Document:

Exhibit

Exhibit 4.02

Counterpart __ of 30

ENTERGY NEW ORLEANS, INC.
to
THE BANK OF NEW YORK MELLON
(formerly The Bank of New York, successor to Harris Trust 
Company of New York and Bank of Montreal Trust Company)
As Trustee under the Mortgage and Deed of Trust, 
dated as of May 1, 1987 of Entergy New Orleans, Inc. 
NINETEENTH SUPPLEMENTAL INDENTURE
Providing among other things for
First Mortgage Bonds,
5.50% Series due April 1, 2066
(Twenty-second Series)
Dated as of March 15, 2016
    

NINETEENTH SUPPLEMENTAL INDENTURE, dated as of March 15, 2016, between ENTERGY NEW ORLEANS, INC., a corporation of the State of Louisiana, whose post office address is 1600 Perdido Street, Building 505, New Orleans, Louisiana 70112 (the “Company”) and THE BANK OF NEW YORK MELLON (formerly The Bank of New York, successor to Harris Trust Company of New York and Bank of Montreal Trust Company), a New York banking corporation, whose principal corporate trust office is located at 101 Barclay Street, New York, New York 10286, as trustee under the Mortgage and Deed of Trust, dated as of May 1, 1987, executed and delivered by the Company (herein called the “Original Indenture”; the Original Indenture and any and all indentures and instruments supplemental thereto being herein called the “Indenture”);

WHEREAS, the Original Indenture has been duly recorded and filed as required in the State of Louisiana simultaneously with the recording and filing of the First Supplemental Indenture thereto, dated as of May 1, 1987, between the Company and BANK OF MONTREAL TRUST COMPANY (The Bank of New York Mellon, successor) and Z. GEORGE KLODNICKI (Stephen J. Giurlando, successor), as trustees (herein called the “First Supplemental Indenture”); and

WHEREAS, the Original Indenture was recorded in various Parishes in the State of Louisiana; and

WHEREAS, the Company executed and delivered to the Trustees (such term and all other defined terms used herein and not defined herein having the respective definitions to which reference is made in Article I below) its Second Supplemental Indenture, dated as of January 1, 1988, its Third Supplemental Indenture, dated as of March 1, 1993, its Fourth Supplemental Indenture, dated as of September 1, 1993, its Fifth Supplemental Indenture, dated as of April 1, 1995, its Sixth Supplemental Indenture, dated as of March 1, 1996, its Seventh Supplemental Indenture, dated as of July 1, 1998 (the “Seventh Supplemental Indenture”), its Eighth Supplemental Indenture, dated as of July 1, 2000 (the “Eighth Supplemental Indenture”), its Ninth Supplemental Indenture, dated as of February 1, 2001, its Tenth Supplemental Indenture, dated as of October 1, 2002, its Eleventh Supplemental Indenture, dated as of July 1, 2003, its Twelfth Supplemental Indenture dated as of August 1, 2004, its Thirteenth Supplemental Indenture dated as of August 15, 2004, its Fourteenth Supplemental Indenture dated as of June 1, 2005, its Fifteenth Supplemental Indenture, dated as of November 1, 2010, its Sixteenth Supplemental Indenture, dated as of November 1, 2012, and its Seventeenth Supplemental Indenture, dated as of June 1, 2013, each as a supplement to the Original Indenture, which Supplemental Indentures have been duly recorded in various Parishes in the State of Louisiana, which Parishes are the same Parishes in which this Nineteenth Supplemental Indenture is to be recorded; and

WHEREAS, the Company executed and delivered to the Trustee its Eighteenth Supplemental Indenture, dated as of March 3, 2016 in connection with the acquisition by the Company of certain real property and interests in real property situated in Arkansas, which Supplemental Indenture is to be recorded in Union County, Arkansas and certain Parishes in Louisiana; and 

WHEREAS, pursuant to an Agreement and Plan of Merger dated as of March 18, 1999, Harris Trust Company of New York merged into Bank of Montreal Trust Company, Trustee under the Indenture, and effective July 1, 1999, the combined entity changed its name to Harris Trust Company of New York, and, by virtue of Section 9.03 of the Original Indenture, Harris Trust Company of New York became successor Trustee under the Indenture, without execution of any paper or the performance of any further act on the part of any other parties to the Indenture; and

WHEREAS, effective July 15, 2000, Harris Trust Company of New York and Mark F. McLaughlin resigned as Trustee and Co-Trustee, respectively, under the Indenture, and by the Eighth Supplemental Indenture, the Company appointed The Bank of New York and Stephen J. Giurlando as successor Trustee and successor Co-Trustee, respectively, effective July 15, 2000, and The Bank of New York and Stephen J. Giurlando accepted said respective appointments; and  

WHEREAS, effective July 1, 2008, The Bank of New York changed its name to The Bank of New York Mellon; and

WHEREAS, effective November 1, 2010, Stephen J. Giurlando resigned as Co-Trustee under the Indenture; and

WHEREAS, the Company has heretofore issued, in accordance with the provisions of the Indenture, the following series of bonds:
	
					
	Series
	Principal Amount
Issued 
	Principal Amount
Outstanding

	10.95% Series due May 1, 1997
	$75,000,000
	 
	None
	 

	13.20% Series due February 1, 1991
	1,400,000
	 
	None
	 

	13.60% Series due February 1, 1993
	29,400,000
	 
	None
	 

	13.90% Series due February 1, 1995
	9,200,000
	 
	None
	 

	7% Series due March 1, 2003
	25,000,000
	 
	None
	 

	8% Series due March 1, 2023
	45,000,000
	 
	None
	 

	7.55% Series due September 1, 2023
	30,000,000
	 
	None
	 

	8.67% Series due April 1, 2005
	30,000,000
	 
	None
	 

	8% Series due March 1, 2006
	40,000,000
	 
	None
	 

	7% Series due July 15, 2008
	30,000,000
	 
	None
	 

	8.125% Series due July 15, 2005
	30,000,000
	 
	None
	 

	6.65% Series due March 1, 2004
	30,000,000
	 
	None
	 

	6.75% Series due October 15, 2017
	25,000,000
	 
	None
	 

	3.875% Series due August 1, 2008
	30,000,000
	 
	None
	 

	5.25% Series due August 1, 2013
	70,000,000
	 
	None
	 

	5.65% Series due September 1, 2029
	40,000,000
	 
	37,807,000
	 

	5.60% Series due September 1, 2024
	35,000,000
	 
	33,276,000
	 

	4.98% Series due July 1, 2010
	30,000,000
	 
	None
	 

	5.10% Series due December 1, 2020
	25,000,000
	 
	25,000,000
	 

	5.0% Series due December 1, 2052
	30,000,000
	 
	30,000,000
	 

	3.90% Series due July 1, 2023
	100,000,000
	 
	100,000,000
	 

; and

WHEREAS, Section 19.04 of the Original Indenture provides, among other things, that any power, privilege or right expressly or impliedly reserved to or in any way conferred upon the Company by any provision of the Indenture, whether such power, privilege or right is in any way restricted or is unrestricted, may be in whole or in part waived or surrendered or subjected to any restriction if at the time unrestricted, or to additional restriction if already restricted, and the Company may enter into any further covenants, limitations, restrictions or provisions for the benefit of any one or more series of bonds issued thereunder, 

or the Company may establish the terms and provisions of any series of bonds by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to be recorded in all of the states in which any property at the time subject to the Lien of the Indenture shall be situated; and

WHEREAS, the Company desires to create a new series of bonds under the Indenture and to add to its covenants and agreements contained in the Indenture certain other covenants and agreements to be observed by it; and

WHEREAS, all things necessary to make this Nineteenth Supplemental Indenture a valid, binding and legal instrument have been performed, and the issue of said series of bonds, subject to the terms of the Indenture, has been in all respects duly authorized;

NOW, THEREFORE, THIS NINETEENTH SUPPLEMENTAL INDENTURE WITNESSETH: That ENTERGY NEW ORLEANS, INC., in consideration of the premises and of Ten Dollars ($10) to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in order to secure the payment of both the principal of and interest and premium, if any, on the bonds from time to time issued under the Indenture, according to their tenor and effect and the performance of all provisions of the Indenture (including any modification made as in the Indenture provided) and of said bonds, hath granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over and confirmed and granted a security interest in, and by these presents doth grant, bargain, sell, release, convey, assign, transfer, mortgage, hypothecate, affect, pledge, set over and confirm and grant a security interest (subject, however, to Excepted Encumbrances as defined in Section 1.06 of the Original Indenture) unto (to the extent of its legal capacity to hold the same for the purpose hereof) THE BANK OF NEW YORK MELLON, as Trustee under the Indenture, and to its successor or successors in said trust, and to said Trustee and its successors and assigns forever (1) all rights, legal and equitable, of the Company (whether in accordance with Paragraph 32 of that certain Resolution No. R-86-112, adopted by the Council of the City of New Orleans on March 20, 1986 and accepted by the Company on March 25, 1986, as superseded by Resolution No. R-91-157, effective October 4, 1991, or pursuant to other regulatory authorization or by operation of law or otherwise), in the event of the purchase and acquisition by the City of New Orleans (or any other governmental authority or instrumentality or designee thereof) of properties and assets of the Company, to recover and receive payment and compensation from the City (or from such other governmental authority or instrumentality or designee thereof or any other person) of an amount equal to the aggregate uncollected balance of (A) the deferrals of Grand Gulf 1 Costs (as defined in the Original Indenture) and the deferred carrying charges accrued thereon that have accumulated prior to the City or such other entity providing official notice to the Company of the City’s or such other entity’s intent to effect such purchase and acquisition and (B) if and to the extent that the City or such other entity and the Company agree that the City or such other entity is liable for all or a portion of the aggregate uncollected balance of such deferrals accumulating thereafter or a court of final resort so holds, such deferrals that have accumulated subsequent to such notice (said rights of the Company, together with the proceeds and products thereof, being defined in the Original Indenture as the “Municipalization Interest”); and (2) all properties of the Company, real, personal and mixed, of the kind or nature described or mentioned in the Original Indenture; and (3) all properties of the Company specifically described in Article VII hereof and all other properties of the Company, real, personal and mixed, of the kind or nature specifically mentioned in the Original Indenture or of any other kind or nature acquired by the Company on or after the date of the execution and delivery of the Original Indenture (except any herein or in the Original Indenture, as heretofore supplemented, expressly excepted), now owned or, subject to the provisions of Section 15.03 of the Original Indenture, hereafter 

acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same, the scope and intent of the foregoing or of any general description contained herein or in the Original Indenture, as heretofore supplemented), all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and other rights in or relating to real estate or the occupancy of the same; all power sites, flowage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, waterways, dams, dam sites, aqueducts, and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants for the generation of electricity by steam, water and/or other power; all power houses, gas plants, street lighting systems, standards and other equipment incidental thereto; all telephone, radio and television systems, air-conditioning systems, and equipment incidental thereto, water wheels, water works, water systems, steam heat and hot water plants, substations, electric, gas and water lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and the equipment thereof; all machinery, engines, boilers, dynamos, turbines, electric, gas and other machines, prime movers, regulators, meters, transformers, generators (including, but not limited to, engine driven generators and turbogenerator units), motors, electrical, gas and mechanical appliances, conduits, cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, towers, overhead conductors and devices, underground conduits, underground conductors and devices, wires, cables, tools, implements, apparatus, storage battery equipment, and all other fixtures and presently; all municipal and other franchises, consents or permits; all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith and (except as herein or in the Original Indenture, as heretofore supplemented, expressly excepted) all the rights, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property herein or in the Original Indenture, as heretofore supplemented, described.

TOGETHER WITH all and singular the tenements, hereditaments, prescriptions, servitudes and appurtenances belonging or in anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 11.01 of the Original Indenture) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property, rights and franchises and every part and parcel thereof.

IT IS HEREBY AGREED by the Company that, subject to the provisions of Section 15.03 of the Original Indenture, all the property, rights and franchises acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way and including real property and interests situated in Louisiana, Arkansas and elsewhere) after the date hereof, except any herein or in the Original Indenture, as heretofore supplemented, expressly excepted, shall be and are as fully granted and conveyed hereby and as fully embraced within the Lien of the Original Indenture and the Lien hereof as if such property, rights and franchises were now owned by the Company and were specifically described herein and granted and conveyed hereby.

PROVIDED that, except as provided herein and in the Original Indenture with respect to the Municipalization Interest, the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed hereunder, nor is a security interest therein hereby or by the Original Indenture, as heretofore 

supplemented, granted or intended to be granted, and the same are hereby expressly excepted from the Lien of the Indenture and the operation of this Nineteenth Supplemental Indenture, viz.: (1) cash, shares of stock, bonds, notes and other obligations and other securities not heretofore or hereafter specifically pledged, paid, deposited, delivered or held hereunder or covenanted so to be; (2) merchandise, equipment, apparatus, materials or supplies held for the purpose of sale or other disposition in the usual course of business or for the purpose of repairing or replacing (in whole or part) any rolling stock, buses, motor coaches, automobiles and other vehicles or aircraft or boats, ships, or other vessels and any fuel, oil and similar materials and supplies consumable in the operation of any of the properties of the Company; rolling stock, buses, motor coaches, automobiles and other vehicles and all aircraft; boats, ships and other vessels; all timber, minerals, mineral rights and royalties; (3) bills, notes and other instruments and accounts receivable, judgments, demands, general intangibles and chooses in action, and all contracts, leases and operating agreements not specifically pledged hereunder or under the Original Indenture or covenanted so to be; (4) the last day of the term of any lease or leasehold which may hereafter become subject to the Lien of the Indenture; (5) electric energy, gas, water, steam, ice, and other materials or products generated, manufactured, produced or purchased by the Company for sale, distribution or use in the ordinary course of its business; (6) any natural gas wells or natural gas leases or natural gas transportation lines or other works or property used primarily and principally in the production of natural gas or its transportation, primarily for the purpose of sale to natural gas customers or to a natural gas distribution or pipeline company, up to the point of connection with any distribution system; and (7) the Company’s franchise to be a corporation; provided, however, that the property and rights expressly excepted from the Lien and operation of the Indenture in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that the Trustee or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XII of the Original Indenture by reason of the occurrence of a Default.

TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed or in which a security interest has been granted by the Company as aforesaid, or intended so to be (subject, however, to Excepted Encumbrances as defined in Section 1.06 of the Original Indenture), unto (to the extent of its legal capacity to hold the same for the purposes hereof) THE BANK OF NEW YORK MELLON, and its successors and assigns forever. 

IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Original Indenture, as heretofore supplemented, this Nineteenth Supplemental Indenture being supplemental thereto.

AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Original Indenture, as heretofore supplemented, shall affect and apply to the property hereinbefore and hereinafter described and conveyed and to the estate, rights, obligations and duties of the Company and the Trustee and the beneficiaries of the trust with respect to said property, and to the Trustee and their successors as Trustee of said property in the same manner and with the same effect as if said property had been owned by the Company at the time of the execution of the Original Indenture and had been specifically and at length described in and conveyed to said Trustee by the Original Indenture as a part of the property therein stated to be conveyed.

The Company further covenants and agrees to and with the Trustee and its successor or successors in said trust under the Indenture, as follows:

ARTICLE I 
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01    Terms From the Original Indenture and First through Eighteenth Supplemental Indentures. Except as set forth in Section 1.02 below, all defined terms used in this Nineteenth Supplemental Indenture and not otherwise defined herein shall have the respective meanings ascribed to them in the Original Indenture or the First through the Eighteenth Supplemental Indentures, as the case may be.

Section 1.02    Certain Defined Terms. As used in this Nineteenth Supplemental Indenture, the following defined terms shall have the respective meanings specified unless the context clearly requires otherwise: 

The term “Bonds of the Twenty-second Series” shall have the meaning specified in Section 2.01.

The term “Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business.

Section 1.03    References are to Nineteenth Supplemental Indenture. Unless the context otherwise requires, all references herein to “Articles”, “Sections” and other subdivisions refer to the corresponding Articles, Sections and other subdivisions of this Nineteenth Supplemental Indenture, and the words “herein”, “hereof”, “hereby”, “hereunder” and words of similar import refer to this Nineteenth Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision hereof or to the Original Indenture or any other supplemental indenture thereto.

Section 1.04    Number and Gender. Unless the context otherwise requires, defined terms in the singular include the plural, and in the plural include the singular. The use of a word of any gender shall include all genders. 

ARTICLE II 
THE TWENTY-SECOND SERIES
Section 2.01    Bonds of the Twenty-second Series. Pursuant to Section 2.01 of the Original Indenture, there shall be a series of bonds designated 5.50% Series due April 1, 2066 (herein sometimes referred to as the “Bonds of the Twenty-second Series”), each of which shall also bear the descriptive title “First Mortgage Bond”. The form of Bonds of the Twenty-second Series shall be substantially in the form of Exhibit A hereto. Bonds of the Twenty-second Series (which shall be initially issued in the aggregate principal amount of $110,000,000) shall mature on April 1, 2066 and shall be issued only as fully registered bonds in denominations of Twenty-Five Dollars and, at the option of the Company, in any multiple or multiples thereof (the exercise of such option to be evidenced by the execution and delivery thereof). Bonds of the Twenty-second Series shall bear interest at the rate of five and fifty one-hundredths percent (5.50%) per annum (except as hereinafter provided), payable quarterly on January 1, April 1, July 1 and October 1 of each year, and at maturity or earlier redemption, the first interest payment to be made on July 1, 2016 for the period from the date of original issuance of the Bonds of the Twenty-second Series to, but not including, July 1, 2016; the principal and interest on each said bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, payable in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts. Interest on Bonds of the Twenty-second Series may at the option of the Company be paid by check mailed to the registered owners thereof. Overdue principal and (to the extent permitted by law) overdue interest in respect of Bonds of the Twenty-second Series shall bear interest (before and after judgment) at the rate of six and fifty one-hundredths 

percent (6.50%) per annum. Interest on the Bonds of the Twenty-second Series shall be computed on the basis of a 360-day year consisting of 12 thirty-day months. Interest on Bonds of the Twenty-second Series in respect of a portion of a month shall be calculated based on the actual number of days elapsed. In any case where any interest payment date, redemption date or maturity of any Bond of the Twenty-second Series shall not be a Business Day, then payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect, and in the same amount, as if made on the corresponding interest payment date or redemption date, or at maturity, as the case may be, and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on the amounts so payable for the period from and after such interest payment date, redemption date or maturity, as the case may be, to such Business Day. 

The Company reserves the right to establish at any time, by Resolution of the Board of Directors of the Company, a form of coupon bond, and of appurtenant coupons, for the Twenty-second Series and to provide for exchangeability of such coupon bonds with the bonds of said Series issued hereunder in fully registered form and to make all appropriate provisions for such purpose.

Section 2.02    Redemption of Bonds of the Twenty-second Series.     (a) The bonds of the Twenty-second Series shall be redeemable at the option of the Company, in whole or in part, upon notice mailed not less than 30 days’ nor more than 60 days’ prior to the date fixed for redemption, at any time on or after April 1, 2021, at a redemption price equal to 100% of the principal amount of the bonds of the Twenty-second Series being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

(b) Bonds of the Twenty-second Series shall also be redeemable, at the option of the holders thereof, as provided in Section 3.04 of the First Supplemental Indenture, as heretofore and hereby amended.  Any redemption under said Section 3.04, as amended, shall be at a redemption price equal to 100% of the principal amount of the Bonds of the Twenty-second Series being redeemed plus accrued and unpaid interest thereon to the redemption date.

(c) Bonds of the Twenty-second Series shall also be redeemable as follows:

Should all or substantially all of the Mortgaged and Pledged Property be taken by the City of New Orleans or any instrumentality or designee thereof by the exercise of the power of eminent domain or taken by the exercise by the City of New Orleans or any instrumentality or designee thereof of the right to purchase or otherwise acquire the same, or should such Mortgaged and Pledged Property be voluntarily sold, transferred or otherwise conveyed to the City of New Orleans or such instrumentality or designee thereof, then, in any such event, the Company shall, upon the consummation of such taking, sale, transfer or other conveyance (in any case whether or not the Lien of the Indenture is released with respect to such Mortgaged and Pledged Property), immediately request the Trustee to take, and upon receipt of such request the Trustee shall take, all requisite action to prepare (in consultation with the Company) and to mail written notice thereof to each registered holder of any Outstanding Bond of the Twenty-second Series, at his or her last address appearing upon the registry books, such notice (hereinafter referred to in this Section 2.02(c) as the “Trustee’s Special Notice”), to state that it is given pursuant to this Section 2.02(c) of this Nineteenth Supplemental Indenture and that the holder of any Bond or Bonds of the Twenty-second Series then Outstanding shall have the right to require the Company to redeem such Bond or Bonds of the Twenty-second Series, in whole or in part, on the terms and subject to the conditions hereinafter in this Section 2.02(c) set forth. 

Upon the mailing of the Trustee’s Special Notice, the holder of any Bonds of the Twenty-second Series then Outstanding may, within forty-five (45) days from the date of the Trustee’s Special Notice, give the Trustee written notice of such holder’s intent to have his or her Bond or Bonds of the Twenty-second Series redeemed by the Company on the sixtieth (60th) day following the date of the Trustee’s Special Notice, upon delivery and surrender of such Bond or Bonds of the Twenty-second Series accompanied by such documentation as the Trustee or the Company may require. Unless on or prior to the forty-fifth (45th) day following the date of the Trustee’s Special Notice, such holder shall have, by further written notice to the Trustee, withdrawn or revoked such written notice of intent to have his or her Bond or Bonds of the Twenty-second Series so redeemed, the Company shall, on the sixtieth (60th) day following the date of the Trustee’s Special Notice, redeem any such Bond or Bonds of the Twenty-second Series that are properly delivered and surrendered for that purpose at the special redemption price of 101% of the principal amount thereof plus accrued and unpaid interest thereon to the redemption date.

Section 2.03    Transfer and Exchange. (a) At the option of the registered owner, any Bonds of the Twenty-second Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, shall be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.

Bonds of the Twenty-second Series shall be transferable, upon the surrender thereof for cancellation, together with a written instrument of transfer in form approved by the registrar duly executed by the registered owner or by his or her duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York.

Upon any such exchange or transfer of Bonds of the Twenty-second Series, the Company may make a charge therefor sufficient to reimburse it for any tax or taxes or other governmental charge, as provided in Section 2.05 of the Original Indenture, but the Company hereby waives any right to make a charge in addition thereto for any such exchange or transfer of Bonds of the Twenty-second Series.

Section 2.04    Dating of Bonds and Interest Payments. (a) Each Bond of the Twenty-second Series shall be dated as of the date of authentication and shall bear interest from the last preceding interest payment date to which interest shall have been paid (unless the date of such bond is an interest payment date to which interest is paid, in which case from the date of such bond); provided that each Bond of the Twenty-second Series dated prior to July 1, 2016 shall bear interest from the date of original issuance thereof; and provided, further, that if any Bond of the Twenty-second Series shall be authenticated and delivered upon a transfer of, or in exchange for or in lieu of, any other Bond or Bonds of the Twenty-second Series upon which interest is in default, it shall be dated so that such bond shall bear interest from the last preceding date to which interest shall have been paid on the bond or bonds in respect of which such bond shall have been delivered or from its date of original issuance, if no interest shall have been paid on the Bonds of the Twenty-second Series.

(b) Notwithstanding the foregoing, Bonds of the Twenty-second Series shall be dated so that the person in whose name any Bond of the Twenty-second Series is registered at the close of business on the Business Day immediately preceding an interest payment date shall be entitled to receive the interest payable on the interest payment date notwithstanding the cancellation of such bond upon any transfer or exchange thereof subsequent to such close of business and prior to such interest payment date, except if, and to the extent that, the Company shall default in the payment of interest due on such interest payment date, in which 

case such defaulted interest shall be paid to the persons in whose names Outstanding Bonds of the Twenty-second Series are registered at the close of business on the Business Day immediately preceding the date of payment of such defaulted interest. Any Bond of the Twenty-second Series issued upon any transfer or exchange subsequent to such close of business and prior to such interest payment date shall bear interest from such interest payment date. In the event there shall be more than one registered owner of Bonds of the Twenty-second Series, then the Company shall not be required to make transfers or exchanges of bonds of said series for a period of fifteen (15) days immediately preceding any interest payment date of said series.

Section 2.05    Additional Bonds of the Twenty-second Series.  Upon the delivery of this Nineteenth Supplemental Indenture and upon compliance with the applicable provisions of the Indenture, as heretofore supplemented, there shall be an initial issue of Bonds of the Twenty-second Series for the aggregate principal amount of $110,000,000.  Additional Bonds of the Twenty-second Series, without limitation as to amount, having substantially the same terms as the Outstanding Bonds of the Twenty-second Series (except for the issue date, the price to public and, if applicable, the initial interest payment date) may be issued by the Company, subject to satisfaction of the requirements of the Indenture, as heretofore supplemented, without the notice to or the consent of the existing holders of the Bonds of the Twenty-second Series.

ARTICLE III 
OTHER PROVISIONS FOR RETIREMENT OF BONDS
Section 3.01    Exchange or Redemption upon Merger or Consolidation. The second sentence of subsection (a) of Section 3.04 of the First Supplemental Indenture, as amended and restated by the Seventh Supplemental Indenture, and as subsequently amended, is hereby further amended to insert the following words immediately after the words “the Nineteenth Supplemental Indenture”: 

“, shall (as to the New LP&L Bonds being exchanged for the Bonds of the Twenty-second Series) be subject to redemption at the option of the Company on terms similar to those provided in the Nineteenth Supplemental Indenture,"

Section 3.02    Redemption Price upon Merger or Consolidation. The redemption price for any Bonds of the Twenty-second Series redeemed pursuant to subsection (b) of Section 3.04 of the First Supplemental Indenture, as amended and restated by the Seventh Supplemental Indenture, and as subsequently amended, shall be equal to 100% of the principal amount of the Bonds of the Twenty-second Series to be redeemed, plus accrued and unpaid interest thereon to the redemption date. 

ARTICLE IV 
COVENANTS

Section 4.01    Maintenance of Paying Agency. So long as any Bonds of the Twenty-second Series are Outstanding, the Company covenants that the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, where the principal of or interest on any Bonds of the Twenty-second Series shall be payable, shall also be an office or agency where any such bonds may be transferred or exchanged and where notices, presentations or demands to or upon the Company in respect of such bonds or in respect of the Indenture may be given or made.

Section 4.02    Further Assurances. From time to time whenever reasonably requested by the Trustee or the holders of a majority in principal amount of Bonds of the Twenty-second Series then Outstanding, the Company will make, execute and deliver or cause to be made, executed and delivered any and all such further and other instruments and assurances as may be reasonably necessary or proper to carry out the intention of or to facilitate the performance of the terms of the Indenture or to secure the rights and remedies of the holders of such Bonds. 

ARTICLE V

THE COMPANY RESERVES THE RIGHT TO AMEND
CERTAIN PROVISIONS OF THE INDENTURE
Section 5.01    The Company reserves the right, without any consent, vote or other action by holders of Bonds of the Twenty-second Series, or of any other subsequent series, to amend the Indenture, as heretofore amended and supplemented, as follows:

To delete all provisions in the Indenture which require a Net Earning Certificate, whether as a condition precedent to the authentication and delivery of bonds or otherwise.
Section 5.02    Each initial and future holder of bonds of the Twenty-second Series, by its acquisition of an interest in such bonds, irrevocably (a) consents to the amendment set forth in (i) Article V, Sections 5.01 through 5.06 of the Sixteenth Supplemental Indenture, dated as of November 1, 2012 between the Company and the Trustee and (ii) Article V, Section 5.01 of this Nineteenth Supplemental Indenture without any other or further action by any holder of such bonds, and (b) designates the Trustee, and its successors, as its proxy with irrevocable instructions to vote and deliver written consents on behalf of such holder in favor of such amendments at any bondholder meeting, in lieu of any bondholder meeting, in any consent solicitation or otherwise.

ARTICLE VI
MISCELLANEOUS PROVISIONS

Section 6.01    Acceptance of Trusts. The Trustee hereby accepts the trusts herein declared, provided, created or supplemented and agrees to perform the same upon the terms and conditions herein and in the Original Indenture, as heretofore supplemented, set forth and upon the following terms and conditions: 

The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Nineteenth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are solely made by the Company. In general, each and every term and condition contained in Article XVI of the Original Indenture shall apply to and form part of this Nineteenth Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Nineteenth Supplemental Indenture.

Section 6.02    Effect of Nineteenth Supplemental Indenture under Louisiana Law. It is the intention and it is hereby agreed that so far as concerns that portion of the Mortgaged and Pledged Property situated within the State of Louisiana, the general language of conveyance contained in this Nineteenth Supplemental Indenture is intended and shall be construed as words of hypothecation and not of conveyance, and that so far as the said Louisiana property is concerned, this Nineteenth Supplemental Indenture shall be considered as an act of mortgage and pledge and granting of a security interest under the laws of the State of Louisiana, and the Trustee herein named is named as mortgagee and pledgee and secured party in trust for the benefit of itself and of all present and future holders of bonds issued under the Indenture and any coupons thereto issued hereunder, and is irrevocably appointed special agent and representative of the holders of such bonds and coupons and vested with full power in their behalf to effect and enforce the mortgage and pledge and a security interest hereby constituted for their benefit, or otherwise to act as herein provided for.

Section 6.03    Record Date. The holders of the Bonds of the Twenty-second Series shall be deemed to have consented and agreed that the Company may, but shall not be obligated to, fix a record date for the purpose of determining the holders of the Bonds of the Twenty-second Series entitled to consent, if any such consent is required, to any amendment or supplement to the Indenture or the waiver of any provision thereof or any act to be performed thereunder. If a record date is fixed, those persons who were holders of the Bonds of the Twenty-second Series at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons continue to be holders of the Bonds of the Twenty-second Series after such record date. No such consent shall be valid or effective for more than 90 days after such record date. 

Section 6.04    Titles. The titles of the several Articles and Sections of this Nineteenth Supplemental Indenture shall not be deemed to be any part hereof.

Section 6.05    Counterparts. This Nineteenth Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 6.06    Governing Law. The laws of the State of New York shall govern this Nineteenth Supplemental Indenture and the Bonds of the Twenty-second Series, except to the extent that the validity or perfection of the Lien of the Indenture, or remedies thereunder, are governed by the laws of a jurisdiction other than the State of New York.

ARTICLE VII
SPECIFIC DESCRIPTION OF PROPERTY
PARAGRAPH ONE

The Electric Generating Plants, Plant Sites and Stations of the Company, including all electric works, power houses, buildings, pipelines and structures owned by the Company and all land of the Company on which the same are situated and all of the Company’s lands, together with the buildings and improvements thereon, and all rights, ways, servitudes, prescriptions, and easements, rights-of-way, permits, privileges, licenses, poles, wires, machinery, implements, switchyards, electric lines, equipment and appurtenances, 

forming a part of said plants, sites or stations, or any of them, or used or enjoyed, or capable of being used or enjoyed in conjunction with any of said power plants, sites, stations, lands and property.

PARAGRAPH TWO

The Electric Substations, Switching Stations, Microwave installations and UHF-VHF installations of the Company, and the Sites therefor, including all buildings, structures, towers, poles, all equipment, appliances and devices for transforming, converting, switching, transmitting and distributing electric energy, and for communications, and the lands of the Company on which the same are situated, and all of the Company’s lands, rights, ways, servitudes, prescriptions, easements, rights-of-way, machinery, equipment, appliances, devices, licenses and appurtenances forming a part of said substations, switching stations, microwave installations or UHF-VHF installations, or any of them, or used or enjoyed or capable of being used or enjoyed in conjunction with any of them. 

PARAGRAPH THREE

All and singular the Miscellaneous Lands and Real Estate or Rights and Interests therein of the Company, and buildings and improvements thereon, now owned, or, subject to the provisions of Section 15.03 of the Original Indenture, hereafter acquired during the existence of this trust.

PARAGRAPH FOUR

The Electric Transmission Lines of the Company, including the structures, towers, poles, wires, cables, switch racks, conductors, transformers, insulators, pipes, conduits, electric submarine cables, and all appliances, devices and equipment used or useful in connection with said transmission lines and systems, and all other property, real, personal or mixed, forming a part thereof or appertaining thereto, together with all rights-of-way, easements, prescriptions, servitudes, permits, privileges, licenses, consents, immunities and rights for or relating to the construction, maintenance or operation thereof, through, over, across, under or upon any public streets or highways or other lands, public or private.

PARAGRAPH FIVE

The Electric Distribution Lines and Systems of the Company, including the structures, towers, poles, wires, insulators and appurtenances, appliances, conductors, conduits, cables, transformers, meters, regulator stations and regulators, accessories, devices and equipment and all of the Company's other property, real, personal or mixed, forming a part of or used, occupied or enjoyed in connection with or in anywise appertaining to said distribution lines and systems, together with all of the Company’s rights-of-way, easements, permits, prescriptions, privileges, municipal or other franchises, licenses, consents, immunities and rights for or relating to the construction, maintenance or operation thereof, through, over, across, under, or upon any public streets or highways or other lands or property, public or private.

PARAGRAPH SIX

The Gas Distributing Systems of the Company, whether now owned or, subject to the provisions of Section 15.03 of the Original Indenture, hereafter acquired, including gas regulator stations, gas main crossings, odorizing equipment, gas metering stations, shops, service buildings, office buildings, expansion tanks, conduits, gas mains and pipes, mechanical storage sheds, boilers, service pipes, fittings, city gates, pipelines, booster stations, reducer stations, valves, valve platforms, connections, meters and all appurtenances, appliances, devices and equipment and all the Company's other property, real, personal or mixed forming a part of or used, occupied or enjoyed in connection with or in anywise appertaining to said distributing systems, or any of them, together with all of the Company’s rights-of-way, easements, prescriptions, servitudes, privileges, immunities, permits and franchises, licenses, consents and rights for or relating to the construction, maintenance or operation thereof, in, on, through, across or under any public streets or highways or other lands or property, public or private.

PARAGRAPH SEVEN

All of the franchises, privileges, permits, grants and consents for the construction, operation and maintenance of electric and gas systems in, on and under streets, alleys, highways, roads, public grounds and rights-of-way and all rights incident thereto which were granted by the governing and regulatory bodies of the City of New Orleans, State of Louisiana.

Also all other franchises, privileges, permits, grants and consents owned or hereafter acquired by the Company for the construction, operation and maintenance of electric and gas systems in, on or under the streets, alleys, highways, roads, and public grounds, areas and rights-of-way and/or for the supply and sale of electricity or natural gas and all rights incident thereto, subject, however, to the provisions of Section 15.03 of the Original Indenture.

    

IN WITNESS WHEREOF, ENTERGY NEW ORLEANS, INC. has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its President, one of its Vice Presidents, its Treasurer or one of its Assistant Treasurers, and its corporate seal to be attested by its Secretary or one of its Assistant Secretaries for and on its behalf, and THE BANK OF NEW YORK MELLON has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents or Assistant Vice Presidents and its corporate seal to be attested by one of its Vice Presidents, Assistant Vice Presidents, Assistant Treasurers or Assistant Secretaries for and on its behalf, all as of the day and year first above written.

ENTERGY NEW ORLEANS, INC.

By: ___/s/ Stacey M. Lousteau
Name:    Stacey M. Lousteau 
Title:    Assistant Treasurer
Attest:
By:    /s/ Dawn A. Balash    
Name: Dawn A. Balash 
Title:    Assistant Secretary

Executed, sealed and delivered by
ENTERGY NEW ORLEANS, INC.
in the presence of:
By:     /s/ Leah W. Dawsey    
Name: Leah W. Dawsey
 
By:     /s/ Shannon K. Ryerson
Name: Shannon K. Ryerson

 THE BANK OF NEW YORK MELLON
As Trustee
By:    /s/ Francine Kincaid    
Name:  Francine Kincaid
Title:    Vice President
Attest:
By:  /s/ Thomas Hacker    
Name:  Thomas Hacker
Title:    Vice President

Executed, sealed and delivered by
  THE BANK OF NEW YORK MELLON 
 in the presence of:

By:    /s/ Ignazio Tamburello        
Name: Ignazio Tamburello

By:     /s Efren Almazan         
Name: Efren Almazan

STATE OF LOUISIANA    )
                                             ) SS.:
PARISH OF ORLEANS     )

On this 17th day of March, 2016, before me appeared STACEY M. LOUSTEAU, to me personally known, who, being duly sworn, did say that she is an Assistant Treasurer of ENTERGY NEW ORLEANS, INC., and that the seal affixed to said instrument is the corporate seal of said corporation and that the foregoing instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and said STACEY M. LOUSTEAU acknowledged said instrument to be the free act and deed of said corporation and that she signed, executed and delivered the said instrument for the consideration, uses and purposes therein mentioned and set forth.

On the 17th day of March, 2016, before me personally came STACEY M. LOUSTEAU, to me known, who, being by me duly sworn, did depose and say that she resides at 1013 Pasadena Avenue, Metairie, Louisiana 70001; that she is an Assistant Treasurer of ENTERGY NEW ORLEANS, INC., one of the parties described in and which executed the above instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that she signed her name thereto by like order.

/s/ Jennifer B. Favalora    
Notary Public
Jennifer B. Favalora
Louisiana Notary ID No. 57639
Commission expires upon my death

STATE OF NEW YORK    )
                                                ) ss.:
COUNTY OF     NEW YORK    )

On this 17th day of March, 2016, before me appeared Francine Kincaid to me personally known or proved to me on the basis of satisfactory evidence and, who, being by me duly sworn, did say that she is a Vice President of THE BANK OF NEW YORK MELLON, and that the seal affixed to the above instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and said Francine Kincaid acknowledged said instrument to be the free act and deed of said corporation and that she signed, executed and delivered the said instrument for the consideration, uses and purposes therein mentioned and set forth.

On the 17th day of March, 2016, before me personally came Thomas Hacker, to me known or proved to me on the basis of satisfactory evidence and, who, being by me duly sworn, did depose and say that he resides in Farmingdale, NY; that he is a Vice President of THE BANK OF NEW YORK MELLON, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal, that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.

/s/ Christopher J. Traina    
Christopher J. Traina
Notary Public - State of New York
No. 01TR6297825
Qualified in Queens County
My Commission Expires March 03, 2018
Certified in New York County 

    

EXHIBIT A

[FORM OF BOND OF THE TWENTY-SECOND SERIES]
[(See legend at the end of this bond for
restrictions on transferability and change of form)]

FIRST MORTGAGE BOND,
5.50% Series due April 1, 2066
CUSIP No. 29364P 103
		
	No. R-__
	$___________

ENTERGY NEW ORLEANS, INC., a corporation duly organized and existing under the laws of the State of Louisiana (the “Company”), for value received, hereby promises to pay to ___________ or registered assigns, at the office or agency of the Company in The City of New York, New York, the principal sum of _____________ ($___________) on April 1, 2066, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts, and to pay in like manner to the registered owner hereof interest thereon from the date of original issuance hereof, if the date of this bond is prior to July 1, 2016, or, if the date of this bond is on or after July 1, 2016, from the January 1, April 1, July 1 or October 1 immediately preceding the date of this bond to which interest has been paid (unless the date hereof is an interest payment date to which interest has been paid, in which case from the date hereof), at the rate of five and fifty one-hundredths percent (5.50%) per annum in like coin or currency on January 1, April 1, July 1 or October 1 of each year, commencing July 1, 2016, and at maturity or earlier redemption until the principal of this bond shall have become due and been duly paid or provided for, and to pay interest (before and after judgment) on any overdue principal, premium, if any, and (to the extent permitted by law) on any overdue interest at the rate of six and fifty one-hundredths percent (6.50%) per annum. Interest on this bond shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest on this bond in respect of a portion of a month shall be calculated based on the actual number of days elapsed.

The interest so payable on any interest payment date will, subject to certain exceptions provided in the Mortgage hereinafter referred to, be paid to the person in whose name this bond is registered at the close of business on the Business Day immediately preceding such interest payment date. At the option of the Company, interest may be paid by check mailed on or prior to such interest payment date to the address of the person entitled thereto as such address shall appear on the register of the Company.

This bond shall not become obligatory until The Bank of New York Mellon, the Trustee under the Mortgage, or its successor thereunder, shall have signed the form of authentication certificate endorsed hereon.

This bond is one of a series of bonds of the Company issuable in series and is one of a duly authorized series of First Mortgage Bonds, 5.50% Series due April 1, 2066 (herein called bonds of the Twenty-second Series), all bonds of all series issued under and equally secured by a Mortgage and Deed of Trust (herein, together with any indenture supplemental thereto including the Nineteenth Supplemental Indenture dated as of March 15, 2016, called the Mortgage), dated as of May 1, 1987, duly executed by the Company to The 

Bank of New York Mellon (successor to Bank of Montreal Trust Company), as Trustee. Reference is made to the Mortgage for a description of the mortgaged and pledged property, assets and rights, the nature and extent of the lien and security, the respective rights, limitations of rights, covenants, obligations, duties and immunities thereunder of the Company, the holders of bonds and the Trustee and the terms and conditions upon which the bonds are, and are to be, secured, the circumstances under which additional bonds may be issued and the definition of certain terms herein used, to all of which, by its acceptance of this bond, the holder of this bond agrees.

The principal hereof may be declared or may become due prior to the maturity date hereinbefore named on the conditions, in the manner and at the time set forth in the Mortgage, upon the occurrence of a Default as in the Mortgage provided. The Mortgage provides that in certain circumstances and upon certain conditions, such a declaration and its consequences or certain past defaults and the consequences thereof may be waived by such affirmative vote of holders of bonds as is specified in the Mortgage.

The Mortgage contains provisions permitting the Company and the Trustee to execute supplemental indentures amending the Mortgage for certain specified purposes without the consent of holders of bonds. With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations of the Company and/or the rights of the holders of the bonds of the Twenty-second Series and/or the terms and provisions of the Mortgage may be modified or altered by such affirmative vote or votes of the holders of bonds then Outstanding as are specified in the Mortgage.

Any consent or waiver by the holder of this bond (unless effectively revoked as provided in the Mortgage) shall be conclusive and binding upon such holder and upon all future holders of this bond and of any bonds issued in exchange or substitution herefor, irrespective of whether or not any notation of such consent or waiver is made upon this bond or such other bond.

No reference herein to the Mortgage and no provision of this bond or of the Mortgage shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this bond in the manner, at the respective times, at the rate and in the currency herein prescribed.

The bonds are issuable as registered bonds without coupons in the denominations of $25 and integral multiples thereof. At the office or agency to be maintained by the Company in The City of New York, New York, and in the manner and subject to the provisions of the Mortgage, bonds may be exchanged for a like aggregate principal amount of bonds of other authorized denominations, without payment of any charge other than a sum sufficient to reimburse the Company for any tax or other governmental charge incident thereto. This bond is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by his or her duly authorized attorney, at the office or agency of the Company in The City of New York, New York, upon surrender of this bond, and upon payment, if the Company shall require it, of the transfer charges provided for in the Mortgage, and, thereupon, a new fully registered bond of the same series for a like principal amount will be issued to the transferee in exchange hereof as provided in the Mortgage. The Company and the Trustee may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary.

This bond is redeemable at the option of the Company under certain circumstances in the manner and at such redemption price as is provided in the Nineteenth Supplemental Indenture. This bond is also redeemable at the option of the owner upon the events, in the manner, and at such redemption prices as are specified in the Nineteenth Supplemental Indenture. This bond is also mandatorily redeemable under certain circumstances in the manner and at such redemption price as is provided in the Nineteenth Supplemental Indenture.

No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such, either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage.

As provided in the Mortgage, this bond shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, Entergy New Orleans, Inc. has caused this bond to be signed in its corporate name by its Chairman of the Board, Chief Executive Officer, President or one of its Vice Presidents by his or her signature or a facsimile thereof, and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries by his or her signature or a facsimile thereof.

Dated: 
ENTERGY NEW ORLEANS, INC.
By:__________________________ 
Name:    
Title:    
 
Attest:
By:____________________ 
Name: 
Title: 
[FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE]
This bond is one of the bonds, of the series herein designated, described or provided for in the within-mentioned mortgage.
Dated: 
THE BANK OF NEW YORK MELLON,
as Trustee,

By:______________________________ 
Authorized Signatory
    

[LEGEND
Unless and until this bond is exchanged in whole or in part for certificated bonds registered in the names of the various beneficial holders hereof as then certified to the Trustee by The Depository Trust Company or its successor (the “Depositary”), this bond may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

Unless this certificate is presented by an authorized representative of the Depositary to the Company or its agent for registration of transfer, exchange or payment, and any certificate to be issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of the Depositary, and any amount payable thereunder is made payable to Cede & Co., or such other name, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

This bond may be exchanged for certificated bonds registered in the names of the various beneficial owners hereof if (a) the Depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within 90 days or (b) the Company elects to issue certificated bonds to beneficial owners (as certified to the Company by the Depositary).]White Mountain Titanium Corp.: Exhibit 10.1 - Filed by newsfilecorp.com

LOAN AGREEMENT 

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. 

2 

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. 

3 

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. 

4 

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. 

5 

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.

6 

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. 

7 

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. 

8 

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.     
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. 

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

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

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

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

j.      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. 

9 

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. 

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.

10 

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.

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.

11 

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; 

(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.

12 

“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. 

“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.

13 

“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. 

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) 

14 

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. 

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. 

15 

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. 

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. 

16 

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 
	 	  	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.

17 

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. 

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. 

18 

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. 

19 

[SIGNATURE PAGE FOLLOWS] 

 

 

20 

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 

21 

EXHIBIT A 

Use of Proceeds Budget 

EXHIBIT B 

7% Senior Convertible Promissory Note 

(See Attached) 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND REGISTRATION OR QUALIFICATION UNDER ANY APPLICABLE
STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE BORROWER THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED PURSUANT TO AN EXEMPTION UNDER SUCH ACT AND SECURITIES LAWS. 

WHITE MOUNTAIN TITANIUM CORPORATION 
(A NEVADA
CORPORATION) 

7% SENIOR CONVERTIBLE PROMISSORY NOTE 

	USD $2,000,000.00 	March 16, 2016 

FOR VALUE RECEIVED, WHITE MOUNTAIN TITANIUM CORPORATION,
a Nevada corporation (the “Borrower”), hereby unconditionally promises to
pay to the order of NEXO WMTM HOLDINGS, LLC, a Delaware limited liability
company (the “Holder”), the principal sum of TWO MILLION U.S. Dollars
(the “Principal Amount”), together with accrued and unpaid interest
thereon (as provided below). 

This Note is made and issued by the Borrower pursuant to the
terms of a Loan Agreement between the Borrower and the Holder dated March 16,
2016 (the “Loan Agreement”) which is expressly incorporated herein.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Loan Agreement. 

In no event shall any interest charged, collected or reserved
under this Note exceed the maximum rate then permitted by applicable law and if
any such payment is paid by the Borrower, then such excess sum shall be credited
by the Holder as a payment of principal.

AS AN IMPORTANT NOTICE, THIS CONVERTIBLE PROMISSORY NOTE
CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF
IMPORTANT RIGHTS THE BORROWER MAY HAVE AS A DEBTOR AND FURTHER ALLOWS THE LENDER
OR ITS SUCCESSOR IN INTEREST TO OBTAIN A JUDGMENT AGAINST THE BORROWER WITHOUT
FURTHER NOTICE. 

1.     Interest Rate
and Repayment of Principal Amount. The Principal Amount
outstanding under this Note shall accrue interest at the rate of SEVEN PERCENT
(7%) per annum (“Standard Interest Rate”) beginning on March 16, 2016
(“Issuance Date”). Interest shall be calculated on the basis of a year of
365 days regardless of the total days the loan is outstanding. The Principal
Amount and all then-accrued and unpaid interest shall be payable two years after
the Issuance Date, on March 16, 2018 (the “Maturity Date”). Following any
Event of Default, the Principal Amount and all then-accrued and unpaid interest
shall immediately begin to accrue interest at the increased rate of TWENTY-FIVE
PERCENT (25%) per annum (“Default Interest Rate”). 

2.     Repayment
Extension. If any payment of principal or interest shall be due
on a Saturday, Sunday or any other day on which banking institutions in the
State of Utah are required or permitted to be closed, such payment shall be made
on the next succeeding business day and such extension of time shall be included
in computing interest under this Note. 

3.     Manner and
Application of Payments. All payments due hereunder shall be paid
in lawful money of the United States of America which shall be legal tender in
payment of all debts and dues, public and private, in immediately available
funds, without offset, deduction or recoupment. Any payment by check or draft
shall be subject to the condition that any receipt issued therefor shall be
ineffective unless the amount due is actually received by the Holder. Each
payment shall be applied first to the payment of any and all costs, fees and
expenses incurred by or payable to the Holder in connection with the collection
or enforcement of this Note, second to the payment of all unpaid late charges
(if any), third, to the payment of all accrued and unpaid interest hereunder and
fourth, to the payment of the unpaid Principal Amount, or in any other manner
which the Holder may, in its sole discretion, elect from time to time. 

4.     Senior Status of
Note. So long as this Note remains outstanding, neither the
Borrower nor any subsidiary of the Borrower shall, without the prior written
consent of the Holder, or the Holders holding a majority of the aggregate
outstanding principal amount of this Note, incur or otherwise become liable with
respect to any indebtedness that would rank senior or pari passu to this
Note in order of payment, other than (i) indebtedness in existence on the date
hereof, (ii) secured indebtedness used solely to finance the purchase or lease
of assets (provided that such debt may only be secured by the purchased or
leased assets and not by any other assets of the Borrower), or (iii)
indebtedness to trade creditors in the ordinary course of business. 

5.    
Conversion.

(a)     Voluntary Conversion.
Subject to and in compliance with, the provisions contained herein, the Holder
is entitled, at its option, at any time prior to the Maturity Date, or in case
this Note or some portion hereof shall have been called for prepayment prior to
such date, then, in respect of this Note or such portion hereof, until and
including, but not after, the close of business within 30 days of the date of
notice of prepayment, to convert the original principal amount of this Note (or
any portion thereof), together with accrued but unpaid interest thereon, into
fully paid and nonassessable shares (calculated as to each conversion to the
nearest share) of Series A Shares by surrender of this Note, duly endorsed (if
so required by the Borrower) or assigned to the Borrower or in blank, to “White
Mountain Titanium Corporation” at its offices, accompanied by written notice to
the Borrower, in the form set forth below, that the holder hereof selects to
convert this Note or, if less than the entire principal amount hereof is to be
converted, the portion hereof to be converted. Such conversion shall be effected
at the rate of $0.12 per Share. No fractions of Shares will be issued on
conversion. 

(b)     Mandatory Conversion. If (i)
the Borrower at any time successfully raises US$8,000,000 through the effectors
of the Holder, or otherwise, that are specifically earmarked for the Qualified
Financings Milestones (as defined below), or (ii) the Borrower and the Holder
obtain (A) a legally binding offtake agreement with a third party for water
arising from the Borrower’s desalination plant for its Cerro Blanco Project
which is (B) for an offtake volume and price that is mutually satisfactory to
the parties, then all principal and accrued interest shall automatically convert
into Series A Shares at a conversion price equal to $0.12 per share upon the
completion of the Qualified Financing or execution of the offtake agreement,
whichever first occurs. For purposes of this Section 5(b), “Qualified
Financing Milestones” means the following tasks occurring during the
designated periods: 

Year 1: Qualified Financing Milestones: In addition to the
monies represented by this Note, the Borrower shall successfully raise an
additional US$2,700,000 which are earmarked and spent effectuating the
following: 

	 	• 	Necessary drilling to update resource statement
      for issuance of NI 43-101; 
	 	• 	Appoint reputable engineering firm to oversee
      bankable feasibility study; and 
	 	• 	Begin the needed resettlement of families
      (beginning phases). 

2 

Year 2: Qualified Financing Milestones: In addition to the
monies raised for completion of Year 1 Qualified Financing Milestones, the
Borrower shall successfully raise an additional US$5,300,000 which are earmarked
and spent effectuating the following: 

	 	• 	Completion of bank feasibility study; 
	 	• 	Completion of land purchase for resettlement;
      and 
	 	• 	Commencement of technical training for project
      personnel. 

6.    
Prepayment. This Note is subject to prepayment, in
whole or in part, at any time upon not less than 30 days’ notice at the election
of the Borrower. Prepayment shall be effected by paying the amount equal to the
outstanding principal amount of this Note, plus all interest accrued to the date
of prepayment. During the 30 days following the date of any notice of
prepayment, the holder shall have the right to convert this Note on the terms
and conditions provided for in paragraph 5 above. 

7.     Change of
Control. In the event that the Borrower enters into a Change in Control
transaction, the Holder will be entitled to immediately demand repayment of all
amounts due and owing on this Note with a premium equal to 25% of all amounts
due and owing. For the purposes of this Note, a “Change in Control” means
the sale of all or substantially all the assets of the Borrower; any merger,
consolidation or acquisition of the Borrower with, by or into another
corporation, entity or person; or any change in the ownership of more than fifty
percent (50%) of the voting capital stock of the Borrower in one or more related
transactions.

8.    
Remedies. 

(a)     Remedies. Upon the
occurrence of an Event of Default (as defined in the Loan Agreement), and
without demand or notice of any kind: (i) all outstanding amounts under this
Note (including the outstanding Principal Amount plus any accrued and unpaid
interest less any principal payments previously made) shall become immediately
due and payable; and (ii) the Holder may exercise any and all rights and
remedies available to it at law, in equity or otherwise. 

(b)     Remedies Cumulative. Each
right, power and remedy of the Holder hereunder shall be cumulative and
concurrent, and the exercise or beginning of the exercise of any one or more of
them shall not preclude the simultaneous or later exercise by the Holder of any
or all such other rights, powers or remedies. No failure or delay by the Holder
to insist upon the strict performance of any one or more provisions of this Note
or to exercise any right, power or remedy consequent upon a breach thereof or
default hereunder shall constitute a waiver thereof or preclude the Holder from
exercising any such right, power or remedy. By accepting full or partial payment
after the due date of any amount of principal of or interest on this Note, or
other amounts payable on demand, the Holder shall not be deemed to have waived
the right either to require prompt payment when due and payable of all other
amounts of principal of or interest on this Note or other amounts payable on
demand, or to exercise any rights and remedies available to it in order to
collect all such other amounts due and payable under this Note. 

(c)     Costs of Collection.
If this Note is placed in the hands of an attorney for collection following
the occurrence of an Event of Default hereunder for reasons not included within
the Confession of Judgment below, the Borrower agrees to pay to the Holder upon
demand all reasonable costs and expenses, including, without limitation, all
reasonable attorneys’ fees and court costs incurred by the Holder in connection
with the enforcement or collection of this Note (whether or not any action has
been commenced by the Holder to enforce or collect this Note) or in successfully
defending any counterclaim or other legal proceeding brought by the Borrower
contesting the Holder’s right to collect the outstanding Principal Amount and/or
interest thereon. All of such costs and expenses shall bear interest at the higher of the rate of interest provided herein
(i.e., Default Interest Rate) from the date of payment by the Holder until
repaid in full. 

3 

(d)     Confession of Judgment. For
the narrow reasons of Event of Default limited to and only arising out of
Section 7(a), (d), (f), (g), (i), and (l) of the Loan Agreement (collectively,
the “Stipulated Reasons for Judgment”), each of the Borrower and SCM
Subsidiary authorizes, constitutes, and appoints Ronald N. Vance or agrees to
appoint another attorney in Utah if Ronald N. Vance is not available, whose
appointment will not be reasonably withheld by the Borrower or SCM Subidiary, as
its lawful attorney-in-fact to appear for the Borrower and SCM Subsidiary, and
to confess judgment against each of the Borrower and SCM Subsidiary in favor of
the Holder for the all of its indebtedness which shall include: (i) the
Principal Amount; (ii) all accrued interest from the Issuance Date at the
Standard Interest Rate; (iii) all accrued interest from the Event of Default at
the Default Interest Rate; (iv) plus any and all collection costs; and (v)
reasonable attorney’s fees all without prior notice or opportunity of the
Borrower or SCM Subsidiary for prior hearing, without stay of execution or right
of appeal, and expressly waiving the benefit of all exemption laws, appeals,
stay of execution or supplementary proceedings, or other relief from the
enforcement or immediate enforcement of a judgment or related proceedings on a
judgment, and any irregularity or error in entering any such judgment. No single
exercise of the power to confess judgment granted in this Section shall exhaust
the power, regardless of whether such exercise is ruled invalid, void, or
voidable by any court. The power to confess judgment granted in this Section may
be exercised from time to time by the Holder as warranted by and arising from
the Stipulated Reasons for Judgment often as the Holder of this Note may elect.

9.     Subsequent
Holders. This Note is not transferrable, in whole or in part, by
its holder, except with the written consent of the Borrower, which consent shall
not be unreasonably withheld. In the event that any holder of this Note
transfers this Note for value, the Borrower agrees that except with respect to
subsequent holders with actual knowledge of a claim or defense, no subsequent
holder of this Note shall be subject to any claims or defenses which Borrower
may have against a prior holder (which claims or defenses are not waived as to
prior holders), all of which are waived as to the subsequent holder, and that
all such subsequent holders shall have all of the rights of a holder in due
course with respect to the Borrower even though the subsequent holder may not
qualify, under applicable law, absent this paragraph, as a holder in due course.

10.   
 Miscellaneous. 

(a)     Notices. Any notice, demand,
request, waiver or other communication required or permitted to be given
pursuant to this Note shall be made in compliance with the notice provisions set
forth in the Loan Agreement. 

(b)     Governing Law and Venue.
This Note 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 Note, 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 Note. 

4 

(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)     Severability. If a court of
competent jurisdiction finds any provision of this Note to be invalid or
unenforceable as to either the Borrower or the Holder, 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 Note in all other respects shall remain valid and enforceable.

(e)     Waiver. Holder shall not be
deemed to have waived any rights under this Note unless such waiver is given in
writing and signed by the Holder. No delay or omission on the part of the Holder
in exercising any right shall operate as a waiver of such right or any other
right. A waiver by the Holder of a provision of this Note shall not prejudice or
constitute a waiver of the Holder’s right otherwise to demand strict compliance
with that provision or any other provision of this Note. No prior waiver by the
Holder, nor any course of dealing between the Holder and the Borrower, shall
constitute a waiver of any of the Holder’s rights or of any obligations of the
Borrower as to any future transactions. Whenever the consent of the Holder is
required under this Note, the granting of such consent by the Holder 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 the Holder.

(f)    Amendment. Neither this Note nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Borrower and the Holder. 

5 

(g)     Replacement Notes. This Note
may be exchanged by Holder at any time and from time to time for a Note or Notes
with different denominations representing an equal aggregate outstanding
Principal Amount, as reasonably requested by Holder, upon surrendering the same.
No service charge will be made for such registration or exchange. In the event
that Holder notifies the Borrower that this Note has been lost, stolen or
destroyed, a replacement Note identical in all respects to the original Note
(except for registration number and Principal Amount, if different than that
shown on the original Note), shall be issued to the Holder, provided that the
Holder executes and delivers to the Borrower an agreement reasonably
satisfactory to the Borrower to indemnify the Borrower from any loss incurred by
it in connection with the Note. 

(h)     Cancellation. After all of
the Principal Amount (including accrued but unpaid interest and default payments
at any time owed on this Note) has been paid in full, this Note shall
automatically be deemed canceled and the Holder shall promptly surrender the
Note to the Borrower at the Borrower’s principal executive offices. 

[SIGNATURE PAGE FOLLOWS] 

6 

SIGNATURE PAGE TO NOTE 

IN WITNESS WHEREOF, the undersigned has
executed this Note as of the Issuance Date. 

	 	WHITE MOUNTAIN TITANIUM CORPORATION
    
	 	  
	 	  
	 	  
	 	By: 	 
	 		Michael P. Kurtanjek, Interim CEO
    

The undersigned Guarantor unconditionally guarantees payment to
Holder of all amounts owing under the Note. This Guarantee remains in effect
until the Note is paid in full. Guarantor must pay all amounts due under this
Note when Lender makes written demand upon Guarantor. Lender is required to seek
payment from Borrower before demanding payment from Guarantor. 

	 	SOCIEDAD CONTRACTUAL MINERA WHITE
  
	 	MOUNTAIN TITANIUM 
	 	  
	 	  
	 	  
	 	By: 	 
	 		Michael P. Kurtanjek, President
    

7 

NOTICE OF CONVERSION 

PSM Holdings, Inc. 

Re: Conversion of Note 

Gentlemen: 

The undersigned owner of this Note hereby irrevocably exercises
the option to convert this Note or the portion hereof designated, into shares of
common stock of PSM Holdings, Inc., in accordance with the terms of this Note,
and directs that the shares issuable and deliverable upon the conversion,
together with any check in payment for fractional shares, be issued in the name
of and delivered to the undersigned unless a different name has been indicated
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay any transfer taxes payable with respect
thereto. 

Date: _____________, 201___ 

__________________________________________
(Signature) 

FILL IN FOR REGISTRATION OF SHARES 

	(Printed Name) 	 	(Social
      Security or other identifying number) 
	 	 	 
	 	 	 
	(Street Address) 	 	  
	 	 	 
	 	 	 
	(City, State, and ZIP Code) 	 	Portion to be converted (if less than all)
  

8 

EXHIBIT C 

Certificate of Designations of Series A Preferred Stock

(See Attached) 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS 
OF

SERIES A CONVERTIBLE PREFERRED STOCK 
OF 
WHITE MOUNTAIN
TITANIUM CORPORATION 

Pursuant to Nevada Revised Statutes 78.1955 

WHITE MOUNTAIN TITANIUM CORPORATION (the
“Company”), a corporation organized and existing under the laws of the
State of Nevada, hereby certifies that pursuant to the provisions of NRS
78.1955, its Board of Directors adopted the following resolution, which
resolution remains in full force and effect as of the date hereof: 

WHEREAS, the Board of Directors of the Company (the
“Board of Directors”) is authorized, within the limitations and
restrictions stated in the Articles of Incorporation of the Company (the
“Articles of Incorporation”) , to fix by resolution or resolutions the
designation of preferred stock and the powers, preferences and relative
participating, optional or other special rights and qualifications, limitations
or restrictions thereof, including, without limiting the generality of the
foregoing, such provisions as may be desired concerning voting, redemption,
dividends, dissolution or the distribution of assets, conversion or exchange,
and such other subjects or matters as may be fixed by resolution or resolutions
of the Board of Directors under the Nevada Revised Statutes; and 

WHEREAS, the Articles of Incorporation of the Company
authorizes one hundred million (100,000,000) shares of preferred stock, $0.001
par value per share (the “Preferred Stock”); and 

WHEREAS, it is the desire of the Board of Directors of
the Company, pursuant to its authority as aforesaid, to authorize and fix the
terms of a series of Preferred Stock to be designated the Series A Convertible
Preferred Stock of the Company and the number of shares constituting such series
of Preferred Stock; 

NOW, THEREFORE, BE IT RESOLVED, that there is hereby
authorized the Series A Convertible Preferred Stock on the terms and with the
provisions herein set forth below: 

1.     Designation and Rank. The
designation of such series of the Preferred Stock shall be the Series A
Convertible Preferred Stock, par value $.001 per share (the “Series A
Preferred Stock”). The maximum number of shares of Series A Preferred Stock
shall be Nineteen Million One Hundred (19,000,100) shares. The Series A
Preferred Stock shall rank senior to the Company’s common stock, par value $.001
per share (the “Common Stock”), and to all other classes and series of
equity securities of the Company. The Series A Preferred Stock shall be
subordinate to and rank junior to all indebtedness of the Company now or
hereafter outstanding. 

2.     Dividends. Any dividends
(whether or not in the form of cash) shall first be payable to the holders
Series A Preferred Stock (treating each holder of shares of Series A Preferred
Stock as being the holder of the number of shares of Common Stock into which
such holder’s shares of Series A Preferred Stock would be converted if such
shares were converted pursuant to the provisions of Section 5 hereof as of the
record date for the determination of holders of Common Stock entitled to receive
such dividend). 

3.     Voting Rights. 

(a)     Except as otherwise required by the
Nevada Revised Statutes, the Series A Preferred Stock shall vote or act together
with the Common Stock as a single class on all actions to be taken by the
stockholders of the Company. In connection with such actions, each holder of
shares of Series A Preferred Stock shall be entitled to the number of votes
equal to the number of shares of Common Stock into which such shares of Series A
Preferred Stock could be converted pursuant to Section 5 hereof on the record
date for the vote or written consent of stockholders. Fractional votes shall
not, however, be permitted and any fractional voting rights resulting from the
above formula (after aggregating all shares of Common Stock into which shares of
Series A Preferred Stock held by such holder could be converted) shall be
rounded to the nearest whole number (with any fraction equal to or greater than
one-half rounded upward to one). The holders of shares of Series A Preferred
Stock shall be entitled to notice of any stockholders’ meeting in accordance
with the Bylaws of the Company. The Common Stock into which the Series A
Preferred Stock is convertible shall, upon issuance, have all of the same voting
rights as other issued and outstanding Common Stock of the Company. 

(b)     Election of Directors and
Appointments. Regardless of the size of the Board of Directors, the holders
of the Series A Preferred Stock, voting as a separate class, shall have the
right to elect or appoint, remove and re-appoint from time to time one (1)
director of the Company. In the event the Board of Directors has seven (7) or
more directors and if the holders of the Series A Preferred Stock (i) obtain a
legally binding offtake agreement with a third party for water arising from the
Company’s desalination plant for its Cerro Blanco Project which is for an
offtake volume and price that is mutually satisfactory to the Company and the
holders of the Series A Preferred Stock and (ii) secure financing for phase one
of the Company’s desalination project, the holders of the Series A Preferred
Stock, voting as a separate class, shall have the right to elect or appoint,
remove and re-appoint from time to time two (2) directors of the Company at each
shareholders’ meeting held for the purpose of electing directors. In addition,
director(s) appointed by the holders of Series A Preferred Stock shall have the
right to appoint the non-executive Chairman of the Company to serve in
accordance with the provisions of the Company’s Bylaws. Director(s) appointed by
the holders of Series A Preferred Stock may only be removed by the holders of a
majority of the Series A Preferred Stock. The non-executive Chairman appointed
by the director(s) appointed by the holders of Series A Preferred Stock may only
be removed by the director(s) appointed by the holders of a majority of the
Series A Preferred Stock.

4.     Liquidation Preference. 

(a)     Payment. In the event of the
liquidation, dissolution or winding up of the affairs of the Company, whether
voluntary or involuntary, the holders of shares of Series A Preferred Stock then
outstanding shall be entitled to receive, out of the assets of the Company
available for distribution to its stockholders, before any payment shall be made
or any assets distributed to the holders of the Common Stock or any other class
or series of Preferred Stock that is junior to the Series A Preferred Stock
(“Junior Stock”), an amount (the “Liquidation Preference Amount”)
per share of the Series A Preferred Stock equal to (i) $0.12 (subject to
adjustment for stock splits, stock dividends, recapitalizations and the like)
plus (ii) any unpaid dividends to which the holders of Series A Preferred Stock
are then entitled. If the assets of the Company are not sufficient to pay in
full the Liquidation Preference Amount payable to the holders of outstanding
shares of the Series A Preferred Stock and any other class of stock ranking
pari passu, as to rights on liquidation, dissolution or winding up, with
the Series A Preferred Stock, and that was created and issued in accordance with
the provisions of this Certificate of Designation, then all of said assets will
be distributed among the holders of the Series A Preferred Stock and the other
classes of stock ranking pari passu with the Series A Preferred Stock, if
any, ratably in accordance with the respective amounts that would be payable on
such shares if all amounts payable thereon were paid in full. The liquidation
payment with respect to each outstanding fractional share of Series A Preferred
Stock shall be equal to a ratably proportionate amount of the full liquidation
payment with respect to each outstanding share of Series A Preferred Stock. All
payments for which this Section 4(a) provides shall be in cash, property (valued
at its fair market value as determined by an independent appraiser reasonably acceptable to the holders of a majority of
the Series A Preferred Stock) or a combination thereof; provided, however, that no cash shall be paid to holders of Junior Stock unless
each holder of the outstanding shares of Series A Preferred Stock has been paid
in cash the full Liquidation Preference Amount to which such holder is entitled
as provided herein. After payment of the full Liquidation Preference Amount to
which each holder is entitled, such holders of shares of Series A Preferred
Stock will not be entitled to any further participation as such in any
distribution of the assets of the Company. 

2

(b)     Certain Events Deemed a
Liquidation; Election as to Consideration. Upon the consent of the Board of
Directors, a consolidation or merger of the Company with or into any other
corporation or corporations, or a sale or other disposition of all or
substantially all of the assets of the Company, or the effectuation by the
Company of a transaction or series of related transactions in which, following
such transaction(s), the holders of the outstanding voting power of the Company
prior to the transaction(s) cease to hold, directly or indirectly, a majority of
the outstanding voting power of the surviving entity, shall be deemed to be a
liquidation, dissolution, or winding up within the meaning of this Section 4.
Notwithstanding anything to the contrary herein, including Section 4(a), in the
event of the occurrence of the transaction(s) in the foregoing sentence, each
holder of Series A Preferred Stock shall have the option to receive (i) an
amount equal to the Liquidation Preference Amount or (ii) the amount that such
holder would have received if it had converted its Series A Preferred Stock into
Common Stock immediately prior to the closing of such transaction (without
giving effect to the liquidation preference of, or any dividends payable on, any
other capital stock of the Company). 

(c)     Notice. Written notice of
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Company within the meaning of this Section 4, stating a payment
date and the place where the distributable amounts shall be payable, shall be
given by mail, postage prepaid, no less than forty-five (45) days prior to the
payment date stated therein, or twenty (20) days prior to the stockholder
meeting to approve the relevant transaction, whichever is earlier, to the
holders of record of the Series A Preferred Stock at their respective addresses
as the same shall appear on the books of the Company. 

(d)    Surrender of Certificates. On the
effective date of any liquidation, dissolution or winding up within the meaning
of this Section 4, the Company shall pay cash and/or such other consideration to
which the holders of shares of Series A Preferred Stock shall be entitled under
this Section 4. Each holder of shares of Series A Preferred Stock shall
surrender the certificate or certificates representing such shares, duly
assigned or endorsed for transfer to the Company (or accompanied by duly
executed stock powers relating thereto), at the principal executive office of
the Company or the offices of the transfer agent for the Company, or shall
notify the Company or any transfer agent that such certificates have been lost,
stolen or destroyed and shall execute an affidavit or agreement reasonably
satisfactory to the Company to indemnify the Company from any loss incurred by
it in connection therewith (an “Affidavit of Loss”), whereupon each
surrendered certificate shall be cancelled and retired. 

5.     Conversion. The holders of
Series A Preferred Stock shall have the following conversion rights (the
“Conversion Rights”): 

(a)     Right to Convert. At
any time on or after the Issuance Date, the holder of any shares of Series A
Preferred Stock may, at such holder’s option, elect to convert (a “Voluntary
Conversion”) all or any portion of the shares of Series A Preferred Stock
held by such person into fully paid and nonassessable shares of Common Stock.
Each share of Series A Preferred Stock to be converted shall convert into a
number of shares of Common Stock equal to the quotient of (i) $0.12 (subject to
adjustment for stock splits, stock dividends, recapitalizations and the like)
plus the amount of accrued but unpaid dividends, divided by (ii) the Conversion
Price (as defined in Section 5(c) below) then in effect as of the date of the
delivery by such holder of its notice of election to convert. In the event of a
liquidation, dissolution or winding up of the Company, the Conversion Rights
shall terminate at the close of business on the last full day preceding the date
fixed for the payment of any such amounts distributable on such event to the
holders of Series A Preferred Stock; provided, however, the shares of Series A
Preferred Stock shall be considered to be convertible for purposes of clause
(ii) of the last sentence of Section 4(b). In the event of such a liquidation,
dissolution or winding up, the Company shall provide to each holder of shares of
Series A Preferred Stock notice of such liquidation, dissolution or winding up,
which notice shall be sent at least twenty (20) days prior to the termination of
the Conversion Rights and (ii) state the amount per share of Series A Preferred
Stock that will be paid or distributed on such liquidation, dissolution or
winding up, as the case may be. 

3

(b) Mechanics of Voluntary Conversion. The Voluntary
Conversion of Series A Preferred Stock shall be conducted in the following
manner: 

(i)     Holder’s Delivery
Requirements. To convert Series A Preferred Stock into full shares of Common
Stock on any date (the “Voluntary Conversion Date”), the holder thereof
shall (A) transmit by facsimile (or otherwise deliver to its Email of Notice ),
for receipt on or prior to 5:00 p.m., Mountain time, on such date, a copy of a
fully-executed notice of conversion in the form attached hereto as Exhibit
I (the “Conversion Notice”), to the Company at (___) ___-____,
Attention: Chief Executive Officer, and (B) surrender to a common carrier for
delivery to the Company as soon as practicable following such Voluntary
Conversion Date the original certificates representing the shares of Series A
Preferred Stock being converted (or an Affidavit of Loss with respect to such
shares in the case of their loss, theft or destruction) (the “Preferred Stock
Certificates”) and the originally executed Conversion Notice. 

(ii)     Company’s Response. Upon
receipt by the Company of a copy of a Conversion Notice, the Company shall
promptly send, via facsimile (or otherwise deliver to its Email of Notice), a
confirmation of receipt of such Conversion Notice to such holder. Upon receipt
by the Company of a copy of the fully-executed Conversion Notice, the Company
shall issue and deliver or cause its designated transfer agent (the “Transfer
Agent”) to issue and deliver, as applicable, within three (3) business days
following the date of receipt by the Company of the fully-executed Conversion
Notice (such third business day being the “Delivery Date”), to the holder
a stock certificate representing the shares of Common Stock as specified in the
Conversion Notice, registered in the name of the holder or its designee, for the
number of shares of Common Stock to which the holder shall be entitled. If the
number of shares of Preferred Stock represented by the Preferred Stock
Certificate(s) submitted for conversion is greater than the number of shares of
Series A Preferred Stock being converted, then the Company shall, as soon as
practicable and in no event later than three (3) business days after receipt of
the Preferred Stock Certificate(s) and at the Company’s expense, issue and
deliver to the holder a new Preferred Stock Certificate representing the number
of shares of Series A Preferred Stock not converted. 

(iii)    Dispute Resolution. In the
case of a dispute as to the arithmetic calculation of the number of shares of
Common Stock to be issued upon conversion, the Company shall cause the Transfer
Agent to promptly issue to the holders the number of shares of Common Stock that
is not disputed and shall submit the arithmetic calculations to the holders via
facsimile (or otherwise deliver to its Email of Notice) as soon as possible, but
in no event later than two (2) business days after receipt of such holder’s
Conversion Notice. If such holder and the Company are unable to agree upon the
arithmetic calculation of the number of shares of Common Stock to be issued upon
such conversion within one (1) business day of such disputed arithmetic
calculation being submitted to the holder, then the Company shall within one (1)
business day submit via facsimile (or otherwise deliver to its Email of Notice)
the disputed arithmetic calculation of the number of shares of Common Stock to
be issued upon such conversion to an independent, outside accountant (other than
the Company's accountant) of national standing nominated by the Company and
approved by such holder. The Company shall cause the accountant to perform the
calculations and to notify the Company and the holder of the results no later
than seventy-two (72) hours from the time it receives the
disputed calculations. Such accountant’s calculation shall be binding upon all
parties absent manifest error. The reasonable expenses of such accountant in
making such determination shall be paid by the Company, in the event the
holder’s calculation was correct, or by the holder, in the event the Company’s
calculation was correct, or equally by the Company and the holder in the event
that neither the Company’s or the holder’s calculation was correct. The period
of time in which the Company is required to effect conversions or redemptions
under this Certificate of Designation shall be tolled with respect to the
subject conversion or redemption pending resolution of any dispute by the
Company made in good faith and in accordance with this Section 5(b)(iii). 

4

(iv)     Record Holder. The person
or persons entitled to receive the shares of Common Stock issuable upon a
conversion of the Series A Preferred Stock shall be treated for all purposes as
the record holder or holders of such shares of Common Stock as of the close of
the stock register for the Common Stock on the Conversion Date. 

(c)     Conversion Price. The term
“Conversion Price” shall mean $0.12, subject to adjustment under Section
5(d) hereof. 

(d)     Adjustments of Conversion
Price. 

(i)     Adjustments for Stock Splits and
Combinations. If the Company shall at any time or from time to time after
the Issuance Date, effect a stock split of the outstanding Common Stock, the
Conversion Price shall be proportionately decreased. If the Company shall at any
time or from time to time after the Issuance Date, combine the outstanding
shares of Common Stock, the Conversion Price shall be proportionately increased.
Any adjustments under this Section 5(d)(i) shall be effective at the close of
business on the date the stock split or combination becomes effective. 

(ii)      Adjustments for Dividends
and Distributions in Shares of Common Stock. If the Company shall at
any time or from time to time after the Issuance Date, make or issue or set a
record date for the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in shares of Common Stock, then, and in
each event, the Conversion Price shall be decreased as of the time of such
issuance or, in the event such record date shall have been fixed, as of the
close of business on such record date, by multiplying the Conversion Price then
in effect by a fraction: 

(1)     the numerator of which shall be the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date; and

(2)     the denominator of which shall be
the total number of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on such record date
plus the number of shares of Common Stock issuable in payment of such dividend
or distribution; 

provided, however, that if such record date shall
have been fixed and such dividend is not fully paid or if such distribution is
not fully made on the date fixed therefor, the Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions; and provided further, however, that no
such adjustment shall be made if the holders of Series A Preferred Stock
simultaneously receive (i) a dividend or other distribution of shares of Common
Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of Series A Preferred Stock had been
converted into Common Stock on the date of such event or (ii) a dividend or
other distribution of shares of Series A Preferred Stock which are convertible,
as of the date of such event, into such number of shares of Common Stock as is
equal to the number of additional shares of Common Stock being issued with respect to each share of
Common Stock in such dividend or distribution. 

5

(iii)     Adjustment for Other Dividends
and Distributions. If the Company shall at any time or from time to time
after the Issuance Date, make or issue or set a record date for the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in assets (other than cash dividends payable out of
earnings or surplus in the ordinary course of business) or equity or debt
securities of the Company other than shares of Common Stock, then, and in each
event, an appropriate revision to the applicable Conversion Price shall be made
and provision shall be made (by adjustments of the Conversion Price or
otherwise) so that the holders of Series A Preferred Stock shall receive upon
conversions thereof, in addition to the number of shares of Common Stock
receivable thereon, the amount of assets and/or the number of securities of the
Company which they would have received had their Series A Preferred Stock been
converted into Common Stock immediately prior to such event and had thereafter,
during the period from the date of such event to and including the Conversion
Date, retained such assets and/or securities (together with any distributions
payable thereon during such period), giving application to all adjustments
called for during such period under this Section 5(d)(iii) with respect to the
rights of the holders of the Series A Preferred Stock; provided,
however, that if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be adjusted pursuant to this paragraph as
of the time of actual payment of such dividends or distributions; and
provided further, however, that no such adjustment shall be made
if the holders of Series A Preferred Stock simultaneously receive a dividend or
other distribution of assets and/or the number of securities that they would
have received if all outstanding shares of Series A Preferred Stock had been
converted into Common Stock immediately prior to such event. 

(iv)     Adjustments for
Reclassification, Exchange or Substitution. If the Common Stock issuable
upon conversion of the Series A Preferred Stock at any time or from time to time
after the Issuance Date shall be changed to the same or different number of
shares of any class or classes of stock, whether by reclassification, exchange,
substitution or otherwise (other than by way of a stock split or combination of
shares or stock dividends provided for in Sections 5(d)(i), (ii) and (iii), or a
reorganization, merger, consolidation, or sale of assets provided for in Section
5(d)(v)), then, and in each event, an appropriate revision to the Conversion
Price shall be made and provisions shall be made (by adjustments of the
Conversion Price or otherwise) so that the holder of each share of Series A
Preferred Stock shall have the right thereafter to convert such share of Series
A Preferred Stock into the kind and amount of shares of stock and/or other
securities that such holder would have received had it converted the shares of
Series A Preferred Stock held by it into Common Stock immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment as provided herein. 

(v)     Adjustments for Reorganization,
Merger, Consolidation or Sales of Assets. Subject to Section 4 above,
if at any time or from time to time after the Issuance Date there shall be a
capital reorganization of the Company (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in
Section 5(d)(i), (ii) and (iii), or a reclassification, exchange or substitution
of shares provided for in Section 5(d)(iv)), or a merger or consolidation of the
Company with or into another corporation or other entity, or the conveyance of
all or substantially all of the assets of the Company to another corporation or
other entity, immediately after such reorganization, merger, consolidation, or
conveyance (an “Organic Change”), then as a part of such Organic Change
an appropriate revision to the Conversion Price shall be made if necessary or
appropriate and provision shall be made if necessary or appropriate (by
adjustments of the Conversion Price or otherwise) so that the holder of each
share of Series A Preferred Stock shall have the right thereafter to convert
such share of Series A Preferred Stock into the kind and amount of shares of
stock and other securities or property of the Company or any successor
corporation resulting from Organic Change. In any such case, appropriate adjustment shall be made in the application of the provisions
of this Section 5(d)(v) with respect to the rights of the holders of the Series
A Preferred Stock after the Organic Change to the end that the provisions of
this Section 5(d)(v) (including any adjustment in the Conversion Price then in
effect and the number of shares of stock or other securities deliverable upon
conversion of the Series A Preferred Stock) shall be applied after that event in
as nearly an equivalent manner as may be practicable. 

6

(vi)     Adjustments for Issuance of
Additional Shares of Common Stock. In the event the Company shall issue or
sell any additional shares of Common Stock (otherwise than as provided in the
foregoing subsections (i) through (v) of this Section 5(d), pursuant to Common
Stock Equivalents (hereafter defined) granted or issued prior to the Issuance
Date, or in accordance with Section 5(d)(ix) below) (the “Additional Shares
of Common Stock”), at a price per share less than the Conversion Price, or
without consideration, the Conversion Price then in effect upon each such
issuance shall be adjusted to that price (rounded to the nearest cent)
determined by multiplying the Conversion Price by a fraction: 

(1)     the numerator of which shall be
equal to the sum of (A) the number of shares of Common Stock outstanding
(including, for purposes of such calculation, shares of Common Stock issuable
upon conversion of the outstanding shares of Series A Preferred Stock)
immediately prior to the issuance of such Additional Shares of Common Stock
plus (B) the number of shares of Common Stock (rounded to the nearest
whole share) which the aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at a price per share
equal to the then Conversion Price, and 

(2)     the denominator of which shall be
equal to the number of shares of Common Stock outstanding (including, for
purposes of such calculation, shares of Common Stock issuable upon conversion of
the outstanding shares of Series A Preferred Stock) immediately after the
issuance of such Additional Shares of Common Stock; 

No adjustment of the number
  of shares of Common Stock shall be made under Section 5(d)(vi) upon the issuance
  of any Additional Shares of Common Stock that are issued pursuant to the
  exercise of any warrants or other subscription or purchase rights or pursuant to
  the exercise of any conversion or exchange rights in any Common Stock
  Equivalents (as defined below), if any such adjustment shall previously have
  been made upon the issuance of such warrants or other rights or upon the
  issuance of such Common Stock Equivalents (or upon the issuance of any warrant
  or other rights therefore) pursuant to Section 5(d)(vii). 

(vii)     Issuance of Common Stock
Equivalents. The provisions of this Section 5(d)(vii) shall apply if (a) the
Company, at any time after the Issuance Date, shall issue any securities
convertible into or exchangeable for, directly or indirectly, Common Stock
(“Convertible Securities”), other than the Series A Preferred Stock, or
(b) any rights, warrants or options to purchase any such Common Stock or
Convertible Securities (collectively, the “Common Stock Equivalents”)
shall be issued or sold. If the price per share for which Additional Shares of
Common Stock may be issuable pursuant to any such Convertible Securities or
Common Stock Equivalents shall be less than the applicable Conversion Price then
in effect, or if, after any such issuance of Convertible Securities or Common
Stock Equivalents, the price per share for which Additional Shares of Common
Stock may be issuable thereafter is amended or adjusted, and such price as so
amended shall be less than the applicable Conversion Price in effect at the time
of such amendment or adjustment, then the applicable Conversion Price upon each
issuance of Convertible Securities or Common Stock Equivalents or amendment
thereof shall be adjusted as provided in subsection (vi) of this Section 5(d).
No adjustment shall be made to the Conversion Price upon the issuance of Common
Stock pursuant to the exercise, conversion or exchange of any Convertible
Securities or Common Stock Equivalents where an adjustment to the Conversion
Price was previously made as a result of the issuance or purchase of any
Convertible Securities or Common Stock Equivalents. 

7

(viii)     Consideration for Stock.
In case any shares of Common Stock or Convertible Securities, or any Common
Stock Equivalents, shall be issued or sold: 

(1)     in connection with any merger or
consolidation in which the Company is the surviving corporation (other than any
consolidation or merger in which the previously outstanding shares of Common
Stock of the Company shall be changed to or exchanged for the stock or other
securities of another corporation and except as provided in Section 5(d)(ix)
below), the amount of consideration therefore shall be deemed to be the fair
value, as determined reasonably and in good faith by the Board of Directors of
the Company including the affirmative vote of at least one (1) Director elected
or appointed by the holders of the Series A Preferred Stock, of such portion of
the assets and business of the nonsurviving corporation as such Board may
determine to be attributable to such shares of Common Stock, Convertible
Securities or Common Stock Equivalents, as the case may be; or 

(2)     in the event of any consolidation
or merger of the Company in which the Company is not the surviving corporation
or in which the previously outstanding shares of Common Stock of the Company
shall be changed into or exchanged for the stock or other securities of another
corporation, or in the event of any sale of all or substantially all of the
assets of the Company for stock or other securities of any corporation, the
Company shall be deemed to have issued a number of shares of its Common Stock
for stock or securities or other property of the other corporation computed on
the basis of the actual exchange ratio on which the transaction was predicated,
and for a consideration equal to the fair market value on the date of such
transaction of all such stock or securities or other property of the other
corporation. If any such calculation results in adjustment of the applicable
Conversion Price, or the number of shares of Common Stock issuable upon
conversion of the Series A Preferred Stock, the determination of the applicable
Conversion Price or the number of shares of Common Stock issuable upon
conversion of the Series A Preferred Stock immediately prior to such merger,
consolidation or sale, shall be made after giving effect to such adjustment of
the number of shares of Common Stock issuable upon conversion of the Series A
Preferred Stock. In the event any consideration received by the Company for any
securities consists of property other than cash, the fair market value thereof
at the time of issuance or as otherwise applicable shall be as determined in
good faith by the Board of Directors of the Company including the affirmative
vote of at least one Director elected or appointed by the holders of the Series
A Preferred Stock. In the event Common Stock is issued with other shares or
securities or other assets of the Company for consideration which covers both,
the consideration computed as provided in this Section 5(d)(viii) shall be
allocated among such securities and assets as determined in good faith by the
Board of Directors of the Company including the affirmative vote of at least one
Director elected or appointed by the holders of the Series A Preferred Stock.

(ix)     Certain Issuances Excepted.
Anything herein to the contrary notwithstanding, the Company shall not be
required to make any adjustment to the Conversion Price upon the authorization
or issuance of (i) securities issued in connection with the acquisition of a
Target Company (hereinafter defined) approved by the Board of Directors through
merger, stock-for-stock exchange, or similar transaction with the Company and/or
one of its subsidiaries and securities issued to retain the personnel of the
Target Company; (ii) securities issued pursuant to the conversion or exercise of
convertible or exercisable securities issued or outstanding on or prior to the
Issuance Date (so long as the conversion or exercise price in such securities
are not amended to lower such price and/or adversely affect the holders); and
(iii) securities issued or granted pursuant to the Company’s 2015 Stock
Incentive Plan or any subsequent equity compensation plans approved by the
Company’s Board of Directors or Compensation Committee, including at least one
of the directors elected or appointed by the holders of the Series A Preferred
Stock pursuant to Section 3(b) hereof. The term “Target Company” shall
mean an entity which at the time of the acquisition was engaged in the mortgage
brokerage or mortgage banking business. 

8

(e)     No Impairment. The Company
shall not, by amendment of its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred Stock against
impairment. In the event a holder shall elect to convert any shares of Series A
Preferred Stock as provided herein, the Company cannot refuse conversion based
on any claim that such holder or anyone associated or affiliated with such
holder has been engaged in any violation of law, unless, and only for so long
as, (i) an order from the Securities and Exchange Commission prohibiting such
conversion or (ii) an injunction from a court, on notice, restraining and/or
adjoining conversion of all or of said shares of Series A Preferred Stock shall
have been issued and the Company posts a surety bond for the benefit of such
holder in an amount equal to 120% of the Liquidation Preference Amount of the
Series A Preferred Stock such holder has elected to convert, which bond shall
remain in effect until the completion of arbitration/litigation of the dispute
and the proceeds of which shall be payable to such holder in the event it
obtains judgment. 

(f)     Certificates as to
Adjustments. Upon occurrence of each adjustment or readjustment of the
Conversion Price or number of shares of Common Stock issuable upon conversion of
the Series A Preferred Stock pursuant to this Section 5, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of such Series A Preferred
Stock a certificate setting forth such adjustment and readjustment, showing in
detail the facts upon which such adjustment or readjustment is based, and in any
event with ten (10) days of such event. The Company shall, upon written request
of the holder of such affected Series A Preferred Stock, at any time, furnish or
cause to be furnished to such holder a like certificate setting forth such
adjustments and readjustments, the Conversion Price in effect at the time, and
the number of shares of Common Stock and the amount, if any, of other securities
or property which at the time would be received upon the conversion of a share
of such Series A Preferred Stock. Notwithstanding the foregoing, the Company
shall not be obligated to deliver a certificate unless such certificate would
reflect an increase or decrease of at least one percent (1%) of such adjusted
amount. 

(g)     Issue Taxes. The Company
shall pay any and all issue and other taxes, excluding federal, state or local
income taxes, that may be payable in respect of any issue or delivery of shares
of Common Stock on conversion of shares of Series A Preferred Stock pursuant
hereto; provided, however, that the Company shall not be obligated
to pay any transfer taxes resulting from any transfer requested by any holder in
connection with any such conversion. 

(h)     Notices. All notices and
other communications hereunder shall be in writing and shall be deemed given if
delivered personally or by facsimile or deliver to its Email of Notice or three
(3) business days following being mailed by certified or registered mail,
postage prepaid, return-receipt requested, addressed to the holder of record at
its address appearing on the books of the Company. The Company will give written
notice to each holder of Series A Preferred Stock at least twenty (20) days
prior to the date on which the Company closes its books or takes a record (I)
with respect to any dividend or distribution upon the Common Stock, (II) with
respect to any pro rata subscription offer to holders of Common Stock, or (III)
for determining rights to vote with respect to any Organic Change, dissolution,
liquidation or winding-up and in no event shall such notice be provided to such
holder prior to such information being made known to the public. The Company
will also give written notice to each holder of Series A Preferred Stock at
least twenty (20) days prior to the date on which any Organic Change,
dissolution, liquidation or winding-up will take place; provided, however, that
in no event shall such notice be provided to such holder prior to such
information being made known to the public. 

9

(i)     Fractional Shares. No
fractional shares of Common Stock shall be issued upon conversion of the Series
A Preferred Stock. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Company shall round the number of shares to be issued
upon conversion up to the nearest whole number of shares. 

(j)     Reservation of Common Stock.
The Company shall, so long as any shares of Series A Preferred Stock are
outstanding, reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the Series A
Preferred Stock, such number of shares of Common Stock equal to the aggregate
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all of the Series A Preferred Stock then outstanding.
If at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then outstanding shares
of Series A Preferred Stock, the Company shall promptly take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number as shall be sufficient for such purpose, including,
without limitation, engaging in best efforts to obtain the requisite stockholder
approval of any necessary amendment to its Articles of Incorporation. The
initial number of shares of Common Stock reserved for conversions of the Series
A Preferred Stock and any increase in the number of shares so reserved shall be
allocated pro rata among the holders of the Series A Preferred Stock based on
the number of shares of Series A Preferred Stock held by each holder of record
at the time of issuance of the Series A Preferred Stock or increase in the
number of reserved shares, as the case may be. In the event a holder shall sell
or otherwise transfer any of such holder’s shares of Series A Preferred Stock,
each transferee shall be allocated a pro rata portion of the number of reserved
shares of Common Stock reserved for such transferor. Any shares of Common Stock
reserved and which remain allocated to any person or entity that does not hold
any shares of Series A Preferred Stock shall be allocated to the remaining
holders of Series A Preferred Stock, pro rata based on the number of shares of
Series A Preferred Stock then held by such holder. 

(k)     Retirement of Series A Preferred
Stock. Conversion of Series A Preferred Stock shall be deemed to have been
effected on the Conversion Date. Upon conversion of only a portion of the number
of shares of Series A Preferred Stock represented by a certificate surrendered
for conversion, the Company shall issue and deliver to such holder at the
expense of the Company, a new certificate covering the number of shares of
Series A Preferred Stock representing the unconverted portion of the certificate
so surrendered as required by Section 5(b)(b)(ii). 

(l)     Regulatory Compliance. If
any shares of Common Stock to be reserved for the purpose of conversion of
Series A Preferred Stock require registration or listing with or approval of any
governmental authority, stock exchange or other regulatory body under any
federal or state law or regulation or otherwise before such shares may be
validly issued or delivered upon conversion, the Company shall, at its sole cost
and expense, use its best efforts to as expeditiously as possible, secure such
registration, listing or approval, as the case may be. 

6.      Lost or Stolen
Certificates. Upon receipt by the Company of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of any Preferred Stock
Certificates representing the shares of Series A Preferred Stock, and, in the
case of loss, theft or destruction, of any indemnification undertaking by the
holder to the Company and, in the case of mutilation, upon surrender and
cancellation of the mutilated Preferred Stock Certificate(s), the Company shall
execute and deliver new preferred stock certificate(s) of like tenor and date;
provided, however, the Company shall not be obligated to reissue
Preferred Stock Certificates if the holder contemporaneously requests the
Company to convert such shares of Series A Preferred Stock into Common Stock, in
which case the Company shall issue the shares of Common Stock to the holder in
accordance with the terms of this Certificate of Designation. 

10

7.     Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief. The remedies provided in
this Certificate of Designation shall be cumulative and in addition to all other
remedies available under this Certificate of Designation, at law or in equity
(including a decree of specific performance and/or other injunctive relief), and
no remedy contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit a holder’s
right to pursue actual damages for any failure by the Company to comply with the
terms of this Certificate of Designation. Amounts set forth or provided for
herein with respect to payments, conversion and the like (and the computation
thereof) shall be the amounts to be received by the holder thereof and shall
not, except as expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the holders of
the Series A Preferred Stock and that the remedy at law for any such breach may
be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the holders of the Series A Preferred Stock shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required. 

8.     Specific Shall Not Limit General;
Construction. No specific provision contained in this Certificate of
Designation shall limit or modify any more general provision contained herein.
This Certificate of Designation shall be deemed to be jointly drafted by the
Company and all initial holder of the Series A Preferred Stock and shall not be
construed against any person as the drafter hereof. 

9.     Failure or Indulgence Not
Waiver. No failure or delay on the part of a holder of Series A Preferred
Stock in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. 

10.     Company Breach. In the event
of a breach by the Company of any provision of Section 2, Section 3, Section 4,
or Section 5 herein (each, a “Company Breach”), in addition to any other
remedies as provided in Section 7 herein the Company shall, promptly and in any
event within two Business Days of the date the Company first becomes aware of
such Company Breach, provide written notice of such Company Breach to each
Holder, provided, however, that notwithstanding the foregoing, holders
holding at least a majority of the outstanding shares of the Series A Preferred
Stock may waive a Company Breach and the provisions of this Section 10 with
respect thereto. 

IN WITNESS WHEREOF, White Mountain Titanium Corporation
has caused this Certificate of Preferred Stock Designation to be signed by its
Chief Executive Officer and Secretary, respectively, on this 16th day
of March, 2016. 

White Mountain Titanium Corporation 

	By: 	  	 
	Name: 	Michael P. Kurtanjek 	 
	Title: 	Chief Executive Officer 	 
	  	  	 
	  	  	 
	By: 	  	 
	Name: 	Ronald N. Vance 	 
	Title: 	Secretary 	 

11

EXHIBIT I 

WHITE MOUNTAIN TITANIUM CORPORATION 

CONVERSION NOTICE 

Reference is made to the Certificate of Designation of the
Relative Rights and Preferences of the Series A Convertible Preferred Stock of
PSM Holdings, Inc. (the “Certificate of Designation”). In accordance with
and pursuant to the Certificate of Designation, the undersigned hereby elects to
convert the number of shares of Series A Convertible Preferred Stock, par value
$.001 per share (the “Preferred Stock”), of White Mountain Titanium
Corporation, a Nevada corporation (the “Company”), indicated below into
shares of Common Stock, par value $.001 per share (the “Common Stock”),
of the Company, by tendering the stock certificate(s) representing the share(s)
of Preferred Stock specified below as of the date specified below. 

	 	Date of Conversion:
      ____________________________________________________________________________________________________________________________________________________________________________
	 	 
	 	Number of shares of Preferred Stock to be
      converted: ____ 
      ______________________________________________________________________________________________________________________________________________
	 	 
	 	Stock certificate no(s). of Preferred Stock to
      be converted:
      ________________________________________________________________________________________________________________________________________________

The shares of Common Stock issuable upon such conversion have been sold
      pursuant to the Registration Statement: YES ______    
      NO____ 
Please confirm the following information: 

	 	Conversion Price:
      ______________________________________________________________________________________________________________________________________________________________________________
	 	 
	 	Number of shares of Common Stock to be issued:
      ______________________________________________________________________________________________________________________________________________________

Number of shares of Common Stock beneficially owned or deemed
beneficially owned by the Holder on the Date of Conversion:
______________________________________________________

Please issue the Common Stock into which the shares of
Preferred Stock are being converted and, if applicable, any check drawn on an
account of the Company, in the following name and to the following address: 

	 	Issue to: 	 
	 	  	

     
	 	 	 
	 	Facsimile Number: 	 
	 	 	 
	 	Email
      of Notice: 	 
	 	 	 
	 	Authorization: 	 
	 		By:
      ___________________________________________________________________________________________________
	 		Title:
      ____________________________________________________________________________________________________

Dated:

EXHIBIT D 

Common Stock Purchase Warrant 

(See Attached) 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE FEDERAL OR STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THESE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY SUCH SECURITIES. 

WHITE MOUNTAIN TITANIUM CORPORATION 

WARRANT TO PURCHASE
COMMON STOCK 

Warrant No.: W-2016-00001 
Number of Shares: 8,333,333

Date of Issuance: March 16, 2016 (the “Issuance Date”) 

White Mountain Titanium Corporation, a Nevada corporation (the
“Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Nexo WMTM
Holdings, LLC, a Delaware limited liability company, the registered holder
hereof or its permitted assigns (the “Holder”), is entitled, subject to
the terms set forth below, to purchase from the Company, at the Exercise Price
(as defined below) then in effect, upon surrender of this Warrant to purchase
Common Stock (including all Warrants to purchase Common Stock issued in
exchange, transfer or replacement hereof, the “Warrant”), at any time or
times on or after the date hereof, but not after 11:59 P.M., New York Time, on
the Expiration Date (as defined below), Eight Million Three Hundred Thirty Three
Thousand (8,333,333) fully paid nonassessable shares of Common Stock (as defined
below) (the “Warrant Shares”). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section
11. This Warrant is being issued pursuant to a $2,000,000 Loan Agreement, dated
March 16, 2016, between the Company and the Holder. 

1.     EXERCISE OF WARRANT. 

(a)     Mechanics of Exercise.
Subject to the terms and conditions hereof, this Warrant may be exercised by the
Holder on any day, in whole or in part, by (i) delivery of a written notice, in
the form attached hereto as Exhibit A (the “Exercise Notice”), of
the Holder’s election to exercise this Warrant and (ii) payment to the Company
of an amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash or wire transfer of immediately available funds.
The Holder shall not be required to deliver the original Warrant in order to
effect an exercise hereunder; provided, however, that the Holder shall
covenant in the Exercise Notice, that it will deliver the original Warrant to
the Company within five (5) Business Days of such exercise. Execution and
delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original Warrant and
issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. On or before the first Business Day
following the date on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (the “Exercise Delivery Documents”), the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent (the “Transfer Agent”). On or before the third Business Day
following the date on which the Company has received all of the Exercise
Delivery Documents (the “Share Delivery Date”), the Company shall (X)
provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities Transfer Program, upon the
request of the Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and dispatch by overnight
courier to the address as specified in the Exercise Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder is entitled pursuant to such exercise. Upon
delivery of the Exercise Notice and Aggregate Exercise Price referred to in
clause (ii)(A) above the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of delivery of the
certificates evidencing such Warrant Shares. If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater
than the number of Warrant Shares being acquired upon an exercise, then the
Company shall as soon as practicable and in no event later than three (3)
Business Days after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 4(d)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock to be
issued shall be rounded up to the nearest whole number. The Company shall pay
any and all taxes, including without limitation, all documentary stamp, transfer
or similar taxes, or other incidental expense that may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant. 

(b)     Exercise Price. For purposes
of this Warrant, “Exercise Price” means US$0.30 per share, subject to
adjustment as provided herein. 

(c)     Disputes. In the case of a
dispute as to the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares, the Company shall promptly issue to the
Holder the number of Warrant Shares that are not disputed and resolve such
dispute in accordance with terms herein. 

(d)     No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. In lieu of any fractional share to
which the Holder would otherwise be entitled, the Company shall make a cash
payment equal to the fair market value of such fractional share.

(e)     Compliance with Securities
Laws.

(i)     The Holder of this Warrant, by
acceptance hereof, acknowledges that this Warrant and the Common Stock to be
issued upon exercise hereof are being acquired solely for the Holder’s own
account and not as a nominee for any other party; and for investment, and that
the Holder will not offer, sell or otherwise dispose of this Warrant or any
Common Stock to be issued upon exercise hereof except under circumstances that
will not result in a violation of the Securities Act or any state securities
laws. Upon exercise of this Warrant, the Holder shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
Common Stock so purchased are being acquired solely for the
Holder’s own account and not as a nominee for any other party, for investment,
and not with a view toward distribution or resale.

2

(ii)     This Warrant and all Common Stock
issued upon exercise hereof unless registered under the Securities Act shall be
stamped or imprinted with a legend in substantially the following form (in
addition to any legend required by state securities laws): THESE SECURITIES HAVE
NOT BEEN REGISTERED WITH THE SECURITIES 

AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THESE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY SUCH SECURITIES. 

2.      ADJUSTMENTS. If, prior to the
exercise of these Warrants, the Company shall have effected one or more stock
split-ups, stock dividends or other increases or reductions of the number of
shares of its Common Stock outstanding without receiving reasonable compensation
therefor in money, services, or property, the number of shares of Common Stock
subject to the Warrants shall, (i) if a net increase shall have been effected in
the number of outstanding shares of Common Stock, be proportionately increased,
and the cash consideration payable per share shall be proportionately reduced,
and, (ii) if a net reduction shall have been effected in the number of
outstanding shares of Common Stock, be proportionately reduced and the cash
consideration payable per share be proportionately increased. 

3.     WARRANT HOLDER NOT DEEMED A
STOCKHOLDER. Except as otherwise specifically provided herein, the Holder,
solely in such Person’s capacity as a holder of this Warrant, shall not be
entitled to vote or receive dividends or be deemed the holder of shares of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the Holder, solely in such Person’s capacity as the
Holder, any of the rights of a shareholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization,
issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 3, the Company will provide the Holder with copies
of the same notices and other information given to the stockholders of the
Company generally, contemporaneously with the giving thereof to the
stockholders. 

4.     REISSUANCE OF WARRANTS. 

(a)     Transfer of Warrant. If this
Warrant is to be transferred, the Holder shall surrender this Warrant to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Warrant (in accordance with Section 4(d)), registered as the
Holder may request, representing the right to purchase the number of
Warrant Shares being transferred by the Holder and, if less then the total
number of Warrant Shares then underlying this Warrant is being transferred, a
new Warrant (in accordance with Section 4(d)) to the Holder representing the
right to purchase the number of Warrant Shares not being transferred. 

3

(b)     Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant, and,
in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall execute and
deliver to the Holder a new Warrant (in accordance with Section 4(d))
representing the right to purchase the Warrant Shares then underlying this
Warrant. 

(c)     Warrant Exchangeable for
Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof
by the Holder at the principal office of the Company, for a new Warrant or
Warrants (in accordance with Section 4(d)) representing in the aggregate the
right to purchase the number of Warrant Shares then underlying this Warrant, and
each such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that no Warrants for fractional shares of Common Stock shall
be given. 

(d)     Issuance of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to the terms of
this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
(ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a
new Warrant being issued pursuant to Section 4(a) or Section 4(c), the Warrant
Shares designated by the Holder which, when added to the number of shares of
Common Stock underlying the other new Warrants issued in connection with such
issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) except for new warrants issued pursuant to section 4(a), shall
have an issuance date, as indicated on the face of such new Warrant, which is
the same as the Issuance Date, and (iv) shall have the same rights and
conditions as this Warrant. 

5.     NOTICES. All notices, demands
or other communications to be given or delivered under or by reason of the
provisions of this Warrant shall be in writing and shall be deemed to have been
given when delivered personally to the recipient, sent to the recipient by
facsimile transmission, sent to the recipient by email, sent to the recipient by
reputable express courier service (charges prepaid), or three (3) Business Days
after being mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands, and other
communications will be sent to the Holder at the address or number indicated on
the records of the Company and to the principal executive offices of the
Company, or to such other address or to the attention of such other person as
the recipient party has specified by prior written notice to the sending party.

6.     AMENDMENT AND WAIVER. Except
as otherwise provided herein, the provisions of this Warrant may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the holders of these Warrants representing at least a
majority of the shares of Common Stock obtainable upon exercise of these
Warrants then outstanding; provided, however, that the Company may reduce the
Exercise Price or extend the Expiration Date without the prior consent of the
holders of these Warrants. 

7.      GOVERNING LAW; VENUE.
This Warrant 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 Warrant, 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
Warrant. 

4

8.     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. 

9.     CONSTRUCTION; HEADINGS. This
Warrant shall be deemed to be jointly drafted by the Company and the Holder and
shall not be construed against any person as the drafter hereof. The headings of
this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant. 

10.     REMEDIES, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this Warrant
at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to
pursue actual damages for any failure by the Company to comply with the terms of
this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the holder of this Warrant and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity
of showing economic loss and without any bond or other security being required.

5

11.     TRANSFER. This Warrant may
not be offered for sale, sold, transferred or assigned without the consent of
the Company.

12.     CERTAIN DEFINITIONS. For
purposes of this Warrant, the following terms shall have the following meanings:

(a) “Business Day” means any day other than Saturday, Sunday or other day
  on which commercial banks in the State of Utah are authorized or required by law
  to remain closed. 

(b)     “Common Stock” means (i) the
Company’s common stock, par value $0.001 per share, and (ii) any capital stock
into which such Common Stock shall have been changed or any capital stock
resulting from a reclassification of such Common Stock. 

(c)     “Expiration Date” means
March 16, 2019, or, if such date falls on a day other than a Business Day
or on which trading does not take place on the Principal Market (a
“Holiday”), the next date that is not a Holiday; provided that the
Warrants will expire earlier upon (i) the sale of all or substantially all of
the assets of the Company or (ii) the merger or consolidation of the Company
after which the Company’s stockholders own less than a majority of the voting
stock of the surviving entity.

(d)     “Person” means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a
government or any department or agency thereof. 

(e)     “Principal Market” means the
principal securities exchange or trading market on which the Common Stock is
listed and trades. 

IN WITNESS WHEREOF, the Company has caused this Warrant
to Purchase Common Stock to be duly executed as of the Issuance Date set out
above. 

	 	WHITE MOUNTAIN TITANIUM
      CORPORATION 
	 	  
	 	  
	 	By: 	 
	 		Name: 
	 		Title: 

6

EXHIBIT A 

EXERCISE NOTICE 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK 

WHITE MOUNTAIN TITANIUM CORPORATION 

The undersigned holder hereby exercises the right to purchase
___________ of the shares of Common Stock (“Warrant Shares”) of White
Mountain Titanium Corporation, a Nevada corporation (the “Company”),
evidenced by the attached Warrant to Purchase Common Stock, Warrant No.:
W____________(the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

1.     Payment of Exercise Price.
The holder shall pay the Aggregate Exercise Price in the sum of
$___________________to the Company in accordance with the terms of the
Warrant. 

2.     Accredited Investor. The
holder is an “accredited investor” as defined in Rule 501(a) under the
Securities Act. 

3.     Delivery of Warrant Shares.
The Company shall deliver to the holder __________Warrant Shares in accordance
with the terms of the Warrant. 

4.     Delivery of Warrant. The
Holder shall deliver the original Warrant to the Company within five (5)
Business Days from the date hereof. 

[5.     The Holder hereby represents that
contemporaneous with the delivery of this exercise notice, that the Holder has
sold __________Warrant Shares and hereby represents that it has complied with
the prospectus delivery requirements of the Securities Act as applicable in
connection with such sale.]1 

Date: __________________, 201______

______________________________________________
    
Name of Registered Holder 

	By: 	 	 
		Name: 	 
		Title: 	 

______________________________________
1 Add only
if a contemporaneous sale has occurred pursuant to a Registration Statement 

EXHIBIT E 

Registration Rights Agreement 

(See Attached) 

REGISTRATION RIGHTS AGREEMENT 

This Registration Rights Agreement (the “Agreement”) is
made and entered into as of March 16, 2016, by and between White Mountain
Titanium Corporation, a Nevada corporation (the “Company”), and NEXO WMTM
Holdings, LLC, a Delaware limited liability company (the “Shareholder”).

RECITALS: 

WHEREAS, the Shareholder concurrently with the execution of
this Agreement is acquiring shares of the Company’s Series A Preferred Stock
(the “Series A Shares”) which are convertible into the Company’s common
stock, par value $0.001 per share (the “Common Stock”); and 

WHEREAS, as a condition to such acquisition, the parties are
willing to enter into the agreements contained herein. 

NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows: 

1.     Definitions.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth below: 

“Holder" or "Holders" means the holder or
holders, as the case may be, from time to time of Registrable Securities. A
holder of securities that are convertible into or exercisable for Registrable
Securities shall be deemed to be a Holder of such Registrable Securities. 

“Loan Agreement” means the Loan Agreement dated March
16, 2016, between the Company and the Shareholder. 

“Person” means an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and government
or any department or agency thereof. 

“Registerable Securities” means (i) the Common Stock
issued or issuable to the Shareholder upon conversion of the Series A Shares
issued in accordance with the terms of the Loan Agreement, and (ii) any
securities issued or issuable with respect to the Common Stock referred to in
clause (i) by way of replacement, share dividend, share split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. 

“SEC” means the Securities and Exchange Commission. 

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

2.     Demands for
Registration 

2.1     Demand Period. So long as
Series A Shares are outstanding (the “Demand Period”), subject to the
terms and conditions of this Agreement, the Shareholder will have in the
one-time right, in addition to other rights enumerated in this
Agreement, to request registration under the Securities Act of all or part of
its Registerable Securities (a “Demand Registration”). The Holders of 50%
or more of the Registerable Securities shall have the right to exercise the
registration rights under this Section 2. 

2.2     Demand Procedure. 

2.2.1     Subject to Sections 2.2.2 and
2.2.4 below, during the Demand Period any Holder or combination of Holders (the
“Demanding Shareholders”) owning 50% or more of the Registerable
Securities may deliver to the Company a written request (a “Demand
Registration Request”) that the Company register any or all such Demanding
Shareholders’ Registerable Shares. 

2.2.2     Holders, taken together, may only
make one Demand Registration Request during the Demand Period. The Company shall
only be required to file one registration statement (as distinguished from
supplements or pre-effective or post-effective amendments thereto) in response
to each Demand Registration Request. 

2.2.3     A Demand Registration Request
from Demanding Shareholders shall (i) set forth the number of Registerable
Securities intended to be sold pursuant to the Demand Registration Request; (ii)
disclose whether all or any portion of a distribution pursuant to such
registration will be sought by means of an underwriting; and (iii) identify any
managing underwriter or managing underwriters proposed for the underwritten
portion, if any, of such registration. 

2.2.4     The parties anticipate that the
registration contemplated under this Section 2 will be accomplished by means of
the filing of a Form S-1 or S-3, and that registration on such form will allow
for different means of distribution, including sales by means of an underwriting
as well as sales into the open market. If the Demanding Shareholders desire to
distribute all or part of the Registerable Securities covered by their request
by means of an underwriting, they shall so advise the Company in writing in
their initial Demand Registration Request as described in Section 2.2.3 above. A
determination of whether all or part of the distribution will be by means of an
underwriting shall be made by Demanding Shareholders holding a majority of the
Registerable Securities to be included in the registration. If all or part of
the distribution is to be by means of an underwriting, all subsequent decisions
concerning the underwriting which are to be made by the Demanding Shareholders
pursuant to the terms of this Agreement, which shall include the selection of
the underwriter or underwriters to be engaged and the representative, if any, of
the underwriters so engaged, shall be made by the Demanding Shareholders who
hold a majority of the Registerable Securities to be included in the
underwriting, subject to approval by the Board of Directors of the Company. 

2.2.5      Upon the receipt by the
Company of a Demand Registration Request in accordance with Section 2.2.4
hereof, the Company shall, within ten (10) days following receipt of such Demand
Registration Request, give written notice of such request to all other Holders.
The Company shall include in such notice information concerning whether all,
part, or none of the distribution is expected to be made by means of an
underwriting, and, if more than one means of distribution is contemplated, may
require Holders to notify the Company of the means of distribution of their
Registerable Securities to be included in the registration. If any Holder who is
not a Demanding Shareholder desires to sell any Registerable Securities owned by
such Holder, such Holder may elect to have all or any portion of its
Registerable Securities included in the registration statement by notifying the
Company in writing (a “Supplemental Demand Registration Request”) within
twenty (20) days of receiving notice of the Demand Registration Request from the
Company. The right of any Holder to include all or any portion of its
Registerable Securities in an underwriting shall be conditioned upon the Company’s having received a timely written request for such
inclusion by way of a Demand Registration Request or Supplemental Demand
Registration Request (which right shall be further conditioned to the extent
provided in this Agreement). Any Holder proposing to distribute his, her, or its
Registerable Securities through an underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting. 

2

2.2.6     Notwithstanding any other
provision of this Section 2, if an underwriter advises the Company in writing
that marketing factors require a limitation on the number of shares to be
underwritten, then the number of shares of Registerable Securities that may be
included in the underwriting shall be allocated among the Holders in proportion
(as nearly as practicable) to the respective amounts of Registerable Securities
each Holder owns (or in such other proportion as they shall mutually agree).
Registerable Securities excluded or withdrawn from the underwriting in
accordance with this Section 2.2.7 shall be withdrawn from the registration.

2.3     Priority on Request
Registration. The Company will not include in any Demand Registration any
securities which are not Registerable Securities without the prior written
consent of the Holders of a majority of the shares of Registerable Securities
included in such registration. If a Demand Registration is an underwritten
offering and the managing underwriters advise the Company in writing that in
their opinion the number of Registerable Securities and, if permitted hereunder,
other securities requested to be included in such offering, exceeds the number
of securities that can be sold in an orderly manner in such offering within a
price range acceptable to the Holders of a majority of the shares of
Registerable Securities initially requesting registration, the Company will
include in such registration prior to the inclusion of any securities which are
not Registerable Securities the number of shares of Registerable Securities
requested to be included that in the opinion of such underwriters can be sold in
an orderly manner within such acceptable price range, pro rata among the
respective Holders thereof on the basis of the number of shares of Registerable
Securities owned by each such Holder. 

3.     Piggyback
Registrations 

3.1      Right to Piggyback. If
the Company proposes to undertake an offering of shares of Common Stock for its
account or for the account of other stockholders and the registration form to be
used for such offering may be used for the registration of Registerable
Securities (a “Piggyback Registration”), each such time the Company will
give prompt written notice to all Holders of Registerable Securities of its
intention to effect such a registration (each, a “Piggyback Notice”) and,
subject to Sections 3.2 and 3.3 hereof, the Company will use its best efforts to
cause to be included in such registration all Registerable Securities with
respect to which the Company has received written requests for inclusion therein
within twenty (20) days after the date of sending the Piggyback Notice. 

3.2     Priority on Primary
Registrations. If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number that can be sold in an
orderly manner within a price range acceptable to the Company, the Company will
include in such registration (a) first, the securities the Company proposes to
sell, and (b) second, the Registerable Securities requested to be included in
such registration and any other securities requested to be included in such
registration that are held by Persons other than the Holders of Registerable
Securities pursuant to registration rights, pro rata among the holders of
Registerable Securities and the holders of such other securities requesting such
registration on the basis of the number of shares of such securities owned by
each such holder. 

3

3.3     Priority on Secondary
Registrations. If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company’s securities other than the
Holders of Registerable Securities (the “Other Holders”), and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number that can be sold in a orderly manner in such offering within a price
range acceptable to the Other Holders requesting such registration, the Company
will include in such registration (a) first, the securities requested to be
included therein by the Other Holders requesting such registration, and (b)
second, the Registerable Securities requested to be included in such
registration hereunder, pro rata among the Holders of Registerable Securities
requesting such registration on the basis of the number of shares of such
securities owned by each such Holder. 

3.4     Selection of Underwriters.
In the case of an underwritten Piggyback Registration, the Company will have the
right to select the investment banker(s) and managers(s) to administer the
offering. 

4.     Registration
Procedures 

4.1     Registration. Whenever the
Holders of Registerable Securities have requested that any Registerable
Securities be sold pursuant to this Agreement, the Company will use its
reasonable best efforts to effect the registration and the sale of such
Registerable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:

4.1.1     Registration Statement.
Prepare and file with the SEC a registration statement with respect to such
Registerable Securities and use its reasonable best efforts to cause such
registration statement to become effective. 

4.1.2     Amendments and
Supplements. Promptly prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period required by the intended method of disposition and the terms of this
Agreement and comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement. 

4.1.3      Provisions for

Copies. Promptly furnish to each seller of Registerable Securities the
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registerable Securities
owned by such seller. 

4.1.4      Blue Sky Laws. Use
its reasonable best efforts to register or qualify such Registerable Securities
under the securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registerable Securities owned by such
seller, provided, that the Company will not be required to (a) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4.1.4; (b) subject itself to taxation in any such
jurisdiction; or (c) consent to general service of process in any such
jurisdiction. 

4

4.1.5      Anti-fraud Rules.
Promptly notify each seller of such Registerable Securities when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any material fact necessary to make the statements therein not misleading, and
in such event, at the request of any such seller, the Company will promptly
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registerable Securities, such prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading, provided,
that the Company will not take any action which causes the prospectus included
in such registration statement to contain an untrue statement of material fact
or omit any material fact necessary to make the statements therein not
misleading, except as permitted by Section 4.5. 

4.1.6      Securities Exchange
Listing. Use its reasonable best efforts to cause all such Registerable
Securities to be listed on each securities exchange on which securities of the
same class issued by the Company are then listed and use its reasonable best
efforts to qualify such Registerable Securities for trading on each system on
which securities of the same class issued by the Company are then qualified.

4.1.7      Underwriting
Agreement. Enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the shares of Registerable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registerable Securities. 

4.1.8     Due Diligence. Make
available for inspection by any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant, or other
agent retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company’s officers, directors, employees, and independent accountants to supply
all information reasonably requested by any such underwriter, attorney,
accountant, or agent in connection with such registration statement. 

4.1.9     Deemed Underwriters or
Controlling Persons. Permit any Holder of Registerable Securities which
Holder, in such Holder’s reasonable judgment, might be deemed to be an
underwriter or a controlling person of the Company, to participate in the
preparation of such registration or comparable statement and to require the
insertion therein of material in form and substance satisfactory to such Holder
and to the Company, and furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included. 

4.1.10     Management Availability.
In connection with underwritten offerings, make available appropriate management
personnel for participation in the preparation and drafting of such registration
or comparable statement, for due diligence meetings and for “road show”
meetings. 

4.1.11      Stop Orders.
Promptly notify Holders of the Registerable Securities of the threat of issuance
by the SEC of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceeding for that purpose, and make every
reasonable effort to prevent the entry of any order suspending the effectiveness
of the registration statement. In the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registerable Securities included in such registration statement
for sale in any jurisdiction, the Company will use its reasonable best efforts
promptly to obtain the withdrawal of such order. 

5

4.1.12     Opinions. At each closing
of an underwritten offering, request opinions of counsel to the Company and
updates thereof (which opinions and updates shall be reasonably satisfactory to
the underwriters of the Registerable Securities being sold) addressed to the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such Holders or their counsel. 

4.2      Further
Information. The Company may require each Holder of Registerable
Securities to furnish to the Company in writing such information regarding the
proposed distribution by such Holder of such Registerable Securities as the
Company may from time to time reasonably request. 

4.3     Notice to Suspend Offers and
Sales. Each Holder severally agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Sections
4.1.5 or 4.1.11 hereof, such Investor will forthwith discontinue disposition of
shares of Common Stock pursuant to a registration hereunder until receipt of the
copies of an appropriate supplement or amendment to the prospectus under Section
4.1.5 or until the withdrawal of such order under Section 4.1.11. 

4.4      Reference to Holders.
If any such registration or comparable statement refers to any Holder by name or
otherwise as the holder of any securities of the Company and if, in the Holder’s
reasonable judgment, such Holder is or might be deemed to be a controlling
person of the Company, such Holder shall have the right to require (a) the
insertion therein of language in form and substance satisfactory to such Holder
and the Company, and presented to the Company in writing, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company’s
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (b)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such Holder, provided that with respect to this
clause (b) such Holder shall furnish to the Company an opinion of counsel to
such effect, which opinion and counsel shall be reasonably satisfactory to the
Company. 

4.5     Company’s Ability to
Postpone. Notwithstanding anything to the contrary contained herein, the
Company shall have the right twice in any twelve month period to postpone the
filing of any registration statement under Sections 2 or 3 hereof or any
amendment or supplement thereto for a reasonable period of time (all such
postponements not exceeding ninety (90) days in the aggregate in any twelve
month period) if the Company furnishes the Holders of Registerable Securities a
certificate signed by the Chairman of the Board of Directors or the President of
the Company stating that, in its good faith judgment, the Company’s Board of
Directors (or the executive committee thereof) has determined that effecting the
registration at such time would materially and adversely affect a material
financing, acquisition, disposition of assets or stock, merger or other
comparable transaction, or would require the Company to make public disclosure
of information the public disclosure of which would have a material adverse
effect upon the Company. 

5.     Registration
Expenses 

5.1    Expense Borne by Company. Except
as specifically otherwise provided in Section 5.2 hereof, the Company will be
responsible for payment of all expenses incident to any registration hereunder, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, road show
expenses, advertising expenses and fees and disbursements of counsel for the
Company and all independent certified public accountants and other Persons
retained by the Company in connection with such registration (all such expenses
borne by the Company being herein called the “Registration Expenses”). 

6

5.2     Expense Borne by Selling
Security Holders. Each selling security holder will be individually
responsible for payment of his, her, or its own legal fees (if the selling
security holder retains legal counsel separate from that of the Company),
underwriting fees and brokerage discounts, commissions and other sales expenses
incident to any registration hereunder. Any other expenses to be borne by the
selling security holders which are common to all of the selling security holders
shall be divided among such security holders (including the Company and holders
of the Company’s securities other than Registerable Securities, to the extent
that securities are being registered on behalf of such Persons) pro rata on the
basis of the number of shares being registered on behalf of each such security
holder, or as such security holders may otherwise agree. 

6.     Indemnification
Section 

6.1     Indemnification by Company.
The Company agrees to indemnify, to the fullest extent permitted by law, each
Holder of Registerable Securities and each Person who controls (within the
meaning of the Securities Act) such Holder against all loses, claims, damages,
liabilities, and expenses in connection with defending against any such losses,
claims, damages, or liabilities, or in connection with any investigation or
inquiry, in each case caused by or based on any untrue or alleged untrue
statement of material fact contained in any registration statement, prospectus,
or preliminary prospectus or any amendment thereof or supplement thereto, or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arise out of any
violation by the Company of any rules or regulations promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with such registration, except insofar as
the same are (i) contained in any information furnished in writing to the
Company by such Holder expressly for use therein; (ii) caused by such Holder’s
failure to deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto; or (iii) caused by such Holder’s failure to
discontinue disposition of shares after receiving notice from the Company
pursuant to Section 4.3 hereof. In connection with an underwritten offering, the
Company will indemnify such underwriters, their officers and directors and each
Person who controls (within the meaning of the Securities Act) such underwriters
at least to the same extent as provided above with respect to the
indemnification of the Holders of Registerable Securities. 

6.2     Indemnification by Holder.
In connection with any registration statement in which a Holder of Registerable
Securities is participating, each such Holder will furnish to the Company in
writing such information as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each Person who controls (within the meaning of the Securities Act) the Company
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information so furnished in writing by such Holder expressly
for use in connection with such registration; provided that the obligation to indemnify will be individual to each Holder and will be
limited to the net amount of proceeds received by such Holder from the sale of
Registerable Securities pursuant to such registration statement. In connection
with an underwritten offering, each such Holder will indemnify such
underwriters, their officers and directors and each Person who controls (within
the meaning of the Securities Act) such underwriters at least to the same extent
as provided above with respect to the indemnification of the Company. 

7

6.3     Assumption of Defense by
Indemnifying Party. Any Person entitled to indemnification hereunder will
(a) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (b) unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. 

6.4     Binding Effect. The
indemnification provided for under this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director, or controlling Person of such indemnified party
and will survive the transfer of securities. The Company also agrees to make
such provisions, as are reasonably requested by any indemnified party, for
contribution to such party in the event the Company’s indemnification is
unavailable for any reason. Each Holder of Registerable Securities also agrees
to make such provisions, as are reasonably requested by any indemnified party,
for contribution to such party in the event such Holder’s indemnification is
unavailable for any reason. 

7.     Participation in
Underwritten Registrations

No Person may participate in any registration hereunder which
is underwritten unless such Person (a) agrees to sell such Person’s securities
on the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements, and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents required under the terms of such underwriting
arrangements. 

8.     Miscellaneous.

8.1     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.

8.2     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. 

8

8.3     Waiver of Jury Trial. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES 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. EACH
PARTY AGREES THAT ANY OTHER PARTY MAY FILE A COPY OF THIS PARAGRAPH WITH ANY
COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF
EACH PARTY IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY JURY, AND THAT ANY
DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN ANY OF THE PARTIES SHALL INSTEAD BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
EACH PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION MAY NOT BE ORALLY WAIVED AND
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF ANY OTHER PARTY, INCLUDING THAT
PARTY’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD
NOT, IN THE EVENT OF SUCH DISPUTE OR CONTROVERSY, SEEK TO ENFORCE THE PROVISIONS
OF THIS PARAGRAPH, AND EACH PARTY ACKNOWLEDGES THAT EACH OTHER PARTY HAS, IN
PART, BEEN INDUCED TO ENTER INTO THIS AGREEMENT IN RELIANCE ON THE PROVISIONS OF
THIS PARAGRAPH. 

8.4     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.

8.5     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. 

9

	 	If to the Company at: 	Augusto Leguia 100, Oficina 1401, Las Condes
  
	 	  	Santiago, Chile 
	 	  	Attention: Michael P. Kurtanjek, CEO 
	 	  	Facsimile No.: 
	 	  	Email Address: 
	 	  	  
	 	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 the Shareholder at: 	  
	 	  	  
	 	  	Attention: 
	 	  	Facsimile No.: 
	 	  	Email Address: 
	 	  	  
	 	With a copy (which will not 	  
	 	constitute notice) to: 	  
	 	  	  
	 	  	  
	 	  	Attention: 
	 	  	Facsimile No.: 
	 	  	Email Address: 

8.6     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.

8.7     Successors and Assigns. All
covenants and agreements contained by or on behalf of any party shall bind its
successors and assigns and shall inure to the benefit of the other Parties,
their successors and assigns.

8.8     Entire Agreement. This
Agreement constitutes the entire understanding among the Parties hereto with
respect to the subject matter hereof and supersedes all negotiations, representations, prior discussions, and preliminary agreements
between any of the Parties hereto relating to the subject matter of this
Agreement. 

10

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

8.10     Waiver. No party shall not
be deemed to have waived any rights under this Agreement unless such waiver is
given in writing and signed by the subject party. No delay or omission on the
part of any party in exercising any right shall operate as a waiver of such
right or any other right. A waiver by any party of a provision of this Agreement
shall not prejudice or constitute a waiver of such party’s right otherwise to
demand strict compliance with that provision or any other provision of this
Agreement. No prior waiver by any party, nor any course of dealing between any
Parties, shall constitute a waiver of any of such party’s rights or of any
obligations of any other party as to any future transactions. Whenever the
consent of a party is required under this Agreement, the granting of such
consent by such party 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.

8.11     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. 

8.12      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. 

8.13     Remedies. Any Person having
rights under any provision of this Agreement will be entitled to enforce such
rights specifically to recover damages caused by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law. The
parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party may
in his, her, or its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement. 

[SIGNATURE PAGE FOLLOWS] 

11

SIGNATURE PAGE 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written. 

	THE COMPANY: 	White Mountain Titanium
      Corporation 
	  	  
	  	  
	  	By 	 
	  		Michael P. Kurtanjek, Interim CEO
    
	  	  
	  	  
	  	  
	  	  
	THE SHAREHOLDER: 	NEXO WMTM HOLDINGS, LLC 
	  	  
	  	  
	  	By 	 
	  		Name: Andrew G. Sloop 
	  		Title: Partner

12

EXHIBIT F 

Development Assignment 

(See Attached) 

ASSIGNMENT OF DEVELOPMENT RIGHTS 
OF 
CERRO
BLANCO DESALINATION PLANT 

This Assignment of Development Rights (“Development
Assignment”) is made effective as of the 16th day of March, 2016
(the “Effective Date”) by and between: 

NEXO Water Ventures, LLC, a
limited liability company organized and existing under the laws of the State of
Delaware, with its principal place of business located at 68 South Main Street,
8th Floor, Salt Lake City, UT 84101 (the “Developer”), 

and 

White Mountain Titanium, Corp. a
corporation organized and existing under the laws of the State of Nevada, with
its principal place of business located at 225 S. Lake Avenue, Suite 300
Pasadena, CA 9110 and its wholly owned subsidiary Sociedad Contractual Minera
White Mountain Titanium, organized and existing under the laws of the
country of Chile, with its principal place of business located at 100 Augusto
Leguia, Suite 1401 Las Condes, Santiago, Chile (together as “White
Mountain”) (each, a “Party” and collectively, the “Parties”).

Unless otherwise defined within this Development Assignment,
certain capitalized terms are defined in Section 9 of the Loan Agreement. 

R E C I T A L S 

WHEREAS, White Mountain has good and marketable title and also
holds Good and Defensible Title to the Cerro Blanco Project which includes the
right to develop and cause to establish a seawater desalination plant at the
Cerro Blanco Project (“Desal Plant”) pursuant to its operative EIS and
other applicable regulatory permits; 

WHEREAS, subject to the conditions set forth in this
Development Assignment, White Mountain is now interested in transferring,
creating step-in rights, and conditionally assigning its Development Rights to
Developer and Developer is interested in accepting all such rights pursuant to
this Development Assignment. 

NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of are hereby acknowledged, the Parties agree as
follows: 

	1. 	
      Assignment of Development
Rights.

1.1     Assignment. Subject to the
conditions set forth within this Development Assignment, White Mountain hereby
assigns, grants, transfers, creates step-in rights, and conveys to Developer all
of its development rights, privileges and entitlements with respect to the Desal
Plant as set forth in Section 1.2 (“Development Rights”) of this
Development Assignment. 

1.2     Development Rights. During
the (i) Term of this Development Assignment; (ii) surviving any Event of
Default, satisfaction, or conversion of the Convertible Promissory Note into
Series A Shares; and (iii) in good faith consultation with White Mountain,
Developer will have the unilateral discretion and exclusive right to perform the
following: 

	 	(a) 	
      Provide, arrange, and or facilitate the financing (both
      in terms of the equity and project finance) (“Development Funding”)
      as needed for the requisite Desal Plant CAPEX;

	 	 	
       

	 	(b) 	
      Negotiate and execute all needed project management
      agreements with the water technology company of Developer’s exclusive
      selection (“Operating Water Company”) which will supply the
      technology, equipment, operations and maintenance required for the Desal
      Plant;

	 	 	
       

	 	(c) 	
      Exclusively select any and all engineering, EPC, and
      other service providers as deemed necessary or required for the
      construction and operation of the Desal Plant; and

	 	 	
       

	 	(d) 	
      Developer shall be the exclusive provider of the
      Development Funding and assignee of Development Rights and White Mountain
      shall not retain, hire, or engage in discussions with any other party
      regarding the provision of services similar to the Development Funding or
      Development Rights in respect of any
jurisdiction.

	2. 	
      White Mountain
Responsibilities.

2.1     White Mountain Assistance.
During the Term of this Development Assignment, White Mountain agrees to perform
the following responsibilities as they pertain to the development of the Desal
Plant: 

	 	(a) 	
      Work in ood faith with Developer by immediately
      allocating reasonable and necessary resources such as time by its
      directors and or officers to establish legally binding offtake
      agreement(s) with external third parties for treated water arising from
      the Desal Plant;

	 	 	
       

	 	(b) 	
      Work in good faith with Developer to establish a legally
      binding offtake agreement (i) between White Mountain and the eventual
      Project Entity that will independently own the Desal Plant (ii) which
      ensures the that the mining operations at the Cerro Blanco Project will
      have its required uninterrupted water supply. It is expected that the
      total volume needed for the mining operations at the Cerro Blanco Project
      will not exceed 250 liters per second;g

	 	 	
       

	 	(c) 	
      In the event that the demand for water produced by the
      Desal Plant is in excess of 1,000 liters per second, White Mountain will
      work in good faith with Developer and provide necessary internal resources
      to obtain the necessary modifications to the EIS and other required
      permits to increase the volume of permitted intake of seawater into the
      Desal Plant; and

2 

	 	(d) 	
      Work in good faith with Developer to facilitate any other
      rights, contracts, and or other easements which may arise during the
      development of the Desal Plant as determined by Developer and White
      Mountain.

	3. 	
      Desal Plant Ownership:

3.1     Project Entity. In the event
that Development Funding requires that a new entity be created for the
establishment of the Desal Plant (a “Project Entity”), then the Parties
agree to the ownership ratio in the Project Entity as set forth in Section 3.2
of this Development Assignment. 

3.2     Equity Split.

(a)      In addition to the payments
made to Developer under the operative offtake agreement, the Developer and its
affiliates shall maintain at least an 80% interest in the Desal Plant
(“Developer Equity”). White Mountain shall receive no greater than 20%
interest in the Desal Plant (“White Mountain Equity”). The Parties agree
that the Equity Split may be structured in any manner determined appropriate by
the Developer and or its affiliates, in their sole discretion, which may
include, among other things, a direct equity interest in Desal Plant, an
interest in the profits of the Desal Plant, or any other interest which provides
Developer with a direct or indirect interest in the Desal Plant. 

(b)      In the event that the Parties
determine that debt financing for the Desal Plant would be in the best interests
of all the Parties, Developer and White Mountain will negotiate in good faith to
determine an equity split which is within industry standards for such a debt
financed project. 

3.3      White Mountain Water
Provided by the Project Entity. As referenced in Section 2.1(b), Parties
shall establish a mutually agreed upon binding offtake agreement to supply the
mining operations at the Cerro Blanco Project with the uninterrupted water
supply required for commercial operation of the Cerro Blanco Project. White
Mountain will enter into a binding offtake agreement with the Project Entity to
purchase a minimum of 200 liters per second water from the Desal Plant for use
in its mining operations at the Cerro Blanco Project at market prices or other
preferred arrangement corresponding to the Development Funding needs. 

3.4      Developer Interests.
In addition to any Equity Split in the Project Entity, Developer shall also
receive: 

	 	a) 	
      The same class and type of equity as White
    Mountain;

	 	 	 
	 	b) 	
      Customary drag-along and tag-along rights, such that it
      shall receive the right to exit on the same terms as White
  Mountain;

	 	 	 
	 	c) 	
      A right of first refusal in respect of any sale or
      transfer of White Mountain’s interest in the Project Entity;

	 	 	 
	 	d) 	
      The right to appoint at least one director, manager or
      equivalent position of the Project Entity, which individual shall have
      input with respect to business development issues;

3 

	 	e) 	
      Preemptive rights in respect of any new equity issued in
      the Project Entity, such that Developer will have the right to maintain
      its percentage equity ownership;

	 	 	
       

	 	f) 	
      The right to approve material transactions relating to
      the Project Entity, including, without limitation, capital expenditures, a
      sale of all or substantially all of the assets of the Project Entity, any
      new issuance of equity of the Project Entity, any change in the rights of
      the terms of the equity granted to Developer, the creation of any class of
      equity of the Project Entity, and the admission of any new member or
      stockholder of the Project Entity; and

	 	 	
       

	 	g) 	
      The ability to put its equity interest in the Project
      Entity to White Mountain or the Project Entity at a price equal to fair
      market value upon the occurrence of certain events, including a breach or
      violation by White Mountain of any of the terms set forth within this
      Development Assignment.

	4. 	
      Costs and Expenses.

4.1      The Parties Expenses.
Except as explicitly provided in this Development Assignment, each of the
Parties shall bear their own expenses incurred in connection with the
preparation, negotiation, execution and performance of this Development
Assignment, including the provision of the Development Rights hereunder.

	5. 	
      Non-Solicitation of
Personnel.

During the Term of this Development Assignment and for a period
of one (1) year following its expiration or termination, neither party shall
directly approach, counsel, or attempt to induce any person who is then an
employee or independent consultant of the other party to terminate his or her
employment with or engagement by the other party, or employ, engage or attempt
to employ or engage any such person. Notwithstanding the foregoing, both parties
agree that each party may publicly post job offerings in the normal course of
business, and such posting and any employment or engagement resulting therefrom
shall not breach the above prohibitions in this paragraph. 

	6. 	
      Non-Competition.

During the Term of this Development Assignment and for a period
of two (2) years following its expiration or termination, White Mountain shall
not, directly or indirectly, own, manage, control, participate in, consult with,
render services for, receive any economic benefit from or exert any influence
upon, or in any manner engage in or represent any business within Latin America
that is competitive with the Developer. 

	7. 	
      Confidential Information.

7.1     The Parties have an existing mutual
nondisclosure agreement dated June 23, 2015 which is also incorporated into this
Development Assignment. 

4 

	8. 	
      Term.

This Development Assignment shall continue in full force and
effect for a period of forty-eight (48) months from the Effective Date and shall
automatically be extended for additional one (1) year at the Developer’s sole
discretion.

8.1     Good Faith Duty within Term.
During the Term of this Development Assignment, the Parties agree that Developer
shall only continue to have Development Rights (i) as long as Developer
continues to work and perform under good faith and (ii) in the event that
Developer does not perform under Section 1.2(a) of this Development Assignment
by providing, arranging, or facilitating a financial commitment for phase one
for the Desal Plant and or the Project Entity within eighteen (18) months of the
Effective Date, the Developer shall not maintain its Development Rights unless
agreed to in writing by the Parties. 

	9. 	
      Notice.

Any notices required or allowed hereunder shall be in writing
and given by registered air mail letter, recognized international courier, or by
email to the parties at the following addresses or to such other address as may
be furnished by one party to the other: 

Developer: 

NEXO Water Ventures, LLC 
68
South Main St., 8th Floor 
Salt Lake City, UT 84101 
Attn: Andrew Sloop

asloop@nexocapitalpartners.com

White Mountain: 

White Mountain Titanium
Corp
225 S. Lake Avenue, Suite 300
Pasadena, CA 9110 
Attn: Ron
Vance
ron@vancelaw.us 

	10. 	
      Independent Contractors.

This Development Assignment does not create a principal or
agent, employer or employee, partnership, joint venture, or any other
relationship except that of independent contractors between the parties. Nothing
contained herein shall be construed to create or imply a joint venture,
principal and agent, employer or employee, partnership, or any other
relationship except that of independent contractors between the parties, and
neither party shall have any right, power or authority to create any obligation,
express or implied, on behalf of the other in connection with the performance
hereunder. 

5 

	11. 	
      Authority.

Each of the Parties represents and warrants that it has full
organizational power and authority to enter into this Development Assignment;
that this Development Assignment is a binding and enforceable obligation of such
party, subject to bankruptcy, insolvency and other laws affecting creditors’
rights generally; and that the individual executing this Development Assignment
on behalf of such party has all necessary power and authority to bind such party
as set forth herein. 

	12. 	
      Assignment.

This Development Assignment may be transferred or assigned by
Developer without the prior written consent of White Mountain; either party,
without written consent but with notice to the other Party, may assign its
rights and obligations under this Development Assignment in connection with a
transfer or sale of all or substantially all its assets or to a successor entity
or acquirer in the event of a merger, consolidation or change of control of
either party. 

	13. 	
      Entire Agreement.

This Development Assignment constitutes the entire agreement
and understanding between the Developer and White Mountain with respect to the
subject matter hereof and supersedes and replaces all prior understandings
and/or agreements with respect thereto. 

	14. 	
      Governing Law; Venue.

This Development Assignment shall be governed by and
interpreted in accordance with the laws of the State of Delaware, without regard
to its principles of conflicts of laws. The Parties agree that the venue for any
dispute, action or claim arising out of this Development Assignment shall be the
State of Utah and consent to submit to the jurisdiction of any state or federal
court located in the State of Utah in connection with any such dispute, action
or claim. 

	15. 	
      Counterparts; Facsimiles.

This Development Assignment may be executed in any number of
counterparts, but all of such counterparts together shall constitute one and the
same Development Assignment. Facsimile or electronic PDF transmission of
executed pages shall constitute valid execution and delivery. 

IN WITNESS WHEREOF, the parties hereto have executed this
Development Assignment as of the date first above written. 

	DEVELOPER 	 	WHITE MOUNTAIN 	 
	  	  	 	  	  	 
	  	  	 	  	  	 
	  	  	 	  	  	 
	By: 	  	 	By: 	  	 
		Name: Andrew G. Sloop 	 		Name: Michael P. Kurtanjek 	 
		Title: Partner 	 		Title: Interim Chief Executive
      Officer 	 

6

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