REGISTRATION RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT
(this
“Agreement”),
dated
as of May 5, 2006, by and between U.S.
ENERGY CORP.,
a
Wyoming corporation (the “Company”),
and
CORNELL
CAPITAL PARTNERS, LP,
a
Delaware limited partnership (the “Investor”).
WHEREAS:
A. In
connection with the Standby Equity Distribution Agreement by and between
the
parties hereto of even date herewith (the “Standby
Equity Distribution Agreement”),
the
Company has agreed, upon the terms and subject to the conditions of the Standby
Equity Distribution Agreement, to issue and sell to the Investor that number
of
shares of the Company’s common stock, par value $0.01 per share (the
“Common
Stock”),
which
can be purchased pursuant to the terms of the Standby Equity Distribution
Agreement for an aggregate purchase price of up to Fifty Million
Dollars ($50,000,000). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Standby Equity Distribution
Agreement.
B. To
induce
the Investor to execute and deliver the Standby Equity Distribution Agreement,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder,
or
any similar successor statute (collectively, the “Securities
Act”),
and
applicable state securities laws.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Investor hereby agree as
follows:
1. DEFINITIONS.
As
used
in this Agreement, the following terms shall have the following
meanings:
a. “Person”
means
a
corporation, a limited liability company, an association, a partnership,
an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
b. “Register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the Securities Act and pursuant
to Rule 415 under the Securities Act or any successor rule providing for
offering securities on a continuous or delayed basis (“Rule
415”),
and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the United States Securities and Exchange Commission (the “SEC”).
c. “Registrable
Securities”
means
the Investor’s Shares, as defined in the Standby Equity Distribution Agreement,
the Warrant Shares, as defined in the Standby Equity Distribution Agreement,
the
shares of Common Stock issuable to Investors pursuant to the Standby Equity
Distribution Agreement, and
the
Placement Agent’s Shares issued under the Placement Agreement. The Registration
Statement shall cover the Investor’s Shares, plus three times (i)
the
number of shares issuable to Investors under the Standby Equity Distribution
Agreement (at $7.15 per share), and (ii) the number of Warrant Shares.
Registrable Securities also shall include three (3) times the number of shares
of Common Stock issuable on exercise of the Milestone Warrants (if such warrants
are issued under the Standby Equity Distribution Agreement), at the Exercise
Price set for the Milestone Warrants..
d. “Registration
Statement”
means
a
registration statement under the Securities Act which covers the Registrable
Securities.
2. REGISTRATION.
a. Mandatory
Registration.
The
Company shall prepare and file with the SEC a Registration Statement on Form
X-0, X-0 or on such other form as is available for resale of the Registrable
Securities. The Company shall cause such Registration Statement to be declared
effective by the SEC prior to the first sale to the Investor of the Company’s
Common Stock pursuant to the Standby Equity Distribution Agreement. The Company
shall cause the Registration Statement to remain effective until the later
to
occur of full completion of the Commitment Period (as such term is defined
in
the Standby Equity Distribution Agreement) or
expiration of the Warrants and the Milestone Warrants . The Company shall
file
and see to effectiveness one or more additional Registration Statements to
cover
resale of the shares issuable on exercise of the Milestone Warrants.
b. Sufficient
Number of Shares Registered.
In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities pursuant to the Standby Equity Distribution Agreement, the Company
shall amend the Registration Statement, or file a new Registration Statement
(on
the short form available therefore, if applicable), or both, so as to cover
all
of such Registrable Securities pursuant to the Standby Equity Distribution
Agreement and/or the Warrants, as soon as practicable, but in any event not
later than thirty (30) days after the necessity therefore arises. The Company
shall use it best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof. For purposes of the foregoing provision, the number of shares available
under a Registration Statement shall be deemed “insufficient to cover all of the
Registrable Securities” if at any time the number of Registrable Securities
issuable on an Advance Notice Date is greater than the number of shares
available for resale under such Registration Statement.
3. RELATED
OBLIGATIONS.
a. The
Company shall keep the Registration Statement effective pursuant to Rule
415 at
all times until the later to occur of completion of the Commitment Period
(as
such term is defined in the Standby Equity Distribution Agreement) or
the
one (1) year anniversary of the termination of that Agreement , and for
Registration Statements relating to the Milestone Warrants, until the one
(1)
year anniversary of the last exercise of the last Milestone Warrant (the
“Registration
Period”),
which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of
a
material fact or omit to state a material fact required to be stated therein,
or
necessary to make the statements therein, in light of the circumstances in
which
they were made, not misleading.
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b. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act,
as may
be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions
of
the Securities Act with respect to the disposition of all Registrable Securities
of the Company covered by such Registration Statement. In case the Company
become’s ineligible to use Form S-2 or S-3, the Company shall file on another
Form and keep that Registration Statement effective by promptly filing
amendments thereto for information included in the Company’s periodic and other
reports and proxy statements filed under the Securities Exchange Act of 1934,
as
amended (the “Exchange
Act”).
c. The
Company shall furnish to the Investor without charge, (i) at least one copy
of
such Registration Statement as declared effective by the SEC and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each preliminary
prospectus, (ii) ten (10) copies of the final prospectus included in such
Registration Statement and all amendments and supplements thereto (or such
other
number of copies as such Investor may reasonably request) and (iii) such
other
documents as such Investor may reasonably request from time to time in order
to
facilitate the disposition of the Registrable Securities owned by such
Investor.
d. The
Company shall use its best efforts to (i) register and qualify the Registrable
Securities covered by a Registration Statement under such other securities
or
“blue sky” laws of such jurisdictions in the United States as the Investor
reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall
not be
required in connection therewith or as a condition thereto to (w) make any
change to its certificate of incorporation or by-laws, (x) qualify to do
business in any jurisdiction where it would not otherwise be required to
qualify
but for this Section 3(d), (y) subject itself to general taxation in any
such
jurisdiction, or (z) file a general consent to service of process in any
such
jurisdiction. The Company shall promptly notify the Investor of the receipt
by
the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
e. As
promptly as practicable after becoming aware of such event or development,
the
Company shall notify the Investor in writing of the happening of any event
as a
result of which the prospectus included in a Registration Statement, as then
in
effect, includes an untrue statement of a material fact or omission to state
a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and promptly prepare a supplement or amendment to
such
Registration
3
Statement
to correct such untrue statement or omission, and deliver ten (10) copies
of
such supplement or amendment to each Investor. The Company shall also promptly
notify the Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective (notification
of
such effectiveness shall be delivered to the Investor by facsimile on the
same
day of such effectiveness), (ii) of any request by the SEC for amendments
or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
f. The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction within the United States of America and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension
at
the earliest possible moment and to notify the Investor of the issuance of
such
order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
g. At
the
reasonable request of the Investor, the Company shall furnish to the Investor,
on the date of the effectiveness of the Registration Statement and thereafter
from time to time on such dates as the Investor may reasonably request (i)
a
letter, dated such date, from the Company’s independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
and (ii) an opinion, dated as of such date, of counsel representing the Company
for purposes of such Registration Statement, in form, scope and substance
as is
customarily given in an underwritten public offering, addressed to the
Investor.
h. The
Company shall make available for inspection by (i) the Investor and (ii)
one
firm of accountants or other agents retained by the Investor (collectively,
the
“Inspectors”) all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the “Records”), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information which any Inspector may reasonably request in connection
with the Registration Statement. The Investor agrees that Records obtained
by it
as a result of such inspections which is conspicuously marked by the Company
as
"Confidential" (subject to the Company’s obligations with respect to material
non-public information set forth in Section 8.1(a) herein) shall be deemed
confidential and held in strict confidence by the Investor, unless (a) the
disclosure of such Records is necessary to avoid or correct a misstatement
or
omission in any Registration Statement or is otherwise required under the
Securities Act, (b) the release of such Records is ordered pursuant to a
final,
non-appealable subpoena or order from a court or government body of competent
jurisdiction, or (c) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or
any
other agreement of which the Inspector and the Investor has knowledge. The
Investor agrees that it shall, upon learning that disclosure of such Records
is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company,
at
its expense, to undertake appropriate action to prevent disclosure of, or
to
obtain a protective order for, the Records deemed confidential.
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i. The
Company shall hold in confidence and not make any disclosure of information
concerning the Investor provided to the Company unless (i) disclosure of
such
information is necessary to comply with federal or state securities laws,
(ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release
of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available
to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure
of
such information concerning the Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt
written notice to the Investor and allow the Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to
obtain
a protective order for, such information.
j. The
Company shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series issued
by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or to secure
the
inclusion for quotation on the National Association of Securities Dealers,
Inc.
OTC Bulletin Board for such Registrable Securities. The Company shall pay
all
fees and expenses in connection with satisfying its obligation under this
Section 3(j).
k. The
Company shall cooperate with the Investor to the extent applicable, to
facilitate the timely preparation and delivery of certificates (not bearing
any
restrictive legend) representing the Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in
such
denominations or amounts, as the case may be, as the Investor may reasonably
request and registered in such names as the Investor may request.
l. The
Company shall use its best efforts to cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved
by
such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.
m. Each
year, the Company shall make generally available to its security holders
its
annual report to shareholders for each annual meeting of shareholders, which
shall contain an annual earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act).
n. The
Company shall otherwise use its best efforts to comply with all applicable
rules
and regulations of the SEC in connection with any registration
hereunder.
o. Within
two (2) business days after a Registration Statement which covers Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and
shall
cause legal counsel for the Company to deliver, to the transfer agent for
such
Registrable Securities (with copies to the Investor) confirmation that such
Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit
A.
5
p. The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of Registrable Securities pursuant
to a
Registration Statement.
4. OBLIGATIONS
OF THE INVESTOR.
The
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e), the Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering
such
Registrable Securities until the Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or receipt
of
notice that no supplement or amendment is required. Notwithstanding anything
to
the contrary, the Company shall cause its transfer agent to deliver unlegended
certificates for shares of Common Stock to a transferee of the Investor in
accordance with the terms of the Standby Equity Distribution Agreement in
connection with any sale of Registrable Securities with respect to which
the
Investor has entered into a contract for sale prior to the Investor’s receipt of
a notice from the Company of the happening of any event of the kind described
in
Section 3(f) or the first sentence of 3(e) and for which the Investor has
not
yet settled.
5. EXPENSES
OF REGISTRATION.
All
expenses incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all registration,
listing and qualifications fees, printers, legal and accounting fees shall
be
paid by the Company.
6. INDEMNIFICATION.
With
respect to Registrable Securities which are included in a Registration Statement
under this Agreement:
a. To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend the Investor, the directors, officers, partners,
employees, agents, representatives of, and each Person, if any, who controls
the
Investor within the meaning of the Securities Act or the Exchange Act (each,
an
“Indemnified
Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys’ fees, amounts paid in settlement or
expenses, joint or several (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by
or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified
Damages”),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue
Sky Filing”),
or
the omission or alleged omission to state a material fact required to be
stated
therein or necessary to make the statements therein not misleading; (ii)
any
untrue
6
statement
or alleged untrue statement of a material fact contained in any final prospectus
(as amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein,
in
light of the circumstances under which the statements therein were made,
not
misleading; or (iii) any violation or alleged violation by the Company of
the
Securities Act, the Exchange Act, any other law, including, without limitation,
any state securities law, or any rule or regulation there under relating
to the
offer or sale of the Registrable Securities pursuant to a Registration Statement
(the matters in the foregoing clauses (i) through (iii) being, collectively,
“Violations”).
The
Company shall reimburse the Investor and each such controlling person promptly
as such expenses are incurred and are due and payable, for any legal fees
or
disbursements or other reasonable expenses incurred by them in connection
with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (x) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified
Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (y) shall
not be
available to the extent such Claim is based on a failure of the Investor
to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant
to
Section 3(e); and (z) shall not apply to amounts paid in settlement of any
Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain
in
full force and effect regardless of any investigation made by or on behalf
of
the Indemnified Person.
b. In
connection with a Registration Statement, the Investor agrees to indemnify,
hold
harmless and defend, to the same extent and in the same manner as is set
forth
in Section 6(a), the Company, each of its directors, each of its officers
who
signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act (each
an
“Indemnified
Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar
as
such Claim or Indemnified Damages arise out of or is based upon any Violation,
in each case to the extent, and only to the extent, that such Violation occurs
in reliance upon and in conformity with written information furnished to
the
Company by the Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(d), the Investor will reimburse any
legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
the
Investor, which consent shall not be unreasonably withheld; provided, further,
however, that the Investor shall be liable under this Section 6(b) for only
that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds
to
the Investor as a result of the sale of Registrable Securities pursuant to
such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified
Party.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement
or
omission of material fact contained in the prospectus was corrected and such
new
7
prospectus
was delivered to the Investor prior to the Investor’s use of the prospectus to
which the Claim relates.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any
indemnifying party under this Section 6, deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so
desires, jointly with any other indemnifying party similarly noticed, to
assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as
the
case may be; provided, however, that an Indemnified Person or Indemnified
Party
shall have the right to retain its own counsel with the fees and expenses
of not
more than one counsel for such Indemnified Person or Indemnified Party to
be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of
the
Indemnified Person or Indemnified Party and the indemnifying party would
be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such
counsel in such proceeding. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to
the
Indemnified Party or Indemnified Person which relates to such action or claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable
for any
settlement of any action, claim or proceeding effected without its prior
written
consent, provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the prior written consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving
by
the claimant or plaintiff to such Indemnified Party or Indemnified Person
of a
release from all liability in respect to such claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter
for
which indemnification has been made. The failure to deliver written notice
to
the indemnifying party within a reasonable time of the commencement of any
such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend
such
action.
d. The
indemnification required by this Section 6 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as
and
when bills are received or Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the
8
indemnifying
party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.
7. CONTRIBUTION.
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with
respect
to any amounts for which it would otherwise be liable under Section 6 to
the
fullest extent permitted by law; provided, however, that: (i) no seller of
Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty
of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received
by
such seller from the sale of such Registrable Securities.
8. REPORTS
UNDER THE EXCHANGE ACT.
With
a
view to making available to the Investor the benefits of Rule 144 promulgated
under the Securities Act or any similar rule or regulation of the SEC that
may
at any time permit the Investors to sell securities of the Company to the
public
without registration (“Rule
144”)
the
Company agrees tomake and keep public information available, as those terms
are
understood and defined in Rule 144 by filing with the SEC in a timely manner
all
reports and other documents required of the Company under the Exchange Act
so
long as the Company remains subject to such requirements (it being understood
that nothing herein shall limit the Company’s obligations under Section 6.3 of
the Standby Equity Distribution Agreement)
9. AMENDMENT
OF REGISTRATION RIGHTS.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only by a written agreement between the Company and the
Investor. Any amendment or waiver effected in accordance with this Section
9
shall be binding upon the Investor and the Company. No consideration shall
be
offered or paid to any Person to amend or consent to a waiver or modification
of
any provision of any of this Agreement unless the same consideration also
is
offered to all of the parties to this Agreement.
10. MISCELLANEOUS.
a. A
Person
is deemed to be a holder of Registrable Securities whenever such Person owns
or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from the registered owner of
such
Registrable Securities.
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b. Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party);
or (iii) one business day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive
the
same. The addresses and facsimile numbers for such communications shall
be:
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If
to the Company, to:
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U.S.
Energy Corp.
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000
Xxxxx 0xx
Xxxx
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Xxxx
X. Xxxxxx Building
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Riverton,
WY 82501
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Attention:
Xxxx X. Xxxxxx
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Telephone:
(000) 000-0000
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Facsimile:
(000)
000-0000
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With
a copy to:
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The
Law Office of Xxxxxxx X. Xxxxxx
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0000
Xxxx Xxxxxx, Xxxxx 000
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Xxxxxx,
XX 00000
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Attention
: Xxxxxxx X. Xxxxxx
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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If
to the Investor, to:
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Cornell
Capital Partners, LP
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000
Xxxxxx Xxxxxx - Xxxxx 0000
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Xxxxxx
Xxxx, Xxx Xxxxxx 00000
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Attention: Xxxx
Xxxxxx
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Portfolio
Manager
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Telephone: (000)
000-0000
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Facsimile: (000)
000-0000
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With
a copy to:
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Cornell
Capital Partners, LP
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000
Xxxxxx Xxxxxx - Xxxxx 0000
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Xxxxxx
Xxxx, XX 00000
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Attention:
Xxxxx Xxxxxxxx, Esq.
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Telephone: (000)
000-0000
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Facsimile: (000)
000-0000
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10
Any
party
may change its address by providing written notice to the other parties hereto
at least five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by a
courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate
as a
waiver thereof.
d. The
corporate laws of the State of New Jersey shall govern all issues concerning
the
relative rights of the Company and the Investor. All other questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New Jersey, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New Jersey or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New Jersey.
Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the
Superior Courts of the State of New Jersey, sitting in Xxxxxx County, New
Jersey
and the Federal District Court for the District of New Jersey sitting in
Newark,
New Jersey, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein,
and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be
deemed
to limit in any way any right to serve process in any manner permitted by
law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction
or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
e. This
Agreement, the Standby Equity Distribution Agreement, the Escrow Agreement,
and
the Placement Agent Agreement constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set
forth
or referred to herein and therein. This Agreement, the Standby Equity
Distribution Agreement, the Escrow Agreement, and the Placement Agent Agreement
supersede all prior agreements and understandings among the parties hereto
with
respect to the subject matter hereof and thereof.
11
f. This
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
g. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in identical counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
i. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
j. The
language used in this Agreement will be deemed to be the language chosen
by the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
k. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may
any
provision hereof be enforced by, any other Person.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
12
IN
WITNESS WHEREOF,
the
parties have caused this Registration Rights Agreement to be duly executed
as of
day and year first above written.
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U.S.
Energy Corp.
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By: /s/
Xxxx X. Xxxxxx
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Name: Xxxx
X. Xxxxxx
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Title: President
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Cornell
Capital Partners, LP
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By: Yorkville
Advisors, LLC
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Its: General
Partner
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By: /s/
Xxxx Xxxxxx
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Name: Xxxx
Xxxxxx
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Title: Portfolio
Manager
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13
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
Attention:
Re: U.S.
ENERGY CORP.
Ladies
and Gentlemen:
We
are
counsel to U.S. Energy Corp. (the “Company”),
and
have represented the Company in connection with that certain Standby Equity
Distribution Agreement (the “Standby
Equity Distribution Agreement”)
entered into by and between the Company and Cornell Capital Partners, LP
(the
“Investor”)
pursuant to which the Company issued to the Investor shares of its Common
Stock,
par value $0.01 per share (the “Common
Stock”).
Pursuant to the Standby Equity Distribution Agreement, the Company also has
entered into a Registration Rights Agreement with the Investor (the
“Registration
Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement)
under
the Securities Act of 1933, as amended (the “Securities
Act”).
In
connection with the Company’s obligations under the Registration Rights
Agreement, on ____________ ____, the Company filed a Registration Statement
on
Form ________ (File No. 333-_____________) (the “Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
relating to the Registrable Securities which names the Investor as a selling
stockholder thereunder.
In
connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the Securities Act at [ENTER
TIME OF EFFECTIVENESS]
on
[ENTER
DATE OF EFFECTIVENESS]
and we
have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC
and
the Registrable Securities are available for resale under the Securities
Act
pursuant to the Registration Statement.
Very
truly yours,
By:
cc: Cornell
Capital Partners, LP
