Exhibit 10.5
 
TERMINATION AND RELEASE AGREEMENT
 
THIS TERMINATION AND RELEASE AGREEMENT (the “Agreement”) is entered into as of
the 12th day of May, 2014, by and between, Michael D. Parnell (“Parnell”) and
U.S. Rare Earths, Inc. on behalf of itself and its subsidiaries (the “Company”).
 
WHEREAS, Parnell and the Company are parties to a Revised Employment Agreement,
dated as of December 10, 2010, as amended from time to time (the “Employment
Agreement”);
 
WHEREAS, Parnell is currently providing services to the Company as National
Accounts Director;
 
WHEREAS, the Company owes Parnell accrued compensation;
 
WHEREAS, Parnell owns a substantial number of shares of stock in the Company and
has an interest in the Company’s success;
 
WHEREAS, it would be detrimental to the Company for the Company to pay Parnell
the accrued compensation;
 
WHEREAS, due to the financial condition of the Company and Parnell’s interests
in the Company, Parnell desires to forgive all accrued compensation and resign
from the Company;
 
WHEREAS, this Agreement governs the terms of Parnell’s separation from the
Company.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereby agree as follows:
 
1. Effective Date of Resignation. As of the date hereof, Parnell hereby resigns
from his position as National Accounts Director of the Company. Parnell
acknowledges that as of the date hereof and as of the Closing Date he does not
hold any other position or office with the Company and he does not hold any
position or office with any subsidiary of the Company. Parnell agrees to execute
any and all documents as may be reasonably necessary to confirm his resignation
from any position he holds with the Company or any subsidiary.  Parnell
understands and agrees that as of the Closing Date he is no longer authorized to
conduct any business on behalf of the Company or Seaglass Holding Corp. or to
hold himself out as representing the Company or Seaglass Holding Corp in any
capacity. As of the Closing Date, the Employment Agreement shall be terminated.
 
2. Compensation, Benefits and Opinion Letter.  Any accrued compensation due to
Parnell or any of his affiliates as of the Closing Date is hereby
extinguished.  Parnell acknowledges and agrees that Parnell and any of his
affiliates are not entitled to any payments, commissions, compensation or
benefits from the Company aside from what is set forth within this
paragraph.  Within five days of request by Parnell, the Company shall obtain at
its expense and deliver to the transfer agent an opinion letter from the
Company’s securities counsel necessary to allow the sale of any shares of stock
in the Company owned by Parnell that are eligible to be sold.
 
 
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3. Mutual Release. In exchange for the consideration provided for in this
Agreement and effective as of the Closing Date, Parnell and the Company on
behalf of themselves irrevocably and unconditionally releases the other party,
its predecessors, parents, subsidiaries, affiliates, and past, present and
future officers, directors, agents, consultants, employees, representatives, and
insurers, as applicable, together with all successors and assigns of any of the
foregoing (collectively, the “Releasees”), of and from all claims, demands,
actions, causes of action, rights of action, contracts, controversies,
covenants, obligations, agreements, damages, penalties, interest, fees,
expenses, costs, remedies, reckonings, extents, responsibilities, liabilities,
suits, and proceedings of whatsoever kind, nature, or description, direct or
indirect, vested or contingent, known or unknown, suspected or unsuspected, in
contract, tort, law, equity, or otherwise, under the laws of any jurisdiction,
that each or its predecessors, legal representatives, successors or assigns,
ever had, now has, or hereafter can, shall, or may have, against the Releasees,
as set forth above, jointly or severally, for, upon, or by reason of any matter,
cause, or thing whatsoever from the beginning of the world through, and
including, the Closing Date (“Claims”).
 
Notwithstanding the foregoing, this release does not include the right of either
Parnell or the Company to enforce the terms of this Agreement.  Specifically,
this release does not include the indemnity obligations of the Company pursuant
to this Agreement or any breach by the Company of any representation or warranty
contained in this Agreement.
 
4. Company Information and Property.  At Closing, Parnell agrees to immediately
return to the Company property and information of the Company and any subsidiary
in his or his affiliates’ possession including, but not limited to, reports,
customer lists, supplier lists, consultant lists, formulas, files, manuals,
memoranda, computer equipment, access codes, discs, software, and any other
business information or records, in any form in which they are maintained,
including records or information regarding customers, suppliers and vendors, and
agrees that he and his affiliates will not retain any copies, duplicates,
reproductions, or excerpts thereof in any form. Parnell further agrees that he
and his affiliates will not, in any manner, make use of any property and
information of the Company and any subsidiary in any future dealings, business
or otherwise, and acknowledges that any use of such property and information in
any future dealings, business or otherwise, would constitute a breach of this
Agreement. The foregoing shall not apply to property and information of Media
Depot, Inc. and Media Max, Inc.
 
5. Non-disparagement. Parnell represents and agrees that he and his affiliates
shall refrain from making any written or oral statements to any person or entity
with whom the Company, Parnell or Parnell’s affiliates has had or may have a
business or social relationship which may reasonably be expected to impugn or
degrade the character, integrity, ethics or business practices of the Company,
its affiliates, employees, directors, officers, agents, representatives or
clients, or which may reasonably be expected to damage the business, image or
reputation of the Company, its affiliates, employees, directors, officers,
agents, representatives, or clients.
 
The Company represents and agrees that it shall refrain from making any written
or oral statements to any person or entity with whom the Company, Parnell or
Parnell’s affiliates has had or may have a business or social relationship which
may reasonably be expected to impugn or degrade the character, integrity, or
ethics of the Parnell or his affiliates.  Should there be any inquiry as to the
services Parnell provided to the Company, the Company agrees to provide the
following information: dates of Parnell’s services to the Company, titles held
by Parnell, and the reason for the cessation of Parnell’s services, and, unless
otherwise required by law or in public filings with the SEC, will not otherwise
comment about Parnell or about Parnell’s performance of his services for the
Company.
 
 
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6. Withholding; Indemnification. The Company acknowledges and agrees that
Parnell is forgiving the accrued compensation owed to him and that said accrued
compensation is not being paid to, or received by Parnell, and that this
transaction is not reportable on a Form 1099 or other income tax form.  The
Company acknowledges that it will have full responsibility for taxes owed by the
Company.  The Company agrees to indemnify, defend and hold Parnell harmless from
any liability for, or assessment of, any claims or penalties with respect to
taxes owed by the Company, provided, however, that such indemnification shall
not apply in the event of willful misconduct or gross negligence by Parnell.
 
In addition, the Company agrees to indemnify, defend, save and hold harmless
Parnell from and against any and all claims, demands, actions, causes of action,
damages, loss, costs, taxes, diminutions in value, interests on borrowed money,
liability, fees (including reasonable attorney’s fees) or expense, including
amounts spent on investigation, defense or settlement of any claim which may be
brought against Parnell and/or which Parnell may suffer, sustain, or become
subject to as a result of, in respect of, or arising out of  (i) any
misrepresentation or breach of any representation, warranty or covenant made by
the Company in this Agreement, (ii) any non-tax related liability, obligation or
commitment of USRE arising out of transactions entered into or events occurring
prior to Closing, or (iii) any non-tax related liability of USRE not expressly
and explicitly assumed by Parnell.
 
Parnell’s right to indemnification, payment of damages or other remedy based on
any representations, warranties, covenants, and obligations will not be affected
by any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement, with respect to the accuracy or inaccuracy of,
or compliance with, any such representation, warranty, covenant, or
obligation.  The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance or compliance with any
covenant or obligation, will not affect Parnell’s right to indemnification,
payment of damages, or other remedy based on such representations, warranties,
covenants, and obligations.
 
With respect to the obligations set forth this Agreement, the parties shall be
entitled and required to take advantage of any insurance policy that covers such
claims, and shall not be required to indemnify or hold harmless the other party
for any claims that are covered by an insurance policy.  It is the express
intent of this Agreement that a party’s obligation to indemnify another party
shall apply only to claims not covered by existing insurance.
 
 
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7. Future Cooperation.  Parnell and the Company agree to reasonably cooperate
with each other, and their respective financial and legal advisors, in
connection with any business matters for which Parnell’s or the Company’s
assistance may be required and in any claims, investigations, administrative
proceedings or lawsuits which relate to the Company and/or Parnell and for which
Parnell or his affiliates or the Company or its affiliates may possess relevant
knowledge or information.
 
8. Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
its conflicts of law principles.  Any dispute regarding this Agreement or
related to the Parnell’s service with the Company shall be resolved in the
Courts located in the County of Collin and State of Texas, without a jury (which
is hereby expressly waived). In the event an action is brought to enforce this
Agreement by the Company, the Company shall be entitled to an award of all
reasonable costs and fees incurred in bringing such an action, including
reasonable attorney’s fees.
 
9. Entire Agreement. This Agreement may not be changed or altered, except by a
writing signed by both parties. This Agreement constitutes an integrated,
written contract, expressing the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes any and all
prior agreements and understandings, oral or written, between the parties,
including the Employment Agreement, except as otherwise provided herein.
 
10. Assignment.  Parnell and his affiliates have not assigned or transferred any
claim he or his affiliates are releasing, nor has he or his affiliates purported
to do so.  If any provision in this Agreement is found to be unenforceable, all
other provisions will remain fully enforceable. This Agreement binds Parnell’s
heirs, administrators, representatives, executors, successors, and assigns, and
will inure to the benefit of all Releasees and their respective heirs,
administrators, representatives, executors, successors, and assigns.
 
11. Injunctive Relief. Parnell acknowledges that a breach or threatened breach
of any of the covenants or other agreements contained herein would give rise to
irreparable injury to the Company relying on such covenant or other agreement
which injury would be inadequately compensable in money damages. Accordingly,
the Company may seek and obtain injunctive relief from the breach or threatened
breach of any provision, requirement or covenant of this Agreement, in addition
to and not in limitation of any other legal remedies which may be available. In
seeking such relief, any requirement to post a bond or other undertaking shall
be waived. The parties acknowledge and agree that the covenants contained herein
are necessary for the protection of the Company’s legitimate business interests
and are reasonable in scope and content.
 
12. Acknowledgement.  Parnell acknowledges that he: (a) has carefully read this
Agreement in its entirety; (b) has been advised to consult and has been provided
with an opportunity to consult with legal counsel of his choosing in connection
with this Agreement; (c) fully understands the significance of all of the terms
and conditions of this Agreement and has discussed them with his independent
legal counsel or has been provided with a reasonable opportunity to do so; (d)
has had answered to his satisfaction any questions asked with regard to the
meaning and significance of any of the provisions of this Agreement; and (e) is
signing this Agreement voluntarily and of his own free will and agrees to abide
by all the terms and conditions contained herein.
 
[Signature page follows]
 
 
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IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Agreement on the date first written above.
 

 
U.S. Rare Earths, Inc.
         
 
By:
 /s/ Kevin M. Cassidy       Name:  Kevin M. Cassidy       Title:    CEO        
 

 

       
 
By:
/s/ Michael Parnell       Michael Parnell  

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