DIRECTORS AGREEMENT

 

This Director’s Agreement (this “Agreement”) is made and entered into as of the 27th day of April, 2011, (the “Effective Date”), by and between James J. Graham (hereinafter referred to as “Director”) and Texas Rare Earth Resources Corp. (“Company”).

 

WITNESSETH:

 

WHEREAS, the Board of Directors (the “Board”) of the Company wish to elect Director to serve on the Board of the Company, and Director has agreed to serve at the pleasure of the Board and on the terms and conditions below;

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1. Appointment as Director

 

Company shall appoint Director to the Board of the Company, and, upon such appointment, Director agrees that Director will devote the amount of time, skill, and efforts during the term of this Agreement to the affairs of the Company as may be reasonably requested and required of Director and in accordance with the duties and obligations imposed upon directors of corporations by applicable law.

 

2. Compensation

 

As compensation for serving as a member of the Board of the Company, Company agrees upon the execution and delivery of this Agreement to grant to Director a five-year option to purchase 60,000 shares of restricted common stock of the Company, at an exercise price of $4.00 per share.  Upon each anniversary of this Agreement, the board of directors will consider additional equity awards to be issued to Director.  Company will reimburse Director for all reasonable costs associated with attending meetings and otherwise fulfilling his services hereunder.

3. Confidential and Proprietary Information; Documents

 

3.1           Director recognizes and acknowledges that Director will have access to certain information of the Company that is confidential and proprietary and constitutes valuable and unique property of the Company. Director agrees that Director will not at any time, either during or subsequent to the term of this Agreement, disclose to others, use, copy or permit to be copied, except in pursuance of Director’s duties on behalf of the Company, its successors, assigns or nominees, or as required by the order of any tribunal having jurisdiction or by mandatory provisions of applicable law, any confidential information or know-how of the Company without the prior written consent of the Board of the Company. Director further agrees to maintain in confidence any confidential information of third parties received as a result of Director’s relationship with the Company.

3.2           Director further agrees to deliver to the Company promptly after his resignation, removal or failure to be nominated or elected as a member of the Board, all materials correspondence, memoranda, notes, records, plans, or other documents and all copies thereof (all of which are hereafter referred to as the “Documents”), made, composed or received by Director, solely or jointly with others, and which are in Director’s possession, custody, or control at such date and which are related in any manner to the past, present, or anticipated business of the Company.

3.3           In the event of a breach or threatened breach of any of the provisions of Section 3, or any breach by Director of his fiduciary obligation to the Company and its shareholders, Company shall be entitled to an injunction ordering the return of such Documents and any and all copies thereof and restraining Director from using or disclosing, for Director’s benefit or the benefit of others, in whole or in part, any confidential information.

4. Conflicts of Interest

 

4.1           In keeping with Director’s fiduciary duties to the Company, Director agrees that Director shall not, directly or indirectly, become involved in any conflict of interest, or upon discovery thereof, allow such a conflict to continue.  Moreover, Director agrees that Director shall promptly disclose to the Board of the Company any facts which might involve any reasonable possibility of a conflict of interest as the Company is currently and in the future configured and practicing business.

4.2           It is agreed that any direct or indirect interest in, connection with, or benefit from any outside activities, particularly commercial activities, which interest might in any way adversely affect the Company or any of its subsidiaries or affiliates, involves a possible conflict of interest. Circumstances in which a conflict of interest on the part of Director would or might arise, and which should be reported immediately by Director to an officer of the Company, include, without limitation, the following: (a) ownership of a material interest in, acting in any capacity for, or accepting directly or indirectly any payments, services or loans from a supplier, contractor, subcontractor, customer or other entity with which the Company does business; (b) misuse of information or facilities to which Director has access in a manner which will be detrimental to the Company’s interest; (c) disclosure or other misuse of information of any kind obtained through the Director’s connection with the Company; (d) acquiring or trading in, directly or indirectly, other properties or interests adjacent to the properties and by the Company; (e) the appropriation to the Director or the diversion to others, directly or indirectly, of any opportunity in which it is known or could reasonably be anticipated that the Company would be interested unless the Company is precluded from or chooses not to pursue such opportunity; and (f) the ownership, directly or indirectly, of a material interest in an enterprise in direct competition with the Company or acting as a director, officer, partner, consultant, Director or agent of any enterprise which is in direct competition with the Company.

5. Remedies

 

Director and the Company agree that, because damages at law for any breach or nonperformance of this Agreement by Director, while recoverable, are and will be inadequate, this Agreement may be enforced in equity by specific performance, injunction, accounting or otherwise.

6. Miscellaneous

 

6.1           This Agreement is made and entered into as of the Effective Date and the rights and obligations of the parties hereto shall be binding upon the heirs and legal representatives of the Director and the successors and assigns of the Company.  This Agreement may be assigned by the Company (including assignment by operation of law to any successor to the business of the Company by merger, consolidation or other business combination) without the consent of Director but is personal to the Director and no rights, duties, and obligations of Director hereunder may be assigned without the consent of the Company or its assigns, which may be granted or withheld in its sole discretion.

6.2           No waiver or non-action with respect to any breach by the other party of any provision of this Agreement, nor the waiver or non-action with respect to any breach of the provisions of similar agreements with other Directors shall be construed to be a waiver of any succeeding breach of such provision, or as a waiver of the provision itself.

6.3            Should any portions hereof be held to be invalid or wholly or partially unenforceable, such holding shall not invalidate or void the remainder of this Agreement.  The portions held to be invalid or unenforceable shall be revised and reduced in scope so as to be valid and enforceable, or, if such is not possible, then such portions shall be deemed to  have been wholly excluded with the same force and effect as it if had never been included herein.

6.4           Director’s obligations with regards Section 3 of this Agreement to the Company shall survive Director’s resignation, removal or failure to be nominated or elected as a member of the Board of the Company.

6.5           This Agreement supersedes, replaces and merges any and all prior and contemporaneous understandings, representations, agreements and discussions relating to the same or similar subject matter as that of this Agreement between Director and the Company and constitutes the sole and entire agreement between the Director and the Company with respect to the subject matter of this Agreement.

6.6           The laws of the State of Texas, excluding any conflicts of law rule or principle that might otherwise refer to the substantive law of another jurisdiction, will govern the interpretation, validity and effect of this Agreement without regard to the place of execution or the place for performance thereof, and the Company and Director agree that the state and federal courts in Harris county, Texas, shall have personal jurisdiction and venue over the Company and Director to hear all disputes arising under this Agreement.  This Agreement is to be at least partially performed in Harris County, Texas.

6.7           All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be deemed to have given when mailed by registered mail or certified mail, return receipt requested, as follows:

If to the Company, to:

Mr. Dan Gorski

Texas Rare Earth Resources Corp.

3 Riverway, Suite 1800

Houston, TX  77056

If to Director, to:

James J. Graham

5489 East Long Place

Centennial, CO  80122-3807

or to such other addresses as either party may designate by notice to the other party hereto in the manner specified in this section.

6.8           This Agreement may not be changed or terminated orally, and no change, termination or waiver of this Agreement or of any of the provisions herein contained shall be binding unless made in writing and signed by both parties, and in the case of the Company, by an authorized officer of the Company.  Any change or changes, from time to time, in Director’s compensation shall not be deemed to be, a change, termination or waiver of this Agreement or of any of the provisions herein contained.

 

IN WITNESS WHEREOF, the undersigned have hereby caused this Agreement to be effective as of the date first written above.

Texas Rare Earth Resources Corp.

By: /s/ Dan Gorski	/s/ James J. Graham
Dan Gorski, CEO	James J. Graham