Void After 12:00 O'clock Midnight., Mountain Time, on December 2, 2000
WARRANT TO PURCHASE 225,000 COMMON SHARES
U.S. ENERGY CORP.
This is to Certify That, FOR VALUE RECEIVED, SUNRISE
FINANCIAL GROUP of 135 East 57th Street, 11th Floor, New York, NY
10022 ("Holder"), is entitled to purchase, subject to the
provisions of this Warrant, from U.S. ENERGY CORP. (the
"Company"), a Wyoming corporation, at any time until 12:00
O'clock Midnight, Mountain Time, on December 2, 2000 ("Expiration
Date"), 225,000 Common Shares of the Company at a price of $10.50
per share, the ("Purchase Price") during the period this Warrant
is exercisable.
(a) Exercise of Warrant. This Warrant may be exercised 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 payment of the Purchase price for the number of
shares specified in such Form. 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 holders of this Warrant
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
Company's 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 of the Company. 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 Purchase 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 agrees that at all
times there shall be reserved for issuance and 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) Substitution or Replacement of Warrant. This Warrant
may be divided or combined with up to ten 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. Not withstanding the foregoing, this Warrant
shall not be divided in such manner that there are, at any time
that this Warrant is outstanding, more than ten Holders of this
Warrant and any other Warrants that carry the same rights
as this Warrant. 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.
(d) Rights of the Holder. The Holder shall not, by virtue
hereof, be 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.
(e) Notices to Holder. So long as this Warrant shall be
outstanding 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.
(f) Reclassification, Reorganization or Merger. Subject to
the last sentence of this subsection (f), in case of any
reclassification, capital reorganization or other change of
outstanding Common Shares of the Company (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 nearly
equivalent as may be practicable to the adjustments provided for
in this Warrant. The foregoing provisions of this Section (f)
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 record date for
payment of the shares of the subsidiary. The Holder shall not
have the right to exercise this Warrant to purchase shares of any
entity into which the Company may convey all or some of its
uranium properties and/or uranium processing facilities, or any
interests or rights in such properties or facilities, regardless
of whether such properties, facilities, interest and right
constitute all or substantially all of the assets of the Company
and regardless of whether the shareholders of the Company were or
will be granted the right to vote upon the approval of the
conveyance thereof to any entity.
(g) Registration Under the Securities Act of 1933.
(1) Within 45 days after receipt of a written request
by the then Holder(s) of the Warrant, provided the request
is made after December 2, 1998 and before the expiration of
this warrant, the Company will file, no more than once, a
registration statement under the Securities Act of 1933, as
amended, registering the Warrant Shares. The Company will
use its best efforts to cause such registration statement to
become effective.
(2) If at any time during the period commencing
December 1, 1997, and ending December 1, 1998, the Company
should file a registration statement (which term shall not
include any registration statement filed on Forms S-8 or S-
4) under the Securities Act of 1933, as amended (the "Act"),
which relates to a current offering of securities of the
Company (other than solely in exchange for properties,
assets or stock of other individuals or corporations), such
registration statement and the prospectus included therein
shall also, at the written request to the Company from the
Holder(s) of the Warrants, relate to, and meet the
requirements of the Act with respect to any public offering
of the Warrant Shares so as to permit the public sale
thereof in compliance with the Act. The Company shall give
notice to the Holder(s) of its intention to file a
registration statement under the Act relating to a current
offering of the aforesaid securities of the Company prior to
the filing of such registration statement, and the written
request provided for in the first sentence of this
subsection shall be made by the Holder(s) to file such
registration statement. Neither the delivery of such notice
by the Company nor of such request by the Holder(s) shall in
any
way obligate the Company to file such registration
statement and notwithstanding the filing of such
registration statement, the Company may, at any time prior
to the effective date thereof, determine not to proceed to
effectiveness with such registration statement, without
liability to the Holders(s). The Company shall pay all
expenses (with the exception of any selling commissions
relating to the sale of the Warrant Shares which shall be
paid by the sellers thereof) of any such registration
statement.
(3) In addition, the Company will cooperate with the
then Holder(s) of the Warrant Shares in preparing and
signing any registration statement, in addition to the
registration statements discussed above, required in order
to sell or transfer the Warrant Shares and will sign and
supply all information required therefor.
(4) When, pursuant to subsection (1), (2), or (3) of
this Section, the Company shall take any action to permit a
public offering or sale or other distribution of the Warrant
Shares, the Company shall:
(A) Supply to the selling Holder(s) two executed
copies of each registration statement and a reasonable
number of copies of the preliminary, final and other
prospectus in conformity with requirements of the Act
and the Rules and Regulations promulgated thereunder
and such other documents as the Holders shall
reasonably request.
(B) Take all actions necessary to register or
qualify for sale the Warrant Shares in up to one state
selected by the Holder. The Company shall bear the
complete cost and expense (other than any selling
commissions relating to the sale of the Warrant Shares,
which shall be paid by the seller thereof) of such
registrations or qualifications except those filed
under subsection (g)(3) which shall be at the Holder's
cost and expense.
(C) Keep effective such registration statement
until the first of the following events occur: (i) 12
months have elapsed after the effective date of such
registration statement or (ii) all of the registered
Warrant Shares issued by the Company either before or
after the effective date of such registration statement
has been publicly sold under such registration
statement.
(5) The Holder(s) shall supply such information as the
Company may reasonably require from such Holder(s), or any
underwriter for any of them, for inclusion in such
registration statement or post effective amendment.
(6) The Company's agreements with respect to the
Warrant Shares in this Section will continue in effect
regardless of the exercise or surrender of this Warrant.
(7) If the Company registers the Warrants under (g)(2)
above, solely to accommodate the registration of the Warrant
Shares, the Holder(s) agree not to sell or otherwise
transfer the Warrants pursuant to the Registration Statement
for a period of 24 months after the effective date. Such
lock-up shall not extend to the Warrant Shares purchased on
exercise of the Warrants.
(8) Any notices or certificates by the Company to the
Holder(s) and by the Holders(s) to the Company shall be
deemed delivered if in writing and delivered personally or
sent by certified mail, return receipt requested, to the
Holder, addressed to him at his address as set forth on the
Warrant or stockholder register of the Company, or, if the
Holder has designated, by notice in writing to the company,
any other address, to such other address, and, if to the
Company, addressed to it at 877 North 8th West, Riverton,
Wyoming 82501. The Company may change its address by
written notice to the Holders.
(h) Transfer to Comply with the Securities Act of 1933.
The Company may cause the following legend, or one similar
thereto, to be set forth on the Warrant 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 pursuant to Section (g) hereof; 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 certificate may not
be offered for sales sold or otherwise transferred
except pursuant to an effective registration statement
made under the Securities Act of 1933 (the "Act") and
under any applicable state securities law, or pursuant
to an exemption from registration under the Act and
under any applicable state securities law, the
availability of which is to be established to the
satisfaction of the Company."
(i) Applicable Law. This Warrant shall be governed by, and
construed in accordance with, the laws of the state of Wyoming.
Dated as of January 9, 1998.
U.S. ENERGY CORP.
By: /s/ Keith G. Larsen
---------------------------
KEITH G. LARSEN, PRESIDENT
ASSIGNMENT FORM
Dated: ____________, 19___
FOR VALUE RECEIVED,
hereby sells, assigns and transfers unto ___________________________
Name: _____________________________________________________________
(Please typewrite or print in block letters)
Address: __________________________________________________________
the right to purchase the $.01 par value Common Shares represented by
Assignor's Warrant to the extent of Common Shares of U.S. Energy Corp.
(the "Company") as to which such right is exercisable.
When Assignee exercises his or her Warrant, please complete the
Purchase Form and return a copy of this Assignment to U.S. Energy
Corp. at 877 North 8th West, Riverton, WY 82501 with full power
to transfer the same on the books of the Company. The signature
on this Assignment Form and the Purchase Form are both to be
Medallion guaranteed.
ASSIGNOR
Signature: ____________________
Name: __________________________
Title: ________________________
(MEDALLION GUARANTY)
PURCHASE FORM
To: U.S. Energy Corp.
877 North 8th West
Riverton, WY 82501
Dated: ________________, 19___
The undersigned hereby irrevocably elects to exercise the Warrant
originally issued to Sunrise Financial Group to the exten of
purchasing ____________ shares of the $.01 par value Common Shares
of U.S. Energy Corp. and hereby makes payment of $_____________ to
U.S. Energy Corp. in payment of the actual Purchase Price thereof.
INSTRUCTIONS FOR REGISTRATION OF SHARES
Please register the shares in the following name(s):
__________________________________________________________________
__________________________________________________________________
(Please typewrite or print in block letters)
____________________________________
Social Security Number or
Federal ID Number
____________________________________
____________________________________
Address
____________________________________
____________________________________
Signature(s)
(MEDALLION GUARANTY)