Document:

uree_ex1028.htm

Exhibit 10.28

 

U.S. RARE EARTHS, INC.

RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT is made as of December 30, 2013 at Plano, Texas, between U.S. Rare Earths, Inc., a Nevada corporation (the “Company”), and  Reagan Horton (the “Director”).

WHEREAS the Director is a director of the Company, and the Director’s continued participation is considered by the Company to be important for the Company’s continued growth; and

WHEREAS in order to give the Director an incentive for the Director to participate in the affairs of the Company, the Company has agreed to award the Director shares of its Common Stock as set forth in this Restricted Stock Award Agreement (the “Agreement”).

THEREFORE, the parties agree as follows:

1.           Sale of Stock. The Company hereby agrees to grant to the Director and the Director hereby agrees to accept 250,000 shares of the Company’s Common Stock (the “Shares”).

2.           Repurchase Option.

(a)           In the event the Director ceases to be an employee, officer, director or consultant of or to the Company (any such position constituting a “Service Provider”) for any reason, except the termination of Director’s position by the Company, or no reason (including death or disability) before all of the Shares are released from the Company’s repurchase option (see Section 3), the Company shall, upon the date of such termination (as reasonably fixed and determined by the Company) have an irrevocable, exclusive option for a period of sixty (60) days from such date to repurchase up to that number of shares which constitute the Unreleased Shares (as defined in Section 4) at a repurchase price equal to $0.00001 per share (the “Repurchase Price”). Said option shall be exercised by the Company by delivering written notice to the Director or the Director’s executor (with a copy to the Escrow Holder (as defined in Section 6)) AND, at the Company’s option, by delivering to the Director or the Director’s executor a check in the amount of the aggregate Repurchase Price. Upon delivery of such notice and the payment of the aggregate Repurchase Price in any of the ways described above, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Shares being repurchased by the Company.

(b)          Whenever the Company shall have the right to repurchase Shares hereunder, the Company may designate and assign one or more employees, officers, directors of the Company or other persons or organizations to exercise all or a part of the Company’s purchase rights under this Agreement and purchase all or a part of such Shares.

4.           Release of Shares From Repurchase Option.

(a)          25% of the Shares shall be released from the Company’s repurchase option one year after the date of this Agreement, 25% of the Shares shall be released from the Company’s repurchase option two years after the date of this Agreement, 25% of the Shares shall be released from the Company’s repurchase option three years after the date of this Agreement, and the remaining 25% of the Shares shall be released from the repurchase option four years after such date, subject to Director continuing to be a Service Provider on such dates.

  

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(b)            In the event of a “Change of Control” of the Company, all of the Shares shall be released from the Company’s repurchase option, unless the transaction constituting a Change in Control includes an exchange of Shares for Shares of another company and the Company assigns and such other Company assumes this Agreement.  For this purpose, a “Change of Control” is defined as:

	
  

	
(i)

	
Any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (other than a group consisting of the Company’s shareholders as of the date of the Closing and their Parents and Subsidiaries) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; or

	
  

	
(ii)

	
The consummation of a merger, consolidation, reorganization, sale of stock or similar transaction in which the shareholders of the Company before such transaction (and their Parents and Subsidiaries) own less than 50% of the voting stock or voting power of the surviving entity immediately after such transaction; or

	
  

	
(iii)

	
The consummation of the sale or disposition of all or substantially all of the Company’s assets.

(c)            Any of the Shares which have not yet been released from the Company’s repurchase option are referred to herein as “Unreleased Shares.”

(d)            The Shares which have been released from the Company’s repurchase option shall be delivered to the Director at the Director’s request (see Section 6).

5.           Restriction on Transfer. Except for the escrow described in Section 6 or transfer of the Shares to the Company or its assignees contemplated by this Agreement, none of the Shares or any beneficial interest therein shall be transferred, encumbered or otherwise disposed of in any way until the release of such Shares from the Company’s repurchase option in accordance with the provisions of this Agreement, other than by will or the laws of descent and distribution.

6.           Escrow of Shares.

(a)            To ensure the availability for delivery of the Director’s Unreleased Shares upon repurchase by the Company pursuant to the Company’s repurchase option under Section 3 above, the Director shall, upon execution of this Agreement, deliver and deposit with Manhattan Transfer Registrar Company (the “Escrow Holder”) the share certificates representing the Unreleased Shares, together with the stock assignment duly endorsed in blank, attached hereto as Exhibit A-1. The Unreleased Shares and stock assignment shall be held by the Escrow Holder, pursuant to the Joint Escrow Instructions of the Company and Director attached as Exhibit A-2 hereto, until such time as the Company’s repurchase option expires. As a further condition to the Company’s obligations under this Agreement, the spouse of Director, if any, shall execute and deliver to the Company the Consent of Spouse attached hereto as Exhibit A-3.

(b)            The Escrow Holder shall not be liable for any act it may do or omit to do with respect to holding the Unreleased Shares in escrow and while acting in good faith and in the exercise of its judgment.

(c)            If the Company or any assignee exercises its repurchase option hereunder, the Escrow Holder, upon receipt of written notice of such option exercise from the proposed transferee, shall take all steps necessary to accomplish such transfer.

(d)            When the repurchase option has been exercised or expires unexercised or a portion of the Shares has been released from such repurchase option, upon Director’s request the Escrow Holder shall promptly cause a new certificate to be issued for such released Shares and shall deliver such certificate to the Company or the Director, as the case may be.

(e)            Subject to the terms hereof, the Director shall have all the rights of a shareholder with respect to such Shares while they are held in escrow, including without limitation, the right to vote the Shares and receive any cash dividends declared thereon. If, from time to time during the term of the Company’s repurchase option, there is (i) any stock dividend, stock split or other change in the Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which the Director is entitled by reason of the Director’s ownership of the Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter as “Shares” for purposes of this Agreement and the Company’s repurchase option.

  

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7.           Legends.

(a)            The Shares are being issued to the Director in reliance on certain exemptions from the registration requirements of state and federal securities laws, and as a condition of the Company granting the Shares to the Director the Director will execute and deliver to the Company the Investor Representation Statement in the form annexed hereto as Exhibit B.

(b)            Director understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by applicable state or federal securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, INCLUDING A REPURCHASE OPTION HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND REPURCHASE OPTION ARE BINDING ON TRANSFEREES OF THESE SHARES.

(c)            Stop-Transfer Notices. Director agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(d)            Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any Director or other transferee to whom such Shares shall have been so transferred.

8.           Adjustment for Stock Split. All references to the number of Shares and the purchase price of the Shares in this Agreement shall be appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made by the Company after the date of this Agreement or the proportionate amount of another issuer’s shares that have been exchanged in a transaction constituting a Change in Control.

9.           Tax Consequences. The Director has reviewed with the Director’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. The Director is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Director understands that the Director (and not the Company) shall be responsible for the Director’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. The Director understands that Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the purchase price for the Shares and the Fair Market Value of the Shares as of the date any restrictions on the Shares lapse. In this context, “restriction” includes the right of the Company to buy back the Shares pursuant to its repurchase option. The Director understands that the Director may elect to be taxed at the time the Shares are purchased rather than when and as the Company’s repurchase option expires by filing an election under Section 83(b) of the Code with the I.R.S. within thirty (30) days from the date of purchase. The form for making this election is attached as Exhibit A-5 hereto.  In connection with such decisions, the Company will make available to the Director and the Director’s tax advisor, in each case on a confidential basis, the most recent final report of experts determining the fair market value of the Company nearest the date of this Agreement.

THE DIRECTOR ACKNOWLEDGES THAT IT IS THE DIRECTOR’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE DIRECTOR REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE DIRECTOR’S BEHALF.

10.           General Provisions.

(a)           This Agreement shall be governed by the laws of the State of Texas. This Agreement represents the entire agreement between the parties with respect to the purchase of Common Stock by the Director.

(b)           Any notice, demand or request required or permitted to be given by either the Company or the Director pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or deposited in the U.S. mail, First Class with postage prepaid, and addressed to the parties at the addresses of the parties set forth at the end of this Agreement or such other address as a party may request by notifying the other in writing.

  

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(c)           The rights and benefits of the Company under this Agreement shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of the Director under this Agreement may only be assigned with the prior written consent of the Company.

(d)           Either party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party from thereafter enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.

(e)           The Director agrees upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.

(f)           DIRECTOR ACKNOWLEDGES AND AGREES THAT THE RELEASE OF SHARES FROM THE REPURCHASE OPTION OF THE COMPANY PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES HEREUNDER). DIRECTOR FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH DIRECTOR’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE DIRECTOR’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

  

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By Director’s signature below, Director represents that he is familiar with the terms and provisions of this Agreement and hereby accepts this Agreement subject to all of the terms and provisions thereof Director has reviewed this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement. Director agrees to accept as binding, conclusive and final all decisions or interpretations of the Company upon any questions arising under this Agreement. Director further agrees to notify the Company upon any change in the residence indicated in below.

 

	DIRECTOR 	 	 	U.S. RARE EARTHS, INC.	 
	 	 	 	 	 
	
/s/ Reagan Horton

	 	 	
/s/ Kevin Cassidy

	 
	
Signature 

	 	 	
Signature

	 
	
 

	 	 	
 

	 
	
Reagan Horton

	 	 	Kevin Cassidy	 
	Printed Name 	 	 	Printed Name	 
	 	 	 	 	 
	 	 	 	CEO	 
	 	 	 	
Title

	 
	 	 	 	 	 
	
Address of Director

	 	 	 	 
	 	 	 	 	 
	
ESCROW HOLDER

	 	 	 	 
	 	 	 	 	 
	
Manhattan Transfer Registrar Company

	 	 	 	 
	 	 	 	 	 
	/s/ John Ahern	 	 	 	 
	
Signature

	 	 	 	 
	 	 	 	 	 
	
John Ahern

	 	 	 	 
	
Printed Name

	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
Title

	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

  

 

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EXHIBIT A-1

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I,                                                                              , hereby sell, assign and transfer unto _______________ ( ) shares of the Common Stock of U.S. Rare Earths, Inc. standing in my name of the books of said corporation represented by Certificate No. ___________ herewith and do hereby irrevocably constitute and appoint _________________________ to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

This Stock Assignment may be used only in accordance with the Restricted Stock Purchase Agreement between said corporation and the undersigned dated December ______, 2013.

Dated:                                         , 20__

Signature:                                                      

INSTRUCTIONS: Please do not fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its “repurchase option,” as set forth in the Agreement, without requiring additional signatures on the part of the Director.

 

  

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EXHIBIT A-2

JOINT ESCROW INSTRUCTIONS

____________________, 20__

Manhattan Transfer Registrar Company

57 Eastwood Road

Miller Place, NY 11764

Attention: John Ahearn

Dear Mr. Ahearn:

As Escrow Agent for both U.S. RARE EARTHS, INC., a Nevada corporation (the “Company”), and the undersigned (the “Director”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Award Agreement (“Agreement”) between the Company and the undersigned, in accordance with the following instructions:

1.           In the event the Company and/or any assignee of the Company (referred to collectively for convenience herein as the “Company”) exercises the Company’s repurchase option set forth in the Agreement, the Company shall give to Director and you a written notice specifying the number of shares of stock to be purchased, the purchase price, and the time for a closing hereunder at the principal office of the Company. Director and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

2.           At the closing, you are directed (a) to date the stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company or its assignee, against the simultaneous delivery to you of the purchase price (by cash, a check, or some combination thereof) for the number of shares of stock being purchased pursuant to the exercise of the Company’s repurchase option.

3.           Director irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement Director does hereby irrevocably constitute and appoint you as Director’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of; the securities. Subject to the provisions of this paragraph 3, Director shall exercise all rights and privileges of the Company while the stock is held by you.

4.           Upon written request of the Director, but no more than once per calendar year, unless the Company’s repurchase option has been exercised, you will deliver to Director a certificate or certificates representing so many shares of stock as are not then subject to the Company’s repurchase option. Within ninety (90) days after cessation of Director’s continuous employment by or services to the Company, or any parent or subsidiary of the Company, you will deliver to Director a certificate or certificates representing the aggregate number of shares held or issued pursuant to the Agreement and not purchased by the Company or its assignees pursuant to exercise of the Company’s repurchase option.

5.           If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Director, you shall deliver all of the same to Director and shall be discharged of all further obligations hereunder.

6.           Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

  

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7.           You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Director while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

8.           You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

9.           You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.

10.           You shall not be liable for the outlawing of any rights under the Statute of Limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

11.           You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor.

12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or f you shall resign by written notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent.

13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to an one all or any part o said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed each of the other parties thereunto entitled at the following addresses or at such other addresses as a party may designate by ten (10) days’ advance written notice to each of the other parties hereto.

COMPANY:                          U.S. Rare Earths, Inc.

5600 Tennyson Parkway, Suite 190

Plano, Texas 75024

Attention:  Chief Financial Officer

DIRECTOR:                           Reagan Horton

 

	
  

	
ESCROW AGENT:

	
Manhattan Transfer Registrar Company

	
  

	
57 Eastwood Road

	
  

	
Miller Place, NY 11764

Attention: John Ahearn

16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement.

17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.

18. These Joint Escrow Instructions shall be governed by, and construed and enforced in accordance with, the laws of the State of Texas.

  

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Very truly yours,

 

	
U.S. RARE EARTHS, INC.

	 	 	 	 
	 	 	 	 	 
	
By:

	 	 	 	 
	 	 	 	 	 
	
Title: CEO

	 	 	 	 
	
Director:

	 	 	
Escrow Agent

	 
	
 

	 	 	
 

	 
	 	 	 	
Manhattan Transfer Registrar Company

	 
	 	 	 	 	 
	 	 	 	 	 
	(Signature)	 	 	(Signature)	 
	 	 	 	 	 
	 	 	 	 	 
	(Typed or Printed Name) 	 	 	(Typed or Printed Name) 	 
	 	 	 	 	 

 

  

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EXHIBIT A-4

CONSENT OF SPOUSE

I,                                                     spouse of__________________________ have read and approve the foregoing Agreement. In consideration of granting of the right to my spouse to receive shares of U.S. Rare Earths, Inc., as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

Dated:                                ,2013                                           Signed:                                                     

  

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EXHIBIT B

 

INVESTMENT REPRESENTATION STATEMENT

DIRECTOR: REAGAN HORTON

COMPANY: U.S. RARE EARTHS, INC.

SECURITY: COMMON STOCK

AMOUNT: 250,000 Shares

DATE:  December 30, 2013

In connection with the grant of the above Securities (exercising a “Stock Purchase Right”), the undersigned Director represents to the Company the following:

(a)           Director is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Director is acquiring these Securities for investment for Director’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

(b)           Director acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Director’s investment intent as expressed herein. In this connection, Director understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Director’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the future. Director further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Director further acknowledges and understands that the Company is under no obligation to register the Securities. Director understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company, and any other legend required under applicable state securities laws.

(c)           Director is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Stock Purchase Right to the Director, the exercise will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including: (1)(A) the Securities being held and the full purchase price paid not less that six months before such resale but only if certain public information about the Company is available or (B) the Securities being held and the full purchase price paid not less that one year before such resale; and, in the case of an affiliate, (A) the resale being made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934), (B) certain public information about the Company is available, (3) the amount of Securities being sold during any three (C) month period not exceeding the limitations specified in Rule 144, and (D) the timely filing of a Form 144, if applicable.

  

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In the event that the Company does not qualify under Rule 701 at the time of grant of the Stock Purchase Right, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than one (1) year after the later of the date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than two years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of the paragraph immediately above.

(d)           Director hereby agrees that if so requested by the Company or any representative of the underwriters in connection with any registration of the offering of any securities of the Company under the Securities Act, Director shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall only apply to the first registration statement of the Company to become effective under the Securities Act which include securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such 180-day period.

(e)           Director further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Director understands that no assurances can be given that any such other registration exemption will be available in such event.

Signature of Director:

Date: December 30, 2013

 

 12uree_ex1029.htm

 

Exhibit 10.29

 

TENNYSON PLACE

OFFICE LEASE AGREEMENT

 

SECTION 1

 

BASIC TERMS

 

	
LANDLORD

	
Primera Tennyson Partners LLC,

a Texas limited liability company

	
TENANT

	
US Rare Earths,

a Mining Company

	
PREMISES RENTABLE AREA (SQ.FT.)

	
1,588

	
PROPORTIONATE SHARE (%)

	
1.597%

	
PREMISES SUITE#

	
240

	
LEASE COMMENCEMENT DATE

	
February 1, 2014

	
LEASE TERM (MONTHS)

	
32

	
LEASE EXPIRATION DATE

	
November 30, 2016

	
BASE RENT(MONTHLY)

	
$3,440.67

	
TENANT CAR SPACES#

	
6

	
SECURITY DEPOSIT

	
$3,440.67

 

SECTION 2

 

PREMISES AND TERM

 

	
  

	
1.  Lease of Premises. Landlord leases the Premises to Tenant, and Tenant leases the Premises from Landlord, on the terms and conditions set forth in this Lease.  A plan of the Premises is attached as Exhibit A (the "Premises").  The Premises are part of that building (the "Building") located at 5600 Tennyson Parkway, Plano, Texas on the 6.67  acre tract of property situated  in the Maria C. Vela Survey, Abstract #935 and being Lot 2, Block A of Parkwood Place I in Legacy of the map records of Collin County, Texas which real property is known as (the "Land").  The Building and the Land are collectively referred to as the "Project".

 

	
  

	
2.  Lease Term. The Lease Term shall be for the period stated in Section 1, unless earlier terminated as provided in this Lease.

 

	
  

	
3. Commencement Date.  The Commencement Date of this Lease shall be the earlier to occur of (1) the scheduled Commencement Date stated in Section 1 or (2) the date on which Tenant takes possession of all or part of the Premises.  The precise Commencement Date shall be confirmed by a Commencement Date Memorandum in the form of Exhibit B, which Tenant agrees to sign when prepared by Landlord in accordance with this paragraph.

 

	
  

	
4.  Rentable Areas. The Rentable Area of the Building is 99,450 sq. ft.  The Rentable Area of the Premises is stated in Section 1.  Rentable Areas of the Premises and the Building are final, conclusive and controlling for all purposes.  A portion of the Building Common Area is included in the Rentable Area of the Premises.

 

	
  

	
5. Initial Physical Condition of Premises. Tenant accepts the Premises, the Building and the Project in its current AS IS condition, and acknowledges that Tenant is not relying on any representations or warranties by any person regarding the Premises or the Building.

 

 

  

  

  

SECTION 3

 

BASE RENT. UTILITY COSTS. TAX COSTS AND OTHER SUMS PAYABLE

 

	
  

	
1.  Tenant Pavments. Tenant agrees to pay Base Rent, Utility Costs and Tax Costs and any other sum payable under this Lease to Landlord when due without demand, deduction, credit, adjustment or offset of any kind.  All such payments shall be in lawful money of the United States and shall be paid to Landlord or to Manager or to such other place as Landlord may from time to time designate in writing.

 

	
  

	
2.  Base Rent. On execution of this Lease, Tenant shall prepay to Landlord the Base Rent for the 1st month of the Lease Term.  Future monthly installments of Base Rent shall be paid, without demand and in advance, on or before the first day of each calendar month during the Lease Term.  The monthly Base Rent installment for any partial month at the beginning or end of the Lease Term shall be prorated.

 

	
  

	
3. Utility Costs.  Utility Costs shall mean all electricity and gas used on or at the Project, together with any taxes and any maintenance charges for utilities.  On the first day of each calendar month during the Lease Term, Tenant agrees to reimburse Landlord for Tenant's monthly Proportionate Share of the Utility Costs pursuant to invoices sent to Tenant from Landlord.  The initial monthly Utility Costs invoices shall be based on estimated Utility Costs as reasonably determined by Landlord and shall be increased or decreased by Landlord to reflect Tenant's Proportionate Share of the actual Utility Costs.  If for any time period in question the Building is less than 95% occupied, for purposes of determining the Proportionate Share of Utility Costs due from Tenant, Landlord may increase those elements of Utility Costs that vary based primarily on the occupancy rate of the Building, as though the Building were 95% occupied.  The Utility Costs payments due from Tenant shall be adjusted by Landlord to the amount that Landlord reasonably believes they would have been if 95% of the Rentable Area of the Building had been occupied.  In addition, Tenant shall, within 30 days of receipt of an invoice from Landlord, pay for any extraordinary or after Normal Business Hours use of Utility Costs as requested by Tenant and as reasonably determined by Landlord.

 

	
  

	
4.  Tax Costs.  ''Taxes" means all ad valorem taxes and governmental and private assessments which are levied, assessed, imposed or become due and payable with respect to the Land and the Building and associated improvements.  If at any time during the Term of this Lease, there shall be levied, assessed or imposed on Landlord a capital levy, franchise, margin or other tax directly on the rents received therefrom and/or a tax, assessment, levy or charge measured by or based, in whole or in part upon such rents from the Project, then all such taxes, assessments, levies or charges or the part, thereof so measured or based, shall be deemed to be included within the term Taxes for the purposes hereof.  Landlord shall have the right to employ a tax consulting firm to attempt to assure a fair tax burden on the Building and Land within the applicable taxing jurisdiction.  The cost of the tax consulting firm shall be included in Taxes.  Beginning January 2015, Tenant shall on the first day of each calendar month pay, pursuant to invoices sent to Tenant from Landlord, its monthly Proportionate Share of the Taxes which are above the Taxes for the calendar year 2014.  Taxes due from Tenant pursuant to this paragraph are known as Tax Costs.

 

	
  

	
5.  Security Deposit.  Tenant has deposited with Landlord or Manager the sum set forth in the blank opposite the words Security Deposit in Section 1 of this Lease ("Security Deposit") to secure Tenant's performance of this Lease. If Tenant defaults in any payment or performance due under this Lease, Landlord, in its absolute discretion and without prejudice in its other rights or remedies, may apply the Security Deposit, in whole or in part, to the payment of sums due from Tenant as a result of such default.  If such application cures the default, Tenant shall within ten (10) days from demand, deposit with Landlord the sum necessary to restore the Security Deposit to the specified amount.  If Tenant has fully performed under this lease, the remainder of the Security Deposit shall be repaid to Tenant, without interest, within thirty (30) days after the expiration of this Lease.

 

	
  

	
6. Late Charge. If Tenant fails to make any payment of Base Rent, or other amount when due under this Lease within 5 calendar days of when due, a late charge is then immediately due and payable by Tenant equal to five percent (5%) of the amount of any such payment but Landlord will waive the late charge for the first such failure occurring during any calendar year during the Lease Term.  Landlord and Tenant agree that this charge compensates Landlord for the administrative costs caused by the late payment.

 

	
  

	
7.  Default Rate.  Any Base Rent or other sum payable under this Lease which is not paid when due shall bear interest at a rate equal to the lesser of:  (a) the published prime or reference rate then in effect at a national banking institution designated by Landlord (the "Prime Rate"), plus two (2) percentage points, or (b) the maximum rate of interest per annum permitted by applicable law (the "Default Rate").

 

	
  

	
8.  Proportionate Share.  Tenant's Proportionate Share is a fraction, the numerator of which is the rentable sq. ft. contained in the Premises and the denominator of which is the entire 99,450 rentable sq. ft. space contained in the Building.  Tenant's Proportionate Share is specified in Section 1.

 

  

  

  

 

SECTION 4

 

SERVICES, UTILITIES AND REPAIRS

 

	
  

	
1. Landlord Services and Repairs.  Subject to the paragraph 5.9 ("Damage or Destruction") and paragraph 5.10 ("Condemnation"), Landlord shall furnish the following services and repairs in a manner and scope as reasonably determined by Landlord.  Landlord shall select the company or companies providing such services.

 

	
  

	
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HVAC (heating, ventilation and air-conditioning services) will be provided to the Premises and the Common Area of the Building during Normal Business Hours.  If Tenant desires HVAC service other than during Normal Business Hours, Tenant shall make advance arrangements with Landlord and shall pay Landlord's usual and customary charge for such additional services.  Landlord shall repair and maintain the HVAC systems serving the Common Area and Premises.

	
  

	
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Elevator Service from the 1st floor to the 2nd and 3rd floors of the Building. (note: Tenant shall only have elevator access to the floor where the Premises is located.)

	
  

	
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Janitor Service will be provided to the Common Area and Premises as specified on Exhibit D.

	
  

	
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Replace Premises light bulbs and ballasts in fixtures which are standard to the Building.

	
  

	
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Repairs and maintenance to the Common Area required, in Landlord's reasonable judgment, for comfortable use of the Common Area.

	
  

	
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Engage a third party contractor to provide full time off site monitoring of the fire sprinkler system serving the Building.

	
  

	
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Maintenance and repairs to: (i) the parking areas and sidewalks associated with the Project, (ii) the grass, shrubbery, landscape sprinkler and other landscape treatments on the Project, (iii) the exterior of the Building including the walls and exterior glass, (iv) exterior lights on the Project, (v) Building roof, and (vi) the Building fire sprinkler system and sewage lines.

	
  

	
2.  Utilities.  Landlord shall arrange with and pay the public utility companies serving the Project to furnish the following utilities to the Project.  Landlord shall select the company or companies providing such utility services.

 

	
  

	
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Electricity and Gas.  Electrical services will be supplied to a panel box designated for each floor of the Building and will have the capacity to meet Tenant's demand in the Premises for the purposes specified in this Lease so long as such demand is usual and customary for such purposes.  Gas shall be supplied to the Building HVAC units installed by Landlord.

	
  

	
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Water and Sewer.  Water and sewage drain services for the Common Area restrooms and Break Room. Water and sewage drain services at the points now existing in the Premises.  Water for the landscape irrigation areas of the Project.

	
  

	
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Telecommunication Services.  Landlord will provide a suitable connection for usual and customary voice telephone service at the locations in the Building designated by Landlord.  All connection, installation, usage charges, maintenance and repair charges for such telephone service shall be Tenant's responsibility.  Installation of Telecommunication Facilities beyond those specified as Landlord's responsibility under the first sentence shall be the responsibility of Tenant.  "Telecommunication Facilities" are defined as equipment, apparatus, installations, facilities and other materials utilized for the purposes of electronic communication, whether wireless or wired, including cable, switches, conduit, sleeves and wiring.  Telecommunication Facilities installed by Tenant, shall if requested by Landlord in writing be removed by Tenant at Tenant's expense upon the expiration of the Lease Term. Tenant acknowledges that space on the Building rooftop and in Building risers, equipment rooms and equipment closets is limited.  Unless otherwise required by law, neither Tenant nor a provider of telecommunication services to Tenant shall be entitled  to locate or install Telecommunication Facilities in, on or about the Building without (a) first obtaining Landlord's advance, written  consent  (given in its reasonable discretion) and (b) the advance execution by Landlord and Tenant of a satisfactory agreement granting a license to Tenant for such purposes.  The agreement referred to in clause (b) of the previous sentence shall be incorporated in and become part of this Lease.

	
  

	
3.  Normal Business Hours.  "Normal Business Hours" are defined as 7:00 AM to 6:00 PM (Monday thru Friday) and 8:00 AM to 1:00 PM (Saturday) excluding Holidays and Sundays.

 

	
  

	
4.  Interruption.  Landlord shall in no case be liable or in any way be responsible for damages (including consequential damages) or the loss to Tenant of utilities or other services arising from the failure of, diminution of or interruption of any  kind to the Premises caused by Landlord's negligence or otherwise, unless (i) such interruption in, deprivation of or reduction of any such service was caused by the gross negligence or willful misconduct of Landlord or its agents, and (ii) any such claims are not covered by Tenant's business interruption insurance.  To the extent that Landlord bears specific responsibility for the foregoing, Landlord's responsibility and Tenant's remedy shall be limited to an abatement in the portion of Base Rent associated with the value of the interrupted service, as reasonably determined by Landlord, for the period beginning with the day which is three (3) consecutive business days after the date on which Tenant delivers written notice to Landlord of such interruption, deprivation or reduction and of the fact that Tenant  is being deprived of all reasonable use of the Premises due to the loss of such service and ending on the date such interruption, deprivation or reduction which is Landlord's responsibility  is no longer causing Tenant to be deprived of all reasonable use of the Premises.

 

	
  

	
5.  Maintenance and Repair by Tenant.  Except for reasonable wear and tear, Tenant shall keep the Premises in good condition and repair.  Tenant agrees to notify Landlord immediately if any damage or defects are discovered in the Premises or Building and to allow Landlord to evaluate and make recommendations and/or take appropriate corrective action.  Tenant shall use reasonable best efforts to protect the Project from waste or damage and shall, subject to Landlord's reasonable direction and schedule, repair any damage caused by Tenant, its agents, employees, contractors or invitees.

 

	
  

	
6.  Security.  Landlord has no duty or obligation to provide any security services in, on or around the Project, and Tenant recognizes that security services, if any, provided by Landlord will be for the sole benefit of Landlord and the protection of Landlord's property.

 

  

  

  

 

SECTIONS

 

OCCUPANCY AND USE PROVISIONS

 

	
  

	
1.  Use and Conduct of Business.  The Premises are to be used only for general business office uses (the "Permitted Uses") and Tenant agrees that the number of employees or other personnel working with or for Tenant occupying the Premises shall not exceed the number of Tenant Car Spaces specified in Section 1 of this Lease. Tenant shall, at its own cost and expense, obtain and maintain any and all licenses, permits, and approvals necessary or appropriate for its use, occupation and operation of the Premises for the Permitted Uses.  Tenant shall not permit or cause any act to be done in or about the Premises that is unlawful or that will increase the existing rate of insurance on the Land or Building.  Tenant shall not commit or allow to be committed or exist: (a) any waste upon the Premises, (b) any public or private nuisance, (c) the use or storage of any hazardous or other materials in violation  of any environmental laws or regulations, or (d) any act or condition which disturbs the quiet enjoyment of any other tenant in the Building, violates any of Landlord's contracts affecting any or all of the Land or Building, or interferes in any unreasonable way with the business of Landlord or any other tenant in the Building.

 

	
  

	
2.  Reasonable Access.  Tenant shall have access to the Building seven (7) days per week, twenty-four (24) hours per day, fifty-two (52) weeks a year.  After Normal Business Hours access to the Building shall be available via a card access system.  Landlord shall provide Tenant with an initial number of access cards equal to the number of Tenant Car Spaces designated in Section 1.  Replacement access cards shall be available to Tenant at a rate of $15/access card.  Tenant shall be responsible for promptly notifying Landlord of any lost or stolen access cards.   Tenant shall return all access cards to Landlord upon the expiration of the Lease Term.  Tenant shall permit Landlord and Landlord's designated representatives to enter into the Premises at any time on reasonable notice (except  in case of emergency in which case no notice shall be required) for the purposes of inspection or for the purpose of repairing, altering or improving the Premises or the Building.  When reasonably necessary, Landlord may temporarily close Building or Land entrances, Building doors or other facilities, but Landlord shall use good faith efforts to minimize disruption to Tenant's business and to provide continued access to the Premises.  Landlord shall have the right on reasonable notice to enter the Premises during the Lease Term for the purpose of showing the Premises to prospective tenants.

 

	
  

	
3.  Compliance with Governmental Requirements.  Tenant shall comply with all Governmental Requirements relating to its use, occupancy and operation of the Premises and shall observe such reasonable rules and regulations as may be adopted and published by Landlord from time to time.  "Governmental Requirements" are  any and all statutes, ordinances, codes, laws, rules, regulations, orders and directives, including environmental laws and regulations, of any Governmental Agency as now or later amended, promulgated or issued and all current or future final orders, judgments or decrees of any court with jurisdiction interpreting or enforcing any of the foregoing.  A "Governmental Agency" is the United States of America, the state in which the Land is located, any county, city, district, municipality or other governmental subdivision, court or agency or quasi-governmental agency with jurisdiction and any board, agency or authority associated with any such governmental entity.

 

	
  

	
4.  Rules and Regulations.  Tenant shall comply with the rules and regulations of the Building which are attached hereto as Exhibit C.  Landlord may, from time to time, reasonably change such rules and regulations for the safety, care or cleanliness of the Building and related facilities including the Common Area and parking area, provided that such changes are applicable to all tenants of the Building and will not materially interfere with Tenant's use of the Premises and provided that Landlord notifies Tenant in writing. Tenant shall be responsible for the compliance with such rules and regulations by its employees, agents and invitees. Any conflicts between the rules and regulation exhibit and this Lease shall be controlled by the Lease.

 

	
  

	
5. Car Parking. Tenant shall have the right to use the number of non-reserved car spaces on the Land "Tenant Car Spaces" as specified in Section 1.  The Tenant Car Spaces includes Tenant's Proportionate Share of (i) visitor spaces "Visitor Spaces" located in front and in back of the Building for use by Tenant and other tenants of the Building and (ii) handicap spaces "Handicap Spaces" located in front and in back of the Building for use by Tenant and other tenants of the Building.  All parking facilities and Tenant Car Spaces furnished by Landlord shall be subject to the reasonable control and management of Landlord who may from time to time, establish, modify, and enforce reasonable rules and regulations with respect thereto.  Landlord reserves the right at any time to assign specific parking spaces for Tenant Car Spaces and Tenant shall thereafter be responsible to insure that the users of such assigned Tenant Car Spaces park in the specifically designated parking spaces. Tenant shall if requested by Landlord furnish to Landlord a complete list of the license plate numbers of all vehicles operated by Tenant, Tenant's employees and agents.  Landlord shall not be liable for any damage of any nature to, or any theft of, vehicles or contents thereof, in on or about the parking facilities on the Land. Tenant and its employees, guests and invitees shall not be allowed to park in areas of the Project designated by Landlord as reserved or on the public streets surrounding the Building and the Land.  Landlord shall not be responsible for enforcing Tenant's parking rights against any third parties.

 

  

  

  

 

	
  

	
6.  Tenant Alterations.  Tenant shall not make or permit to be made any alterations, additions, improvements or installations in or to the Premises (including Telecommunication Facilities), or place signs or other displays visible from outside the Premises (individually and collectively ''Tenant Alterations"), without first obtaining the consent of Landlord which may be withheld in Landlord's sole discretion.  Tenant shall deliver to Landlord complete plans and specifications for any proposed Tenant Alterations and, if consent by Landlord is given, all such work shall be performed at Tenant's expense by Landlord or, with Landlord's consent, by Tenant.  Tenant shall be authorized to perform Tenant Alterations only to the extent and under such terms and conditions as Landlord, in its reasonable discretion, shall specify.

 

	
  

	
7.  Surrender of Possession.  Tenant shall, at the expiration or earlier termination of this Lease, surrender and deliver the Premises to Landlord in as· good condition as when received by Tenant from Landlord or as later improved, reasonable use and wear excepted, and free from any tenancy or occupancy by any person.

 

	
  

	
8.  Removal of Property.  Upon the expiration or earlier termination of this Lease, Tenant may remove its personal property, office supplies and office furniture and equipment if such items are readily moveable and are not attached to the Premises; such removal is completed prior to the expiration or earlier termination of this Lease; and Tenant immediately repairs all damage caused by or resulting from such removal.  All Tenant Alterations shall become the property of Landlord and shall remain upon and be surrendered with the Premises, unless Landlord requires their removal.  If removal is required, Tenant shall, at its sole cost and expense, remove all (or such portion as Landlord shall designate) of the Tenant Alterations, repair any damages resulting from such removal and return the Premises to the same condition as existed prior to such Tenant Alterations.

 

	
  

	
9.  Damage or Destruction.  If the Premises are damaged by fire, earthquake or other casualty ("Casualty''), Tenant shall give immediate written notice to Landlord.  If Landlord estimates that the damage can be repaired to meet Tenant's business needs within one hundred eighty (180) days after Landlord is notified by Tenant of such damage and if there are sufficient insurance proceeds available to repair such damage, then Landlord shall proceed with reasonable diligence to restore the Premises to substantially the condition which existed prior to the damage and this Lease shall not terminate.  If neither circumstance described in the previous sentence exists, Landlord may elect, in its absolute discretion, to either: (a) terminate this Lease or (b) restore the Premises to substantially the condition which existed prior to the damage and this Lease will continue.  Notice of Landlord's election shall be delivered to Tenant within sixty (60) days after the date Landlord receives written notice of the damage.  Failure to deliver notice within the specified period shall be treated as election not to restore.  Tenant agrees to look to the provider of Tenant's insurance for coverage for the loss of Tenant's use of the Premises and any other related losses or damages incurred by Tenant during any reconstruction period following a Casualty.  If the Building is damaged by Casualty and more than fifty percent (50%) of the Building is rendered untenantable, without regard to whether the Premises are affected by such damage, Landlord may, in its absolute discretion, elect to terminate this Lease by notice in writing to Tenant within thirty (30) days after the date Landlord receives written notice of the damage.  Such notice shall be effective twenty (20) days after delivery to Tenant unless a later date is set forth in Landlord's notice.

 

	
  

	
10.  Condemnation.  If more than fifty percent (50%) of the Premises, or such portions of the Building as may be required for the Tenant's reasonable use of the Premises, are taken by eminent domain or by conveyance in lieu thereof, this Lease shall automatically terminate as of the date the physical taking occurs, and all Base Rent and other sums payable under this Lease shall be paid to that date. In the case of a taking of a part of the Premises or a portion of the Building not required for the Tenant's reasonable use of the Premises, this Lease shall continue in full force and effect and the Base Rent shall be equitably reduced based on the proportion by which the floor area of the Premises is reduced, such reduction in Base Rent to be effective as of the date the physical taking occurs.  Utility Costs and Tax Costs payments may be redetermined as equitable under the circumstances.  Landlord reserves all rights to damages or awards for any taking by eminent domain relating to the Premises, Building, Land and the unexpired term of this Lease.  Tenant assigns to Landlord any right Tenant may have to such damages or award and Tenant shall make no claim against Landlord for damages for termination of its leasehold interest or interference with Tenant's business.  Tenant shall have the right, however, to claim and recover from the condemning authority compensation for any loss to which Tenant may be entitled for Tenant's moving expenses or other relocation costs if they are awarded separately to Tenant in the eminent domain proceedings and are not claimed by Tenant to be a part of the damages recoverable by Landlord.

 

	
  

	
11.  Liens.  Tenant shall have no authority, express or implied, to create or place any lien or encumbrance of any kind or nature whatsoever upon the interest of Landlord or Tenant in the Premises or against Landlord's interests under this Lease for any Claims in favor of any person dealing with Tenant, including those who may furnish materials or perform labor for any construction or repairs.  If any such lien or encumbrance is filed or recorded, Tenant shall cause it to be released or otherwise removed within five (5) days by a means or method approved by Landlord.

 

	
  

	
12. Estoppel Certificate.  On Landlord's request, Tenant shall within 5 days of a request by Landlord complete, sign and deliver a certificate to an addressee designated by Landlord stating the material terms of this Lease, whether any default currently exists under the Lease, and such other information as may reasonable be requested.

 

 

  

  

  

 

	
  

	
13.  Relocation.  RESERVED

 

	
  

	
14.  Holdover.  Tenant is not authorized to hold over beyond the expiration or earlier termination of the Lease Term. No payment of money by Tenant to Landlord after the expiration or termination of this Lease reinstates, continues or extends the Lease Term and no extension of this Lease after the termination or expiration is valid unless agreed in writing by Landlord and Tenant.  If, for any reason, Tenant retains possession of the Premises after (i)  the expiration or termination of this Lease or (ii) if Tenant  fails to complete any repairs  required hereby, unless the parties hereto otherwise agree in writing, such possession shall establish a month to month tenancy, which shall be subject to termination by either Landlord or Tenant at any time upon not less than ten (10) days advance written notice, and provided all of the other terms and provisions of this Lease shall be applicable during such period, except that Tenant shall pay Landlord from time to time, upon demand, as rental for the period of such possession, an amount computed on a daily basis equal to 150% of the Base Rent in effect on the termination date

 

	
  

	
15. Common Area.  The Building entry areas, lobby, associated hallways, restrooms, utility rooms, Conference Center and Break Room are known as the "Common Area".  The lobby conference room on the 1st floor is known as the "Conference Center".  The lobby break room on the 1st floor is known as the "Break Room".  The access and use of the Conference Center and Break Room by Tenant and other tenants of the Building shall be reasonably determined by Landlord.  Landlord shall have the right to modify the Common Area, provided such changed Common Area provides substantially the same function to Tenant as the existing Common Area.  The Common Area shall be under Landlord's management and control.  Tenant shall have the right, subject to the rights of other Tenants and Landlord, to use such Common Area in accordance with the terms of this Lease and any reasonable rules adopted by Landlord regarding such use.

 

	
  

	
16. Mortgage.  This Lease shall be subject and subordinate to any mortgages and/or deeds of trust now or at any time hereafter constituting a lien or charge upon the Premises or the improvements situated thereon or the Building of which the Premises are a part.  Tenant agrees to attorn to any mortgagee, trustee under a deed of trust or purchaser at a foreclosure sale or trustee's sale as Landlord under this Lease. Tenant, at any time hereafter, within ten (10) business days after request by Landlord, shall execute any instruments, releases or other documents that may be reasonably required by any mortgagee for the purpose of subjecting and subordinating this Lease to the lien of any such mortgage provided Tenant is  provided a non­disturbance agreement in a form reasonably satisfactory to Landlord and Tenant.

 

SECTION 6

 

INSURANCE AND INDEMNIFICATION

 

	
  

	
1.  Indemnification.  Tenant shall indemnify, defend and hold harmless Landlord and Landlord's Affiliates and the property manager of the Building from and against any and all Claims made against such persons, arising out of (a) the possession, use or occupancy of the Premises or the business conducted in the Premises, (b) any act, omission or actionable neglect of Tenant or Tenant's Affiliates, or (c) any breach or default under this Lease by Tenant or by any Tenant's Affiliates.  Tenant's obligations under the previous sentence shall not apply if the Claim arose solely from intentional misconduct by or actionable neglect of Landlord or Landlord's Affiliates. "Landlord's Affiliates" are all officers, managers, members, contractors, employees, and invitees of Landlord. "Tenant's Affiliates" are all officers, partners, contractors, employees and invitees of Tenant.  "Claims" is an individual and collective reference  to any and all claims, demands, damages, injuries, losses, liens, liabilities, penalties, fines, lawsuits, actions, and other proceedings and expenses (including attorneys' fees and expenses incurred in connection with the proceeding, whether at trial or on appeal).

 

	
  

	
2.  Tenant Insurance.  Tenant shall, throughout the Lease Term, at its own expense, keep and maintain in full force and effect each and every one of the following policies, each of which shall be endorsed as needed to provide that the insurance afforded by these policies is primary and that all insurance carried by Landlord is strictly excess and secondary and shall not contribute with Tenant's liability insurance:

 

	
  

	
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A policy of commercial general liability insurance, including a contractual liability endorsement covering Tenant's obligations  under the paragraph captioned "Indemnification", insuring against claims of bodily injury and death or property damage or loss with a combined single limit at the Lease Commencement  Date of this Lease of not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) general aggregate, which policy shall be payable  on  an "occurrence" rather than a "claims made" basis.  Tenant shall include Landlord and Landlord's lender as additional insureds.

	
  

	
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RESERVED

	
  

	
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"Special Form" property insurance (which is commonly called "all risk") covering business interruption, Tenant Alterations, and any and all furniture, fixtures, equipment, inventory, improvements and other property in or about the Premises which is not owned by Landlord, for the then, entire current replacement cost of such property.

	
  

	
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A policy of worker's compensation insurance if  and as required  by applicable  law and employer's liability insurance with limits of no less than One Million and No/100 Dollars ($1,000,000.00).

	
  

	
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A policy of comprehensive automobile liability insurance, including loading and unloading, and covering Tenant owned, non-owned vehicles used in the course of doing business for Tenant and Tenant  hired vehicles with limits of no less than  One Million Dollars ($1,000,000.00) per occurrence.

	
  

	
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All insurance policies required under this paragraph shall be with companies having a rating according to Best's Insurance Key Rating Guide for Property - Casualties of no less than A-Class VIII.  Each policy shall provide that it is not subject to cancellation, lapse or reduction in coverage except after thirty (30) days written notice to Landlord.  Tenant shall deliver to Landlord, prior to the Commencement Date and, from time to time thereafter, certificates evidencing the existence and amounts of all such policies and, on Landlord's request, copies of such insurance policies.  There shall be no deductible amount or self-insured retention applicable with respect to the insurance policy requirements in this Section 6.2 unless approved in advance by Landlord.  Deductibles under policies procured must be reasonable and customary.

	
  

	
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If Tenant fails to acquire or maintain any insurance or provide evidence of insurance required by this Section 6.2, Landlord may, but shall not be required to, obtain such insurance or evidence and the costs associated with obtaining such insurance or evidence shall be payable by Tenant to Landlord on demand.

 

 

 

  

  

  

	
  

	
3.  Landlord's Insurance.  Landlord shall, throughout the Lease Term, keep and maintain in full force and effect:

 

	
  

	
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Commercial general liability insurance, insuring against claims of bodily injury and death or property damage or loss with a combined single limit at the Commencement Date of not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million  Dollars ($2,000,000.00) general aggregate, which policy shall be payable on an "occurrence" rather than a "claims made" basis.

	
  

	
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"Special Form" property insurance (which is commonly called "all risk") covering the Building and Landlord's personal property, if any, located on the Land for the then, current replacement value of such property.

	
  

	
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Landlord may, but shall not be required to, maintain other types of insurance as Landlord deems appropriate.

 

	
  

	
4.  Waiver of Subrogation.  Notwithstanding anything in this Lease to the contrary, Landlord and Tenant each waive and release the other from any and all Claims or any loss or damage that may occur to the Land, Building, Premises, or personal property located on or in the described Premises, by reason of Casualty, but only to the extent of deductibles specified in the insurance policies plus the insurance proceeds paid to such party under its policies  of insurance  or, if it fails to maintain  the required  policies, the insurance proceeds that would have been paid to such party if it had maintained such policies.

 

 

SECTION 7

 

ASSIGNMENT AND SUBLETTING

 

	
  

	
1.  Assignment and Subletting by Tenant.  Tenant shall not have the right, directly or indirectly (by change of control or otherwise) to assign, transfer, mortgage or encumber this Lease in whole or in part, nor sublet the whole or any part of the Premises, nor allow the occupancy of all or any part of the Premises by another, without first obtaining Landlord's consent, which consent may not be unreasonably withheld or delayed.  Neither Landlord's demand for Recapture under paragraph 7.2 ("Recapture") or Landlord's conditioning of its consent under paragraph 7.3 ("Landlord Share of Revenue Surplus") shall be deemed unreasonable.  No sublease or assignment, including one to which Landlord has consented, shall release Tenant from its obligations under this Lease.

 

	
  

	
2.  Recapture.  Landlord shall have the right to recapture all or the applicable portion of the Premises proposed to be assigned or sublet by giving written notice of Landlord's intention to exercise such right within fifteen (15) days after delivery of Tenant's request that Landlord consent to assignment or subletting ("Recapture").  The Recapture shall be effective on the earlier of the date Tenant proposed to assign or sublet or the last day of a calendar month which is at least sixty (60) days after delivery of Tenant's request that Landlord's consent to the assignment or subletting.  On the effective date of the Recapture, this Lease shall be terminated as to the Premises or the portion of the Premises subject to the Recapture.

 

	
  

	
3.  Landlord Share of Revenue Surplus. Landlord may elect to condition its consent to an assignment or subletting on this paragraph.  If Landlord so gives conditional consent, Tenant shall pay to Landlord if, as and when received  by Tenant, fifty percent (50%) of  the consideration received by Tenant for the assignment or subletting to the extent that consideration exceeds Tenant's obligations under this Lease for the same portion of the Lease Term.  If the sublet is for other than the entirety of the Premises, Tenant's obligation under this Lease shall be prorated based on the area subleased as compared to the Rentable Area of the Premises.

 

	
  

	
4.  Assignment by Landlord.  Landlord shall have the right to transfer and assign, in whole or in part, its rights and obligations under this Lease and in any and all of the Land or Building.  If Landlord sells or transfers any or all of the Building, Landlord and Landlord's Affiliates shall, upon consummation of such transfer be released automatically from any liability under this Lease for obligations to be performed or observed after the date of the transfer.  After the effective date of the transfer, Tenant must look solely to Landlord's successor-in­ interest.

 

  

  

  

 

SECTION 8

 

DEFAULTS AND REMEDIES

 

	
  

	
1.  Events of Default.  The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Tenant ("Event of Default''):

 

	
  

	
●

	
vacation or abandonment of all or any portion of the Premises without continued payment when due of Base Rent and other sums due under this Lease;

	
  

	
●

	
failure by Tenant to make any payment of Base Rent or any other sum payable by Tenant under this Lease within three (3) days after its due date, or, in the case of the first such failure during a calendar year of the Lease Term, within three (3) days after notice to Tenant of such failure;

	
  

	
●

	
failure by Tenant to observe or perform any covenant or condition of this Lease, other than the making of Base Rent and other payments, where such failure continues for a period of twenty (20) days after written notice from Landlord;

	
  

	
●

	
the failure of Tenant to surrender possession of the Premises at the expiration or earlier termination of this Lease in the condition required by this Lease;

	
  

	
●

	
the making by Tenant of any general assignment or general arrangement for the benefit of creditors; the filing by or against Tenant of a petition in bankruptcy, including reorganization or arrangement, unless, in the case of a petition filed against Tenant, it is dismissed within twenty (20) days; the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located in the Premises or of Tenant's interest in this Lease; any execution, levy, attachment or other process of law against  any property of Tenant or Tenant's interest in this Lease, unless it is dismissed within twenty (20) days; or adjudication that Tenant is bankrupt.  If a petition in bankruptcy is filed by or against Tenant, and if this Lease is treated as an "unexpired lease" under applicable bankruptcy law, then Tenant shall neither attempt nor cause any trustee to attempt to extend the time period specified by the Bankruptcy Act for the assumption or rejection of this Lease.

 

	
  

	
2.  Remedies.  If any Event of Default occurs, Landlord may at any time after such occurrence, with or without notice or demand except as stated in this paragraph, and without limiting Landlord in the exercise of any other right or remedy which Landlord may have by reason of such Event of Default, exercise the rights and remedies, either singularly or in combination, specified or described as follows:

 

	
  

	
(1) Terminate this Lease and pursue Tenant for actual damages; and/or

	
  

	
(2) Enter upon and take possession of the Premises without terminating this Lease; and/or

(3) Alter all locks and other security devices at the Premises with or without terminating this Lease, deny access to Tenant and pursue, at Landlord's option, one or more remedies pursuant to this Lease.

	
  

	
●

	
Upon the occurrence of any Event of Default, Tenant shall, immediately upon receipt of written notice or demand from Landlord, surrender the Premises to Landlord and if Tenant fails so to do, Landlord, without waiving any other remedy it may have, may enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying such Premises or any part thereof, without being liable for prosecution or any claim of damages therefore.

	
  

	
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If Landlord repossesses the Premises with or without terminating the Lease, Tenant, at Landlord's option, shall be liable for and shall pay Landlord on demand all Base Rent and other payments owed to Landlord hereunder, accrued to the date of such repossession, plus all amounts required to be paid by Tenant to Landlord until the date of expiration as such sums become due and payable hereunder without acceleration. Actions to collect amounts due by Tenant to Landlord under this paragraph may be brought from time to time, on one or more occasions, without the necessity of Landlord's waiting until expiration of the Lease Term.

	
  

	
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Upon an Event of Default, in addition to any sum provided to be paid herein, Tenant also shall be liable for and shall pay the costs of removing and storing Tenant's property; the costs of repairing, altering, remodeling or otherwise putting the Premises into the condition required by this Lease as if the Lease had expired and all reasonable expenses incurred by Landlord in enforcing or defending Landlord's rights and/or remedies.

	
  

	
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If Landlord relets the Premises without terminating this Lease, Landlord shall apply the revenue from such reletting to Landlord's costs and Tenant's obligations in such order as Landlord deems appropriate.  Should revenue from letting during any month be less than the sum of the Base Rent and other sums payable under this Lease and Landlord's expenditures for the Premises during such month, Tenant shall be obligated to pay such deficiency to Landlord as and when such deficiency arises.

	
  

	
●

	
All sums payable by Tenant under this Lease shall be considered rent and all rights and remedies available pursuant to law for non-payment of rent shall apply.

 

	
  

	
3.  Right to Perform. If Tenant shall fail to pay any sum of money,  other than Base Rent, Utility Costs or Tax Costs, required to be paid by it under this Lease or shall fail to perform any other act on its part to be performed under this Lease, and such failure shall continue for ten (10) days after notice of such failure by Landlord, Landlord may, but shall not be obligated to, and without waiving or releasing Tenant from any obligations, make such payment or perform such other act on Tenant's part to be made or performed as provided in this Lease. Landlord shall have all rights and remedies for recovery of any sum or for the cost of such performance as specified in this Lease.

 

	
  

	
4.  Landlord's Default.  Landlord shall not be in default under this Lease unless Landlord fails to perform obligations required of Landlord within thirty (30) days after written notice is delivered by Tenant to Landlord specifying the obligation which Landlord has failed to perform; provided, however, that if  the nature of Landlord's obligation  is such that more than the specified period required for performance, then Landlord shall not be in default if Landlord commences performance within such period and thereafter diligently prosecutes it to completion.  Tenant shall not have the right to place a lien upon the property of Landlord or the right to withhold or setoff Base Rent or other sums due to Landlord.

 

	
  

	
5.  Limitation on Recourse.  Liability with respect to the entry and performance of this Lease by or on behalf of Landlord or any other obligation of Landlord, however it may arise, shall be asserted and enforced only against Landlord's estate and equity interest in the Building.  Neither Landlord nor any of Landlord's Affiliates shall have any personal liability in the event of any Claim against any of them arising out of or in connection with this Lease, the relationship of Landlord and Tenant or Tenant's use of the Premises.  Any and all personal liability, if any, beyond that which may be asserted under this paragraph, is expressly waived and released  by Tenant and by all persons claiming by, through or under Tenant.

 

  

  

  

 

SECTION 9

 

MISCELLANEOUS PROVISIONS

 

	
  

	
1.  Notices.  All notices, demands, consents, approvals, statements and communications required or permitted under this Lease shall be in writing and shall be addressed to a party at the addresses set forth opposite that party's signature, or to such other address as either party may specify by written notice, given in accordance with this paragraph.  Unless otherwise specified opposite Tenant's signature, Tenant's notice address shall be changed to the address of the Premises after the Commencement Date.  All such communications shall be transmitted by personal delivery, reputable express or courier service, or United States Postal Service, postage prepaid. All such communications shall be deemed delivered and effective on the earlier of (a) the date received or refused for delivery, or (b) five (5) calendar days after having been mailed by certified mail, return receipt requested, with the United States Postal Service, postage prepaid.

 

	
  

	
2.  Attorney's Fees and Expenses.  In the event that either party requires the services of an attorney in connection with enforcing the terms of this Lease, suit is brought for the enforcement of this Lease or the exercise of rights and remedies afforded by this Lease or under law, or proceedings are held in bankruptcy, then the substantially prevailing party shall be entitled to a reasonable sum for attorney's and paralegal's fees, expenses and court costs, including those relating to any appeal.

 

	
  

	
3.    Successors; Joint and Several Liability.  All of the covenants and conditions contained in this Lease shall apply to and be binding upon Landlord and Tenant and their respective heirs, executors, administrators, permitted successors and permitted assigns.  In the event that more than one person or organization is included in the term "Tenant", then each such person or organization shall be jointly and severally liable for all obligations of Tenant under this Lease.

 

	
  

	
4.  Choice of Law.  This Lease shall be construed and governed by the laws of the state in which the Land is located. S.    Offer to Lease.  The submission of this Lease in a draft form to Tenant or its broker or other agent does not constitute an offer to Tenant to lease the Premises.  This Lease shall have no force or effect until it is executed and delivered by both Tenant and Landlord.

 

	
  

	
6.  Force Majeure.  Landlord shall be excused for the reasonable period of any delay in its performance when such delay is beyond Landlord's reasonable control.  Except for payment of Base Rent and all other sums due from Tenant, Tenant shall be excused for the reasonable period of any delay in its performance when such delay is beyond Tenant's reasonable control.

 

	
  

	
7. Interpretation.  Headings or captions shall in no way define, limit or otherwise affect the construction or interpretation of this Lease.  Whenever a provision of this Lease uses the terms "include" or "including", that term shall not be limiting but shall be construed as illustrative.  This Lease shall be given a fair and reasonable interpretation of the words contained in it without any weight being given to whether a provision was drafted by one party or its counsel. Unless otherwise specified, whenever this Lease requires a consent or approval, the decision shall be reached in good faith discretion of the party entitled to give such consent or approval.

 

	
  

	
8.  Prior Agreement and Amendments.  This Lease contains all of the agreements of the parties to this Lease with respect to any matter covered or mentioned in this Lease.  No prior agreement, understanding or statement pertaining to any such matter shall be effective for any purpose.  No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties to this Lease.

 

	
  

	
9.  Time of Essence.  Time is of the essence with respect to the performance of this Lease.

 

  

  

  

 

	
  

	
10. Survival of Obligations.  Notwithstanding anything contained in this Lease to the contrary or the expiration or earlier termination of this Lease, any and all obligations of either party accruing prior to the expiration or termination of this Lease shall survive the expiration or earlier termination of this Lease, and either party shall promptly perform all such obligations whether or not this Lease has expired or terminated.

 

	
  

	
11. Holidays.  Holidays" are nationally recognized bank holidays generally practiced in Dallas, Texas.

 

	
  

	
12. Authority. Tenant represents and warrants to Landlord that Tenant is duly organized, validly existing, and in good standing under the laws of the state of its organization, and is duly qualified to transact business in Texas.

 

	
  

	
13. No Representations.  Neither Landlord nor Landlord Affiliates made any representations or promises with respect to the Leased Premises or the Project except as expressly set forth in this Lease.  No rights, easements, or licenses are acquired by Tenant by implication or otherwise except as expressly set forth in this Lease.

 

	
  

	
14.  Binding Effect.  This Lease is binding upon the respective heirs, personal representatives, successors, and, to the extent assignment is permitted, assigns of Landlord and Tenant.

 

	
  

	
15.  Exhibits.  All exhibits attached to this Lease are incorporated into and made a part of this Lease as if set forth in the body of this Lease.

 

	
  

	
16.  Counterparts.  This Lease may be executed in two or more counterparts, each of which is deemed an original and all of which together constitute one and the same instrument.

 

	
  

	
17.  Effective Date.  Effective Date or similar references shall be deemed to refer to the last date, in point of time, on which all parties hereto have executed this Lease.

 

 

	
Designated Address for Landlord:

	
LANDLORD:

	
1445 Ross Avenue, Suite #5150

	
Primera Tennyson Partners LLC, a Texas limited

	
Dallas, Texas 75202

	
liability company

	
  

	
Attention:  Tennyson Asset Manager

	
  

	
      By:  /s/ Charles Buob                          

	
  

	
      Name:   Charles Buob

	
and to:

	
      Its: CFO

	
  

	
5600 Tennyson Parkway, Suite #143

	
  

	
Plano, Texas 75024

	
Attention:  Tennyson Property Manager

	
Date: 1/22/14

 

 

	
Designated Address for Tenant:

	
TENANT:

	
5600 Tennyson Parkway, Suite #240

	
U.S. Rare Earths, Inc.

	
  

	
Plano, Texas 75024

	
  

	
      By: /s/ Scott Chrimes_________

	
  

	
      Name:   Scott Chrimes

	
  

	
      Its:         CFO

	
  

	
and to:

	
______________________________

	
Date:  01/20/14

	
  

	
______________________________

	
  

	
______________________________

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