Document:

Unassociated Document

  
 

 

EXECUTION COPY

Warrant No. 3

WARRANT

 

CAPITAL TRUST, INC.

 

THIS IS TO CERTIFY THAT Citigroup Financial Products Inc., a Delaware corporation, is entitled, at any time from and after the Exercisability Date (such term, and certain other capitalized terms used herein being hereinafter defined) and prior to the Expiration Date, to purchase from CAPITAL TRUST, INC., a Maryland corporation (the “Company”), 376,197 fully paid and non-assessable shares of Class A Common Stock (subject to adjustment as provided in Section 4 hereof), at the Exercise Price (subject to adjustment as provided in Section 4 hereof), all on the terms and conditions and pursuant to the provisions hereinafter set forth.

 

	
1.

	
DEFINITIONS

 

As used in this Warrant, the following terms have the respective meanings set forth below:

 

“Affiliate” means, with respect to any specified Person, any other Person which, directly or indirectly, controls, is controlled by or is under common control with, such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means ownership directly or indirectly of 100 percent (100%) of the capital stock entitled to vote for the election of directors in the case of a corporation, or 100 percent (100%) of the equity interests in the case of any other type of legal entity, and the terms “affiliated,” “controlling,” and “controlled” have meanings correlative to the foregoing.

 

“Beneficially Owned” or “Beneficial Owner” shall have the interpretation set forth in Rule 13d-3 under the Exchange Act.

 

“Business Day” shall mean any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York or Maryland.

 

“Cashless Exercise” shall have the meaning set forth in Section 2.1(d) hereof.

 

“Change of Control Event” means any of the following transactions: (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Company’s property or business, or (ii) any transaction (including a merger, consolidation or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of.

 

“Class A Common Stock” shall mean the class A common stock of the Company, par value $0.01 per share.

 

“Commission” shall mean the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws.

 

  

  

  

 

“Common Stock” shall mean (except where the context otherwise indicates) the Class A Common Stock and any capital stock or Other Property or assets into which such Class A Common Stock may thereafter be changed, and any other shares of common stock of the Company now or hereafter designated, that have the right (subject to any prior rights of and not including any class or series of preferred stock) to participate in any distribution of the assets or earnings of the Company without limit as to per share amount, and shall also include shares of common stock of any successor or acquiring corporation (as defined in Section 4.4 hereof) received by or distributed to the holders of Common Stock of the Company in the circumstances contemplated by Section 4.4 hereof.

 

“Designated Office” shall have the meaning set forth in Section 10 hereof.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

 

“Exercisability Date” shall mean three (3) years from the Original Issue Date.

 

“Exercise Date” shall have the meaning set forth in Section 2.1(a) hereof.

 

“Exercise Notice” shall have the meaning set forth in Section 2.1(a) hereof.

 

“Exercise Period” shall mean the period during which this Warrant is exercisable pursuant to Section 2.1 hereof.

 

“Exercise Price” shall mean, in respect of a share of Common Stock, initially, $1.79 per share, as adjusted from time to time pursuant to Section 4 hereof.

 

“Expiration Date” shall mean March 16, 2019.

 

“Fair Market Value” shall have the meaning set forth in Section 4.7 hereof.

 

“Holder” shall mean the Person in whose name the Warrant set forth herein is registered from time to time on the books of the Company maintained for such purpose.

 

“Opinion of Counsel” means a written opinion of counsel (who may be an employee of a Holder) experienced in Securities Act matters chosen by the holder of this Warrant or Warrant Stock issued upon the exercise hereof and reasonably acceptable to the Company.

 

“Original Issue Date” shall mean, March 16, 2009, the date on which the Original Warrants were issued.

 

“Original Warrants” shall mean the Warrants to purchase an aggregate of 3,479,691 shares of Class A Common Stock originally issued by the Company on the Original Issue Date to Citigroup Financial Products Inc. and the entities nominated by JPMorgan Chase Bank, National Association and Morgan Stanley Bank, N.A.

 

  

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“Other Property” shall have the meaning set forth in Section 4.5 hereof.

 

“Person” shall mean any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated or unincorporated organization or association, corporation, institution, public benefit corporation, entity or government (whether federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).

 

“Repurchase Agreement” means that certain Master Repurchase Agreement, dated as of July 30, 2007 (as amended, restated, supplemented or otherwise modified from time to time), by and among Company, as Seller, and Citigroup Global Markets Inc. and Citigroup Financial Products, Inc., as Buyers.

 

“Restricted Common Stock” shall mean shares of Common Stock which are, or which upon their issuance on the exercise of this Warrant would be, evidenced by a certificate bearing the restrictive legend set forth in Section 8.2(a) hereof.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

 

“Subsidiary” means any corporation or association more than 50% (by number of votes) of the voting stock of which is at the time owned by the Company or by one or more Subsidiaries or by the Company and one or more Subsidiaries, or any other business entity in which the Company or one or more Subsidiaries or the Company and one or more Subsidiaries own more than a 50% interest either in the profits or capital of such business entity.

 

“Transfer” shall mean any disposition of any Warrant or Warrant Stock or of any interest in either thereof, which would constitute a “sale” thereof within the meaning of Section 5 of the Securities Act, and the term “Transferable” shall have a meaning correlative to the foregoing.

 

“Warrant Price” shall mean an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of this Warrant pursuant to Section 2.1 hereof, multiplied by (ii) the Exercise Price as of the date of such Exercise Date.

 

“Warrants” shall mean the Original Warrants and all warrants issued upon transfer, division or combination of, or in substitution for, such Original Warrants or any other such Warrant.  All Warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised.

 

“Warrant Stock” generally shall mean the shares of Common Stock issued, issuable or both (as the context may require) upon the exercise of Warrants until such time as such shares of Common Stock have either (i) been Transferred in a public offering pursuant to a registration statement filed under the Securities Act or (ii) been Transferred or become Transferable in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Rule 144 thereunder with all transfer restrictions and restrictive legends with respect to such Common Stock being removed in connection with such transaction.

 

  

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2.

	
EXERCISE OF WARRANT

 

2.1           Manner of Exercise.

 

(a)           From and after the Exercisability Date and until 5:00 P.M., New York City time, on the Expiration Date, the Holder may from time to time exercise this Warrant, on any Business Day, for all or any part of the number of shares of Common Stock purchasable hereunder (subject to adjustment pursuant to Section 4 hereof); provided that the Holder may exercise this Warrant prior to the Exercisability Date (i) from and after the occurrence of an Event of Default (as defined in the Repurchase Agreement) or (ii) immediately prior to the consummation of a Change of Control Event; provided, further, that the Company shall give the Holder reasonable prior written notice of the date of consummation of such Change of Control Event in order to permit the Holder to exercise the rights under this Warrant.  In order to exercise this Warrant, in whole or in part, the Holder shall (i) deliver to the Company at the Designated Office (as defined herein) a written notice of the Holder’s election to exercise this Warrant (an “Exercise Notice”), which Exercise Notice shall be irrevocable and specify the number of shares of Common Stock to be purchased, together with this Warrant and (ii) pay to the Company the Warrant Price (the date on which both such delivery and payment shall have first taken place being hereinafter sometimes referred to as the “Exercise Date”) (x) by delivery of a certified, cashiers’ or official bank check or wire transfer in the amount of such Warrant Price or (y) through a Cashless Exercise.  Such Exercise Notice shall be in the form of the subscription form attached as Annex A to this Warrant, duly executed by the Holder or its duly authorized agent or attorney.

 

(b)           Upon receipt of such Exercise Notice, Warrant and payment of the Warrant Price (subject, as applicable, to Section 2.1(d)), the Company shall, as promptly as practicable, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the aggregate number of full shares of Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereafter provided.  The stock certificate or certificates so delivered shall be in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Notice and shall be registered in the name of the Holder or such other name as shall be designated in the Exercise Notice.  This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the Exercise Date; provided, however, that a Holder shall not be entitled to revoke, rescind or modify its Exercise Notice after such notice is delivered to the Company.

 

(c)           If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing the shares of Common Stock being issued, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased shares of Common Stock called for by this Warrant.  Such new Warrant shall in all other respects be identical with this Warrant.

 

(d)           Subject to compliance with this subsection (d), a Holder shall have the right to exercise its Warrants without any payment (a “Cashless Exercise”) by instructing the Company to withhold a number of shares of Warrant Stock then issuable upon exercise of this Warrant with an aggregate Fair Market Value equal to the Warrant Price such that the number of shares of Common Stock to be issued to such Holder would be equal to a fraction, (i) the denominator of which shall be the Fair Market Value per share of Common Stock calculated as of the Exercise Date, and (ii) the numerator of which shall be equal to the product of (x) the number of shares of Common Stock in respect of which such Warrants are then being exercised by such Holder times (y) the Fair Market Value described in clause (i) above minus the Exercise Price then in effect.

 

  

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(e)           Notwithstanding the terms of this Section 2.1, if (i) the Holder has not elected to exercise this Warrant prior to the Expiration Date, and (ii) the Exercise Price is less than the Fair Market Value of one share of Common Stock upon such Expiration Date, then (unless notice to the contrary is provided by the Holder), this Warrant shall be deemed automatically exercised as to the maximum number of Shares of Common Stock for which this Warrant is then exercisable pursuant to the provisions of Section 2.1(d) above, on such Expiration Date, without any action by the Holder.

 

2.2           No Liens.  All shares of Common Stock issuable upon the exercise of this Warrant pursuant to the terms hereof shall be validly issued, fully paid and nonassessable, issued without violation of any preemptive rights and free and clear of all taxes, liens and other charges (other than any created by actions of the Holder).

 

2.3           Fractional Shares.  The Company shall not be required to issue a fractional share of Common Stock upon exercise of any Warrant and, in lieu thereof, the Company shall pay a cash adjustment in respect of a fractional share in an amount equal to the product of: (i) the fractional share and (ii) the Fair Market Value of one share of Common Stock on the Exercise Date.

 

	
3.

	
TRANSFER, DIVISION AND COMBINATION

 

3.1           Transfer.  Subject to compliance with Section 8 hereof, each transfer of this Warrant and all rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the Designated Office, together with a written assignment of this Warrant in the form attached as Annex B to this Warrant, duly executed by the Holder or its duly authorized agent or attorney.  Upon such surrender and delivery, the Company shall, subject to Section 8 hereof, execute and deliver a new Warrant or Warrants in the name(s) of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor(s) one or more new Warrant(s) evidencing the portion of this Warrant not so assigned and this Warrant shall promptly be cancelled.  A Warrant, if then exercisable and properly assigned in compliance with Section 8 hereof, may be exercised by the new Holder for the purchase of shares of Common Stock without having a new Warrant issued.

 

3.2           Division and Combination.  Subject to compliance with the applicable provisions of this Warrant, this Warrant may be divided or combined with other Warrants upon presentation hereof at the Designated Office, together with a written notice specifying the name(s) and denomination(s) in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with the applicable provisions of this Warrant as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

 

  

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3.3           Expenses.  The Company shall prepare, issue and deliver at its own expense any new Warrant or Warrants required to be issued under this Section 3.

 

3.4           Maintenance of Books.  The Company agrees to maintain, at the Designated Office, books for the registration and transfer of the Warrants.

 

	
4.

	
ANTIDILUTION PROVISIONS

 

The number of shares of Common Stock for which this Warrant is exercisable and the Exercise Price shall be subject to adjustment from time to time as set forth in this Section 4.

 

4.1           Stock Dividends, Subdivisions and Combinations.  If at any time the Company shall:

 

(a)           take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, additional shares of Common Stock,

 

(b)           subdivide, split or reclassify its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

 

(c)           combine or reclassify its outstanding shares of Common Stock into a smaller number of shares of Common Stock,

 

then the Exercise Price shall be adjusted to equal the product of (i) the Exercise Price in effect immediately preceding such event multiplied by (ii) a fraction, (x) the numerator of which shall be equal to the number of shares of Common Stock outstanding immediately preceding the adjustment, and (y) the denominator of which shall be equal to the number of shares of Common Stock outstanding immediately after such adjustment.  Such adjustment shall be made successively whenever any event listed above shall occur.

 

4.2           Adjustments for Other Distributions.  If at any time the Company distributes to all holders of any class of Common Stock any of its assets, property or debt, securities or other capital stock (or any rights, options or warrants to purchase any of the foregoing) (in each case, other than (a) dividends or distributions for which an adjustment is made pursuant to other provisions of this Section 4 hereof or for which an adjustment hereunder is not required as a result of the application of Section 4.5 hereof; provided in each case that the Company complies with the notice provisions contained in Section 7.1 hereof or (b) cash dividends or distributions paid from the Company’s retained earnings as shown on the Company’s books prepared in accordance with generally accepted accounting principals), the Exercise Price to be in effect after the record date for the determination of stockholders entitled to receive such distribution shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, (i) the denominator of which shall be the Fair Market Value per share of Common Stock on the record date for the determination of stockholders entitled to receive the distribution, and (ii) the numerator of which shall be (x) the Fair Market Value per share of Common Stock on the record date minus (y) the fair market value as determined in good faith by the board of directors of the Company (the “Board of Directors”) of the portion of the assets, property or debt, securities or other capital stock to be distributed, which in each case is applicable to one share of Common Stock.  Such adjustments shall be made successively whenever any such distribution is made and shall become effective immediately after the record date.

 

  

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4.3           Adjustment of Number of Shares Purchasable.  Upon any adjustment of the Exercise Price as provided in this Section 4, the Holder hereof shall thereafter be entitled to purchase upon the exercise of this Warrant, at the Exercise Price resulting from such adjustment, the number of shares of Common Stock (calculated to the nearest 1/100th of a share) obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable on the exercise hereof immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.

 

4.4           Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.  In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is any change whatsoever in, or distribution with respect to, the outstanding Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all of its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, (a) shares of common stock of the successor or acquiring corporation or of the Company (if it is the surviving corporation) or (b) any cash, shares of stock or other securities, assets, property or indebtedness of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation (“Other Property”) are to be received by or distributed to the holders of Common Stock of the Company who are holders immediately prior to such transaction, then the Holder of this Warrant shall have the right thereafter to receive, upon exercise of this Warrant, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event.  In such event, the aggregate Exercise Price otherwise payable for the shares of Common Stock issuable upon exercise of this Warrant shall be allocated among the shares of common stock and Other Property receivable as a result of such reorganization, reclassification, merger, consolidation or disposition of assets in proportion to the respective Fair Market Values of such shares of common stock and Other Property as determined in good faith by the Board of Directors of the Company.  In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be reasonably deemed appropriate (as determined in good faith by the Board of Directors of the Company and evidenced by a board resolution) in order to provide for adjustments of any shares of the common stock of such successor or acquiring corporation for which this Warrant thus becomes exercisable, with modifications shall be as equivalent as practicable to the adjustments provided for in this Section 4.  For purposes of this Section 4.4, “common stock of the successor or acquiring corporation” shall include stock of such corporation of any class that is not preferred as to dividends or assets over any other class of stock of such corporation and that is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities that are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.  The foregoing provisions of this Section 4.4 shall similarly apply to successive reorganizations, reclassification, mergers, consolidations or disposition of assets and shall apply to any securities to be received as a result of the foregoing.

 

  

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4.5           Rights Issuances.  If the Company shall distribute any rights, options or warrants to all holders of any class of its Common Stock entitling them to purchase shares of Common Stock, then concurrently therewith the Company shall distribute to each Holder on the record date for the determination of stockholders entitled to receive such distribution that number of rights, options or warrants to which the shares of Common Stock then issuable upon exercise of the Warrants held by it on such record date would have been entitled to receive if such shares of Common Stock had been outstanding on such record date.  In no event shall any adjustment to the Exercise Price be made in connection with any distribution described in this Section 4.5.

 

4.6           Determination of Consideration.  For purposes of any computation respecting consideration received pursuant to Article 4 hereof, the following shall apply:

 

(a)           in the case of the issuance of Common Stock for cash, the consideration shall be the net amount received by the Company after deduction of any underwriting commissions or concessions paid or allowed by the Company;

 

(b)           in the case of the issuance of shares of Common Stock for consideration in whole or in part other than cash, the consideration other than cash shall be the Fair Market Value thereof; and

 

(c)           in the case of securities exercisable for, convertible into or exchangeable for shares of Common Stock, the aggregate consideration received therefore shall be deemed to be the consideration received by the Company for the issuance of such securities plus the additional consideration, if any, to be received by the Company upon exercise, conversion or exchange thereof (the consideration in each case shall be determined in the same manner as provided in clause (a) and (b) of this Section 4.7).

 

4.7           Fair Market Value.  For the purposes of this Warrant, “Fair Market Value” means with respect to the Common Stock, (a) the Volume Weighted Average Price (or VWAP) of the Common Stock over the ten (10) consecutive trading days ending the day prior to the date for which such value is to be computed (the “Trading Period”), or (b) if the VWAP cannot be calculated as the result of an absence of trading during the Trading Period, the average of the last bid and ask prices, as those prices are reported on the New York Stock Exchange or other such national securities exchange or automated dealer quotation system, or (c) if the Common Stock is not listed or authorized for trading on the New York Stock Exchange or any comparable system, the average of the closing bid and asked prices as furnished by two members of the Financial Industry Regulatory Authority, Inc. selected from time to time by the Company for that purpose.

 

  

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“Volume Weighted Average Price” means, for any security as of any date, an average price calculated by adding up the dollars traded for every transaction (price multiplied by number of shares traded) and then dividing by the total shares traded for the day for such security as reported on the New York Stock Exchange, not identified as having been reported late to such system, or if the Common Stock is not listed on the New York Stock Exchange, Inc., as reported on any other national securities exchange or automated dealer quotation system, which is the primary market or system on which the Common Stock is then listed or quoted.

 

If the Common Stock is not listed and traded in a manner that the quotations referred to above are available for the period required hereunder, the Fair Market Value per share of Common Stock shall be deemed to be the fair value per share of such security as determined in good faith by the Board of Directors.  With respect to property, assets or securities other than Common Stock, the Fair Market Value of such property, assets or securities other than Common Stock shall be deemed to be the fair value as determined in good faith by the Board of Directors.

 

4.8           Other Provisions Applicable to Adjustments Under this Section 4.  The following provisions shall be applicable to the adjustments provided for pursuant to this Section 4:

 

(a)           When Adjustments to Be Made.  The adjustments required by this Section 4 shall be made whenever and as often as any specified event requiring such an adjustment shall occur.  For the purpose of any such adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence.

 

(b)           Record Date.  In case the Company shall take a record of the holders of the Common Stock for any purpose requiring an adjustment hereunder, then all references in this Section 4 to the effective date for such adjustment shall be such record date.

 

(c)           Fractional Interests.  In computing adjustments under this Section 4, fractional interests in Common Stock shall be taken into account to the nearest 1/100th of a share.

 

(d)           When Adjustment Not Required.  If the Company shall take a record of the holders of its Common Stock for any purpose requiring an adjustment hereunder, but shall, thereafter and before the consummation of the event requiring such adjustment legally abandon its plan, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled.

 

(e)           Certain Limitations.  Notwithstanding anything herein to the contrary, no adjustment to the Exercise Price hereunder shall be made, to the extent it would cause the Exercise Price to be less than the par value of the Common Stock, if any; provided that adjustments to the number of shares pursuant to Section 4.3 hereof shall be made based on the adjustment to the Exercise Price that would otherwise occur.

 

  

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(f)           Tax Adjustments.  The Company may make such reductions in the Exercise Price or increase in the number of Common Stock to be received by any Holder upon the exercise or exchange of this Warrant, in addition to those adjustments required by this Section 4, as it in its sole discretion shall determine to be advisable in order that any adjustment hereunder shall not be taxable to such holders.

 

(g)           Certain Business Combinations.  The Company will not merge or consolidate with or into, or sell, transfer or lease all or substantially all of its property to, any other entity unless the successor or purchasing entity, as the case may be (if not the Company), shall expressly agree to provide to each Holder the securities, cash or Other Property required by Section 4.4 hereof upon the exercise or exchange of this Warrant.

 

(h)           Notice of Adjustments.  Whenever the number of shares of Common Stock for which this Warrant is exercisable or the Exercise Price shall be adjusted pursuant to this Section 4, the Company shall forthwith prepare a certificate to be executed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment was calculated, specifying the number of shares of Common Stock for which this Warrant is exercisable and describing the number and kind of any other shares of stock or Other Property for which this Warrant is exercisable, and any related change in the Exercise Price, after giving effect to such adjustment or change.  The Company shall promptly cause a signed copy of such certificate to be delivered to each Holder in accordance with Section 12.2 hereof.  The Company shall keep at its principal office or at the Designated Office, if different, copies of all such certificates and cause the same to be available for inspection at said office during normal business hours by any Holder or any prospective transferee of a Warrant designated by a Holder thereof.

 

(i)           Independent Application.  Except as otherwise provided herein, all subsections of this Section 4 are intended to operate independently of one another (but without duplication).

 

(j)           Treasury Shares.  The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for the account of the Company or any Subsidiary, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock pursuant to Section 4.3.

 

(k)           Continued Expression of Original Terms.  Irrespective of any adjustments in the Exercise Price or the number or kind of shares purchasable upon the exercise of the Warrants, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the Warrants initially issued.

 

	
5.

	
NO IMPAIRMENT

 

The Company shall not by any action, including, without limitation, amending its charter documents or through any reorganization, reclassification, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other similar voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as maybe necessary or appropriate to protect the rights of the Holder against impairment.  Without limiting the generality of the foregoing, the Company shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, free and clear of all liens.

 

  

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6.

	
RESERVATION AND AUTHORIZATION OF COMMON STOCK; OBTAINING STOCK EXCHANGE LISTING

 

From and after the Original Issue Date, the Company shall at all times reserve and keep available for issuance upon the exercise of the Warrants such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants in accordance with the terms hereof.  All shares of Common Stock issuable pursuant to the terms hereof, when issued upon exercise of this Warrant with payment therefor in accordance with the terms hereof, shall be duly and validly authorized and issued and fully paid and nonassessable, not subject to preemptive rights and shall be free and clear of all taxes, charges and liens.  The Company shall take all action which may be necessary so that the shares of Common Stock issuable upon exercise of the Warrants will be listed by the Exercisability Date on such principal securities exchanges, markets and automated quotation systems with the United States of America, if any, on which other shares of Common Stock are then listed; provided, that such Common Stock is not Restricted Common Stock and provided, further, that the Company shall not be required to register any Common Stock issuable upon exercise of the Warrants pursuant to the Securities Act.

 

	
7.

	
NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS

 

7.1           Notices of Corporate Actions.  In the event of:  (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or distribution (other than cash dividends or distributions paid from the Company’s retained earnings as shown on the Company’s books prepared in accordance with generally accepted accounting principals), (b) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger involving the Company and any other Person or any sale, transfer or other disposition of all or substantially all the assets of the Company to another Person or (c) any action taken by the Company which would require an adjustment pursuant to Section 4 hereof, (d) any tender offer or exchange offer for shares of Common Stock or (e) any dissolution, liquidation or winding up of the Company, the Company shall mail to each Holder of a Warrant in accordance with the provisions of Section 11.2 hereof a notice specifying (i) the date or expected date on which any such record is to be taken for the purpose of such dividend or distribution, and the amount and character of such dividend or distribution and (ii) the date or expected date on which any such reorganization, reclassification, recapitalization, consolidation, merger, sale, transfer or disposition or exchange offer, tender offer, dissolution, liquidation or winding up is to take place, the time, if any such time is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for the securities or Other Property deliverable upon such reorganization, reclassification, recapitalization, consolidation, merger, sale, transfer or disposition or exchange offer, tender offer, dissolution, liquidation or winding up and a description in reasonable detail of the transaction.  Such notice shall be mailed to the extent practicable under the circumstances as determined in the reasonable judgment of an officer of the Company at least ten (10) days prior to any record date for such event or the date therein specified, and shall describe the material terms of the matter in question.  In the event that the Company at any time sends any other notice to the holders of its Common Stock with respect to the events described in the first sentence of this Section 7.1, including any proxy or information or other statute it shall concurrently send a copy of such notice to each Holder of a Warrant.

 

  

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7.2           Closing of Transfer Books.  The Company shall not at any time, except upon dissolution, liquidation or winding up of the Company (and in such event, only after prior written notice in accordance with Section 7.1), close its stock transfer books or Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Warrant.

 

7.3           No Rights as Stockholders.  Except as provided herein, Holders shall have no rights as holders of Common Stock of the Company solely as a result of being the Beneficial Owner of a Warrant.  Holders shall have no right to vote, consent or otherwise participate with respect to matters submitted to a vote of the stockholders of the Company solely as a result of being the Beneficial Owner of a Warrant.

 

	
8.

	
TRANSFER

 

The Holder, by acceptance of this Warrant, agrees to be bound by the provisions of this Section 8.

 

8.1           Restrictions on Transfer.  This Warrant shall not be transferred or transferable prior to the Exercisability Date, except to an Affiliate of the Holder.  Thereafter, neither this Warrant nor any shares of Restricted Common Stock issued upon the exercise hereof shall be Transferred other than pursuant to an effective registration statement under the Securities Act or an exemption from the registration provisions thereof.  The Holder of this Warrant by its acceptance hereof, (i) acknowledges that the Company has no obligation or current intention to register the Transfer of any Warrants or Common Stock issuable upon the exercise thereof under Section 5 of the Securities Act and (ii) agrees not to offer, sell or otherwise transfer this Warrant other than (a) to the Company or a subsidiary of the Company, (b) pursuant to a registration statement that has been declared effective under the Securities Act or (c) pursuant to any other available exemption from the registration requirements of the Securities Act, subject to the Company’s right prior to any such offer, sale or transfer pursuant to clause (c) to require the delivery of an Opinion of Counsel to the effect that such Transfer is exempt from the registration requirements of the Securities Act, and such related certification and/or other information reasonably satisfactory to it.  In connection with any Transfer, the Holder will deliver to the Company such certificates and other information as the Company may reasonably require to confirm that the transfer complies with the foregoing restrictions.  Holders of the Warrants or the Restricted Common Stock, as the case may be, shall not be entitled to Transfer such Warrants or such Restricted Common Stock except in accordance with this Section 8.1.

 

  

12

  

 

8.2           Restrictive Legends.

 

(a)           Except as otherwise provided in this Section 8, each certificate for Warrant Stock initially issued upon the exercise of this Warrant, and each certificate for Warrant Stock issued to any subsequent transferee of any such certificate, in each case for so long as such Common Stock is Warrant Stock, shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW.  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OTHER THAN (A) TO THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (C) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND SUCH RELATED CERTIFICATION AND/OR OTHER INFORMATION REASONABLY SATISFACTORY TO IT.  IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

 

(b)           Except as otherwise provided in this Section 8, each Warrant shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

“NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW.  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, OTHER THAN (A) TO THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND SUCH RELATED CERTIFICATION AND/OR OTHER INFORMATION REASONABLY SATISFACTORY TO IT.  IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

 

  

13

  

 

8.3           Termination of Securities Law Restrictions.  Notwithstanding the foregoing provisions of Section 8, the restrictions imposed by Section 8.1 hereof upon the transferability of the Warrants and the Restricted Common Stock and the legend requirements of Section 8.2 hereof shall terminate as to any particular Warrant or shares of Restricted Common Stock when the Company shall have received from the holder thereof an Opinion of Counsel satisfactory to the Company to the effect that such legend is not required in order to ensure compliance with the Securities Act.  All Warrants and any Restricted Common Stock issued upon registration of transfer, division or combination of, or in substitution for, any Warrant or Warrants and any Restricted Common Stock entitled to bear such legend shall have a similar legend endorsed thereon.  Wherever the restrictions imposed by this Section 8.3 shall terminate as to any Warrants or share of Restricted Common Stock, as hereinabove provided, the holder thereof shall be entitled to receive from the Company, at the Company’s expense, a new certificate representing such Warrants or Common Stock not bearing the restrictive legend set forth in Section 8.2(a) hereof.

 

8.4           Nominees for Beneficial Owners.  In the event that any Warrant Stock is held by a nominee for the Beneficial Owner thereof, the Beneficial Owner thereof may, at its election, be treated as the Holder of such Warrant Stock for purposes of any request or other action by any Holder or Holders of Warrant Stock pursuant to this Warrant or any determination of any number or percentage of shares of Warrant Stock held by any Holder or Holders of Warrant Stock contemplated by this Agreement.  If the Beneficial Owner of any Warrant Stock so elects, the Company may require assurances reasonably satisfactory to it of such owner’s Beneficial Ownership of such Warrant Stock; provided, however, that in no event shall there be “double-counting” of Warrants or Warrant Stock.

 

8.5           Payment of Taxes.  The Company shall pay all documentary stamp taxes attributable to the initial issuance of Common Stock upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in any transfer in connection with the issue of any certificates for Warrants (or Common Stock issuable upon the exercise thereof) in a name other than that of the registered Holder of a Warrant surrendered upon the exercise of a Warrant, and the Company shall not be required to issue or deliver such certificates for Warrants unless and until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not due and owing.

 

  

14

  

 

	
9.

	
LOSS OR MUTILATION

 

Upon receipt by the Company from any Holder of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Warrant and an indemnity reasonably satisfactory to it and, in case of mutilation, upon surrender and cancellation hereof, the Company will execute and deliver in lieu hereof a new Warrant of like tenor to such Holder; provided, however, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

 

	
10.

	
OFFICE OF THE COMPANY

 

As long as any of the Warrants remain outstanding, the Company shall maintain an office or agency, which may be the principal executive offices of the Company (the “Designated Office”), where the Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant.  Such Designated Office shall initially be the office of the Company at 410 Park Avenue, 14th Floor, New York, NY 10022.  The Company may from time to time change the Designated Office to another office of the Company or its agent within the United States by notice given to all registered holders of Warrants at least ten (10) Business Days prior to the effective date of such change.

 

	
11.

	
MISCELLANEOUS

 

11.1           Nonwaiver.  No course of dealing or any delay or failure to exercise any right hereunder on the part of the Company or the Holder shall operate as a waiver of such right or otherwise prejudice the rights, powers or remedies of such Person.

 

11.2           Notice Generally.  Any notice, demand, request, consent, approval, declaration, delivery or communication hereunder to be made pursuant to the provisions of this Warrant shall be sufficiently given or made if in writing and either delivered in person with receipt acknowledged or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

(a)           if to any Holder of this Warrant or holder of Warrant Stock issued upon the exercise hereof, at its last known address appearing on the books of the Company maintained for such purpose;

 

(b)           if to the Company, at its Designated Office;

 

or at such other address as may be substituted by notice given as herein provided.  The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice.  Every notice, demand, request, consent, approval, declaration, delivery or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered, with receipt acknowledged, or three (3) Business Days after the same shall have been deposited in the United States mail, or one (1) Business Day after the same shall have been delivered to Federal Express or another overnight courier service.

 

  

15

  

 

11.3           Limitation of Liability.  No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of the Holder hereof, shall give rise to (i) any liability of such Holder to pay the Exercise Price for any Warrant Stock other than pursuant to an exercise of this Warrant or (ii) any liability as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

11.4           Remedies.  Each holder of Warrants and/or Warrant Stock, in addition to being entitled to exercise its rights granted by law, including recovery of damages, shall be entitled to specific performance of its rights provided under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees, in an action for specific performance, to waive the defense that a remedy at law would be adequate.

 

11.5           Successors and Assigns.  Subject to the provisions of Sections 3.1 and 8, this Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the permitted successors and assigns of the Holder hereof.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and, to the extent applicable, all holders of shares of Warrant Stock issued upon the exercise hereof (including permitted transferees), and shall be enforceable by any such holder.

 

11.6           Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

11.7           Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant.

 

11.8           Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

11.9           GOVERNING LAW; JURISDICTION.  IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, EXCEPT WITH RESPECT TO THE ISSUANCE OF COMMON STOCK UPON EXERCISE HEREOF, WHICH SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND.  THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK CITY SHALL HAVE, EXCEPT AS SET FORTH BELOW, EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS WARRANT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED THAT IT IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK CITY IN THE STATE OF NEW YORK.

 

  

16

  

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly authorized officer with effect from the 16th day of March, 2009.

 

	 	CAPITAL TRUST, INC.	 
	 	 	 	 
	 	
By: 

	/s/ Geoffrey G. Jervis	 
	 	 	Name: Geoffrey G. Jervis	 
	 	 	Title: Chief Financial Officer	 
	 	 	 	 

  

17

  

 

ANNEX A

 

SUBSCRIPTION FORM

 

[To be executed only upon an exercise of Warrant]

 

The undersigned registered owner of this Warrant irrevocably exercises this Warrant for the purchase of            shares of Common Stock or by surrender of                   Warrants pursuant to a Cashless Exercise in accordance with the terms of this Warrant and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to                                       whose address is                                                    and, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable hereunder be delivered to the undersigned or                                     whose address is                                                    .

 

	 	 	 
	 	(Name of Registered Owner)	 
	 	 	 
	 	 	 
	 	 	 
	 	(Signature of Registered Owner)	 
	 	 	 
	 	 	 
	 	 	 
	 	(Street Address) 	 
	 	 	 
	 	 	 
	 	 	 
	 	(City) 	(State) 	(Zip Code)	 

 

	
NOTICE:

	
The signature on this subscription must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatsoever.

 

 

  

A-1

  

 

ANNEX B

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the assignee named below all of the rights of the undersigned under this Warrant, with respect to the number of shares of Common Stock set forth below:

 

	
Name and Address of Assignee

	
Number of Shares of Common Stock

	  	  

 

and does hereby irrevocably constitute and appoint                                                               attorney-in-fact to register such transfer onto the books of the Company maintained for that purpose, with full power of substitution in the premises.

 

	Dated: 	 	 	Print Name:  	 	 
	 	 	 	 	 
	 	 	Signature: 	 	 
	 	 	 	 	 
	
                                           

	 	Witness: 	
                                                                    

	 
	  	 	
                                                                    

	 

 

	
NOTICE:

	
The signature on this assignment must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatsoever.

 

 

B-1BE Resources Inc.: Exhibit 10.23 - Filed by newsfilecorp.com

Exhibit 10.23

AMENDED AND RESTATED 
EMPLOYMENT AGREEMENT 

This Amended and Restated Employment Agreement (the
“Agreement”) is made effective as of January 1, 2011 (the “Effective Date”)
between BE Resources Inc., a Colorado corporation (the “Company”) and
David Q. Tognoni, an individual (“Employee”). 

R E C I T A L S 

WHEREAS, the Company and Employee entered into that
certain Employment Agreement dated December 1, 2007 (the “Original Employment
Agreement”) pursuant to which Employee was employed as the President and Chief
Executive Officer of the Company; and 

WHEREAS, the Original Employment Agreement was
subsequently amended by the first amendment dated effective as of September 1,
2009 and the second amendment dated effective as of July 1, 2010; and 

WHEREAS, the Original Employment Agreement was extended
to December 31, 2010 effective as of January 1, 2009; and 

WHEREAS, the Company and Employee wish to further amend
and restate the Original Employment Agreement as set forth herein.

NOW THEREFORE, in consideration of the mutual covenants
and promises of the parties, the Company and Employee covenant and agree as
follows: 

1.       Employment; Duties. During the Term of this
Agreement, as defined in Section 3.1, Employee will be employed by the Company
to serve as the Chief Executive Officer and President of the Company. Employee
shall report to the Board of Directors of the Company (the “Board”), and have
such general charge and control of the Company’s business and affairs and shall
have all powers and duties incident and customary to the offices of Chief
Executive Officer and President and such other responsibilities and authority as
the Board may assign from time to time. 

1.1     Policies and Procedures. Employee shall
perform all duties and exercise all authority in accordance with, and otherwise
comply with, all Company policies, procedures, practices and directions. 

1.2     Time and Efforts. Employee shall devote
sufficient time and reasonable best efforts to successfully perform his duties
and advance the Company’s interests, including but not limited to participating
in local civic engagements. During the Term (as herein defined in Section 3), it
is understood that Employee may render services to third parties which would not
materially conflict with Employee’s obligations hereunder, and for which
Employee may receive compensation. Should Employee be appointed or elected to
serve as a director, officer or member of any professional, charitable and civic
organizations, Employee agrees to inform the Board upon the Employee being appointed or elected to any such
director, officer, or membership position. Nothing in this Section 1.3 shall
prohibit Employee from personally owning and trading in stocks, bonds,
securities, real estate, commodities or other investment properties for
Employee’s own benefit, or the benefit of Employee’s family, which do not create
conflicts of interest with the Company.

1.3     Location. The parties agree that Employee
shall perform his duties primarily at the Company’s principal office located at
107 Hackney Circle, Elephant Butte, New Mexico or at other such location as
approved by the Board. Employee agrees that any relocation approved by the Board
will not be considered a modification of this Agreement and will not be subject
to Section 8.2. 

2.       Salary, Benefits and Other Compensation. 

2.1     Base Salary. As payment for the services to be
rendered by Employee as provided in Section 1 and subject to the terms and
conditions of Section 3, Company agrees to pay to Employee a “Base Salary,”
payable in equal monthly installments in accordance with the
Company’s regular payroll cycle. The Base Salary payable to Employee under this
Section will be $36,000 per annum. Employee will be entitled to periodic
performance reviews by the Board during the Term of this Agreement. The Board
may elect to increase the Base Salary by such amounts as the Board deems
appropriate. 

2.2     Bonus. During the Term of this Agreement, Employee
will be eligible to participate in all bonus and incentive plans established by
the Board in accordance with the terms of those plans including, without
limitation, all stock and equity incentive plans.

2.3     Withholding of Taxes. Employee understands that the
services to be rendered by Employee under this Agreement will cause Employee to
recognize taxable income, which is considered under the Internal Revenue Code of
1986, as amended, and applicable regulations thereunder (the “Code”), as
compensation income subject to the withholding of income tax (and Social
Security or other employment taxes). Employee hereby consents to the withholding
of such taxes as are required by law. 

2.4     Vacation. During the Term of this Agreement,
Employee will be entitled to four (4) weeks paid vacation time per year.
Employee agrees to use reasonable efforts in scheduling vacations so as to not
unreasonably interfere with the business of the Company. In the event the
Employee does not take all the vacation time to which he is entitled in any
year, the Employee shall not be entitled to carry over such vacation entitlement
to any subsequent year. In addition, the Employee shall be entitled to paid
holidays for federally-recognized holiday celebrated in the United States. 

2.5     Expenses. During the Term of the Agreement, the
Company shall pay Employee a flat fee allowance of $15,000 per month (the
“Office Allowance”) which is intended to cover the cost of office space used by
the Employee and all overhead costs associated therewith, including telephone,
fax, supplies, equipment rental, secretarial and other support. Employee shall
not be required to provide evidence of expenses concerning the Office Allowance
and the Office Allowance shall be paid by the Company to the Employee
regardless of the actual amount incurred by the Employee. Employee shall be
responsible for all costs of office space and all overhead costs associated
therewith to the extent such expenses exceed $15,000 in any given month.

2

In addition to the Office Allowance, the Company will promptly
reimburse Employee for Employee’s reasonable out-of-pocket expenses incurred in
connection with Company business provided that Employee submits evidence of such
expenses to the Company on a monthly basis in accordance with Company policy.
Such reasonable out-of-pocket expenses shall be exclusive of expenses concerning
the office space used by the Employee and all overhead costs associated
therewith as such expenses are paid by the Company pursuant to the Office
Allowance discussed in this Section 2.5.

3.       Term of Employment.

3.1     Term. The term of employment of
Employee by the Company will commence on the Effective Date and will extend
through the period ending on December 31, 2011, unless earlier terminated
pursuant to this Section 3 (“Initial Term”). Upon the expiration of the Initial
Term, the Term of Employee’s employment may be renewed with the consent of both
parties. During any Renewal Term of employment, the terms, conditions and
provisions set forth in this Agreement shall remain in effect unless modified in
accordance with this Agreement. 

3.2     Termination Without Cause. The Company may
terminate Employee’s employment for any reason at any time (“Termination without
Cause”) upon giving him thirty (30) days notice. The Company’s non-renewal of
this Agreement under Section 3.1 shall be considered a Termination Without
Cause. 

3.3     Termination With Cause. The Company may terminate
Employee’s employment immediately without notice at any time (“Termination with
Cause”) for the reasons set forth below:

	 	(i) 	
      Employee’s dishonesty that relates to the discharge of
      his duties and responsibilities, fraud, or breach of Employee’s fiduciary
      duty; 

	 	 	
       

	 	(ii) 	
      Employee’s material breach of this Agreement, including
      without limitation action that constitutes a breach of Section 5 of this
      Agreement, or Employee’s failure to substantially comply with the
      directions of the Board, which is not cured within thirty (30) days after
      receipt of a written notice thereof given by the Company; 

	 	 	
       

	 	(iii) 	
      Employee’s repeated or gross negligence or intentional
      misconduct with respect to the performance of Employee’s duties under this
      Agreement; or 

	 	 	
       

	 	(iv) 	
      Employee being convicted of, or Employee’s entering of a
      guilty plea or plea of no contest to, a felony or any other crime to which
      imprisonment is a possible punishment. 

3

3.4     Resignation for Good Reason. Employee may
resign his employment (“Resignation for Good Reason”) for any of the following
reasons by providing thirty (30) days written notice to the Company:

	 	(i) 	
      A material reduction, without the consent of Employee, by
      the Company in Employee’s Base Salary or overall benefit package then in
      effect; 

	 	 	
       

	 	(ii) 	
      A material breach of the terms of this Agreement by the
      Company; 

	 	 	
       

	 	(iii) 	
      A material diminution, without Employee’s consent, of
      Employee’s job title, reporting relationship, job duties, responsibilities
      or requirements that are inconsistent with the position or positions
      listed in Section 1; or 

	 	 	
       

	 	(iv) 	
      Failure by the Company to obtain a written agreement from
      any successor of the Company to assume and perform this Agreement.
  

Paragraph 3.4 shall not apply if the Company remedies the
action within thirty (30) days of receipt of notice thereof given by
Employee. 

3.5     Resignation. Employee may resign his employment
under this Agreement for any reason (“Resignation”) by providing written notice
not less than thirty (30) days in advance of such resignation to the Company.
Employee’s non-renewal of this Agreement under Section 3.1 shall be considered a
Resignation. 

3.6     Survivability. Sections 4 (Compensation and
Benefits Upon Termination), 5 (Confidential Information, Company Property and
Competitive Business Activities), 6 (Intellectual Property Ownership), 7
(Release), and 8 (Miscellaneous) shall survive the termination or resignation of
Employee’s employment and/or the termination of this Agreement regardless of the
reasons for such termination. 

4.       Compensation and Benefits Upon Termination. 

4.1     No Termination Benefits. If
Employee’s employment or this Agreement is terminated for any reason other than
Termination without Cause by the Company pursuant to Section 3.2 or Resignation
with Good Reason by Employee pursuant to Section 3.4, the Company’s obligation
to compensate Employee ceases on the effective date of such termination
(“Termination Date”), except as to amounts due at such time for accrued Base
Salary, earned incentive bonus (if any), or other accrued or vested benefits,
including, without limitation, any accrued but unused vacation time payable
under Company policy. Base Salary and any accrued but unused vacation shall be
paid within thirty (30) days of the Termination Date. All other payments shall
be made as quickly as possible in accordance with the terms of the applicable
plans. 

4.2     Post-Termination Payments. If Employee’s
employment under this Agreement is terminated under Section 3.2 (Termination
without Cause) or Section 3.4 (Resignation for Good Reason), then the Company’s
sole obligation shall be to pay Employee: (i) amounts due at the Termination Date for accrued Base Salary, or vested benefits,
including, without limitation, any accrued but unused vacation time payable
under Company policy and (ii) an amount equal to twelve times Employee’s then
current monthly Base Salary (less applicable withholdings) (“Post-Termination
Payments”); provided, however, that the Company’s obligation to provide the
payments under this Section 4.2 is conditioned upon Employee’s execution of an
enforceable release of all claims related to his employment (“Release”) and his
compliance with Sections 5 and 6 of this Agreement. Post-Termination Payments
shall be payable in equal monthly installments, with payment(s) beginning after
the effective date of the Release. If Employee chooses not to execute such a
Release or fails to comply with Sections 5 and 6, then the Company’s obligation
to compensate him ceases on the Termination Date except as to amounts due at
that time.

4

4.3     Integration With Other Benefits. Employee is
not entitled to receive any compensation or benefits upon his termination except
as: (i) set forth in this Agreement; (ii) otherwise required by law; or (iii)
otherwise required by any employee benefit plan in which Employee participates
with the following exception. The terms and conditions afforded Employee under
this Agreement are in lieu of any severance benefits to which Employee otherwise
might be entitled pursuant to a severance plan, policy or practice. Nothing in
this Agreement, however, is intended to waive or supplant any death, disability,
retirement, 401(k) pension benefits, or group health continuation rights, if
any, to which he may be entitled under employee benefit plans in which Employee
participates. 

5.       Confidential
Information, Company Property and Noncompetition. Employee acknowledges
that: (i) by virtue of Employee’s senior management and key leadership position
with the Company, Employee will have access to Trade Secrets and Confidential
Information, as defined below; (ii) the Company is a mineral exploration company
engaged in the exploration and evaluation of beryllium mineral exploration
properties in the State of New Mexico (the “Company Business”); and (iii) the
provisions set forth in this Confidential Information, Company Property and
Competitive Business Activities Section are reasonably necessary to protect the
Company’s legitimate business interests, are reasonable as to time, territory
and scope of activities which are restricted, do not interfere with public
policy or public interest and are described with sufficient accuracy and
definiteness to enable Employee to understand the scope of the restrictions
imposed upon him.

5.1     Trade Secrets and Confidential Information. Employee
acknowledges that: (i) the Company will disclose to Employee certain Trade
Secrets and Confidential Information; (ii) Trade Secrets and Confidential
Information are the sole and exclusive property of the Company (or a third party
providing such information to the Company) and the Company or such third party
owns all worldwide rights therein under patent, copyright, trade secret,
confidential information, or other property right; and (iii) the disclosure of
Trade Secrets and Confidential Information to Employee does not confer upon
Employee any license, interest or rights of any kind in or to the Trade Secrets
or Confidential Information. 

5.1.1     Employee may use the Trade Secrets and
Confidential Information only in accordance with applicable Company policies and
procedures and solely for the Company’s benefit while Employee is employed or
otherwise retained by the Company. Except as authorized in the performance of
services for the Company, Employee will hold in confidence and not directly or indirectly, in any form, by any means, or for any purpose,
disclose, reproduce, distribute, transmit, reverse engineer, decompile,
disassemble, or transfer Trade Secrets or Confidential Information or any
portion thereof. Upon the Company’s request, Employee shall return Trade Secrets
and Confidential Information and all related materials. 

5

5.1.2     If Employee is required to disclose Trade Secrets
or Confidential Information pursuant to a court order or other government
process or such disclosure is necessary to comply with applicable law or defend
against claims, Employee shall: (i) notify the Company promptly before any such
disclosure is made; (ii) at the Company’s request and expense, take all
reasonably necessary steps to defend against such disclosure, including
defending against the enforcement of the court order, other government process
or claims; and (iii) permit the Company to participate with counsel of its
choice in any proceeding relating to any such court order, other government
process or claims. 

5.1.3     Employee’s obligations with regard to Trade
Secrets shall remain in effect for as long as such information shall remain a
trade secret under applicable law.

5.1.4     Employee’s obligations with regard to Confidential
Information shall remain in effect while he is employed or otherwise retained by
the Company and for five (5) years thereafter. 

5.1.5     As used in this Agreement, “Trade Secrets” means
information of the Company and its licensors, suppliers, customers, or
prospective licensors or customers, including, but not limited to, data,
formulas, patterns, compilations, programs, devices, methods, techniques,
processes, financial data, financial plans, product plans, or lists of actual or
potential customers or suppliers, which: (i) derives independent actual or
potential commercial value, from not being generally known to or readily
ascertainable through independent development or reverse engineering by persons
or entities who can obtain economic value from its disclosure or use; and (ii)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy. 

5.1.6     As used in this Agreement, “Confidential
Information” means information other than Trade Secrets, that is of value to its
owner and is treated as confidential, including, but not limited to, future
business plans, licensing strategies, advertising campaigns, information
regarding executives and employees, and the terms and conditions of this
Agreement; provided, however, Confidential Information shall not include
information which is in the public domain or becomes public knowledge through no
fault of Employee. 

5.2     Company Property. Upon the termination of his
employment under this Agreement, Employee shall: (i) deliver to the Company all
records, memoranda, data, documents and other property of any description which
refer or relate in any way to Trade Secrets or Confidential Information,
including all copies thereof, which are in Employee’s possession, custody or
control; (ii) deliver to the Company all Company property (including, but not
limited to, keys, credit cards, client files, contracts, proposals, work in
process, manuals, forms, computer stored work in process and other computer
data, research materials, other items of business information concerning any
Company client, or Company business or business methods, including all copies
thereof) which is in Employee’s possession, custody or control; (iii) take
reasonable steps to bring all such records, files and other materials up
to date before returning them; and (iv) fully cooperate with the Company in
winding up Employee’s work and transferring that work to other individuals
designated by the Company; provided, however, that the Company shall provide
Employee with reasonable compensation for Employee’s time in providing
assistance under Section 5.2 (iii) or (iv) after Employee’s Termination Date, if
Employee is not otherwise receiving Post-Termination Payments. 

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5.3     Competitive Business Activities.

5.3.1     Noncompetition. Employee agrees that for a
period of time (the “Noncompetition Period”) commencing on the Effective Date of
this Agreement and ending on the date occurring one (1) year after Employee’s
Termination Date (irrespective of the circumstances of such termination),
Employee will not engage in the following activities within the Protected Area
(as defined in Section 5.3.4): 

(a) on Employee’s own or another’s behalf, whether as an
officer, director, stockholder, member, partner, associate, owner, employee,
agent, consultant, broker, intermediary, or otherwise, directly or indirectly:

(i) compete with the Company in the Company’s Business;

(ii) solicit or do business which is the same, substantially
similar to or otherwise in competition with the Company’s Business, from or with
persons or entities: (a) who are customers of the Company; (b) who Employee or
someone for whom he was responsible solicited, negotiated, contracted, serviced
or had contact with on the Company’s behalf; (c) who were customers of the
Company at any time during the last two (2) years of Employee’s employment with
the Company; or (d) to whom the Company had made proposals to do business at any
time during the last two (2) years of Employee’s employment with the Company; or

(b) be employed (or otherwise engaged) in (i) a management
capacity, (ii) other capacity providing the same or substantially similar
services which Employee provided to the Company, or (iii) any capacity connected
with competitive business activities, by any person or entity that engages in
the same, similar or otherwise competitive business as the Company’s
Business;

(c) directly or indirectly make any negative or disparaging
oral or written statements about the company or any of its officers, directors
and employees, or otherwise engage in any conduct that could reasonably be
expected to adversely affect the reputation or business of the Company or any of
its officers, directors and employees.

5.3.2     Nonsolicitation. Employee agrees that for a
period of time (the “Nonsolicitation Period”) commencing on the Effective Date
of this Agreement and ending on the date occurring one (1) year after Employee’s
Termination Date (irrespective of the circumstances of such termination),
Employee will not, within the Protected Area, offer employment to or otherwise
solicit for employment any employee or other person who had been employed by the
Company during the last year of Employee’s employment with the Company. 

7

5.3.3     Notwithstanding the foregoing, Employee’s
ownership, directly or indirectly, of not more than one percent of the issued
and outstanding stock of a corporation the shares of which are regularly traded
on a national securities exchange or in the over-the-counter market shall not
violate Section 5.3.1. 

5.3.4     Protected Area. Employee acknowledges that
the Company is currently performing mineral exploration activities in the state
of New Mexico and that it is reasonable to limit Employee’s activities during
the Noncompetition Period and the Nonsolicitation Period to the state of New
Mexico. Employee also acknowledges that due to the nature of the Company’s
Business, any geographic limitations on the scope of his noncompetition and
nonsolicitation obligations under this Agreement that would be narrower in scope
than the entire state of New Mexico would not adequately protect the
Company.

5.3.5     Employee acknowledges that this Section 5.3 is
reasonable in terms of its scope and duration, and necessary for the Company to
protect its investments and legitimate interests. 

5.4     Remedies. Employee acknowledges that Employee’s
failure to abide by the Confidentiality Information, Company Property and
Noncompetition provisions of this Agreement would cause irreparable harm to the
Company for which legal remedies would be inadequate. Therefore, in addition to
any legal or other relief to which the Company may be entitled by virtue of
Employee ‘s failure to abide by this Section 5: (i) the Company will be released
of its obligations under this Agreement to make any Post Termination Payments,
including but not limited to those otherwise available pursuant to Section
4.2(ii); (ii) the Company may seek legal and equitable relief, including but not
limited to preliminary and permanent injunctive relief, for Employee’s actual or
threatened failure to abide by this Section 5; (iii) Employee will return all
Post-Termination Payments received pursuant to Section 4.2(ii); (iv) Employee
will indemnify the Company for all expenses including reasonable attorneys’ fees
in seeking to enforce these provisions; and (v) if, as a result of Employee’s
failure to abide by the this Section 5, any commission or fee becomes payable to
Employee or to any person, corporation or other entity with which Employee has
become employed or otherwise associated, Employee shall pay the Company or cause
the person, corporation or other entity with whom he has become employed or
otherwise associated to pay the Company an amount equal to such commission or
fee. In the event that the Company exercises its right to discontinue
Post-Termination Payments under this provision and/or Employee returns all Post
Termination-Payments received pursuant to this Agreement, Employee shall remain
obligated to abide by Section 5 of this Agreement. 

5.5     Tolling. The period during which Employee must
refrain from the activities set forth in Sections 5.2 and 5.3 shall be tolled
during any period in which he fails to abide by these provisions. 

5.6     Other Agreements. Nothing in this Agreement shall
terminate, revoke or diminish Employee’s obligations or the Company’s rights and
remedies under law or any agreements relating to trade secrets, confidential
information, non-competition and intellectual property which Employee has executed in the past or may execute in the future
or contemporaneously with this Agreement. 

8

6.       Intellectual Property Ownership. 

6.1     Works of Authorship. Employee agrees that all works
of authorship, including, but not limited to, computer programs, code,
databases, icons, design plans, flow charts, designs, notes, drawings, marketing
plans, product plans, writings and all other works subject to copyright
protection in any jurisdiction, created by Employee (solely or in concert with
others) that:

	 	(i) 	
      relate specifically to his employment with the Company or
      the business activities of the Company; 

	 	 	
       

	 	(ii) 	
      result specifically from any work that he may perform for
      the Company; or 

	 	 	
       

	 	(iii) 	
      result from the use of the time, materials, information,
      equipment, or facilities of the Company, even if created during other than
      working hours with the Company (all the foregoing in this Section 6.1,
      collectively, “Works of Authorship, 

shall, to the extent of Employee’s interest therein, be
WORKS MADE FOR HIRE, and all of Employee’s right, title, and interest in
and to all such Works of Authorship, including, but not limited to, all
Intellectual Property Rights, shall vest and reside in, and be the exclusive
property of, the Company, as applicable. Provided, however, that the foregoing
shall not apply to any ideas of Employee having general application outside of
the Company’s Business and that do not relate specifically to the Company
Business nor shall it apply to purely personal use of the Company’s lap top for
activities wholly unrelated to Company business. 

6.1.1     To the extent that,
by operation of law or otherwise, any right, title, or interest in or to the
Works of Authorship, including, but not limited to, any Intellectual Property
Rights, does not vest exclusively in the Company, as applicable, Employee hereby
irrevocably and unconditionally assigns to Company, as applicable, and forever
waives, all such right, title and interest. At all times during, and after
termination of, Employee’s employment with the Company, Employee will assist in
the preparation of and sign all documents that the Company reasonably considers
necessary to vest in the Company all right, title, and interest in and to the
Works of Authorship, including, but not limited to, all Intellectual Property
Rights. Further, at all times during, and after termination of, Employee’s
employment with the Company, Employee will use reasonable efforts to assist the
Company in obtaining, maintaining and/or enforcing the Company’s right, title,
and interest in and to such Works of Authorship, and such assistance shall
include, but is not limited to, activities involving: 

9

	 	 	 	(i) 	
      preparation and prosecution of copyright registration applications for
      Works of Authorship, both domestic and foreign; 
	 	 	 	 	
       
	 	 	 	(ii) 	
      enforcement of any copyrights and registrations
      associated therewith arising out of the Works of Authorship (collectively,
      “Copyrights”), including, but not limited to, assistance as reasonably
      deemed necessary by the Company in any legal actions involving
      infringement or misappropriation of the Copyrights; and 

	 	 	 	 	
       

	 	 	 	(iii) 	
      preparation of descriptions, sketches, drawings and other
      documents relating to Works of Authorship. 

Any assistance that Employee provides pursuant to this Section
6.1 after termination of his employment with the Company shall be rendered at
the Company’s expense, including a reasonable payment for the time involved.

6.2     Prior Works of Authorship. Employee has attached
hereto, as Exhibit A, a list describing with particularity all discoveries,
original works of authorship, and trade secrets, and all developments and
improvements thereof, conceived, reduced to practice, created or otherwise made
or owned by Employee, whether alone or jointly with others, prior to the
commencement of his Employee’s employment with Company and that relate in any
way to the Company’s current or proposed business or products or any research or
development in connection therewith and are not assigned to Company hereunder
(collectively, along with any portion or component thereof, “Prior Works of
Authorship”). If no such list is attached hereto, Employee hereby represents and
warrants that there are no such Prior Works of Authorship. If, in the course of
Employee’s employment with Company, he incorporates into a Company publication,
product, process, machine, or service any Prior Works of Authorship owned by
Employee or in which Employee has any right, title, or interest, Employee hereby
grants Company a non-exclusive, royalty-free, fully-paid-up, irrevocable,
perpetual, worldwide license (with the right to sublicense) to make, copy,
modify, prepare derivative works of, use, sell, offer to sell, import, provide,
and distribute, whether by Company or any third party on Company’s behalf, such
Prior Work of Authorship or Invention as part of or in connection with such
publication, product, process, machine or service.

7.       Release. Employee acknowledges that: (i) as a part of
Employee’s services, Employee may provide his image, likeness, voice, or other
characteristics; and (ii) the Company may use Employee’s image, likeness, voice,
or other characteristics in its products and services. Employee consents to the
use of such characteristics and expressly releases the Company and its agents,
executives, licensees and assigns from and against any and all claims which
Employee has or may have for invasion of privacy, right of privacy, defamation,
copyright infringement, or any other causes of action arising out of the use,
adaptation, reproduction, distribution, broadcast, or exhibition of such
characteristics. 

8.       Miscellaneous. 

8.1     Waiver; Assignment. The waiver of any breach
of any provision of this Agreement will not operate or be construed as a waiver
of any subsequent breach of the same or other provision of this Agreement.
Employee may not assign Employee’s rights and obligations under this Agreement
without the prior written consent of the Company, which consent may be withheld for any reason or for no reason. The Company may not
assign its rights and obligations under this Agreement without the prior written
consent of Employee, which consent may not be unreasonably withheld, except that
the Company may assign this Agreement, without Employee’s consent, to a
successor in interest upon a transaction of sale of all, or substantially all,
of the assets or of the stock of the Company. 

10

8.2     Entire Agreement; Modification. This Agreement
represents the entire understanding among the parties with respect to the
subject matter of this Agreement, and this Agreement supersedes any and all
prior understandings, agreements, plans, and negotiations, whether written or
oral, with respect to the subject matter hereof, including without limitation,
any understandings, agreements, or obligations respecting any past or future
compensation, bonuses, reimbursements, or other payments to Employee from the
Company. All modifications to the Agreement must be in writing and signed by the
party against whom enforcement of such modification is sought. 

8.3     Notice. All notices and other communications under
this Agreement must be in writing and must be given by personal delivery,
telecopier or telegram, or first class mail, certified or registered with return
receipt requested, and will be deemed to have been duly given upon receipt if
personally delivered, three (3) days after mailing, if mailed, or 24 hours after
transmission, if delivered by telecopier or telegram, to the Company at the
Company’s principal office address as registered with the Colorado Secretary of
State with a copy to the registered agent as registered with the Colorado
Secretary of State and a copy to a director other than David Tognoni at the
address for such director as maintained in the corporate records and if to the
Employee as follows: 

David Q. Tognoni 

107 Hackney Circle 

Elephant Butte, NM 87935

Any party may change such party’s address for notices by notice
duly given pursuant to this Section. 

8.4     No Conflict. Employee represents and warrants that
Employee is not subject to any agreement, order, judgment or decree of any kind
that would prevent Employee from entering into this Agreement or performing
fully Employee’s obligations hereunder. 

8.5     Headings. The Section headings of this Agreement are
intended for convenience only and may not by themselves determine the
construction or interpretation of this Agreement. 

8.6     Governing Law and Forum. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Colorado. Except for actions seeking equitable relief in the form of an
injunction, any disputes arising from the interpretation or enforcement of this
Agreement shall be submitted to binding arbitration in the City and County of
Denver, State of Colorado pursuant to the rules of the Colorado Uniform
Arbitration Act. Not less than 30 days before any such arbitration may be
commenced, the party desiring arbitration shall give notice to the other party
and the parties shall endeavor to mediate the dispute with an impartial
mediator. If the mediation is not successful within that 30 day period, a single
arbitrator shall be mutually selected by the Company and Employee, provided that
the arbitrator shall be an attorney licensed to practice law in the State of
Colorado for a period not less than 15 years. In the event that the Company and
Employee cannot agree on the choice of an arbitrator, one shall be appointed by
the District Court in the City and County of Denver. The arbitrator shall base
his or her decision on applicable law and judicial precedent and judgment on the
award may be entered in a court of competent jurisdiction for enforcement.

11

Any suits of an equitable nature relating to, arising out of or
in connection with this Agreement shall be submitted to the in personam
jurisdiction of the courts of the State of Colorado and venue for all such
suits, proceedings and other actions shall be in the City and County of Denver,
Colorado. The Employee hereby waives any claim against or objection to in
personam jurisdiction and venue in the courts of the City and County of
Denver, Colorado.

8.7     Successors and Assigns. This Agreement will be
binding on, and inure to the benefit of, the executors, administrators, heirs,
successors, and assigns of the parties; provided, however, that except as
expressly provided in this Agreement, this Agreement may not be assigned either
by the Company or by Employee. 

8.8      Counterparts. This Agreement may be executed in one
or more counterparts, all of which taken together will constitute one and the
same Agreement. 

8.9       Withholdings. All sums payable to Employee under
this Agreement will be reduced by all federal, state, local and other
withholdings and similar taxes and payments required by applicable law. 

8.10     Severability. In the event that any of the
provisions of this Agreement shall be held to be invalid or unenforceable, the
remaining provisions shall nevertheless continue to be valid and enforceable as
though the invalid or unenforceable parts had not been included therein. Without
limiting the generality of the foregoing, in the event that any provision of
Section 5 relating to time period, scope of activities restricted and/or
geographic areas of restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time period, scope or areas(s) such court
deems enforceable, said time period, scope and/or area(s) of restriction shall
be deemed to become, and thereafter be, the maximum time period and/or area for
which such are enforceable. 

8.11     Opportunity to Consult Counsel. The parties hereto
represent and agree that prior to executing this Agreement, each has had the
opportunity to review this Agreement to consider its terms and consult with
independent counsel. 

8.12     Section 409A Savings Clause. To the extent any of
the payments or benefits required under this Agreement are, or in the opinion of
counsel to the Company or Employee, could be interpreted in the future to
create, a nonqualified deferred compensation plan that does not meet the
requirements of Section 409A(a)(2), (3) and (4) of the Internal Revenue Code
(“Code”) of 1986, as amended, and all regulations, guidance, or other
interpretative authority thereunder (the “Section 409A Requirements”), the
Company and Employee hereby agree to execute any and all amendments to this Agreement or otherwise
reform this Agreement as deemed necessary by either of such counsel, and
prepared by counsel to the Company, to either cause such payments or benefits
not to be a nonqualified deferred compensation plan or to meet the Section 409A
Requirements. In amending or reforming this Agreement for Code Section 409A
purposes, the Company shall maintain, to the maximum extent practicable, the
original intent and economic benefit of this Agreement without subjecting the
Employee to additional tax or interest; provided further, however, the Company
shall not be obligated to pay any additional material amount to Employee as a
result of such amendment.

12

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

BE RESOURCES INC., 
a Colorado corporation 

By: /s/ Ed Godin                                                   

Name: Ed Godin 
Title: Director 
Date: February 25, 2011

EMPLOYEE

By: /s/David Q. Tognoni                                       

       David Q. Tognoni 
Date: February 25,
2011

13

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