EXHIBIT 4.28
VOID AFTER 5:00 P.M., MOUNTAIN TIME, ON AUGUST 1, 2005
WARRANTS TO PURCHASE COMMON SHARES
U. S. ENERGY CORP
THIS IS TO CERTIFY THAT, FOR VALUE RECEIVED, FREDERICK LUTZ, (THE "HOLDER"), IS
ENTITLED TO PURCHASE, SUBJECT TO THE TERMS SET FORTH BELOW, FROM U. S. ENERGY
CORP. (THE "COMPANY" OR "WE"), AT ANY TIME UNTIL 5:00 P.M., MOUNTAIN TIME, ON
AUGUST 1, 2005 (THE "EXPIRATION DATE") 10,000 SHARES OF THE COMMON STOCK OF THE
COMPANY (THE "COMMON SHARES") AT A PURCHASE PRICE PER SHARE OF $2.00. THE
NUMBER OF COMMON SHARES TO BE RECEIVED UPON THE EXERCISE OF THIS WARRANT AND THE
PRICE TO BE PAID FOR A COMMON SHARE MAY BE ADJUSTED FROM TIME TO TIME AS
HEREINAFTER SET FORTH. THE PURCHASE PRICE OF A COMMON SHARE IN EFFECT AT ANY
TIME AND AS ADJUSTED FROM TIME TO TIME IS HEREINAFTER SOMETIMES REFERRED TO AS
THE "EXERCISE PRICE." THE COMMON SHARES, AS ADJUSTED FROM TIME TO TIME,
UNDERLYING THE WARRANTS ARE HEREINAFTER SOMETIMES REFERRED TO AS "WARRANT
SHARES" AND INCLUDE ALL COMMON SHARES THAT HAVE BEEN ISSUED UPON THE EXERCISE OF
THE WARRANTS AND ALL UNISSUED COMMON SHARES UNDERLYING THE WARRANTS.
(A) EXERCISE OF WARRANT. THIS WARRANT MAY BE EXERCISED IN WHOLE OR IN
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PART AT ANY TIME OR FROM TIME TO TIME UNTIL THE EXPIRATION DATE OR IF THE
EXPIRATION DATE IS A DAY ON WHICH BANKING INSTITUTIONS ARE AUTHORIZED BY LAW TO
CLOSE, THEN ON THE NEXT SUCCEEDING DAY WHICH SHALL NOT BE SUCH A DAY, BY
PRESENTATION AND SURRENDER HEREOF TO THE COMPANY OR AT THE OFFICE OF ITS STOCK
TRANSFER AGENT, IF ANY, WITH THE PURCHASE FORM ANNEXED HERETO DULY EXECUTED AND
ACCOMPANIED BY CASH PAYMENT OF THE EXERCISE PRICE FOR THE NUMBER OF SHARES
SPECIFIED IN SUCH FORM, TOGETHER WITH ALL FEDERAL AND STATE TAXES APPLICABLE
UPON SUCH EXERCISE. THE COMPANY AGREES NOT TO MERGE, REORGANIZE OR TAKE ANY
ACTION THAT WOULD TERMINATE THIS WARRANT UNLESS PROVISIONS ARE MADE AS PART OF
SUCH MERGER, REORGANIZATION OR OTHER ACTION WHICH WOULD PROVIDE THE HOLDER WITH
AN EQUIVALENT OF THIS WARRANT AS SPECIFIED IN SECTION (I) HEREOF; PROVIDED,
HOWEVER, THAT IF REASONABLY REQUIRED BY THE OTHER PARTY OR PARTIES TO SUCH
MERGER, REORGANIZATION OR OTHER ACTION, THE COMPANY MAY ACCELERATE THE
EXPIRATION DATE TO A DATE PRIOR TO SUCH MERGER, REORGANIZATION OR OTHER ACTION,
PROVIDED FURTHER, HOWEVER, THAT THE COMPANY SHALL GIVE THE HOLDER WRITTEN NOTICE
OF SUCH ACCELERATION AT LEAST 30 DAYS PRIOR TO SUCH ACCELERATED EXPIRATION DATE.
THE COMPANY AGREES TO PROVIDE NOTICE TO THE HOLDER THAT ANY TENDER OFFER IS
BEING MADE FOR THE COMMON SHARES NO LATER THAN THREE BUSINESS DAYS AFTER THE DAY
THE COMPANY BECOMES AWARE THAT ANY TENDER OFFER IS BEING MADE FOR OUTSTANDING
COMMON SHARES. IF THIS WARRANT SHOULD BE EXERCISED IN PART ONLY, THE COMPANY
SHALL, UPON SURRENDER OF THIS WARRANT FOR CANCELLATION, EXECUTE AND DELIVER A
NEW WARRANT EVIDENCING THE RIGHT OF THE HOLDER TO PURCHASE THE BALANCE OF THE
COMMON SHARES PURCHASABLE HEREUNDER. UPON RECEIPT BY THE COMPANY OF THIS
WARRANT AT THE OFFICE OF THE COMPANY OR AT THE OFFICE OF THE COMPANY'S STOCK
TRANSFER AGENT, IN PROPER FORM FOR EXERCISE AND ACCOMPANIED BY THE EXERCISE
PRICE, THE HOLDER SHALL BE DEEMED TO BE THE HOLDER OF RECORD OF THE COMMON
SHARES ISSUABLE UPON SUCH EXERCISE, NOTWITHSTANDING THAT THE STOCK TRANSFER
BOOKS OF THE COMPANY SHALL THEN BE CLOSED OR THAT CERTIFICATES REPRESENTING SUCH
COMMON SHARES SHALL NOT THEN BE ACTUALLY DELIVERED TO THE HOLDER.
(B) RESERVATION OF SHARES. THE COMPANY HEREBY AGREES THAT AT ALL TIMES
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THERE SHALL BE RESERVED FOR ISSUANCE AND/OR DELIVERY UPON EXERCISE OF THIS
WARRANT SUCH NUMBER OF COMMON SHARES AS SHALL BE REQUIRED FOR ISSUANCE OR
DELIVERY UPON EXERCISE OF THIS WARRANT.
(C) FRACTIONAL SHARES. NO FRACTIONAL SHARES OR SCRIP REPRESENTING
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FRACTIONAL SHARES SHALL BE ISSUED UPON THE EXERCISE OF THIS WARRANT. WITH
RESPECT TO ANY FRACTION OF A COMMON SHARE CALLED FOR UPON ANY EXERCISE HEREOF,
THE COMPANY SHALL, UPON RECEIPT BY THE COMPANY OR THE COMPANY'S STOCK TRANSFER
AGENT OF THE EXERCISE PRICE ON SUCH FRACTIONAL SHARE, PAY TO THE HOLDER AN
AMOUNT IN CASH EQUAL TO SUCH FRACTION MULTIPLIED BY THE CURRENT MARKET VALUE OF
SUCH FRACTIONAL SHARE, DETERMINED AS FOLLOWS:
(1) IF THE COMMON SHARES ARE LISTED ON A NATIONAL SECURITIES EXCHANGE,
ARE ADMITTED TO UNLISTED TRADING PRIVILEGES ON SUCH AN EXCHANGE, OR ARE
LISTED FOR TRADING ON A TRADING SYSTEM OF THE NASDAQ STOCK MARKET, INC.,
THEN THE CURRENT VALUE SHALL BE THE LAST REPORTED SALE PRICE OF THE COMMON
SHARES ON SUCH AN EXCHANGE OR SYSTEM ON THE LAST BUSINESS DAY PRIOR TO THE
DATE OF EXERCISE OF THIS WARRANT OR IF NO SUCH SALE IS MADE ON SUCH DAY,
THE AVERAGE OF THE CLOSING BID PRICES FOR THE COMMON SHARES FOR SUCH DAY ON
SUCH EXCHANGE OR SUCH SYSTEM SHALL BE USED; OR
(2) IF THE COMMON SHARES ARE NOT SO LISTED ON SUCH EXCHANGE OR SYSTEM
OR ADMITTED TO UNLISTED TRADING PRIVILEGES, THE CURRENT VALUE SHALL BE THE
AVERAGE OF THE LAST REPORTED BID PRICES REPORTED BY THE NATIONAL QUOTATION
BUREAU, INC. ON THE LAST BUSINESS DAY PRIOR TO THE DATE OF THE EXERCISE OF
THIS WARRANT; OR
(3) IF THE COMMON SHARES ARE NOT SO LISTED OR ADMITTED TO UNLISTED
TRADING PRIVILEGES AND IF BID AND ASKED PRICES ARE NOT SO REPORTED, THE
CURRENT VALUE SHALL BE AN AMOUNT, NOT LESS THAN BOOK VALUE, DETERMINED IN
SUCH REASONABLE MANNER AS MAY BE PRESCRIBED BY THE BOARD OF DIRECTORS OF
THE COMPANY.
(D) EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. THIS WARRANT IS
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EXCHANGEABLE, WITHOUT EXPENSE, AT THE OPTION OF THE HOLDER, UPON PRESENTATION
AND SURRENDER HEREOF TO THE COMPANY OR AT THE OFFICE OF ITS STOCK TRANSFER
AGENT, IF ANY, FOR OTHER WARRANTS OF DIFFERENT DENOMINATIONS ENTITLING THE
HOLDER THEREOF TO PURCHASE (UNDER THE SAME TERMS AND CONDITIONS AS PROVIDED BY
THIS WARRANT) IN THE AGGREGATE THE SAME NUMBER OF COMMON SHARES PURCHASABLE
HEREUNDER. THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933. ANY SUCH TRANSFER OR
ASSIGNMENT SHALL BE MADE BY SURRENDER OF THIS WARRANT TO THE COMPANY OR AT THE
OFFICE OF ITS STOCK TRANSFER AGENT, IF ANY, WITH THE ASSIGNMENT FORM ANNEXED
HERETO DULY EXECUTED AND WITH FUNDS SUFFICIENT TO PAY ANY TRANSFER TAX;
WHEREUPON THE COMPANY SHALL, WITHOUT CHARGE, EXECUTE AND DELIVER A NEW WARRANT
IN THE NAME OF THE ASSIGNEE NAMED IN SUCH INSTRUMENT OF ASSIGNMENT AND THIS
WARRANT SHALL PROMPTLY BE CANCELED. THIS WARRANT MAY BE DIVIDED OR COMBINED
WITH OTHER WARRANTS WHICH CARRY THE SAME RIGHTS UPON PRESENTATION HEREOF AT THE
OFFICE OF THE COMPANY OR AT THE OFFICE OF ITS STOCK TRANSFER AGENT, IF ANY,
TOGETHER WITH A WRITTEN NOTICE SPECIFYING THE NAMES AND DENOMINATIONS IN WHICH
NEW WARRANTS ARE TO BE ISSUED AND SIGNED BY THE HOLDER HEREOF. THE TERM
"WARRANT" AS USED HEREIN INCLUDES ANY WARRANTS ISSUED IN SUBSTITUTION FOR OR
REPLACEMENT OF THIS WARRANT, OR INTO WHICH THIS WARRANT MAY BE DIVIDED OR
EXCHANGED. UPON RECEIPT BY THE COMPANY OF EVIDENCE SATISFACTORY TO IT OF THE
LOSS, THEFT, DESTRUCTION OR MUTILATION OF THIS WARRANT, AND (IN THE CASE OF
LOSS, THEFT OR DESTRUCTION) OF REASONABLY SATISFACTORY INDEMNIFICATION, AND UPON
SURRENDER AND CANCELLATION OF THIS WARRANT, IF MUTILATED, THE COMPANY WILL
EXECUTE AND DELIVER A NEW WARRANT OF LIKE TENOR AND DATE. SUBJECT TO SUCH RIGHT
OF INDEMNIFICATION, ANY SUCH NEW WARRANT EXECUTED AND DELIVERED SHALL CONSTITUTE
AN ADDITIONAL CONTRACTUAL OBLIGATION ON THE PART OF THE COMPANY, WHETHER OR NOT
THIS WARRANT SO LOST, STOLEN, DESTROYED, OR MUTILATED SHALL BE AT ANY TIME
ENFORCEABLE BY ANYONE.
(E) RIGHTS OF THE HOLDER. THE HOLDER SHALL NOT, BY VIRTUE HEREOF, BE
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ENTITLED TO ANY RIGHTS OF A SHAREHOLDER IN THE COMPANY, EITHER AT LAW OR EQUITY,
AND THE RIGHTS OF THE HOLDER ARE LIMITED TO THOSE EXPRESSED IN THE WARRANT AND
ARE NOT ENFORCEABLE AGAINST THE COMPANY EXCEPT TO THE EXTENT SET FORTH HEREIN.
(F) ADJUSTMENT PROVISIONS.
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(1) ADJUSTMENTS OF THE EXERCISE PRICE.
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(A) IF THE COMPANY SUBDIVIDES THE OUTSTANDING COMMON SHARES
INTO A GREATER NUMBER OF COMMON SHARES, THE EXERCISE PRICE IN EFFECT
IMMEDIATELY PRIOR TO SUCH SUBDIVISION SHALL BE PROPORTIONATELY REDUCED.
CONVERSELY, IF THE COMPANY COMBINES ITS OUTSTANDING COMMON SHARES INTO A
LESSER NUMBER OF COMMON SHARES, THE EXERCISE PRICE IN EFFECT IMMEDIATELY
PRIOR TO SUCH COMBINATION SHALL BE PROPORTIONALLY INCREASED. IN CASE OF A
SUBDIVISION OR COMBINATION, THE ADJUSTMENT OF THE EXERCISE PRICE SHALL BE
MADE AS OF THE EFFECTIVE DATE OF THE APPLICABLE EVENT. A DISTRIBUTION ON
COMMON SHARES, INCLUDING A DISTRIBUTION OF CONVERTIBLE SECURITIES (AS THAT
TERM IS DEFINED HEREIN), TO SHAREHOLDERS OF THE COMPANY ON A PRO RATA BASIS
SHALL BE CONSIDERED A SUBDIVISION OF COMMON SHARES FOR THE PURPOSES OF THIS
SUBSECTION (1)(A), EXCEPT THAT THE ADJUSTMENT WILL BE MADE AS OF THE RECORD
DATE FOR SUCH DISTRIBUTION AND ANY SUCH DISTRIBUTION OF CONVERTIBLE
SECURITIES SHALL BE DEEMED TO BE A DISTRIBUTION OF THE COMMON SHARES
UNDERLYING SUCH CONVERTIBLE SECURITIES. AS USED HEREIN, THE TERM
"CONVERTIBLE SECURITIES" SHALL MEAN OPTIONS OR WARRANTS OR RIGHTS FOR THE
PURCHASE OF COMMON SHARES OR FOR THE PURCHASE OF ANY STOCK OR OTHER
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR COMMON SHARES.
(B) IF THE COMPANY SHALL AT ANY TIME DISTRIBUTE OR CAUSE TO BE
DISTRIBUTED TO ITS SHAREHOLDERS, ON A PRO RATA BASIS, CASH, ASSETS, OR
SECURITIES OF ANY ENTITY OTHER THAN THE COMPANY, THEN THE EXERCISE PRICE IN
EFFECT IMMEDIATELY PRIOR TO SUCH DISTRIBUTION SHALL AUTOMATICALLY BE
REDUCED BY AN AMOUNT DETERMINED BY DIVIDING (X) THE AMOUNT (IF CASH) OR THE
VALUE (IF ASSETS OR SECURITIES) OF THE HOLDERS' OF WARRANTS (AS SUCH TERM
IS DEFINED IN THE FIRST PARAGRAPH HEREOF) PRO RATA SHARE OF SUCH
DISTRIBUTION DETERMINED ASSUMING THAT ALL HOLDERS OF WARRANTS HAD EXERCISED
THEIR WARRANTS ON THE DAY PRIOR TO SUCH DISTRIBUTION, BY (Y) THE NUMBER OF
COMMON SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT BY THE HOLDER ON
THE DAY PRIOR TO SUCH DISTRIBUTION.
(5) TREASURY SHARES. FOR THE PURPOSE OF THIS SECTION (F), COMMON
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SHARES AT ANY RELEVANT TIME OWNED OR HELD BY, OR FOR THE ACCOUNT OF, THE
COMPANY SHALL NOT BE DEEMED OUTSTANDING.
(G) NO ADJUSTMENT FOR SMALL AMOUNTS. THE COMPANY SHALL NOT BE REQUIRED
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TO GIVE EFFECT TO ANY ADJUSTMENT IN THE EXERCISE PRICE UNLESS AND UNTIL THE NET
EFFECT OF ONE OR MORE ADJUSTMENTS, DETERMINED AS ABOVE PROVIDED, SHALL HAVE
REQUIRED A CHANGE OF THE EXERCISE PRICE BY AT LEAST FIVE CENTS, BUT WHEN THE
CUMULATIVE NET EFFECT OF MORE THAN ONE ADJUSTMENT SO DETERMINED SHALL BE TO
CHANGE THE ACTUAL EXERCISE PRICE BY AT LEAST FIVE CENTS, SUCH CHANGE IN THE
EXERCISE PRICE SHALL THEREUPON BE GIVEN EFFECT.
(H) NUMBER OF SHARES ADJUSTED. UPON ANY ADJUSTMENT OF THE EXERCISE
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PRICE, THE HOLDER OF THIS WARRANT SHALL THEREAFTER (UNTIL ANOTHER SUCH
ADJUSTMENT) BE ENTITLED TO PURCHASE, AT THE NEW EXERCISE PRICE, THE NUMBER OF
COMMON SHARES, CALCULATED TO THE NEAREST FULL SHARE, OBTAINED BY MULTIPLYING THE
NUMBER OF COMMON SHARES INITIALLY ISSUABLE UPON EXERCISE OF THIS WARRANT BY THE
EXERCISE, PRICE SPECIFIED IN THE FIRST PARAGRAPH HEREOF AND DIVIDING THE PRODUCT
SO OBTAINED BY THE NEW EXERCISE PRICE.
(I) NOTICES TO HOLDERS. SO LONG AS THIS WARRANT SHALL BE OUTSTANDING
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AND UNEXERCISED (I) IF THE COMPANY SHALL PAY ANY DIVIDEND OR MAKE/ANY
DISTRIBUTION UPON THE COMMON SHARES OR (II) IF THE COMPANY SHALL OFFER TO THE
HOLDERS OF COMMON SHARES FOR SUBSCRIPTION OR PURCHASE BY THEM ANY SHARES OF
STOCK OF ANY CLASS OR ANY OTHER RIGHTS OR (III) IF ANY CAPITAL REORGANIZATION OF
THE COMPANY, RECLASSIFICATION OF THE CAPITAL STOCK OF THE COMPANY, CONSOLIDATION
OR MERGER OF THE COMPANY WITH OR INTO ANOTHER CORPORATION, SALE, LEASE OR
TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE PROPERTY AND ASSETS OF THE COMPANY
TO ANOTHER CORPORATION, OR VOLUNTARY OR INVOLUNTARY DISSOLUTION, LIQUIDATION OR
WINDING UP OF THE COMPANY SHALL BE EFFECTED, THEN, IN ANY SUCH CASE, THE COMPANY
SHALL CAUSE TO BE DELIVERED TO THE HOLDER, AT LEAST 10 DAYS PRIOR TO THE DATE
SPECIFIED IN (X) OR (Y) BELOW, AS THE CASE MAY BE, A NOTICE CONTAINING A BRIEF
DESCRIPTION OF THE PROPOSED ACTION AND STATING THE DATE ON WHICH (X) A RECORD IS
TO BE TAKEN FOR THE PURPOSE OF SUCH DIVIDEND, DISTRIBUTION OR RIGHTS, OR (Y)
SUCH RECLASSIFICATION, REORGANIZATION, CONSOLIDATION, MERGER, CONVEYANCE, LEASE,
DISSOLUTION, LIQUIDATION OR WINDING UP IS TO TAKE PLACE AND THE DATE, IF ANY IS
TO BE FIXED, AS OF WHICH THE HOLDERS OF COMMON SHARES OF RECORD SHALL BE
ENTITLED TO EXCHANGE THEIR COMMON SHARES FOR SECURITIES OR OTHER PROPERTY
DELIVERABLE UPON SUCH RECLASSIFICATION, REORGANIZATION, CONSOLIDATION, MERGER,
CONVEYANCE, DISSOLUTION, LIQUIDATION OR WINDING UP.
(J) RECLASSIFICATION, REORGANIZATION OR MERGER. IN CASE OF ANY
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RECLASSIFICATION, CAPITAL REORGANIZATION OR OTHER CHANGE OF OUTSTANDING COMMON
SHARES (OTHER THAN A CHANGE IN PAR VALUE, OR FROM PAR VALUE TO NO PAR VALUE, OR
FROM NO PAR VALUE TO PAR VALUE, OR AS A RESULT OF AN ISSUANCE OF COMMON SHARES
BY WAY OF DIVIDEND OR OTHER DISTRIBUTION OR OF A SUBDIVISION OR COMBINATION), OR
IN CASE OF ANY CONSOLIDATION OR MERGER OF THE COMPANY WITH OR INTO ANOTHER
CORPORATION (OTHER THAN A MERGER WITH A SUBSIDIARY IN WHICH MERGER THE COMPANY
IS THE CONTINUING CORPORATION AND WHICH DOES NOT RESULT IN ANY RECLASSIFICATION,
CAPITAL REORGANIZATION OR OTHER CHANGE OF OUTSTANDING COMMON SHARES OF THE CLASS
ISSUABLE UPON EXERCISE OF THIS WARRANT) OR IN CASE OF ANY SALE OR CONVEYANCE TO
ANOTHER CORPORATION OF THE PROPERTY OF THE COMPANY AS AN ENTIRETY OR
SUBSTANTIALLY AS AN ENTIRETY, THE COMPANY SHALL CAUSE EFFECTIVE PROVISION TO BE
MADE SO THAT THE HOLDER SHALL HAVE THE RIGHT THEREAFTER, BY EXERCISING THIS
WARRANT, TO PURCHASE THE KIND AND AMOUNT OF SHARES OF STOCK AND OTHER SECURITIES
AND PROPERTY WHICH THE HOLDER WOULD HAVE RECEIVED UPON SUCH RECLASSIFICATION,
CAPITAL REORGANIZATION OR OTHER CHANGE, CONSOLIDATION, MERGER, SALE OR
CONVEYANCE HAD THIS WARRANT BEEN EXERCISED PRIOR TO THE CONSUMMATION OF SUCH
TRANSACTION. ANY SUCH PROVISION SHALL INCLUDE PROVISION FOR ADJUSTMENTS WHICH
SHALL BE AS NEARLY EQUIVALENT AS MAY BE PRACTICABLE TO THE ADJUSTMENTS PROVIDED
FOR IN THIS WARRANT. THE FOREGOING PROVISIONS OF THIS SECTION (J) SHALL
SIMILARLY APPLY TO SUCCESSIVE RECLASSIFICATIONS, CAPITAL REORGANIZATIONS AND
CHANGES OF COMMON SHARES AND TO SUCCESSIVE CONSOLIDATIONS, MERGERS, SALES OR
CONVEYANCES. IN THE EVENT THE COMPANY SPINS OFF A SUBSIDIARY BY DISTRIBUTING TO
THE SHAREHOLDERS OF THE COMPANY AS A DIVIDEND OR OTHERWISE THE STOCK OF THE
SUBSIDIARY, THE COMPANY SHALL RESERVE FOR THE LIFE OF THIS WARRANT, SHARES OF
THE SUBSIDIARY TO BE DELIVERED TO THE HOLDERS OF THE WARRANTS UPON EXERCISE TO
THE SAME EXTENT AS IF THEY WERE OWNERS OF RECORD OF THE WARRANT SHARES ON THE
RECORDDATE FOR PAYMENT OF THE SHARES OF THE SUBSIDIARY.
(K) NOTICES. ALL NOTICES REQUIRED TO BE GIVEN TO ANY OF THE PARTIES
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HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN SUFFICIENTLY
GIVEN FOR ALL PURPOSES WHEN PRESENTED PERSONALLY TO SUCH PARTY OR SENT BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, TO SUCH PARTY AT ITS
ADDRESS SET FORTH BELOW:
IF TO THE COMPANY: U. S. ENERGY CORP.
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877 NORTH 8TH WEST
RIVERTON, WYOMING 82501
ATTN: KEITH LARSEN
FAX: 307-856-9271
WITH A COPY TO: THE LAW OFFICES OF STEPHEN E. ROUNDS
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1544 YORK STREET, SUITE 110
DENVER, COLORADO 80206
ATTN: STEPHEN E. ROUNDS, ESQ.
FAX: 303-377-0231
IF TO THE HOLDER: FREDERICK LUTZ
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1089 DUNBARTON CHASE
ATLANTA, GEORGIA 30319
SUCH NOTICE SHALL BE DEEMED TO BE GIVEN WHEN RECEIVED IF DELIVERED
PERSONALLY OR FIVE (5) BUSINESS DAYS AFTER THE DATE MAILED. ANY NOTICE MAILED
SHALL BE SENT BY CERTIFIED OR REGISTERED MAIL. ANY NOTICE OF ANY CHANGE IN SUCH
ADDRESS SHALL ALSO BE GIVEN IN THE MANNER SET FORTH ABOVE. WHENEVER THE GIVING
OF NOTICE IS REQUIRED, THE GIVING OF SUCH NOTICE MAY BE WAIVED IN WRITING BY THE
PARTY ENTITLED TO RECEIVE SUCH NOTICE.
(L) TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. THE COMPANY
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MAY CAUSE THE FOLLOWING LEGEND, OR ONE SIMILAR THERETO, TO BE SET FORTH ON THE
WARRANTS AND ON EACH CERTIFICATE REPRESENTING WARRANT SHARES OR ANY OTHER
SECURITY ISSUED OR ISSUABLE UPON EXERCISE OF THIS WARRANT NOT THERETOFORE
DISTRIBUTED TO THE PUBLIC OR SOLD TO UNDERWRITERS FOR DISTRIBUTION TO THE
PUBLIC, UNLESS LEGAL COUNSEL FOR THE COMPANY IS OF THE OPINION AS TO ANY SUCH
CERTIFICATE THAT SUCH LEGEND, OR ONE SIMILAR THERETO, IS UNNECESSARY:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR
SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES IS
THEN IN EFFECT, OR IN AN OPINION OF COUNSEL OF THE REGISTERED OWNER AND
ADDRESSED TO THE ISSUER AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER, SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER APPLICABLE
SECURITIES LAWS IS NOT REQUIRED."
(M) REGISTRATION UNDER THE SECURITIES ACT OF 1933 ("PIGGY BACK
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REGISTRATION"). THE COMPANY AGREES WITH THE HOLDER THAT THE COMPANY SHALL, ON
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BEHALF OF THE HOLDER, INCLUDE THE COMMON SHARES FOR PUBLIC RESALE BY THE HOLDER
IN A REGISTRATION STATEMENT ON FORM S-3 TO BE FILED WITH (AND USE ITS BEST
EFFORTS TO CAUSE SUCH REGISTRATION STATEMENT TO BE DECLARED EFFECTIVE AS
PROMPTLY AS PRACTICABLE BY) THE SEC, SUCH REGISTRATION STATEMENT TO INCLUDE
OTHER SHARES AND SECURITIES FOR RESALE HELD BY OTHER PERSONS. IF FORM S-3 IS NOT
AVAILABLE AT THAT TIME, THEN THE COMPANY SHALL FILE A REGISTRATION STATEMENT ON
SUCH FORM IS THEN AVAILABLE TO EFFECT A REGISTRATION OF THE COMMON SHARES,
SUBJECT TO THE CONSENT OF THE HOLDER, WHICH CONSENT WILL NOT BE UNREASONABLY
WITHHELD; AND (2) AS NECESSARY, QUALIFY SUCH OFFERS AND SALES OF THE COMMON
SHARES UNDER THE SECURITIES LAWS OF THE STATE OF RESIDENCE OF THE HOLDER. THE
COMPANY EXPECTS SUCH REGISTRATION STATEMENT WILL BE FILED WITH THE SEC IN THE
THIRD QUARTER 2003. THE COMPANY SHALL MAINTAIN THE EFFECTIVENESS OF THE
REGISTRATION STATEMENT AND THE CURRENT AND COMPLETE STATUS OF THE RELATED
PROSPECTUS, AT ITS SOLE EXPENSE, UNTIL ALL COMMON SHARES HAVE BEEN SOLD.
(N) APPLICABLE LAW. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED
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IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WYOMING. IN THE EVENT OF
LITIGATION, THE HOLDER AGREES THAT VENUE SHALL BE IN THE WYOMING COURTS.
[EXECUTION PAGE FOLLOWS]
IN WITNESS WHEREOF, THE COMPANY AND HOLDER HAVE CAUSED THIS WARRANT TO
BE EXECUTED BY ITS OFFICER THEREUNTO DULY AUTHORIZED.
DATED: JULY 2003
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U. S. ENERGY CORP.
BY:
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NAME: KEITH G. LARSEN
TITLE: PRESIDENT
PURCHASE FORM
Dated:
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The undersigned hereby irrevocably elects to exercise the Warrant to the extent
of purchasing shares of the Company's common stock and hereby
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makes payment of $ in payment of the actual exercise price
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thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
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(Please typewrite or print in block letters)
Address:
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Signature:
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ASSIGNMENT FORM
Dated:
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FOR VALUE RECEIVED,
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hereby sells, assigns and transfers unto
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(Name: Please typewrite or print in block letters)
Address:
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the right to purchase the Company's common stock represented by this Warrant to
the extent of shares as to which such right is exercisable and
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does hereby irrevocably constitute and appoint
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attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.
Signature:
-------------------------------