Amendment To The Management Services Agreement
Amendment
To
The
THIS AMENDMENT (the “Amendment”), entered into
effective the 1st day of
January 2010, (the “Effective
Date”) is to the Management Services Agreement entered into effective
August 1, 2009 (the “Agreement”), by and between
White Mountain Titanium Corporation (“WMTC”) and Chapelle Capital
Corp., a corporation created under the laws of British Columbia, Canada (the
“Service
Provider”).
RECITALS:
A.
The Agreement provides for the
services of Xxxxx Flower (“Mr. Flower”) as Executive Chairman of WMTC;
and
B.
WMTC is intent on retaining senior management,
including Mr. Flower, through providing competitive compensation;
and
B.
The parties hereto desire to extend the term of the
Agreement to secure the continued performance of Mr. Flower; and
C.
Section 8(d) of the Agreement grants to the parties the
right to amend the Agreement upon approval of each of the parties
thereto.
NOW, THEREFORE, for additional
consideration of the parties, the receipt and sufficiency of which is hereby
acknowledged by each party, the parties hereto agree as follows:
1. Section
1(c) of the Agreement is amended to read as follows:
Conflicts of
Interest. During the term of this Agreement neither the
Service Provider nor any affiliate shall carry on or be engaged in or concerned
with or advise in the operating of any other business or enterprise which is in
conflict with their obligations under this Agreement or in competition with WMTC
or its subsidiary. Nothing contained herein shall prevent Mr. Flower
from managing his own personal investments and affairs, including, but not
limited to, his investment in Chinuka Limited and any subsidiary
thereof.
2.
Effective January 1, 2010, Section 2(a) of
the Agreement is amended to read as follows:
Monthly
Fee. In consideration of the services provided by Service
Provider, WMTC shall pay to the Service Provider US$13,340 per month plus
reimbursable out of pocket expense - both being subject to Goods and Services
Tax in Canada (“GST”), with the monthly fee amount prorated for any partial
month of service. Payments hereunder shall be made on or before the
fifteenth (15th) day of
the calendar month following the month in which such services were
provided. In the event that the time commitment of the Service
Provider and Mr. Flower increases beyond 80%, the base compensation payable to
the Service Provider shall be increased proportionately, but not to exceed the
base compensation payable to Xxxxxxx Xxxxxxxxx, President of the
WMTC. The amount of time devoted to the business of WMTC by the
Service Provider and Mr. Flower will be determined by the Compensation Committee
within ten business days following the end of each calendar quarter beginning
with the calendar quarter ending December 31, 2009, and the base compensation
will be adjusted accordingly for each such new calendar
quarter.
3. Section
2(d) is added to the Agreement to read as follows:
Extension
Bonus. For and inconsideration of the Service Provider
entering into this Amendment, WMTC shall grant to it a five-year incentive
warrant to purchase up to 1,000,000 shares of common stock of WMTC at US$1.50
per share and subject to the further terms and conditions set forth in the form
of the warrant attached hereto as Exhibit A and incorporated
herein.
4. Section
2(e) is added to the Agreement to read as follows:
Share Compensation
Pool. Mr. Flower shall be entitled to participate in the
annual share compensation pool and shall receive not fewer than 25% per year
from such pool.
5. Section
3 of the Agreement is amended to read as follows:
Term and
Renewal. The term of this Agreement shall be for a period of
five years from January 1, 2010, through December 31, 2015 (the “Original Expiration Date”),
unless it is terminated earlier as provided herein. Beginning on the
Original Expiration Date, and on each anniversary thereafter, unless it is
terminated earlier as provided herein or WMTC delivers written notice to the
Service Provider of its intention not to extend the Agreement at least six (6)
months before the Original Expiration Date or each anniversary date thereafter,
the term of this Agreement shall automatically be extended for additional
one-year terms. The restrictive covenants in paragraph 6 hereof shall
survive the termination of this Agreement.
6. Section
4(a) of the Agreement is amended to read as follows:
Termination Without
Cause. Either WMTC or the Service Provider may terminate this
Agreement at any time without cause (as defined below), provided that it gives
written notice of termination to the other party at least six (6) months before
the date of such termination.
2
7. Section
5 of the Agreement is amended to read as follows:
Termination Upon
Change of Control. In the event of termination upon a change
of control of WMTC, the following provisions shall apply:
|
|
(a)
|
“Termination
Upon Change of Control” means:
|
(i) any
termination of the engagement of the Service Provider by WMTC without cause
during the period commencing on or after the date that WMTC first publicly
announces a definitive agreement that would result in a Change of Control (as
defined below), even though still subject to approval by WMTC’s stockholders and
other conditions and contingencies; or
(ii) any
resignation by the Service Provider based on a diminution of responsibilities
where (1) such diminution of responsibilities occurs during the period
commencing on or after the date that WMTC first publicly announces a definitive
agreement that would result in a Change of Control (as defined below), even
though still subject to approval by WMTC’s stockholders and other conditions and
contingencies, and ending on the date which is twelve (12) months following the
Change of Control, and (2) such resignation occurs within one-hundred and twenty
(120) days following such diminution of responsibilities.
(b) The
term “Termination Upon Change of Control” shall not include any other
termination, including a termination of the Service Provider (i) by WMTC for
cause; (ii) by WMTC as a result of the disability of a party; (iii) as a result
of the death of the party; or (iv) as a result of the voluntary termination of
engagement by the party for reasons other than a diminution of
responsibilities.
(c) “Change
of Control” means:
(i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or
other fiduciary holding securities of WMTC under an employee benefit plan of
WMTC, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of WMTC representing
30% or more of (A) the outstanding shares of common stock of WMTC or (B) the
combined voting power of WMTC’s then-outstanding securities;
(ii) WMTC
is party to a merger or consolidation, or series of related transactions, which
results in the voting securities of WMTC outstanding immediately prior thereto
failing to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or another entity) at least
fifty (50%) percent of the combined voting power of the voting securities of
WMTC or such surviving or other entity outstanding immediately after such merger
or consolidation;
(iii) the
sale or disposition of all or substantially all of WMTC’s assets (or
consummation of any transaction, or series of related transactions, having
similar effect);
3
(iv)
there occurs a change in the composition of the Board of Directors of WMTC
within a two-year period, as a result of which fewer than a majority of the
directors are incumbent directors;
(v) the
dissolution or liquidation of WMTC; or
(vi) any
transaction or series of related transactions that has the substantial effect of
any one or more of the foregoing.
(d) In
the event of termination upon a Change of Control, the Service Provider shall
receive the following compensation: (i) immediate payment of a
severance amount equal to three times the highest annual base cash compensation
paid the Service Provider; (ii) the immediate vesting of any outstanding
unvested options, warrants, or other convertible instruments and the immediate
vesting of any unvested shares held by the Service Provider or its affiliates;
(iii) the pro rata amount of any bonuses or share compensation pool for which
the Service Provider is eligible; (iv) the extension of the exercise period of
any options, warrants, or other convertible instrument for at least six months
following such termination.
8. Except
as amended hereby, the Agreement shall continue to be, and shall remain, in full
force and effect. Except as provided herein, this Amendment shall not
be deemed (i) to be a waiver of, or consent to, or a modification or amendment
of, any other term or condition of the Agreement or (ii) to prejudice any right
or rights which the parties may now have or may have in the future under or in
connection with the Agreement or any of the instruments or agreements referred
to therein, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
9. The
terms of the Agreement are incorporated herein by reference and shall form a
part of this Amendment as if set forth herein in their entirety.
[SIGNATURE
PAGE FOLLOWS]
4
IN WITNESS WHEREOF, each of the parties
hereto has executed this Amendment the respective day and year set forth
below.
|
White
Mountain Titanium Corporation
|
||
|
Date: February
7, 2010
|
By
|
/s/ Xxxxxxx X. Xxxxxxxxx
|
|
Xxxxxxx
X. Xxxxxxxxx, President
|
||
|
Chapelle
Capital Corp.
|
||
|
Date: February
7, 2010
|
By
|
/s/ Xxxxx Flower
|
|
Xxxxx
Flower, Principal
|
||
5
