AMENDMENT NUMBER 1 TO REGISTRATION RIGHTS AGREEMENT
AMENDMENT
NUMBER 1 TO
THIS
AMENDMENT AGREEMENT (the
“Amendment”) is
entered into as of September 5, 2006, between U.S.
ENERGY CORP., a
corporation organized and existing under the laws of the State of Wyoming
(the
“Company”),
and
CORNELL
CAPITAL PARTNERS, LP, a
Delaware limited partnership (the
“Investor”).
WHEREAS,
the
Company and the Investor are parties to a certain Registration Rights Agreement
dated as of May 5, 2006 (the “Agreement”);
and
WHEREAS,
the
parties wish to amend the Agreement as set forth below.
NOW,
THEREFORE,
it is
agreed:
I. Amendments.
A. Section
1(c).
Section
1(c) of the Agreement is hereby deleted in its entirety and the following
language shall replace said Section 1(c) of the Agreement:
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.
B. Section
2(a).
Section
2(a) of the Agreement is hereby deleted in its entirety and the following
language shall replace said Section 2(a) of the Agreement:
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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. 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, subsequent to the issuance of Milestone Warrants
pursuant to the SEDA, after the date of this Amendment.
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II. Miscellaneous.
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A.
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Except
as provided hereinabove, all of the terms and conditions contained
in the
Agreement shall remain unchanged and in full force and
effect.
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B.
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This
Amendment is made pursuant to and in accordance with the terms
and
conditions of the Agreement.
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C.
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All
capitalized but not defined terms used herein shall have those
meanings
ascribed to them in the Agreement.
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D. All
provisions in
the Agreement and any amendments, schedules or exhibits thereto in conflict
with
this Amendment shall be and hereby are changed to conform to this
Amendment.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF,
the
parties hereto have caused this Amendment to be executed by the undersigned,
thereunto duly authorized, as of the date first set forth above.
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COMPANY:
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U.S.
ENERGY CORP.
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By:
/s/ Xxxxx X. Xxxxxx
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Name Xxxxx
X. Xxxxxx
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Title: Chief
Executive Officer
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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 X. Xxxxxx
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Name Xxxx
X. Xxxxxx
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Title: Portfolio
Manager
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