exhibit4_3.htm


    
      

    

     

     

    
      EXHIBIT
4.3

      WARRANT
TO PURCHASE COMMON SHARES

      U.S.
ENERGY CORP.

      


      This is
to certify that, for value received, Gordon Financial Advisors, LLC (the
“Holder”), is entitled to purchase, subject to the terms set forth below, from
U.S. Energy Corp., a Wyoming corporation (the “Company” or “we”), 40,000 shares of the common
stock (the “Common Shares”), of the Company at a purchase price per share of
$2.81, (the purchase
price of a Common Share is hereinafter sometimes referred to as the “Exercise
Price.”) at any time until 5:00 P.M., Mountain Time, three (3) years from the
date(s) of Vesting (the “Expiration Date,” subject to earlier termination as
provided in paragraph (a))  Such Warrants shall vest and be
exercisable as follows:

      


      10,000
warrants vesting on August 31, 2008 and expiring on August 30, 2011

      10,000
warrants vesting on November 30, 2008 and expiring on November 29,
2011

      10,000
warrants vesting on February 28, 2009 and expiring on February 27,
2012

      10,000
warrants vesting on May 20, 2009 and expiring on May 19, 2012

      


      The
Common Shares 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 part at any time or from time to time until the
Expiration Date(s) 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; provided however, that if the
closing stock market price for the Company’s Common Stock exceeds a gain of 150%
over the exercise price (for example $2.81 + 150% gain = $7.03) for a period of
twenty (20) consecutive trading days after the date of vesting of such warrants,
the Holder must exercise such warrants within thirty (30) days of such date or
such warrants will terminate.  If that day is a Saturday or a day when
banks are closed or authorized to be closed, then the next business day after
such 20th trading day.  The Company shall be under no obligation to
inform the Holder of the Company’s stock market price at any time.

      


      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
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.  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 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 fractional shares shall be issued upon the exercise
of this Warrant.

      


      (d)                 Exchange,
Assignment or Loss of Warrant.  This Warrant is
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 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)                 Notices
to Holders.  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.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      (g)                 Reclassification,
Reorganization or Merger.  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 as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant.  The foregoing provisions of
this Section (k) 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 Share on the record date for payment of the shares of the
subsidiary.

      


      (h)                 Registration
Under the Securities Act of 1933.  The Company
agrees to use its best efforts to include such Shares to be received upon
exercise of this Warrant in its next regular SEC registration
statement.  The Company shall file a Form S-3 registration statement
and use its best commercially reasonable efforts to have the SEC declare the
registration statement effective by August 31, 2008, all at the sole expense of
the Company.

      


      (i)                 Notices.  All
notices required to be given to any of the parties 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.

      877 North
8th West

      Riverton,
Wyoming 82501

      Attn:
Robert Scott Lorimer, Treasurer

      scott@usnrg.com

      Fax:
307-857-3050

      


      With a copy
to:                    The
Law Offices of Stephen E. Rounds

      4635 East
18th
Avenue

      Denver,
Colorado 80220

      Attn:
Stephen E. Rounds, Esq.

      sercounsel@msn.com

      Fax:
303-377-0231

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       

      If to the
Subscriber:             Gordon
Financial Advisors LLC

      205 Third
Ave, 19th
Floor

      New York,
New York 10003

      Attn:
Andrew Gordon

      agordon@gfanyc.com

      Fax:  212-477-0428

      


      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.

      


      (k)                 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
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.”

      


      (l)                 Applicable
Law.  This Warrant
shall be governed by, and construed in accordance with, the laws of the State of
Wyoming.

      


      IN
WITNESS WHEREOF, the Company and Holder have caused this Warrant to be executed
by its officer thereunto duly authorized.

      


      Effective:
May 21, 2008.

      


      Gordon
Financial Advisors
LLC                                                                           U.S.
Energy Corp.

      


      


      By:_____________________________                                                          By:
______________________________

      Name:
Andrew
Gordon                                                                                           Name:
Keith G. Larsen

      Title:  Managing
Partner                                                                                       
Title:  Chairman and CEO

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       

       

      WARRANT
EXERCISE FORM

      Dated: ________________                                          

      


      The
undersigned hereby irrevocably elects to exercise the Warrant to the extent of
purchasing ________________ shares of Common Stock and hereby makes payment of
$_____________________ in payment of the actual exercise price
thereof.

      


      INSTRUCTIONS
FOR REGISTRATION OF STOCK

      


      


      Name:                                                                                
                                                                                    

      (Please typewrite or print in block
letters)

      


      Address:                                                                             
                         



      


      Signature:                                                                           

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
 

      WARRANT
ASSIGNMENT FORM

      


      


      Dated:                                           

      


      FOR VALUE
RECEIVED,                                                                                                                
hereby sells, assigns and transfers unto                                                                                                                             
(Name:  Please typewrite or print in block letters)

      


      Address:                                                      

                             

                     
                   


      
 

      


      the right
to purchase Common Stock represented by this Warrant to the extent
of                                 
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint                                                                     
attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.

      


      Signature: