or hereafter acquired, in the wastewater system located on the Land, including without limitation, control boxes; Harrington Tank and filter pump; sperry filter press; 3300 gallon, 100-inch non-potable water tank; associated motors; 1100 gallon storage tank; non potable water tank numbered 30-09.140; 3000 gallon tank; white tank; Dayton Trivolt industrial duty three-phase TEFC; and associated piping and all Proceeds thereof;


"Proceeds" are all of Trustor's right, title and interest now held or hereafter acquired, to all proceeds (including claims or demands thereto) from the conversion, voluntary or involuntary, of any of the Land, Improvements, or Appurtenant Rights and Easements, or Wastewater System into cash or liquidated claims, including, without limitation, proceeds of all present and future fire, hazard or casualty insurance policies and all condemnation awards or payments in lieu thereof made by any public body or decree by any court of competent jurisdiction for taking or for degradation of the value in any condemnation or eminent domain proceeding, and all causes of action and the proceeds thereof of all types for any damage or injury to the Land, Improvements, Appurtenant Rights and Easements, or Wastewater System or any part thereof, including, without limitation, causes of action arising in tort or contract and causes of action for fraud or concealment of a material fact, and all proceeds from the sale thereof (herein collectively "Proceeds"); provided, however, that Proceeds shall not include any proceeds payable to Trustor as an additional insured under that certain environmental insurance policy for the Property to be obtained by Beneficiary in accordance with that certain Purchase and Sale Agreement between Trustor and Beneficiary dated on or about even date herewith, as a result of any losses incurred by Trustor not related to the clean-up or remediation of Hazardous Materials, as defined in Section 43 below, on, under or about the Property.


IN ADDITION, Trustor absolutely and irrevocably assigns to Beneficiary all right, title and interest of Trustor in and to (i) all leases, rental agreements and other contracts and agreements relating to use and possession of any of the Land or Improvements, or Appurtenant Rights and Easements (collectively "Leases"), and (ii) the rents, issues, profits and proceeds therefrom together with all guarantees thereof and all deposits (to the full extent permitted by law) and other security therefor (collectively "Rents"). (The Land, Improvements, Appurtenant Rights and Easements, Wastewater System, Proceeds, Leases, Rents, and all other rights, titles, and interests of Trustor described above are hereinafter collectively referred to as "the Property".)


2. Obligations Secured. Trustor makes this Deed of Trust for the purposes of securing:


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(a) Payment of all indebtedness and other obligations evidenced by that certain promissory note of even date herewith ("Note"), made by Trustor payable to the order of Beneficiary in the principal sum of Three Million and 00/100ths Dollars ($3,000,000);


(b) Payment and performance of all obligations of Trustor under this Deed of Trust, including payment of all sums expended or advanced by Beneficiary hereunder, together with interest thereon at the rate specified herein, or if no rate is specified, at the rate of seven percent per annum (the "Note Rate"), in the preservation, enforcement and realization of the rights of Beneficiary hereunder or under any of the other obligations secured hereby, including, but not limited to, attorney's fees, court costs, other litigation expenses and foreclosure expenses;


(c) Payment and performance of all future advances and other obligations that the then record owner of all or part of the Property may agree to pay or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when such obligation is evidenced by a writing which states that it is secured by this Deed of Trust;


(d) Payment and performance of all modifications, extensions and renewals (if any) of one or more of the obligations secured hereby, including without limitation (i) modifications of the required principal payment dates or interest payment dates, deferring or accelerating payment dates wholly or partly, and (ii) modifications, extensions or renewals at a different rate of interest whether or not, in the case of a note or other contract, the modification, extension or renewal is evidenced by a new or additional promissory note or other contract; and


(e) Performance of each and every obligation of Trustor as lessor or lessee under any and all leases executed in connection with the Property.


The Note and other obligations secured by this Deed of Trust are herein collectively called the "Secured Obligations". All persons who may have or acquire an interest in the Property shall be deemed to have notice of, and shall be bound by, the terms of the Note, this Deed of Trust, and any other instruments, agreements or documents made or entered into in connection herewith (collectively "Documents") and each of the Secured Obligations.


3. Assignment of Leases and Rents. Trustor does hereby sell, assign and transfer unto Beneficiary all of the leases, rents, income and profits now due and which may hereafter become due under or by virtue of any lease, whether written or oral, or any agreement for the use or occupancy of the Property, it being the intention of Trustor and Beneficiary to establish an absolute transfer and assignment of all such leases and agreements, and all of the rents and profits from the Property unto the Beneficiary, and the Trustor does hereby appoint irrevocably the Beneficiary its true and lawful attorney in its name and stead, which appointment is coupled with an interest, to collect all of said rents and profits; provided, Beneficiary grants the trustor the privilege to collect and retain such rents, income, and profits unless and until an Event of Default (as hereinafter defined) exists under this Deed of Trust. Upon the occurrence of an Event of Default, and whether before or after the institution of legal proceedings to foreclose the lien hereof or before or after sale of the Property, or during any period of redemption, and without regard to waste, adequacy of the security or solvency of the Trustor, the Beneficiary may revoke the privilege granted Trustor hereunder to collect the rents, issues and profits of the Property, and may, at its option, without notice:


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(i) In person or by agent, with or without taking possession of or entering the Property, with or without bringing any action or proceeding, give, or require Trustor to give, notice to any or all tenants under any lease authorizing and directing the tenant to pay such rents and profits to Beneficiary; collect all of the rents, issues and profits; enforce the payment thereof and exercise all of the rights of the landlord under any lease and all of the rights of Beneficiary hereunder; may enter upon, take possession of, manage and operate said Property, or any part thereof; may cancel, enforce or modify any leases, and fix or modify rents, and do any acts which the Beneficiary deems proper to protect the security hereof with or without taking possession of the Property; or


(ii) Apply for the appointment of a receiver in accordance with Nevada law, which receivership Trustor hereby consents to, who shall collect the rents, profits and all other income of any kind; manage the Property so as to prevent waste; and execute leases which may expire within or after the period of receivership.


(a) Neither the assignment of the Leases and Rents set forth above nor any other provision of any of the Documents shall impose upon Beneficiary any duty to produce Rents from the Property or cause Beneficiary to be (a) a "mortgagee in possession" for any purpose, (b) responsible for performing any of the obligations of the lessor under any Lease, or (c) responsible or liable for any waste by any lessees or any other parties, for any dangerous or defective condition of the Property, for any negligence in the management, upkeep, repair or control of the Property, or for any other act or omission by any other person. The foregoing assignment is an absolute assignment and not an assignment for security only, and Beneficiary's right to the Rents is not contingent upon its possession of the Property.


(b) Trustor hereby directs each tenant of the Property, or any portion thereof, to pay such Rents to Beneficiary or Beneficiary's agent, and irrevocably appoints Beneficiary as its true and lawful attorney-in-fact, at the option of Beneficiary, at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions and to use, in the name of Trustor or Beneficiary, for all such Leases and Rents and apply the same to the Secured Obligations; provided, however, Beneficiary confers upon Trustor the authority to collect and retain the Rents as they become due and payable, subject, however, to the right of Beneficiary to revoke said authority at any time after the occurrence of an Event of Default hereunder, and without taking possession of all or any part of the Property. Trustor covenants and agrees that prior to entering into any Lease of the Property, or any interest therein, or any portion thereof, from and after the date of this Deed of Trust, it shall provide at least fifteen (15) days' advanced written notice to Beneficiary, which notice shall identify the proposed lessee and the proposed lessee's use of the leased premises. If the proposed use includes bringing any Hazardous Materials, as defined in Section 43 below, onto the Property, and/or the use thereof on the Property by the proposed lessee, then Beneficiary shall have the right, but not the obligation, within ten (10) days after receipt of such notice, to provide Trustor with language to be included in the proposed lease regarding the use of any such Hazardous Materials, which language may include


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without limitation reasonable representations, covenants and restrictions related to such use of Hazardous Materials, as well as environmental insurance requirements applicable to the proposed lessee. Any such language provided by Beneficiary within such period must be included in the proposed lease, and the proposed lease shall not be entered into or effective unless and until such language is included in the proposed lease, and such language will not be modified by any extensions, renewals and modifications thereof without the prior written consent of Beneficiary. Trustor agrees that commencing with an event of Default, as hereinafter defined, each tenant of the Property, or any portion thereof, shall make such Rents payable to and pay such Rents to Beneficiary, or Beneficiary's agent, upon Beneficiary's written demand to each tenant therefor, without any liability on the part of such tenant to inquire further as to the existence of a Default by Trustor, provided, however, in the event of Trustor's cure of any such Default as herein provided, Trustor shall again be entitled to recover and collect such rents as provided above prior to the event of Default.


(c) Trustor shall (i) fulfill or perform each and every condition and covenant of each Lease to be fulfilled or performed by the lessor thereunder, (ii) give prompt notice to Beneficiary of any notice of default by the lessor or the lessee thereunder received by Trustor together with a complete copy of any such notice, and (iii) enforce, short of termination thereof, the performance or observance of each and every covenant and condition thereof by the lessee thereunder to be performed or observed.


(d) Trustor shall furnish to Beneficiary, within thirty (30) days after a request by Beneficiary, a written statement containing the names of all lessees of the Property, the terms of their respective Leases, the space occupied, and the rentals payable and received thereunder and a copy of each Lease.


(e) All Leases shall contain the following language, and shall not be entered into by Trustor or effective unless and until such language is included therein (and such language shall not be modified by any extensions, renewals and modifications thereof):


"This Lease, and all rights of Tenant hereunder, are and
shall be subject and subordinate to all mortgages which
may now or hereafter affect the property, the building,
and/or the leased premises, and each of the terms,
covenants and conditions thereto (the "Superior
Mortgage(s)"), whether or not such mortgages shall also
cover other lands, buildings or leases, to each and every
advance made or hereafter to be made under such mortgages,
and to all renewals, modifications, replacements and
extensions of such mortgages and spreaders and
consolidations of such mortgages. This Paragraph shall be
self-operative and no further instrument of subordination
shall be required. Tenant shall promptly execute,
acknowledge and deliver any reasonable instrument that
Landlord or the holder of any such mortgage or any of
their respective successors in interest may reasonably
request to evidence such subordination; if Tenant fails to
execute, acknowledge and deliver any such instrument
within ten (10) business days after request therefor,
Tenant hereby irrevocably constitutes and appoints
Landlord as Tenant's attorney-in-fact, coupled with an
interest, to execute and deliver any such instrument for
and on behalf of Tenant. Without limiting the foregoing,
Tenant's failure to execute, acknowledge and deliver such


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instrument within the aforesaid time period shall
constitute a Default hereunder. As used herein, the holder
of a Superior Mortgage is herein called "Superior
Mortgagee".


In the event of a default under any Superior Mortgage, the
Superior Mortgagee, in its sole and absolute discretion,
may by giving notice to Tenant in accordance with the
notice provision of this Lease or by posting notice at the
leased premises or by recording notice in the Official
Records of Washoe County, elect to either immediately
terminate this Lease or to succeed to the rights of
Landlord under this Lease. If any Superior Mortgagee
elects to succeed to the rights of Landlord under this
Lease, whether through possession or foreclosure action or
delivery of a new lease or deed (such party so succeeding
to Landlord's rights herein called "Successor Landlord"),
then, at the sole and absolute discretion of such
Successor Landlord, Tenant shall attorn to and recognize
such Successor Landlord as Tenant's landlord under this
Lease (without the need for further agreement) and shall
promptly execute and deliver any reasonable instrument
that such Successor Landlord may reasonably request to
evidence such attornment. This Lease shall continue in
full force and effect as a direct lease between the
Successor Landlord and Tenant upon all of the terms,
conditions and covenants as are set forth in this Lease,
except that the Successor Landlord shall not (a) be liable
for damages or any previous act or omission of Landlord
under this Lease, except to the extent such act or
omission shall constitute a continuing Landlord default
hereunder; (b) be subject to any offset, not expressly
provided for in this Lease; or (c) be bound by any
previous modification of this Lease or by any previous
prepayment of more than one month's Base Rent, unless such
modification or prepayment shall have been expressly
approved in writing by the Successor Landlord (or its
predecessor in interest)."


Without limitation of the foregoing requirement, any tenant entering into a Lease without such language shall be deemed to have agreed to this language as if stated in the Lease word for word.


4. Trustor acknowledges, represents and warrants that Trustor lawfully holds, owns and possesses the Property in fee simple subject to no lien, claim, security interest or encumbrance except those approved by Beneficiary in writing prior to the delivery hereof.


5. Taxes and Assessments.


(a) Trustor shall pay prior to delinquency all taxes, assessments, levies and charges of any kind or nature whatsoever imposed by any governmental or quasi-public authority or utility company which are (or, if not paid, may become) a lien upon or cause a loss in value of any interest in any of the Property, including assessments on appurtenant water stock. Trustor shall furnish Beneficiary, within ten (10) days after the date such payments are due and payable, official receipts of the appropriate authority or other proof satisfactory to Beneficiary evidencing the payment thereof.


(b) "Costs", as used in this section, means taxes, bond installments, assessments, levies, insurance premiums and other expenses which Trustor agrees to pay under this Deed of Trust. At Beneficiary's option, and


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upon its demand, each time a payment of principal or interest is due under the Note, Trustor shall pay to Beneficiary an additional amount ("Payment") estimated by Beneficiary to be equal to the total of the amount next due for all Costs, divided by, for each item of Costs the number of payments required under the Note before that item of Costs will become due, less one. Beneficiary shall use the amounts in the account, or at Beneficiary's sole option, Beneficiary may release those amounts to Trustor, for payment of the Costs. Beneficiary shall maintain an account showing all Payments received and all Costs paid by Beneficiary, and shall give Trustor reports on the account as required by law, but not less than annually. If the amounts paid to Beneficiary hereunder are insufficient to discharge the obligations of Trustor to pay such premium or premiums, taxes and assessments as the same become due, Trustor shall pay to Beneficiary upon demand such additional sums as Beneficiary may require to discharge Trustor's obligations to pay the premium or premiums, taxes and assessments. Beneficiary, at its sole option, may refund any amount in the account which exceeds the amount due or may continue to hold the excess and reduce proportionately the Payments for the next year. Trustor grants Beneficiary a security interest in the account to secure payment and performance of the Secured Obligations. Upon the occurrence of any Default and to the extent permitted by law, Beneficiary, at its sole option, may apply all or any part of the account to payment or performance of any Secured Obligation. Trustor shall restore all amounts so applied as a condition of curing the Default in addition to fulfillment of any other conditions. The existence of the account shall not limit Beneficiary's rights under any other provision of this Deed of Trust or any other agreement or statute or rule of law. Trustor shall not receive interest on the account except to the extent and in the amount required by law. The relationship between Beneficiary and Trustor with respect to the account shall be one of debtor and creditor, and Beneficiary shall not be a trustee, special depository or any other fiduciary acting for the benefit of Trustor.


6. Insurance.


(a) Trustor shall at its expense, procure for, deliver to and maintain insurance policies providing the following types of insurance relating to the Property for the benefit of Beneficiary until the Secured Obligations are fully repaid, issued by insurance companies with a Best insurance rating of at least A, and with a financial size category equal or better than that of the insurance company(ies) initially providing insurance coverage as described below, such policies to provide that the insurer shall give Beneficiary at least thirty (30) days prior written notice of cancellation or termination, in the manner provided for the giving of notices to Beneficiary under paragraph 33 hereof and to provide that no act or thing done by the insured shall invalidate or diminish the insurance provided to Beneficiary and, except for liability policies, to contain a standard mortgage clause either in form 438BFU NS (Rev. May 1, 1942) X, or other form satisfactory to Beneficiary:


(i) Broad form property insurance against all risks of physical loss, including, without limitation, fire, extended coverage, vandalism, malicious mischief and collapse, with waiver of subrogation, to the extent of the full replacement cost of the improvements to the Property, without deduction for depreciation, either without co-insurance requirements or with agreed amount endorsement attached, or in the amount of $3,000,000, whichever is greater;


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(ii) Public liability insurance, with all-risk endorsement, covering all liabilities incident to the ownership, possession, occupancy and operation of the Property and naming Beneficiary as an additional insured thereunder, having limits of not less than $1,000,000.00 each accident, $1,000,000.00 each person, and $100,000.00 property damage. In addition, Trustor shall furnish Beneficiary with a certificate evidencing an umbrella policy of public liability and property damage insurance in an amount of not less than $3,000,000.00 naming Beneficiary as an additional insured thereunder.


(iii) During the period of any construction on or renovation or alteration of the Improvements that requires a building permit from the City of Reno or other applicable governmental agency, a "Builder's Risk-All Risk Completed Value" insurance policy and Worker's Compensation Insurance covering all persons engaged in such construction, renovation or alteration.


(b) Trustor covenants and agrees that Beneficiary is hereby authorized and empowered, at its option, to adjust, compromise or settle any loss under any insurance policies maintained pursuant hereto, and to collect and receive the proceeds from any policy or policies. Each insurance company is hereby authorized and directed to make payment for all such losses directly to Beneficiary, instead of to Trustor and Beneficiary jointly. In the event any insurance company fails to disburse directly and solely to Beneficiary, but disburses instead either solely to Trustor or to Trustor and Beneficiary jointly, Trustor agrees immediately to endorse and transfer such proceeds to Beneficiary. Upon the failure of Trustor to endorse and transfer such proceeds as aforesaid, Beneficiary may execute such endorsements or transfers for and in the name of Trustor and Trustor hereby irrevocably appoints Beneficiary as its agent and attorney-in-fact so to do. After deducting from said insurance proceeds all of its expenses incurred in the collection and administration of such sums, including attorneys' fees, Benefici ...