MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement") is entered into
this 1st day of September 2006, (the "Effective Date"), by and between White
Mountain Titanium Corporation, a Nevada corporation ("WMTC"), and X. X.
Xxxxxxx (the "Service Provider").
RECITALS:
A. WMTC, through its wholly owned Chilean subsidiary, owns a rutile
mineral property known as the Cerro Xxxxxx project located in Region III of
Chile and is or proposes to carry on mining operations on the project.
B. Pursuant to Section 15(d) of the U.S. Securities Act, WMTC is
subject to the reporting requirements of the U.S. Securities Exchange Act,
including the preparation and filing of quarterly and annual reports which
include the financial statements and financial information of WMTC.
C. WMTC desires to engage the services of the Service Provider on a
part-time basis as Chief Financial Officer and the Service Provider is
willing to accept such appointment.
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Services and Duties.
a. Appointment as CFO. Service Provider shall be appointed, and
shall accept appointment, as Chief Financial Officer of WMTC, which shall
include service as the principal financial officer of WMTC.
b. Services to be Performed. Service Provider shall provide on
an average basis approximately 50% of his billable time to WMTC-related
issues, including, but not limited to, the following tasks:
* Prepare, or supervise the preparation of, WMTC's quarterly and
annual financial statements in conformity with U.S. Generally
Accepted Accounting Standards.
* Prepare, or supervise the preparation of, the MD&A sections
and other financial information for WMTC's quarterly and
annual reports to be filed with the U.S. Securities and
Exchange Commission on Forms 10-QSB and 10-KSB, respectively
(the "SEC Reports").
* Prepare annual operating budgets as well as monthly cash flow
and variance reports for distribution to the board of
directors.
* Establish and maintain disclosure controls and procedures (as
defined in U.S. Securities Exchange Act Rules 13a-15(e) and
15d-15(e)) in order to (i) ensure that material information
relating to WMTC, including its consolidated subsidiaries, is
made known to management by others within those entities,
particularly during the period in which any SEC Report is
being prepared; (ii) evaluate the effectiveness of WMTC's
disclosure controls and procedures and present in its SEC
Reports the conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by such report based on such evaluation; and
(iii) report in any SEC Report any change in WMTC's internal
control over financial reporting that has materially affected,
or is reasonably likely to materially affect, WMTC's internal
control over financial reporting.
* Disclose to WMTC's auditors and the audit committee all
significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting
which are reasonably likely to adversely affect the ability of
WMTC to record, process, summarize and report financial
information and any fraud, whether or not material, that
involves management or other employees who have a significant
role in WMTC's internal control over financial reporting.
* Perform such other related functions as directed by the
President or Executive Chairman or as customarily performed by
a chief financial officer.
c. Performance of Duties. All services provided by the Service
Provider hereunder shall be performed in a timely manner and in accordance
with good and standard professional practice.
d. Conflicts of Interest. During the term of this Agreement,
Service Provider shall not 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 his obligations under this Agreement or in competition with
WMTC or its subsidiary.
2. Compensation and Reimbursable Expenses.
a. Monthly Fee. In consideration of the services provided by
Service Provider, WMTC shall pay to Service Provider C$5,000 per month plus
Goods and Services Tax in Canada, with the monthly fee amount pro rated for
any partial month of service. Payments hereunder shall be made against
invoice on or before the fifteenth (15th) day of the calendar month following
the month in which such services were provided.
b. Common Stock Purchase Options. Upon execution of this
Agreement, Service Provider shall also be granted 100,000 5-year options
priced at 100% of the fair market value of WMTC common stock at the Effective
Date. Vesting for the options will be as follows: 25% immediately and 12.5%
as of the end of each three-month period thereafter until fully
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vested. All options will be subject to the terms, definitions and provisions
of WMTC's Stock Option Plan which document is incorporated herein by reference.
c. Office Space. WMTC will provide to Service Provider the use
of reasonable office space at the offices of WMTC for the times he performs
the services set forth herein at the WMTC offices.
3. Term and Renewal. Subject to the terms of Section 4 of this
Agreement, the term of this Agreement shall be for a period of one year from
the Effective Date, unless it is terminated earlier as provided herein.
Beginning on that date, and on each anniversary thereafter, unless it is
terminated earlier as provided herein or WMTC delivers written notice to
Service Provider of its intention not to extend the Agreement at least ninety
(90) days before such anniversary date, the term of this Agreement shall
automatically be extended for one additional year. The restrictive covenants
in paragraph 5 hereof shall survive the termination of this Agreement.
4. Termination.
a. Termination Without Cause. Either WMTC or Service Provider
may terminate this Agreement at any time without cause (as defined below),
provided that the terminating party gives written notice of termination to
the other party at least ninety (90) days before the date of such
termination.
b. Termination For Cause. WMTC shall be entitled at any time,
with or without prior notice, to terminate this Agreement for cause, in which
case no compensation or other fees (other than such fees that have already
been earned by Service Provider) shall be payable to Service Provider after
such termination. "Cause" means Service Provider's (i) gross negligence in
the performance or non-performance of any material duties to WMTC;
(ii) commission of any material criminal act or fraud or of any act that affects
adversely the reputation of WMTC; (iii) habitual neglect of Service
Provider's duties that are required to be performed under this Agreement;
(iv) dishonesty; or (v) gross misconduct. Such termination shall not
prejudice any other remedy under law or equity of WMTC and the failure of
WMTC to terminate Service Provider when cause exists shall not constitute the
waiver of WMTC's right to terminate this Agreement at a later time.
Termination under this paragraph shall be considered for cause for purposes
of this Agreement.
5. Confidential Information. Service Provider recognizes and
acknowledges that certain information, including, but not limited to,
information pertaining to the financial condition of WMTC, its systems,
methods of doing business, agreements with customers or suppliers, or other
aspects of the business of WMTC or which are sufficiently secret to derive
economic value from not being disclosed (hereinafter "Confidential
Information") may be made available or otherwise come into the possession of
Service Provider by reason of this engagement with WMTC. Accordingly,
Service Provider agrees that he will not (either during or after the term of
this engagement with WMTC) disclose any Confidential Information to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever or make use to his personal advantage or to the advantage
of any third party, of any Confidential
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Information, without the prior written consent of WMTC. Service Provider shall,
upon termination of this engagement, return to WMTC all documents which reflect
Confidential Information (including copies thereof). Notwithstanding anything
heretofore stated in this paragraph, Service Provider's obligations under this
Agreement shall not, after termination of Service Provider's engagement with
WMTC, apply to information which has become generally available to the public
without any action or omission of Service Provider (except that any Confidential
Information which is disclosed to any third party by an employee or
representative of WMTC who is authorized to make such disclosure shall be
deemed to remain confidential and protectable under this provision).
6. Independent Contractor. Service Provider agrees that in performing
this Agreement, he is acting as an independent contractor and not as an
employee or agent of WMTC. All services hereunder may, but need not, be
performed at the offices of WMTC. As independent contractor, Service
Provider shall not be eligible for any benefits which WMTC may provide to its
employees. All persons, if any, hired by Service Provider to perform this
Agreement shall be employees of Service Provider and shall not be construed
as employees or agents of WMTC in any respect. Service Provider shall be
responsible for all taxes, insurance and other costs and payments legally
required to be withheld or provided in connection with Service Provider's
performance of this Agreement, including without limitation, all withholding
taxes, worker's compensation insurance, and similar costs.
7. Miscellaneous Provisions.
a. Notice. All notices required or permitted hereunder shall be
in writing and shall be deemed effective: (1) upon personal delivery; (2)
when sent by facsimile at the number set forth below; or (3) in the case of
delivery by internationally recognized overnight delivery service, when
received, addressed as follows:
If to WMTC to:
0000-0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attn: Xxxxx Flower, CFO
FAX: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
FAX: (000) 000-0000
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If to Service Provider, to:
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX
Xxxxxx X0X 0X0
FAX: (000 ) 000-0000
or to such other address or addresses, or facsimile number or numbers, as
either party shall designate to the other in writing from time to time by
like notice.
b. Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or parties
will be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.
c. Additional Remedies. Service Provider acknowledges and agrees
that, in the event he shall violate any of the restrictions of paragraph 5
hereof, WMTC will be without adequate remedy at law and will therefor be
entitled to enforce such restrictions by temporary or permanent injunctive or
mandatory relief obtained in an action or may have at law or in equity, and
Service Provider hereby consents to the jurisdiction of such court for such
purpose, provided that reasonable notice of any proceeding is given, it being
understood that such injunction shall be in addition to any remedy which WMTC
may have at law or otherwise.
d. Entire Agreement; Modification; Waiver. This Agreement
constitutes the entire agreement between or among the parties pertaining to
the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement will be
binding unless executed in writing by all the parties or the applicable
parties to be bound by such amendment. No waiver of any of the provisions of
this Agreement will constitute a waiver of any other provision, whether or
not similar, nor will any waiver constitute a continuing waiver. No waiver
will be binding unless executed in writing by the party making the waiver.
e. Survival of Covenants, Etc. All covenants, representations
and warranties made herein shall survive the making of this Agreement and
shall continue in full force and effect for a period of two years from the
termination date of this Agreement, at the end of which period no claim may
be made with respect to any such covenant, representation, or warranty unless
such claim shall have been asserted in writing to the indemnifying party
during such period.
f. Assignment. This Agreement, as it relates to the engagement
of Service Provider, is a personal contract and the rights and interests of
Service Provider hereunder may not be sold, transferred, assigned, pledged or
hypothecated, without the prior written consent of WMTC, which consent may be
withheld for any reason.
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g. Binding on Successors. This Agreement will be binding on, and
will inure to the benefit of, the parties to it and their respective heirs,
legal representatives, successors, and assigns.
h. Governing Law and Venue. This Agreement shall be governed by
and construed in accordance with the laws of the State of Utah, U.S.A.,
without reference to the choice of law principals thereof. The parties
hereto irrevocably submit to the jurisdiction of the Courts of the State of
Utah, U.S.A., located in Salt Lake County and the United States District
Court of Utah in any action arising out of or relating to this Agreement, and
hereby irrevocably agree that all claims in respect of such action may be
heard and determined in such state or federal court. The parties hereto
irrevocably waive, to the fullest extent they may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. The parties further agree, to the extent permitted by law, that
final and unappealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the
judgment, a certified copy of which shall be conclusive evidence of the fact
and amount of such judgment.
i. Rights Are Cumulative. The rights and remedies granted to the
parties hereunder shall be in addition to and cumulative of any other rights
or remedies either may have under any document or documents executed in
connection herewith or available under applicable law. No delay or failure
on the part of a party in the exercise of any power or right shall operate as
a waiver thereof nor as an acquiescence in any default nor shall any single
or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right.
j. Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of final jurisdiction, it is the intent
of the parties that all other provisions of this Agreement be construed to
remain fully valid, enforceable, and binding on the parties.
k. Drafting. This Agreement was drafted with the joint
participation of the parties and/or their legal counsel. Any ambiguity
contained in this Agreement shall not be construed against any party as the
draftsman, but this Agreement shall be construed in accordance with its fair
meaning.
l. Headings. The descriptive headings of the various paragraphs
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
m. Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, the feminine, or the neuter gender shall include the masculine,
feminine, and neuter.
n. Counterparts; Facsimile Execution. This Agreement may be
executed in any number of counterparts and all such counterparts taken
together shall be deemed to
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constitute one instrument. Delivery of an executed counterpart of this
Agreement by facsimile or email shall be equally as effective as delivery of
a manually executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by facsimile or email also shall
deliver a manually executed counterpart of this Agreement, but the failure
to deliver a manually executed counterpart shall not affect the validity,
enforceability, or binding effect of this Agreement.
o. Full Knowledge. By their signatures, the parties acknowledge
that they have carefully read and fully understand the terms and conditions
of this Agreement, that each party has had the benefit of counsel, or has
been advised to obtain counsel, and that each party has freely agreed to be
bound by the terms and conditions of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement the respective day and year set forth below.
WMTC: White Mountain Titanium Corporation
Date: September 6, 2006 By /s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx, President
Service Provider:
Date: September 7, 2006 /s/ X. X. Xxxxxxx
X. X. Xxxxxxx
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