Amendment To The Management Services Agreement
Amendment
To
The
This
Amendment (the “Amendment”), entered into effective the 21st
day of
December 2007, is to the Management Services Agreement entered into on February
6, 2006, with an effective date of February 1, 2006, as amended on September
1,
2006, and on August 31, 2007 (the “Agreement”), by and between White Mountain
Titanium Corporation (“WMTC”) and Trio International Capital Corp. (“Trio”) and
its wholly owned subsidiary, Pacific Venture Management Ltd.
RECITALS:
A. WMTC
is
intent on retaining senior management, including Xxxxx Flower, a partial owner
of Trio who provides services for WMTC through the Agreement, through providing
competitive compensation; and
B. The
notification period in the Agreement is 90 days, which together with overall
ownership and compensation has been an expressed concern of several shareholders
and prospective investors; and
C. Mr.
Flower has been engaged to provide key services for the ongoing operation of
WMTC at compensation levels below that of persons in similar corporate
circumstances; and
D. Mr.
Flower has expressed concern in the event of a corporate takeover that his
company be compensated in a manner which would take into account the prior
reduced compensation; and
E. A
change
of control could result in the termination of the Agreement which would cause
a
material detrimental effect on the economic and noneconomic incentives of Mr.
Flower to remain with WMTC; and
F.
In
addition to the loss of cash and bonus compensation existing under the
Agreement, Mr. Flower’s job security could be threatened, as well as career
advancement commensurate with seniority and skills, marketability, professional
respect, and satisfaction of working at a respected company; and
G. WMTC
believes that providing compensation which accounts for a potential change
of
control would assure Mr. Flower that he would be fairly compensated in such
event and permit him to focus his entire attention on the business needs of
WMTC; and
H. Section
7(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. Effective
January 1, 2008, the amount of time required to be provided under Section 1(b)
of the Agreement shall be not less than 80%.
2. Effective
January 1, 2008, 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
PVM US$11,600 per month plus reimbursable out of pocket expense - both being
subject to Goods and Services Tax in Canada (“GST”), with the monthly fee amount
pro rated 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 Trio and Mr. Flower increases beyond
80%,
the base compensation payable to Trio 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 Trio 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, 2007, and the base compensation will be adjusted accordingly
for each such new calendar quarter.
3. 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 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 Trio of its intention not
to
extend the Agreement at least one hundred twenty (120 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. Section
4(a) of the Agreement is amended to read as follows:
Termination
Without Cause.
Either
WMTC or Trio 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 one hundred twenty (120 days before the date of such
termination.
5. Section
4A is added to the Agreement immediately following Section 4 to read as
follows:
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Termination
Upon Change of Control
In
the
event of termination upon a change of control of WMTC, the following provisions
shall apply:
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(a)
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“Termination
Upon Change of Control” means:
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(i)
any
termination of the employment of Trio 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 Trio 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 Trio (i) by WMTC for cause; (ii) by WMTC as a result
of the disability of party; (iii) as a result of the death of the party; or
(iv)
as a result of the voluntary termination of employment 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;
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(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);
(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, Trio shall receive the following
compensation: (i) immediate payment of a severance amount equal to three times
the highest annual base cash compensation paid Trio; (ii) the immediate vesting
of any outstanding unvested options, warrants, or other convertible instruments;
(iii) the pro rata amount of any bonuses for which Trio 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.
6. 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.
7. 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.
IN
WITNESS WHEREOF,
each of
the parties hereto has executed this Agreement the respective day and year
set
forth below.
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White
Mountain Titanium Corporation
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Date:
January 10, 2008
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By
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/s/
Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx
X. Xxxxxxxxx, President
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Trio
International Capital Corp.
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Date:
January 10, 2008
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By
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/s/
Xxxxx Flower
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Xxxxx
Flower, Principal
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Pacific
Venture Management Ltd.
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Date:
January 10, 2008
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By
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/s/
Xxxxx Flower
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Xxxxx
Flower, Principal
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