White Mountain Titanium Corp.: Exhibit 10.39 - Filed by newsfilecorp.com






LOAN AGREEMENT 
(Revised) 

THIS LOAN AGREEMENT
(“Agreement”) is made as of the 16th day of March, 2016 (the
“Effective Date”), between WHITE MOUNTAIN TITANIUM CORPORATION, a Nevada
corporation, (the “Borrower”) and Sociedad Contractual Minera White
Mountain Titanium, a Chilean stock company and wholly-owned subsidiary of
Barrower (“SCM Subsidiary”), and NEXO WMTM Holdings, LLC, a Delaware
limited liability company (“Lender”). Certain capitalized terms used in
this Agreement are defined in Section 9 of this Agreement.

R E C I T A L S 

WHEREAS, Borrower is a mineral
exploration company engaged in the search for mineral deposits or reserves which
could be economically and legally extracted or recovered from mining concessions
designated as the Borrower’s Cerro Blanco Project located in the Atacama region
(Region III) of northern Chile, which concessions are held by SCM Subsidiary;


WHEREAS, Borrower has requested
that Lender make a loan to Borrower to be used primarily to develop the Cerro
Blanco Project as described in this Agreement, and Lender is willing to loan
such amount to Borrower subject to the terms and conditions of this
Agreement.

NOW, THEREFORE, the Parties
hereto agree as follows: 

1.   
 LOAN TRANSACTION. 

a.    
Amount. Lender agrees, on the terms and conditions of this Agreement,
to make an unsecured loan (the “Loan”) to Borrower in the principal
amount of Two Million and No/100 Dollars ($2,000,000.00), to be disbursed to
Borrower as described in Section 1(e), below. 

b.    
Purpose. The proceeds of the Loan shall be used exclusively for those
purposes set forth in the budget in Exhibit A attached hereto (the
“Use of Proceeds Budget”).

c.    
Note. The Loan shall be evidenced by, and payable in accordance with,
a single 7% Senior Convertible Promissory Note (the “Note”) in form
attached hereto as Exhibit B and dated as of the date of this Agreement.
The Note shall bear simple interest on the unpaid principal amount thereof until
such principal amount shall be paid in full, at 7% per annum. The Note is
convertible into preferred shares of the Borrower’s Series A Preferred Stock
(the “Series A Shares”) created under the Certificate of Designations
attached hereto as Exhibit C (the “Series A Certificate of
Designations”). The Series A Shares are convertible into Common Stock at the
rate and under the terms established under the Series A Certificate of
Designations. The Note shall be guaranteed by SCM Subsidiary as provided in the
Note. 

d.    
Term. The term of the Loan shall be for a period of two years from
the Effective Date, unless renewed or extended by the Parties by mutual
agreement in writing.

e.    
Disbursements of the Loan Proceeds. On the Effective Date, and
subject to the terms and conditions under this Agreement, Lender shall disburse
Two Million and No/100 Dollars ($2,000,000.00) to Borrower (the
“Disbursement”) to be used as described in Exhibit A attached
hereto. The Disbursement shall be deposited by bank wire transfer into the
account of the Borrower in accordance with bank wiring instructions furnished to
the Lender at least 48 hours prior to the Disbursement. 




f.    
Warrants to Purchase Common Stock. Contemporaneous with the
Disbursement, and as additional consideration for the Loan, the Borrower shall
issue to the Lender warrants to purchase up to 8,333,333 shares of common stock
of the Borrower (the “Warrant Shares”) evidenced by a single warrant
agreement (the “Warrant”) in form attached hereto as Exhibit D.
The Warrant shall have a term of three years and shall be exercisable at $0.30
per share.

g.    
Preferred Shares. Also contemporaneous with the Disbursement, and as
additional consideration for the Loan which is not precluded by the Borrower’s
Bylaws nor Articles of Incorporation, the Borrower shall issue to the Lender 100
Series A Shares evidenced by a single stock certificate representing the 100
Series A Shares. The Borrower shall not issue any additional Series A Shares
except upon conversion of the Note as provided therein. Contemporaneous with the
Disbursement, the Parties shall enter into the Registration Rights Agreement for
registration of the shares of Common Stock issuable upon conversion of the
Series A Shares as provided in the form of the Registration Rights Agreement
attached hereto as Exhibit E. 

h.    
Default Protection. Pursuant to the terms outlined therein, the
Borrower agrees to Confession of Judgment provisions for narrow and limited
reasons known as the Stipulated Reasons of Judgment as shown in Exhibit B (a
“Default Protection”). In the event that Borrower is
for any reason unable to repay the Loan, SCM Subsidiary hereby agrees to repay
any remaining amount of the Loan. 

i.    
Assignment of Development Rights of Cerro Blanco Desalination Plant.
Contemporaneous with the Disbursement, the Parties shall enter into an agreement
for the construction and operation of a desalination plant as provided in the
Development Assignment attached hereto as Exhibit F (the “Development
Assignment”). 

j.    
Appointment of Chairman. Contemporaneous with the Disbursement,
Borrower shall appoint Andrew Sloop as nonexecutive chairman of the Board of
Directors.

2.    
CONDITIONS PRECEDENT TO DISBURSEMENT. Lender’s obligation to make the
Disbursement shall be subject to the fulfillment to Lender’s satisfaction of all
of the conditions set forth in this Agreement and the other Loan Documents.
Borrower understands and agrees that each of the conditions set forth in this
section is for the sole benefit of Lender.

a.    
Loan Documents. Borrower shall have provided to Lender in form
satisfactory to Lender and its legal counsel (a) each and every Loan Document,
duly and validly executed by Borrower; and (d) any other documents required
under this Agreement or by Lender or its counsel.

b.    
Borrower Authorizations. Borrower shall have provided Lender copies
of the resolutions of the Borrower’s Board of Directors (the “Board”)
authorizing, approving and ratifying this Agreement and the other Loan Documents
and the transactions contemplated herein and therein, as applicable, duly
adopted by the Board, together with a certificate of an authorized officer of
Borrower, dated the date hereof, stating that each such copy is a true and
correct copy of resolutions duly adopted at a meeting, or by action taken on
written consent, of the Board and that such resolutions have not been modified,
amended, rescinded or revoked in any respect and are in full force and effect as
of the date hereof.

c.    
Classification of Directors. Prior to the Disbursement, the Borrower
shall have provided to the Lender proof of an amendment to the Borrower’s Bylaws
to provide for election of directors by the holders of the Series A Preferred
Shares in accordance with the terms of the Certificate of Designations. 

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d.    
Other. Borrower shall have provided Lender all such other documents
or items reasonably requested by Lender or its counsel.

3.   
 REPRESENTATIONS AND WARRANTIES. In order to induce
Lender to enter into this Agreement and to make the Loan, Borrower represents
and warrants to Lender as follows (which representations and warranties shall
survive the delivery of the Loan Documents and the making of the Loan
contemplated hereby):

a.    
Organization. Each of the Borrower and the SCM Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted. The Borrower has delivered to the Lender true,
correct and complete copies of the Articles of Incorporation and Bylaws and
other organizational documents, as currently in effect, of the Borrower and the
SCM Subsidiary, each as amended to date. 

b.    
Issuance of Securities. The equity securities issuable under this
Agreement are duly authorized and, when issued and paid for in accordance with
the Loan Documents, will be free and clear from all Encumbrances with respect to
the issue thereof and shall not be subject to preemptive rights or similar
rights of stockholders. The Series A Shares shall be entitled to all the rights
and preferences set forth in the Certificate of Designations. As of the
Effective Date, a number of shares of Common Stock shall have been duly
authorized and reserved for issuance which equals 130% of the number of shares
of Common Stock issuable upon conversion of the Preferred Shares and issuable
upon exercise of the Warrants. Upon exercise and issuance in accordance with the
Warrants, the Warrant Shares shall be validly issued, fully paid and
nonassessable and free from all Encumbrances with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common
Stock. Upon conversion of the Preferred Shares and the issuance of shares of
Common Stock in accordance with the Certificate of Designations, the shares of
Common Stock shall be validly issued, fully paid and nonassessable and free from
all Encumbrances with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock. As of the Effective
Date, the Certificate of Designations shall have been filed with the Secretary
of State of the State of Nevada and shall be in full force and effect,
enforceable against the Borrower in accordance with its terms and shall not have
been amended. 

c.    
Authorization; Validity of Agreement. The Borrower has the requisite
power and authority to execute, deliver and perform this Agreement and each of
the other Loan Documents to be executed and delivered by the Borrower pursuant
to this Agreement, and to assume and perform any obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and thereby.
Each of this Agreement and the other Loan Documents to be executed and delivered
by the Borrower pursuant to this Agreement have been duly authorized, executed
and delivered by the Borrower and are valid and binding obligations of the
Borrower, enforceable against it in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or other laws from
time to time in effect which affect creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Borrower has not taken any steps, and does
not currently expect to take any steps, to seek protection pursuant to any
bankruptcy or similar law nor does Borrower have any Knowledge or reason to
believe that its creditors intend to initiate involuntary bankruptcy or similar
proceedings. 

d.    
SEC Reports; Financial Statements. Borrower has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, or on a voluntary basis as though such documents had been required to be filed under these provisions, for the
two years preceding the date hereof (or such shorter period as the Borrower was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and none
of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Borrower included in the SEC Reports (the “Financial
Statements”) comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing. The Financial Statements have been prepared in
accordance with GAAP (except (i) as may be otherwise indicated in the Financial
Statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of Borrower on a consolidated basis as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. 

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e.   
 Liabilities. There are no material liabilities of
Borrower, whether accrued, absolute, contingent or otherwise, which arose or
relate to any transaction of Borrower or any Subsidiary, their agents or
servants occurring prior to the period covered by the Financial Statements which
are not disclosed by or reflected in the Financial Statements. To the Knowledge
of Borrower, there are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may hereafter give rise to
liabilities, except in the normal course of business of Borrower and its
Subsidiaries. 

f.    
Material Changes; Undisclosed Events, Liabilities or Developments.
Since the period covered by the Financial Statements, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected, individually or in the aggregate, to result in or cause a Material
Adverse Effect, (ii) Borrower has not incurred any liabilities (contingent or
otherwise) other than trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice, (iii) Borrower has
not altered its method of accounting, (iv) Borrower has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) Borrower has not issued any equity securities to any
officer, director or Affiliate. Except for the transactions contemplated by the
Loan Documents, no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to occur or exist
with respect to Borrower, any Subsidiary, or their business, prospects,
properties, operations, assets or financial condition that would result in or
cause a Material Adverse Effect. 

g.    
Taxes. All federal, state, foreign, county, and local income,
withholding, profits, franchise, occupation, property, sales, use, gross
receipts and other taxes (including any interest or penalties relating thereto)
and assessments which are due and payable have been duly reported, fully paid
and discharged as reported by Borrower, and there are no unpaid taxes which are,
or could become a Lien on the properties and assets of Borrower, except as
provided for in the Financial Statements, or have been incurred in the normal
course of business of Borrower and its Subsidiaries since that date. All tax
returns of any kind required to be filed have been filed and the taxes paid.
There are no disputes as to taxes of any nature payable by Borrower or its
Subsidiaries. 

h.    
Environmental Laws. Each of Borrower and the SCM Subsidiary (i) is in
compliance with any and all Environmental Laws; (ii) has received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct its
business; and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, including the EIS, where, in each of the three
foregoing cases, the failure to so comply would have or cause, individually or
in the aggregate, a Material Adverse Effect. 

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i.    
Compliance. Neither Borrower nor any Subsidiary: (i) is in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by
Borrower or any Subsidiary under), nor has Borrower or any Subsidiary received
notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it or he is a party or by which it or he or any of their properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any judgment, decree or order of any court, arbitrator or
governmental body or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the mortgage industry, except in each case as
could not have or reasonably be expected to result in or cause a Material
Adverse Effect. 

j.   
 Insurance. Each of Borrower and the Subsidiaries is
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which Borrower or a Subsidiary, as applicable, is engaged. Neither Borrower nor
any Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost. 

k.    
Litigation. There are no actions, suits, arbitrations, regulatory
proceedings or other litigation, proceedings or governmental investigations
pending or, to the Knowledge of Borrower or any Subsidiary, threatened against
Borrower or any Subsidiary or any of their officers or directors in their
capacity as such, or any of their properties or businesses, and Borrower has no
Knowledge of any facts or circumstances which may reasonably be likely to give
rise to any of the foregoing. Neither Borrower nor any Subsidiary is subject to
any order, judgment, decree, injunction, stipulation or consent order of or with
any court or other Governmental Authority. Neither Borrower nor any Subsidiary
has entered into any agreement to settle or compromise any proceeding pending or
threatened in writing against it which has involved any obligation for which
either Borrower or any Subsidiary or their properties or business has any
continuing obligation. There are no claims, actions, suits, proceedings, or
investigations pending or, to the Knowledge of Borrower, threatened by or
against either Borrower or any Subsidiary with respect to this Agreement or the
other Loan Documents, or in connection with the transactions contemplated hereby
or thereby, and Borrower has no reason to believe there is a valid basis for any
such claim, action, suit, proceeding or investigation. 

l.    
Labor Relations. No material labor dispute exists or, to the
knowledge of Borrower, is imminent with respect to any of the employees of
Borrower or any Subsidiary, which could reasonably be expected to result in or
cause a Material Adverse Effect. None of Borrower or any Subsidiary’s employees
is a member of a union that relates to such employee’s relationship with
Borrower or a Subsidiary, and neither Borrower nor any Subsidiary is a party to
a collective bargaining agreement, and Borrower reasonably believes that their
relationship with their employees is good. No executive officer, to the
Knowledge of Borrower, is, or is now expected to be, in violation of any
material term of any employment or consulting contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant in favor of any
third party, and the continued employment or engagement of each such executive
officer does not subject either Borrower or any Subsidiary to any liability with
respect to any of the foregoing matters. Each of Borrower and the Subsidiaries is in material compliance with
all U.S. federal, state, and local laws, all applicable foreign laws, and all
U.S. and foreign regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure
to be in compliance could not, individually or in the aggregate, reasonably be
expected to have or cause a Material Adverse Effect. 

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m.    
Material Contracts. Excepting the Loan Documents, the SEC Reports set
forth true, complete and correct lists of every Material Contract currently in
effect to which the Borrower or any of the Subsidiaries is a party. Each of the
Material Contracts is in full force and effect and there is not now and there
has not been claimed or alleged by any Person with respect to any of the
Material Contracts, any existing default, or event that with notice or lapse of
time or both would constitute a default or event of default, on the part of the
Borrower or any of the Subsidiaries or on the part of any other party thereto;
no consent from, or notice to, any Governmental Authority or other Person is
required in order to maintain in full force and effect any of the Material
Contracts, other than such consents that have been obtained and are in full
force and effect. 

n.    
Regulatory Permits. Borrower and SCM Subsidiary possess all
certificates, authorizations and Permits issued by the appropriate federal,
state, local or foreign regulatory authorities, including the EIS, necessary to
conduct its business as described in the SEC Reports, except where the failure
to possess such Permits could not reasonably be expected to result in or cause a
Material Adverse Effect (“Material Permits”), and neither Borrower nor
any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit. 

o.    
Title to Assets. Each of Borrower and the Subsidiaries has good and
marketable title in fee simple to all real property owned by it and good and
marketable title in all personal property owned by it that is material to the
business of Borrower or any Subsidiary, as applicable, in each case free and
clear of all Liens, except for Liens as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by such entity and Liens for the payment of federal,
state or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by either Borrower
or any Subsidiary are held by it under valid, subsisting and enforceable leases
with which such entity is in compliance. 

p.    
Mining Interests. The Borrower, though SCM Subsidiary, holds Good and
Defensible Title to the Cerro Blanco Project. Neither the Borrower nor SCM
Subsidiary is in material breach or default (and no situation exists which with
the passing of time or giving of notice would give rise to such a breach or
default) of SCM Subsidiary’s obligations under any of the Cerro Blanco Basic
Documents, and no breach or default by any other party to any Cerro Blanco Basic
Document (or situation which with the passage of time or giving of notice would
give rise to such a breach or default) exists, to the extent such breach or
default (whether by SCM Subsidiary or another party to any Cerro Blanco Basic
Document) could adversely affect any of the interests of SCM Subsidiary in and
to the Cerro Blanco Project. All conditions necessary to maintain the Cerro
Blanco Basic Documents in force have been duly performed. To the Knowledge of
Borrower, no delinquent unpaid bills or past due charges exist for any labor and
materials incurred by or on behalf of the Borrower or SCM Subsidiary related to
the exploration, development or operation of the Cerro Blanco Project. No suit,
action or proceeding (including, without limitation, tax or environmental
demands proceedings) is pending or threatened, which might result in material
impairment or loss of title to any of the interests in the Cerro Blanco Project
or the material value thereof. 

q.    
Survival of Representations and Warranties. Borrower understands and
agrees that Lender, without independent investigation, is relying upon the above
representations and warranties in making the Loan to Borrower. Borrower further
agrees that the foregoing representations and warranties shall be continuing in nature and shall remain in full force
and effect in all material respects so long as the Note remains outstanding.

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4.    
REPRESENTATIONS AND WARRANTIES OF LENDER. In order to induce Borrower
to enter into this Agreement and to issue the Note, the Warrant, and the Series
A Shares concurrent with the Distribution, Lender represents and warrants to
Borrower as follows (which representations and warranties shall survive the
delivery of the documents mentioned herein and the making of the Loan
contemplated hereby): 

a.    
Organization; Authority. The Lender is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership or other applicable
power and authority to enter into and to consummate the transactions
contemplated by the Loan Documents and otherwise to carry out its obligations
hereunder and thereunder. This Agreement has been duly executed and delivered by
the Lender and constitutes the valid and binding obligation of the Lender,
enforceable against it in accordance with its terms. 

b.    
Accredited Investor. The Lender is an “accredited investor” as
defined in Rule 501(a) of Regulation D promulgated by the SEC under the
Securities Act. 

c.    
Restricted Securities. The Lender understands that none of the
Securities has been registered pursuant to the Securities Act, or any state
securities act, and thus are “restricted securities” as defined in Rule 144
promulgated by the SEC under the Securities Act. Accordingly, the undersigned
hereby acknowledges that it is prepared to hold the Securities for an indefinite
period. 

d.    
Investment Purpose. The Lender acknowledges that the Note, the
Warrant, and the Series A Shares are being purchased for its own account, for
investment, and not with the present view towards the distribution, assignment,
or resale to others or fractionalization in whole or in part.

e.   
 Limitations on Resale; Restrictive Legend. The Lender
acknowledges that it will not sell, assign, hypothecate, or otherwise transfer
any rights to, or any interest in, the Securities except (i) pursuant to an
effective registration statement under the Securities Act, or (ii) in any other
transaction which, in the opinion of counsel acceptable to the Borrower, is
exempt from registration under the Securities Act, or the rules and regulations
of the SEC thereunder. The Lender also acknowledges that an appropriate legend
will be placed upon each of the documents or certificates representing the
Securities stating that they have not been registered under the Securities Act
and setting forth or referring to the restrictions on transferability and sale
thereof. 

f.    
Information. The Lender has been furnished (i) with all requested
materials relating to the business, finances, and operations of the Borrower;
(ii) with information deemed material to making an informed investment decision;
and (iii) with additional requested information necessary to verify the accuracy
of any documents furnished to the undersigned by the Borrower. Representatives
of the Lender have been afforded the opportunity to ask questions of the
Borrower and its management and to receive answers concerning the terms and
conditions of this transaction. 

g.    
Documents. Representatives of the Lender have received or had access
to following documents: (i) the Borrower’s annual report on Form 10-K for the
year ended December 31, 2014 (the “Annual Report”); (ii) the Borrower’s
quarterly reports on Form 10-Q for each of the quarters following the date of
the Annual Report; (iii) the Borrower’s reports on form 8-K filed with the SEC
since the filing of the Annual Report; and (iv) each and every other filing made
by the Borrower with the SEC since the Annual Report. Such persons have relied upon the information
contained therein and have not been furnished any other documents, literature,
memorandum, or prospectus. 

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h.    
Knowledge and Experience in Business and Financial Matters. The
parties representing the Lender in this transaction have such knowledge and
experience in business and financial matters that they are capable of evaluating
the risks of the prospective investment in the Borrower, and the financial
capacity of the Borrower is of such proportion that the total amount of the Loan
to the Borrower would not be material when compared with its total financial
capacity. 

5.    
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender
that, while this Agreement is in effect, Borrower will, for itself and on behalf
of the Subsidiaries: 

a.    
Change in Financial Condition/Litigation. Promptly inform Lender in
writing of (a) all material adverse changes in Borrower’s financial condition,
and (b) all existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower which could
materially and adversely affect its financial condition.

b.    
Financial Records. Maintain its books and records in accordance with
GAAP, applied on a consistent basis. 

c.    
Additional Information. Furnish such true and accurate additional
information and copies of statements, financial statements, lists of assets and
liabilities, agings of receivables and payables, inventory schedules, budgets,
notices of any claims or lawsuits concerning Borrower’s business operations
(including but not limited to claims of materialmen or subcontractors),
forecasts, tax returns, and other reports with respect to Borrower’s financial
condition and business operations as Lender may reasonably request from time to
time. 

d.   
 Insurance. Maintain reasonable insurance coverage on the
Cerro Blanco Project in accordance with past practices or as reasonably
necessary in the future to protect the value of the Cerro Blanco Project.

e.    
Other Agreements. Comply with all terms and conditions of all
Material Contracts whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.

f.    
Loan Proceeds. Use all Loan proceeds as set forth in the Use of
Proceeds Budget, unless specifically consented to the contrary by Lender in
writing.

g.    
Taxes, Charges and Liens. Provided it does not give rise of an Event
of Default hereunder, pay and discharge prior to delinquency all of Borrower and
each Subsidiary’s indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every kind and
nature, imposed upon Borrower, any Subsidiary, or their properties, income, or
profits, prior to the date on which penalties would attach, and all lawful
claims that, if unpaid, might become a lien or charge upon any of Borrower or
any Subsidiary’s properties, income, or profits; provided however, Borrower will
not be required to pay and discharge any such assessment, tax, charge, levy,
lien or claim so long as (i) the legality of the same shall be contested in good
faith by appropriate proceedings, and (ii) Borrower shall have established on
its books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted accounting
practices. 

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h.    
Performance. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the other Loan Documents in a
timely manner, and promptly notify Lender if Borrower learns of the occurrence
of any event which constitutes an Event of Default under this Agreement or under
any of the Loan Documents.

6.    
NEGATIVE COVENANTS. Borrower and SCM Subsidiary covenant and agree
with Lender that while the Note remains outstanding, Borrower and SCM Subsidiary
shall not, and shall not permit any Subsidiary within any jurisdiction to engage
in the following actions, without the prior written consent of Lender: 

a.    
Limitations on Liens. Incur, create, assume or permit to exist any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind
upon any of their real or personal property (including any concessions held by
SCM Subsidiary in Chile) now owned or hereafter acquired, or assets of any
character, except Permitted Liens. For purposes of this Agreement, “Permitted
Liens” shall be limited to and mean the following: (i) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; and (ii) liens of materialmen, mechanics, warehousemen, or carriers, or
other like liens arising in the ordinary course of business and securing
obligations which are not yet delinquent.

b.    
Limitation on Indebtedness. Create, incur, assume or suffer to exist
any debt (i) senior to the debt evidenced by the Note, except as evidence of a
Permitted Lien nor (ii) any debt, including junior debt which contains any
Default Protection involving SCM shares or substantively similar Default
Protection connected to the SCM Subsidiary.

c.    
Limitation on Preferred Stock. Issue or create any series of
Preferred Stock equal to or superior to the rights of the Series A Shares issued
or issuable to Borrower. 

d.    
Continuity of Operations. Cease to maintain continuity of present
operations, its current management and
ownership, and its current form of existence, or transfer or sell any
interest in Borrower or SCM Subsidiary to any other person.

e.    
Continuity of Management. Cease to engage Michael P. Kurtanjek, or in
lieu of Mr. Kurtanjek if prior written consent is provided
by Lender, some other person reasonably suitable to Lender,
in a principal executive position with Borrower and SCM Subsidiary reasonably
necessary to maintain the viability of the EIS, development
of the proposed desalination plant, and relations with the
Chilean staff of SCM Subsidiary. 

f.    
Change of Control. Issue any securities, or instruments convertible
into securities of the Borrower which would change the
voting control of WMTM by more than 15%. 

g.    
Transfer of Property. Sell, transfer, assign, pledge, hypothecate or
encumber any interest in the SCM Shares or the Cerro Blanco Project without the
prior written consent of Lender. 

h.    
Sale or Transfer of Interests in SCM Subsidiary. Permit the sale,
issuance, or transfer of any ownership or voting interest in SCM Subsidiary.

i.    
Guaranty Obligations. Assume, guarantee, endorse or otherwise be or
become directly or contingently liable for obligations of any person. 

j.    
Loans to Principals. Make any loans or advances to its owners or
management. 

9 




k.   
 Limitation on Dividends. Pay or declare any dividends or
other distributions to its shareholders.

l.    
Transactions with Affiliates. Enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or the rendering
of any service, with any affiliate, except in the ordinary course of and
pursuant to the reasonable requirements of business of Borrower or the
Subsidiaries, as applicable, and upon fair and reasonable terms no less
favorable to Borrower or any Subsidiary, as applicable, than such party would
obtain in a comparable arm’s length transaction with a person not an affiliate.
All indebtedness of Borrower owed to any affiliate shall be made subordinate to
the indebtedness under or pursuant to this Agreement in accordance with
subordination agreements in form satisfactory to Lender. 

7.    
EVENTS OF DEFAULT. Each of the following shall constitute an
“Event of Default” under this Agreement:

a.    
Non-Payment of Principal or Interest. Borrower failing to make the
required principal or interest payments under the Note within 30 days of
becoming due. 

b.    
Breach of Condition, Etc. Borrower or SCM Subsidiary violating any
other material term, condition, or representation contained in this Agreement or
any other Loan Document and, absent any other cure period expressly provided in
the Loan Documents, such violation continues 30 days after notice from
Lender.

c.   
 Other Defaults. The failure on the part of Borrower to
pay any other material indebtedness now or hereafter owed by Borrower to Lender,
or to keep and perform all of Borrower’s covenants and agreements made in
connection with such other indebtedness, after all applicable notice and cure
periods set forth in written documents relating to such other indebtedness 

d.   
 Default in Favor of Third Parties. Should Borrower
default under any loan, lease, extension of credit, security agreement, purchase
or sales agreement, or any other agreement, in favor of any party other than
Lender that continues beyond any applicable notice and cure period and that may
materially and adversely affect any of Borrower’s property, including the shares
of SCM Subsidiary, or Borrower’s ability to repay the Loan or perform its
obligations under this Agreement or any of the other Loan Documents.

e.    
False Statements. Should any warranty, representation or statement
made or furnished to Lender by or on behalf of Borrower or SCM Subsidiary under
this Agreement or any of the other Loan Documents be false or misleading in any
material respect at the time made or furnished, or become false or misleading in
any material respect at any time thereafter.

f.    
Insolvency. The insolvency of Borrower, the appointment of a receiver
for any part of Borrower’s property, any assignment for the benefit of
creditors, any type of creditor workout, a majority vote of the Borrower’s Board
of Directors to file for bankruptcy, or the commencement of any proceeding under
any bankruptcy or insolvency laws by or against Borrower; provided, however, in
the case of a default occasioned by an involuntary bankruptcy, insolvency or
receivership proceeding against Borrower, Borrower shall have 45 days within
which to obtain a dismissal thereof. In the event of a majority vote of the
Borrower’s Board of Directors to file any type of petition for bankruptcy, the
Borrower shall not have 45 days to obtain a dismissal; rather the majority vote
by its Board of Directors shall constitute an incurable Event of Default allowing Lender
to have the absolute right and sole discretion to immediately take any of the
actions set forth in Section 8. 

10 





g.   
 Creditor or Forfeiture Proceedings. Commencement of
foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Borrower or SCM
Subsidiary or by any governmental agency.

h.    
Material Adverse Effect or Material Uninsured Loss. The occurrence of
any Material Adverse Effect in (i) the validity, performance or enforceability
of any Loan Document, (ii) the legality, financial condition, business,
operations, properties, prospects, or profits of Borrower, or (iii) the ability
of Borrower to fulfill its obligations under the Loan Documents or any Material
Contract to which it is a party.

i.    
Judgments. The entry of a judgment or the issuance of a warrant of
attachment, execution or similar process against Borrower or any of its assets
in excess of $50,000 which shall not be dismissed, discharged, stayed pending
appeal or bonded within 30 days after entry and, if bonded, such bond (or
replacement bond) shall not continue in effect at all times until such judgment
is dismissed or discharged. 

j.     Adverse
Change. A material adverse change occurs in Borrower’s financial condition,
which causes Lender reasonably to believe that the prospect of payment or
performance under this Agreement is impaired.

k.    
Conflicts Among Loan Documents. In the event of any conflict between
the Events of Default denoted in this Agreement and any other of the Loan
Documents, the appropriate and applicable provision of this Agreement or the
Loan Documents inuring to the greatest benefit of Lender shall be deemed to
apply in such circumstance. Further, no notice or cure period referenced in this
Agreement shall be used to extend any notice or cure period granted in any other
Loan Document, nor shall any notice or cure period granted in this Agreement be
in addition to any notice or cure period granted in any other Loan Document.


l.    
Subsidiary Defaults. The occurrence of any of the foregoing Events of
Default, to the extent applicable, with regard to a Subsidiary. 

8.   
 EFFECT OF AN EVENT OF DEFAULT. Upon the occurrence of an
Event of Default, or an event which, with the passage of time or notice or both,
would constitute a default or Event of Default under any of the Loan Documents,
in addition to, and not in limitation of the other remedies provided by law or
any of the Loan Documents, Lender (either itself, or through any representative
designated by it) shall have the absolute right at its option and election and
in its sole discretion to take any of the following actions at the same or
different times:

a.    
Cancellation. Cancel this Agreement by written notice to Borrower.


b.   
 Specific Performance. Institute appropriate proceedings
to enforce specific performance of the terms and conditions of this Agreement.


c.    
Acceleration. Accelerate maturity of the Note and demand payment of
the principal sums due thereunder, with interest, advances, costs, and
reasonable attorneys’ fees, and in default of said payment or any part thereof,
to enforce collection of such payment by appropriate action provided for
hereunder and/or in any of the other Loan Documents in any court of competent
jurisdiction.

11 




d.    
Other Remedies. Lender shall have all the rights and remedies
provided in the Loan Documents or available at law, in equity, or otherwise.
Lender shall be privileged and shall have the absolute right to resort to any
one, or more, or all, of said remedies, neither to the limited exclusion of the
other. Except as may be prohibited by applicable law, all of Lender’s rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower shall not affect Lender’s right to declare a default and
to exercise its rights and remedies.

e.    
Desalination Development Protection. Upon the Event of Default,
Borrower agrees to perform the following measures to protect the Developer (as
defined in Exhibit F): 

	 	i. 	
      Term Extension: Extend Term (as defined in Exhibit
      F) of the Development Assignment from four (4) years to eight (8)
      years;

	 	 	 
	 	ii. 	
      Project Entity: As defined in Exhibit F, Borrower
      agrees it will forfeit any White Mountain Equity unless and until the
      Confession of Judgment is completely satisfied and has been paid in
      full;

	 	 	 
	 	iii. 	
      EIS Modification: Borrower and SCM Subsidiary shall add
      the Developer as a party to the EIS; and

	 	 	 
	 	iv. 	
      SCM Subsidiary: Borrower and SCM Subsidiary (i) shall add
      the Developer as a director and or manager (or their collectively
      equivalent under Chilean law) to the SCM Subsidiary; and (ii)
      affirmatively agrees to the additional negative covenant of the SCM
      Subsidiary being precluded from signing any material contract without
      prior Developer (as defined in Exhibit F)
consent.



9.    
CERTAIN DEFINITIONS.

a.    
As used herein, the following terms shall have the meanings set forth below:


“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 405 under the Securities Act. 

“Applicable Law” means all
Laws, to the extent applicable to any Person. 

“Appurtenant Rights” means
the Borrower’s, interest in (a) all presently existing and valid unitization and
pooling declarations, agreements, and/or orders relating to or affecting the
Cerro Blanc Project and all rights in the Cerro Blanco Project; (b) all Fixtures
and Equipment located on or used in connection with the Cerro Blanco Project;
(c) all presently existing production sales contracts, operating, pooling,
unitization and other contracts or agreements which relate to the Cerro Blanco
Project; and (d) all permits, licenses, easements, rights-of-way, rights of use,
and similar agreements pertaining to the Cerro Blanco Project. 

“Cerro Blanco Basic
Documents” means all of the following documents and instruments, including
those that are recorded and unrecorded, which are reasonably necessary to the
conduct of exploration, mining, or other operations on the Cerro Blanco
Project: 

(i)     all
material contracts and agreements comprising any part of, or relating or
pertaining to, the mining concessions, including but not limited contracts by
which the mining concessions were acquired; 

12 




 (ii)     all
agreements or arrangements for the sale, transportation, or other marketing of a
material volume of production from the Interests (including calls on, or other
rights to purchase, production, whether or not the same are currently being
exercised), comprising any part of or otherwise relating or pertaining to the
Interests; and 

 (iii)    
all documents and instruments evidencing the EIS. 

“Cerro Blanco Project”
means the nine natural rutile prospects designated as the Las Carolinas, La
Cantera, Eli, Chascones, Hororio’s Creek, Hippo Ear, Quartz Creek, Algodon and
Bono prospects represented by 44 registered mining exploitation concessions and
36 exploration concessions held by SMC Subsidiary and located over an area of
approximately 17,041 hectares in in the Atacama geographic region (Region III)
of northern Chile.

 “Common Stock” means the
common stock of the Borrower, par value $0.001 per share. 

“Contract” means any
contract, lease, commitment or understanding, sales order, purchase order,
agreement, indenture, mortgage, note, bond, instrument or license, whether
written or verbal, which is intended or purports to be a binding and enforceable
agreement. 

“Encumbrance” means a
claim, Lien, charge, tax, right of first refusal, mortgage, encumbrance, pledge,
other security interest of any kind or other restriction. 

“EIS” means the
Environmental Impact Statement received by SCM Subsidiary for the Cerro Blanco
Project issued by the relevant Chilean government agencies.

“Environmental Laws” means
any relevant national, state or local law or ordinance or regulation in
applicable jurisdictions pertaining to the protection of human health or the
environment. 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder. 

“Fixtures and Equipment”
means the tangible personal property, equipment, improvements, fixtures, and
other personal property and appurtenances.

 “GAAP” means United
States generally accepted accounting principles, consistently applied.

“Good and Defensible
Title” means, as to the Cerro Blanco Project, (i) title to the Cerro Blanco
Project by virtue of which the Borrower can successfully defend against a claim
to the contrary made by a third party, and in the exercise of reasonable
judgment and in good faith; and (ii) SCM Subsidiary’s interest in the Cerro
Blanco Project is subject to no liens, encumbrances, obligations or defects.


“Governmental Authority”
means: (a) the government of the United States: (b) the government of any
foreign country; (c) the government of any state or political subdivision of the
government of the United States or the government of any foreign country; or (d)
any entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government. 

 “Knowledge” means, as it
relates to the Borrower, the actual knowledge of each member of its Board of
Directors and its CEO, in each case upon reasonable inquiry. 

13 




“Law” means any law,
statute, regulation, ordinance, rule, order, decree, judgment, consent decree,
settlement agreement or governmental requirement enacted, promulgated, entered
into, agreed or imposed by any Governmental Authority. 

“Lien” means any mortgage,
lien, charge, restriction, pledge, security interest, option, lease or sublease,
claim, right of any third party, easement, encroachment or encumbrance upon any
of the assets or properties of any Person. 

“Loan Documents” means
this Agreement and the Note, the Certificate of Designations, the Warrant, the
Development Assignment, and such other documents as to which the Parties may
enter into in connection with the transaction set forth in this Agreement. 

“Material” and
“materially” except as otherwise specifically defined in this Agreement,
when used in this Agreement refer, with respect to a given Person, to a level of
significance that would have affected any decision of a reasonable person in
that Person’s position regarding whether to enter into this Agreement or would
affect any decision of a reasonable person in that Person’s position regarding
whether to consummate the transactions contemplated by this Agreement. 

“Material Contract” means
each Contract required to be filed in accordance with the provisions of Item
601(10) of Regulation S-K promulgated by the SEC. 

 “*Party” or
“Parties” means the Borrower and Lender and their assigns. 

“Permit” means a permit,
license, registration, certificate of occupancy, approval or other authorization
issued by any Governmental Authority.

 “Person” means any
corporation, proprietorship, firm, partnership, limited partnership, trust,
association, individual or other entity.

“Material Adverse Effect”
means any change or effect that is, or is reasonably likely to be, materially
adverse to the business, assets and liabilities (taken together), financial
condition or operations or results of operations of the Borrower or its
Subsidiaries, taken as a whole; provided, however, that none of the following
shall be deemed (either alone or in combination) to constitute such a change or
effect: (a)(i) any adverse change attributable to the announcement or pendency
of the transactions contemplated by this Agreement; or (ii) any adverse change
attributable to or conditions generally affecting the world economy or financial
markets in general; (b) any act or threat of terrorism or war anywhere in the
world, any armed hostilities or terrorist activities anywhere in the world, any
threat or escalation of armed hostilities or terrorist activities anywhere in
the world or any governmental or other response or reaction to any of the
foregoing; or (c) any action by Borrower or its Subsidiaries approved or
consented to in writing by the Lender. 

 “SEC” means the U.S.
Securities and Exchange Commission. 

“Securities” shall mean
the Note, the Warrant, the Warrant Shares, the Series A Shares, and the shares
of Common Stock issuable upon conversion of the Series A Shares. 

“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder. 

“Subsidiary” or
“Subsidiaries” shall means any corporation, partnership, limited
liability company, association or other business entity at least 50% of the
outstanding voting power of which is at the time owned or controlled directly or indirectly by the
Borrower or by one or more of such subsidiary entity. 

14 





b.   
 Other Definitions. In addition to the terms set forth in
Section 9(a) and elsewhere in this Agreement, each of the following terms is
defined in the section set forth opposite such term: 

	Defined Term 	Location 
	Agreement 	Preamble 
	Annual Report 	§4(g) 
	Borrower 	Preamble 
	Development Assignment 	§1(i) 
	Disbursement 	§1(e) 
	Effective Date 	Preamble 
	Event of Default 	§7 
	Financial Statements 	§3(d) 
	Lender 	Preamble 
	Loan 	§1(a) 
	Material Permits 	§3(n) 
	Permitted Liens 	§6(a) 
	SCM Shares 	§1(h) 
	SCM Subsidiary 	Preamble 
	SEC Reports 	§3(d) 
	Series A Certificate of Designations 	§1(c) 
	Series A Shares 	§1(c) 
	Default Protections 	§1(h) 
	Use of Proceeds Budget 	§1(b) 
	Warrant 	§1(f) 
	Warrant Shares 	§1(f) 


10.    
ADDITIONAL STIPULATIONS AND AGREEMENTS OF BORROWER. The following
additional agreements of Borrower and Lender are a part of this Agreement and
pursuant to which Borrower and Lender hereby agrees as follows:

a.    
Amendments. No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the Party or Parties sought to
be charged or bound by the alteration or amendment.

b.    
Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, 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
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. To the extent any Party hereto has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself or
its property, each of the Parties hereto hereby irrevocably waives such immunity
in respect of its obligations under this Agreement. 

15 





c.    
Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM,
SETOFF, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR IN ANY WAY
PERTAINING OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR IN ANY
WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF
THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS,
OR IN CONNECTION WITH THE TRANSACTIONS RELATED THERETO OR CONTEMPLATED THEREBY
OR THE EXERCISE OF ANY PARTY’S RIGHTS AND REMEDIES THEREUNDER, IN ALL OF THE
FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE. BORROWER AGREES THAT LENDER MAY FILE A COPY OF
THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND
BARGAINED AGREEMENT OF BORROWER IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY
JURY, AND THAT ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN BORROWER AND LENDER
SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING
WITHOUT A JURY. BORROWER HEREBY ACKNOWLEDGES THAT THIS PROVISION MAY NOT BE
ORALLY WAIVED AND CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER, INCLUDING
LENDER’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD
NOT, IN THE EVENT OF SUCH DISPUTE OR CONTROVERSY, SEEK TO ENFORCE THE PROVISIONS
OF THIS PARAGRAPH, AND BORROWER ACKNOWLEDGES THAT LENDER HAS, IN PART, BEEN
INDUCED TO MAKE THE EXTENSION OF CREDIT EVIDENCED BY THE NOTE IN RELIANCE ON THE
PROVISIONS OF THIS PARAGRAPH. 

d.    
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.

e.    
This Agreement Part of Note. The Note may specifically incorporate
this Agreement by reference and in the event that the Note and/or any of the
other Loan Documents are duly assigned, this Agreement shall be considered
assigned in like manner. In the event of a conflict between any of the
provisions of the Note or any other document evidencing or securing the Loan,
and this Agreement, the provisions of this Agreement shall control unless such
other document results in further or greater protection to Lender, in which case
such document resulting in further or greater protection to Lender shall
control.

f.   
 Exclusiveness. This Agreement and the other Loan
Documents are made for the sole protection of Borrower and Lender, and Lender’s
successors and assigns, and no other party shall have any right of action
hereunder.

g.    
Broker’s Commissions. Borrower represents and covenants that it does
not know of a broker which was in any way connected with the Loan. Borrower
agrees to indemnify and hold Lender harmless from and against any loss, cost,
liability or expense (including, but not limited to, reasonable attorneys’ fees)
incurred as a result of the enforcement of any claim of a broker’s or finder’s
fee against Lender should these representations prove to be false. 

h.    
Costs, Fees and Expenses. Each Party to this Agreement shall bear and
be financially responsible for its own costs associated with this Agreement, the
other Loan Documents, and the transactions contemplated hereby and thereby, including but not
limited to: due diligence costs, and legal expenses for the creation and review
of the Definitive Agreements. 

16 





i.    
Post Judgment Attorney Fees. If the service of an attorney is
required by Lender to enforce a judgment rendered in connection with the Loan,
this Agreement, or any of the other Loan Documents, Lender shall be entitled to
its reasonable attorneys’ fees, legal expenses, and costs and such attorneys’
fees, legal expenses and costs shall be recoverable together with its Confession
of Judgment. This provision shall be severable from all other provisions of this
Agreement or the other Loan Documents, shall survive any judgment, and shall not
be deemed merged into the judgment. 

j.    
Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given pursuant to this Agreement must be in writing
(including electronic format) and will be deemed by the Parties to have been
received (i) upon delivery in person (including by reputable express courier
service) at the address set forth below; (ii) upon delivery by facsimile (as
verified by a printout showing satisfactory transmission) at the facsimile
number designated below (if sent on a business day during normal business hours
where such notice is to be received and if not, on the first business day
following such delivery where such notice is to be received); (iii) upon
delivery by electronic mail (as verified by a printout showing satisfactory
transmission) at the electronic mail address set forth below (if sent on a
business day during normal business hours where such notice is to be received
and if not, on the first business day following such delivery where such notice
is to be received); or (iv) upon three business days after mailing with the
United States Postal Service if mailed from and to a location within the
continental United States by registered or certified mail, return receipt
requested, addressed to the address set forth below. Any Party hereto may from
time to time change its physical or electronic address or facsimile number for
notices by giving notice of such changed address or number to the other Party in
accordance with this section. 

	 	If to Borrower at: 	Augusto Leguia 100, Oficina 1401, Las Condes
  
	 	  	Santiago, Chile 
	 	  	Attention: Michael P. Kurtanjek, CEO 
	 	  	Facsimile No.: 
	 	  	Email Address: mpk@wmtcorp.com 
	 	  	  
	 	With a copy (which will not 	  
	 	constitute notice) to: 	Ronald N. Vance 
	 	  	The Law Office of Ronald N. Vance & 
	 	  	Associates, P.C. 
	 	  	1656 Reunion Avenue 
	 	  	Suite 250 
	 	  	South Jordan, UT 84095 
	 	  	Facsimile No. (801) 446-8803 
	 	  	Email Address: ron@vancelaw.us 
	 	  	  
	 	If to Lender at: 	68 South Main Street, 8th Floor
  
	 	  	Salt Lake City, Utah 84101 
	 	  	Attention: Joshua T. Tandy 
	 	  	Facsimile No.: 
	 	  	Email Address: josh@nexocapitalpartners.com
  
	 	  	  
	 	With a copy (which will not 	68 South Main Street, 8th Floor
  
	 	constitute notice) to: 	Salt Lake City, Utah 84101 


17 





	 	 	Attention: Andrew G. Sloop 
	 	 	Facsimile No.: 
	 	 	Email Address: andrew@nexocapitalpartners.com
    


k.    Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be
invalid or unenforceable as to any Party, such finding shall not render that
provision invalid or unenforceable as to any other Persons. If feasible, any
such offending provision shall be deemed to be modified to be within the limits
of enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in all
other respects shall remain valid and enforceable.

l.   
 Successors and Assigns. All covenants and agreements
contained by or on behalf of Borrower shall bind its successors and assigns and
shall inure to the benefit of Lender, its successors and assigns. Borrower shall
not, however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.

m.    
Entire Agreement. This Agreement constitutes the entire understanding
between the Parties hereto with respect to the subject matter hereof and
supersedes all negotiations, representations, prior discussions, and preliminary
agreements, including Summary of Terms dated March 4, 2016, between the Parties
hereto relating to the subject matter of this Agreement. 

n.    
Survival. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument delivered
by Borrower to Lender under this Agreement shall be considered to have been
relied upon by Lender and will survive the making of the Loan and delivery to
Lender of the Loan Documents, regardless of any investigation made by Lender or
on Lender’s behalf.

o.    
Time Is of the Essence. Time is of the essence in the performance of
this Agreement and the obligations created hereby.

p.   
 Waiver. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of
Lender’s right otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any course of
dealing between Lender and Borrower, shall constitute a waiver of any of
Lender’s rights or of any obligations of Borrower as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing consent
in subsequent instances where such consent is required, and in all cases such
consent may be granted or withheld in the sole discretion of Lender.

q.   
 Extension or Renewal. Borrower and Lender agree that, by
mutual consent evidenced by a written instrument, this Agreement and the other
Loan Documents, from time to time, may be extended or renewed in whole or in
part, and the rate of interest thereon may be changed, or fees in consideration
of loan extensions imposed, and any related right or security thereby waived,
exchanged, surrendered or otherwise dealt with, and any of the acts mentioned in
the Note may be done, all without affecting the liability (except as set forth
therein) of Borrower and all other obligors, endorsers, and co-makers under this
Agreement, the Note and the other Loan Documents. 

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r.    
Governing Language. This Agreement has been prepared in the English
language and the English language shall control its interpretation. All
consents, notices, reports and other written documents to be delivered or
provided by a Party under this Agreement shall be in the English language,
unless otherwise agreed by the receiving Party, and in the event of any conflict
between the provisions of any document and the English language translation
thereof, the terms of the English language translation shall control. 

s.    
Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be an original,
but such counterparts shall, together, constitute one and the same instrument.
This Agreement, the other Loan Agreements, and each other agreement or
instrument entered into in connection herewith or therewith or contemplated
hereby or thereby, and any amendments hereto or thereto, to the extent signed
and delivered by means of a photographic, photostatic, facsimile or similar
reproduction of such signed writing using a facsimile machine or e-mail shall be
treated in all manner and respects as an original agreement or instrument and
shall be considered to have the same binding legal effect as if it were the
original signed version thereof delivered in person. At the request of any Party
hereto or to any such agreement or instrument, each other Party hereto or
thereto shall reexecute original forms thereof and deliver them to all other
Parties. No Party hereto or to any such agreement or instrument shall raise the
use of a facsimile machine or e-mail to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine or e-mail as a defense to the formation or
enforceability of a contract and each such Party forever waives any such
defense. 

t.    
Currency. Unless otherwise stated, all dollars specified in this
Agreement and the other Loan Documents are in U.S. dollars. 

u.    
Computation of Time Periods; Other Definitional Provisions. In this
Agreement and the other Loan Documents in the computation of periods of time
from a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding”.
References in the Loan Documents to any agreement or contract “as amended” shall
mean and be a reference to such agreement or contract as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with its terms. The words “include,” “includes” and “including” shall be deemed
to be followed by the words “without limitation” or words of similar import, and
all references herein to sections, exhibits and schedules shall be deemed
references to sections, exhibits and schedules of this Agreement, unless the
context shall otherwise require. 

v.    
Exhibits. Each of the exhibits referenced in this Agreement is
annexed hereto and is incorporated herein by this reference and expressly made a
part hereof. The following exhibits are attached to this Agreement: 


	Exhibit A 	Use of Proceeds Budget 
	Exhibit B 	7% Senior Convertible Promissory Note 
	Exhibit C 	Certificate of Designations for Series A
      Preferred Stock 
	Exhibit D 	Common Stock Purchase Warrant 
	Exhibit E 	Registration Rights Agreement 
	Exhibit F 	Development Assignment




w.    
Representation of Counsel. Notwithstanding any rule or maxim of
construction to the contrary, any ambiguity or uncertainty with respect to the
provisions of this Agreement or their interpretation or application shall not be
construed against either Borrower or Lender based upon authorship of any of the
provisions hereof. Borrower and Lender each hereby warrants, represents and certifies to the other as follows: (a) that the contents of
this Agreement and the other Loan Documents have been completely and carefully
read by the representing Party and counsel for the representing Party; (b) that
the representing Party has been separately represented by counsel and the
representing Party is satisfied with such representation; and (c) that the
representing Party’s counsel has advised the representing Party of, and the
representing Party fully understands, the legal consequences of this Agreement. 

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[SIGNATURE PAGE FOLLOWS] 

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SIGNATURE PAGE 

IN WITNESS WHEREOF, each
of the Parties has caused this Agreement to be duly executed as of the Effective
Date set out above. 

	 	LENDER: 
	 	NEXO WMTM Holdings, LLC 
	 	 	  
	 	 	  
	 	By:  	/s/
      Andrew G. Sloop 
	 	 	Name: Andrew G. Sloop 
	 	 	Title: Partner 
	 	 	  
	 	 	  
	 	 	  
	 	BORROWER: 
	 	WHITE MOUNTAIN TITANIUM
      CORPORATION 
	 	 	  
	 	 	  
	 	By:  	/s/
      Michael P. Kurtanjek 
	 	 	Name: Michael P. Kurtanjek 
	 	 	Title: Interim Chief Executive Officer 
	 	 	  
	 	 	  
	 	 	  
	 	SCM SUBSIDIARY: 
	 	SOCIEDAD CONTRACTUAL MINERA
      WHITE 
	 	MOUNTAIN TITANIUM 
	 	 	  
	 	 	  
	 	By:  	/s/
      Michael P. Kurtanjek 
	 	 	Name: Michael P. Kurtanjek 
	 	 	Title: President 


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