AGREEMENT AND RELEASE

 

This Agreement and Release (this “Agreement”) is entered into as of October 18,
2017, by and between U.S. Energy Corp. (the “Company”), a Wyoming corporation
and Stephen Conrad, Thomas Bandy, Jerry Danni, James Fraser, and Leo Heath
(collectively the “Former Directors”). The Company and the Former Directors are
collectively referred to herein as the “Parties”.

 

BACKGROUND

 

WHEREAS, the Company sponsors and maintains the U.S. Energy Corp. Amended and
Restated 2012 Equity and Performance Incentive Plan (the “Plan”)

 

AND WHEREAS, the Former Directors were Eligible Individuals under the Plan;

 

AND WHEREAS, on September 23, 2016 the board of directors of the Company
purported to grant to each Former Director 58,500 shares of Company Common Stock
$0.01 par value per share (the “Shares”) as restricted stock pursuant to the
Plan;

 

AND WHEREAS, on April 27, 2017 the board of directors of the Company, by written
consent, accelerated the vesting of the Shares;

 

AND WHEREAS, the Parties wish to resolve certain matters arising from the grant
and issuance of the Shares.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the Parties hereby agree as follows:

 

AGREED TERMS

 

1.       Release. In consideration of the issuance, to each of the Former
Directors, of 33,332 shares of Common Stock of the Company, each of the Former
Directors, severally, on behalf of himself, his predecessors, successors, direct
and indirect parent companies, direct and indirect subsidiary companies,
companies under common control with any of the foregoing, affiliates and
assigns, and his past, present and future officers, directors, shareholders,
interest holders, members, partners, attorneys, agents, employees, managers,
representatives, assigns and successors in interest, and all persons acting by,
through, under or in concert with them, and each of them, hereby release and
discharge the Company, together with its predecessors, successors, direct and
indirect parent companies, direct and indirect subsidiary companies, companies
under common control with any of the foregoing, affiliates and assigns and its
past, present and future officers, directors, shareholders, interest holders,
members, partners, attorneys, agents, employees, managers, representatives,
assigns and successors in interest, and all persons acting by, through, under or
in concert with them, and each of them, from all known and unknown charges,
complaints, claims, grievances, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts, penalties, fees, wages, medical costs, pain and suffering,
mental anguish, emotional distress, expenses (including attorneys’ fees and
costs actually incurred) and punitive damages, of any nature whatsoever, known
or unknown, which the Former Directors have, or may have had, against the
Company, whether or not apparent or yet to be discovered, or which may hereafter
develop, for any acts or omissions related to or arising from:

 

 

 

 

(a)       the Shares and any alleged entitlement of the Former Directors thereto
(the “Dispute”);

 

(b)       the failure by the Company to issue the Shares prior to the entry into
this Agreement by the Company and the undersigned;

 

(c)       any and all other agreements between the Parties;

 

(d)       any and all other matters between the Parties; and/or

 

(e)       any and all claims under federal, state, or local law, rule or
regulation.

 

This Agreement resolves any claim for relief that is, or could have been
alleged, no matter how characterized, including, without limitation,
compensatory damages, damages for breach of contract, bad faith damages,
reliance damages, liquidated damages, damages for humiliation and embarrassment,
punitive damages, costs and attorneys' fees related to or arising from the
Dispute.

 

2.       Share Issuance. The Company shall cause the issuance of 33,332 shares
of Common Stock of the Company to each of the Former Directors within 7 business
days of the effectiveness of this Agreement as determined by paragraph 15 below.

 

3.       Taxes and Attorneys’ Fees. Each Former Director shall be solely
responsible for, and is legally bound to make payment of, any taxes determined
to be due and owing (including penalties and interest related thereto) by it to
any federal, state, local or regional taxing authority as a result of the shares
of Common Stock of the Company received by the Former Directors. Each Former
Director understands that the Company has not made, and he does not rely upon,
any representations regarding the tax treatment of the sums paid or Common Stock
of the Company issued pursuant to this Agreement. Moreover, each Former Director
agrees to indemnify and hold the Company harmless in the event that any
governmental taxing authority asserts against the Company any claim for unpaid
taxes, failure to withhold taxes, penalties or interest based upon the issuance
of Common Stock to such Former Director. In addition, the Parties acknowledge
and agree that they are solely responsible for paying any attorneys' fees and
costs they incurred and that neither Party nor its attorney(s) will seek any
award of attorneys' fees or costs from the other Party.

 

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4.       No Outstanding or Known Future Claims/Causes of Action. Each Former
Director affirms that he has not filed with any governmental agency or court any
type of action or report against the Company, and currently knows of no existing
act or omission by the Company that may constitute a claim or liability excluded
from the release in paragraph 1 above.

 

5.       Acknowledgment of Settlement. Each Former Director acknowledges that
(a) the consideration set forth in this Agreement is in full settlement of all
claims or losses of whatsoever kind or character that he has, or may ever have
had, against the Company including by reason of the Dispute and (b) by signing
this Agreement, and accepting the consideration provided herein and the benefits
of it, he is giving up forever any right to seek further monetary or other
relief from the Company for any acts or omissions up to and including the date
hereof, including, without limitation, the Dispute.

 

6.       No Admission of Liability. The Former Directors acknowledge that this
Agreement was agreed upon as a compromise and final settlement of disputed
claims and that issuance of Common Stock of the Company to the Former Directors
is not, and may not be construed as, an admission of liability by the Company
and is not to be construed as an admission that the Company engaged in any
wrongful, tortious or unlawful activity. The Company specifically disclaims and
denies (a) any liability to the Former Directors and (b) engaging in any
wrongful, tortious or unlawful activity.

 

7.       Indemnification Agreement. Those certain Indemnification Agreements by
an between each of the Former Directors and Angelus Capital Group, dated May 2,
2017 shall remain in full force and effect and this Agreement shall have no
effect on the Indemnification Agreements.

 

8.       Agreement is Legally Binding. The Parties intend this Agreement to be
legally binding upon and shall inure to the benefit of each of them and their
respective successors, assigns, executors, administrators, heirs and estates.

 

9.       Entire Agreement. The recitals set forth at the beginning of this
Agreement are incorporated by reference and made a part of this Agreement. This
Agreement constitutes the entire agreement and understanding of the Parties and
supersedes all prior negotiations and/or agreements, proposed or otherwise,
written or oral, concerning the subject matter hereof. No modification of this
Agreement shall be binding unless in writing and signed by each of the parties
hereto.

 

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10.       Interpretation. Should any provision of this Agreement be declared or
be determined by any court to be illegal or invalid, the validity of the
remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a part of
this Agreement. The headings within this Agreement are purely for convenience
and are not to be used as an aid in interpretation. Moreover, this Agreement
shall not be construed against either Party as the author or drafter of the
Agreement.

 

11.       Governing Law and Choice of Forum. This Agreement is made and entered
into within and shall be governed by, construed, interpreted and enforced in
accordance with the laws of the State of Wyoming, without regard to the
principles of conflicts of laws. Any action to enforce this Agreement shall be
brought only in the state or federal courts located in the City and County of
Denver, Colorado.

 

12.       Reliance on Own Counsel. In entering into this Agreement, the Parties
acknowledge that they have relied upon the legal advice of their respective
attorneys, who are the attorneys of their own choosing, that such terms are
fully understood and voluntarily accepted by them, and that, other than the
consideration set forth herein, no promises or representations of any kind have
been made to them by the other Party.

 

13.       Counterparts. This Agreement may be executed by the Parties in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

14.       Authority to Execute Agreement. By signing below, each Party warrants
and represents that the person signing this Agreement on its behalf has
authority to bind that Party and that the Party’s execution of this Agreement is
not in violation of any by-law, covenants and/or other restrictions placed upon
them by their respective entities

 

15.       Effectiveness. This Agreement shall become effective, as of the date
above written, upon its execution and delivery by the Company and each of the
Former Directors.

 

[signature page follows]

 

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IN WITNESS WHEREOF, and intending to be legally bound, each of the Parties
hereto has caused this Agreement to be executed as of the date set forth above.

 

U.S. ENERGY CORP.         By: /s/ David Veltri   Name: David Veltri   Title:
Chairman, President and Chief Executive Officer  

 

/s/ Thomas Bandy   Thomas Bandy       /s/ Stephen Conrad   Stephen Conrad      
/s/ Jerry Danni   Jerry Danni       /s/ James Fraser   James Fraser       /s/
Leo Heath   Leo Heath  

 

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