EXHIBIT 10.4
CONSULTING AGREEMENT
This is a Consulting Agreement entered into at Riverton, WY as of May 14, 2001
by and between U.S. Energy Corp. of 000 Xxxxx 0xx Xxxx, Xxxxxxxx, XX 00000 (USE)
and Riches in Resources, Inc., with mailing address of 0000 Xxxxxxx Xxxxxx,
Xxxxxxx, XX 00000 (RIR). for the consideration set out below, RIR agrees to
provide consulting services to USE for an 18 month period, beginning May 14,
2001 through November 14, 2002.
USE agrees to pay for the consulting services as follows: 1) $2,000.00 per month
payable on a monthly basis for the term of the Agreement with the first payment
due on June 14, 2001; 2) a restricted stock certificate for 15,000 shares of USE
common stock; and 3) a restricted stock certificate for 15,000 shares in Rocky
Mountain Gas, Inc. (RMG). The stock certificates shall be issued in RIR's name
on or before June 30, 2001 and will be held by USE until they are awarded to RIR
on or before November 14, 2002, pursuant to this Agreement. RIR understands that
these shares are restricted shares, will bear a restrictive legend, and will
either have to be registered or sold under Rule 144 of the Security and Exchange
Act of 1934.
USE agrees to grant a stock option to RIR to purchase 10,000 shares of USE
common stock at $4.70 per share (which was the asking price of the Stock on May
14, 2001, this was the date that this Agreement was negotiated by RIR and USEG),
in whole or in part, for an 24 month period, from May 14, 2001 through May 14,
2003. This option will become exercisable by RIR only if USE common stock closes
at or above $6.50 per share for 90 consecutive days prior to the option
expiration on may 14, 2003. USE agrees to grant a second option to RIR to
purchase 20,000 shares of USE common stock at $4.70 per share, in whole or in
part, only if USE common stock closes at or above a price of $10.00 per share
for 90 consecutive days prior to the option expiration of May 14, 2003. USE may,
at its sole discretion, reduce the 90 consecutive day requirement. If RIR
exercises either option, USE agrees to file a registration statement with the
Securities and Exchange commission at a time when the financial statements for
the recently concluded fiscal year have been audited. Optionee acknowledges that
such filing will not be feasible from March 1 through September 1 of each year.
USE agrees to pay travel and related expenses that RIR incurs solely on USE
related matters outside of the greater Denver, Colorado area on a pre-approved
case by case basis. All other expenses incurred by RIR will be RIR's
responsibility unless other pre-approved arrangements are made by the Parties.
RIR agrees to use its best efforts in assisting USE and its subsidiaries to
expand the number of firms, brokers and institutions interested in investing in
USE, This includes, but is not limited to: 1) preparing a corporate profile
which will be used to introduce USE to RIR's network of investors, investment
banking and financing firms as well as potential industry partners; 2) assisting
USE in its marketing efforts through mailing updates, corporate news releases,
presentations and general advise on investor issues, and; 3) arranging meetings
(no less than 1 per month if the respective parties are available) with key
individuals who have shown a particular interest in USE.
Either RIR or USE may terminate this contract upon 60 days written notice to the
other Party, by certified mail to the addresses listed below. If USE terminates
this Agreement prior to November 14, 2002, the cash payments will cease at the
end of the 60 day notice period. If RIR terminates the Agreement, USE may
terminate the payments immediately. Upon termination, the USE and RMG shares
shall be prorated to the end of the 60 day notice period on the basis of 833
shares of USE common stock and 833 shares of RMG common stock earned by RIR each
month between May 14, 2001 and November 14, 2002. USE shall deliver the shares
to RIR at the end of the 60 day notice period. If either RIR or USE terminates
this Agreement, any unexercised options shall expire at the end of the 60 notice
period.
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In the event that either USE or RMG merge with or are acquired by an outside
entity prior to November 14, 2002, and USE therefore terminates this Agreement,
USE agrees to deliver all 15,000 shares of USE and RMG at the end of the 60 day
notice period, and the stock options shall remain in effect for the entire
option periods.
This Agreement shall be governed by the laws of the State of Wyoming.
U.S. Energy Corp. Riches In Resources, Inc.
000 Xxxxx 0xx Xxxx 0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxx, Xxxxxxxx 00000
Dated May 14, 2001
/s/ Xxxxx X. Xxxxxx /s/ Xxxx Xxxxxxx
--------------------------------------- ------------------------------------
Xxxxx X. Xxxxxx, President Xxxx Xxxxxxx, President
U.S. Energy Corp. Riches In Resources, Inc.
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