Exhibit 10.4 Placement agent Agreement


     

      
        

      

    

     

     

    

      U.S.
        ENERGY CORP. 

      PLACEMENT
        AGENT AGREEMENT

      


      


      Dated
        as
        of: April
        __,
        2006

      


      Newbridge
        Securities Corporation

      1451
        Cypress Creek Road, Suite 204

      Fort
        Lauderdale, Florida 33309

      


      


      Ladies
        and Gentlemen:

      


      The
        undersigned, U.S. Energy Corp., a Wyoming corporation (the “Company”),
        hereby agrees with
        Newbridge Securities Corporation (the “Placement
        Agent”)
        as
        follows:

       

      1. Offering.
        The
        Company hereby engages the Placement Agent to act as its exclusive placement
        agent in connection with the Standby Equity Distribution Agreement dated
        the
        date hereof between the Company and Cornell Capital Partners, LP (the
“Investor”)
        (the
“Standby
        Equity Distribution Agreement”),
        pursuant to which the Company shall issue and sell to the Investor, from
        time to
        time, and the Investor shall purchase from the Company (the “Offering”)
        up to
        Fifty Million Dollars ($50,000,000) (the “Commitment
        Amount”)
        of the
        Company’s common stock, par value $0.01 per share (the “Common
        Stock”),
        at
        price per share equal to the Purchase Price, as that term is defined in the
        Standby Equity Distribution Agreement. The
        Placement Agent services
        shall
        consist of reviewing
        the
terms
        of
the
        Standby Equity Distribution Agreement and advising
        the
        Company with
        respect to those
        terms.
        The
        Placement Agent shall provide its advice in writing to the Company.

       

      All
        capitalized terms used herein and not otherwise defined herein shall have
        the
        same meaning ascribed to them as in the Standby Equity Distribution Agreement.
        The Investor will be granted certain registration rights with respect to
        the
        Common Stock as more fully set forth in the Registration Rights Agreement
        between the Company and the Investor dated the date hereof (the “Registration
        Rights Agreement”).
        The
        documents to be executed and delivered in connection with the Offering,
        including, but not limited, to the
        Company’s latest Quarterly Report on Form 10-Q as filed with the United States
        Securities and Exchange Commission, this
        Agreement, the Standby Equity Distribution Agreement, and the Registration
        Rights Agreement are referred to sometimes hereinafter collectively as the
        “Offering
        Materials.”
The
        Company’s Common Stock
        purchased by the Investor under
        the
        Standby Equity Distribution Agreement is sometimes referred to hereinafter
        as
        the “Securities.”
The
        Placement Agent shall not be obligated to sell any Securities.

       

      2. Compensation.

       

      A.  Upon
        the
        execution of this Agreement, the Company shall issue to the Placement Agent
        or
        its designee one thousand three hundred thirty nine (1,399) shares of the
        Company’s Common Stock (the “Placement
        Agent’s Shares”).
        The
        Placement Agent shall be 

       

       

       

      
        
           

        

        
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      entitled
        to “piggy-back” registration rights with respect to the Placement Agent’s
        Shares, which shall be triggered upon registration of any shares of Common
        Stock
        by the Company pursuant to the Registration Rights Agreement dated the date
        hereof. 

       

      3. Representations,
        Warranties and Covenants of the Placement Agent.

       

      A.  The
        Placement Agent represents, warrants and covenants as follows:

       

      (i)  The
        Placement Agent has the necessary power to enter into this Agreement and
        to
        consummate the transactions contemplated hereby.

       

      (ii)  The
        execution and delivery by the Placement Agent of this Agreement and the
        consummation of the transactions contemplated herein will not result in any
        violation of, or be in conflict with, or constitute a default under, any
        agreement or instrument to which the Placement Agent is a party or by which
        the
        Placement Agent or its properties are bound, or any judgment, decree, order
        or,
        to the Placement Agent’s knowledge, any statute, rule or regulation applicable
        to the Placement Agent. This Agreement when executed and delivered by the
        Placement Agent, will constitute the legal, valid and binding obligations
        of the
        Placement Agent, enforceable in accordance with their respective terms, except
        to the extent that (a) the enforceability hereof or thereof may be limited
        by
        bankruptcy, insolvency, reorganization, moratorium or similar laws from time
        to
        time in effect and affecting the rights of creditors generally, (b) the
        enforceability hereof or thereof is subject to general principles of equity,
        or
        (c) the indemnification provisions hereof or thereof may be held to be in
        violation of public policy.

       

      (iii)  Upon
        receipt and execution of this Agreement, the Placement Agent will promptly
        forward copies of this Agreement to the Company or its counsel and the Investor
        or its counsel.

       

      (iv)  The
        Placement Agent will not intentionally take any action that it reasonably
        believes would cause the Offering to violate the provisions of the Securities
        Act of 1933, as amended (the “1933
        Act”),
        the
        Securities Exchange Act of 1934 (the “1934
        Act”),
        the
        respective rules and regulations promulgated thereunder
        (the
“Rules
        and Regulations”)
        or
        applicable “Blue Sky” laws of any state or jurisdiction.

       

      (v)  The
        Placement Agent is a member of the National Association of Securities Dealers,
        Inc., and is a broker-dealer registered as such under the 1934 Act and under
        the
        securities laws of the states in which the Securities will be offered or
        sold by
        the Placement Agent unless an exemption for such state registration is available
        to the Placement Agent. The Placement Agent is in material
        compliance
        with the
        rules
        and regulations applicable to the Placement Agent generally and applicable
        to
        the Placement Agent’s participation in the Offering.

       

       

       

      
        
           

        

        
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      4. Representations
        and Warranties of the Company.

       

      B.  The
        Company represents and warrants as follows:

       

      The
        representations and warranties made by the Company in Sections 4.1 through
        4.20
        of the Standby Equity Distribution Agreement incorporated by reference herein.
        

       

      (i)  Subject
        to the performance by the Placement Agent of its obligations
        hereunder
        the
        offer and sale of the Securities complies,
        and
        will continue to comply,
        in all
        material respects with the requirements of Rule 506 of Regulation D promulgated
        by the SEC pursuant to the 1933 Act and any other applicable federal and
        state
        laws, rules, regulations and executive orders. Neither the Offering Materials
        nor any amendment or supplement thereto nor any documents prepared by the
        Company in connection with the Offering will contain any untrue statement
        of a
        material fact or omit to state any material fact required to be stated therein
        or necessary to make the statements therein, in light of the circumstances
        under
        which they were made, not misleading. All statements of material facts in
        the
        Offering Materials are true and correct as of the date of the Offering
        Materials.

       

      5. Certain
        Covenants and Agreements of the Company.

       

      The
        Company covenants and agrees at its expense and without any expense to the
        Placement Agent as follows:

       

      A.  To
        advise
        the Placement Agent of
        any
        material adverse change in the Company’s financial condition, prospects or
        business or of any development materially affecting the Company or rendering
        untrue or misleading any material statement in the Offering Materials occurring
        at any time as soon as the Company is either informed or becomes aware
        thereof.

       

       

      B.  To
        comply
        with the terms of the Offering Materials.

       

      C.  Upon
        the
        effectiveness of a registration statement covering the Securities, the Company
        shall promptly provide the Placement Agent with an opinion of Counsel to
        the
        Company, which opinion shall be in form and substance reasonably satisfactory
        to
        and the Placement Agent.

       

      D.  At
        or
        prior to the Closing, the Company shall have been furnished such documents,
        certificates and opinions as it may reasonably require for the purpose of
        enabling the Placement Agent to review or pass upon the matters referred
        to in
        this Agreement and the Offering Materials, or in order to evidence the accuracy,
        completeness or satisfaction of any of the representations, warranties or
        conditions herein contained.

       

      6. Indemnification
        and
        Limitation of Liability.

       

      A.  The
        Company hereby agrees that it will indemnify and hold the Placement Agent
        and
        each officer, director, shareholder, employee or representative of the Placement
        Agent 

       

       

       

      
        
           

        

        
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      and
        each
        person controlling, controlled by or under common control with the Placement
        Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
        1934
        Act or the SEC’s Rules and Regulations promulgated thereunder (the “Rules
        and Regulations”),
        harmless from and against any and all loss, claim, damage, liability, cost
        or
        expense whatsoever (including, but not limited to, any and all reasonable
        legal
        fees and other expenses and disbursements incurred in connection with
        investigating, preparing to defend or defending any action, suit or proceeding,
        including any inquiry or investigation, commenced or threatened, or any claim
        whatsoever or in appearing or preparing for appearance as a witness in any
        action, suit or proceeding, including any inquiry, investigation or pretrial
        proceeding such as a deposition) to which the Placement Agent or such
        indemnified person of the Placement Agent may become subject under the 1933
        Act,
        the 1934 Act, the Rules and Regulations, or any other federal or state law
        or
        regulation, common law or otherwise, arising out of or based upon (i) any
        untrue
        statement or alleged untrue statement of a material fact contained in (a)
        Section 4 of this Agreement, (b) the Offering Materials (except those written
        statements relating to the Placement Agent given by the
        Placement Agent
        for
        inclusion therein), (c) any application or other document or written
        communication executed by the Company or based upon written information
        furnished by the Company filed in any jurisdiction in order to qualify the
        Common Stock under the securities laws thereof, or any state securities
        commission or agency; (ii) the omission or alleged omission from documents
        described in clauses (a), (b) or (c) above of a material fact required to
        be
        stated therein or necessary to make the statements therein not misleading;
        or
        (iii) the breach of any representation, warranty, covenant or agreement made
        by
        the Company in this Agreement. The Company further agrees that upon demand
        by an
        indemnified person, at any time or from time to time, it will promptly reimburse
        such indemnified person for any loss, claim, damage, liability, cost or expense
        actually and reasonably paid by the indemnified person as to which the Company
        has indemnified such person pursuant hereto. Notwithstanding the foregoing
        provisions of this Paragraph 7(A), any such payment or reimbursement by the
        Company of fees, expenses or disbursements incurred by an indemnified person
        in
        any proceeding in which a final judgment by a court of competent jurisdiction
        (after all appeals or the expiration of time to appeal) is entered against
        the
        Placement Agent or such indemnified person based upon specific finding of
        fact
        that the Placement Agent or such indemnified person’s gross negligence or
        willful misfeasance will be promptly repaid to the Company.

       

      B.  The
        Placement Agent hereby agrees that it will indemnify and hold the Company
        and
        each officer, director, shareholder, employee or representative of the Company,
        and each person controlling, controlled by or under common control with the
        Company within the meaning of Section 15 of the 1933 Act or Section 20 of
        the
        1934 Act or the Rules and Regulations, harmless from and against any and
        all
        loss, claim, damage, liability, cost or expense whatsoever (including, but
        not
        limited to, any and all reasonable legal fees and other expenses and
        disbursements incurred in connection with investigating, preparing to defend
        or
        defending any action, suit or proceeding, including any inquiry or
        investigation, commenced or threatened, or any claim whatsoever or in appearing
        or preparing for appearance as a witness in any action, suit or proceeding,
        including any inquiry, investigation or pretrial proceeding such as a
        deposition) to which the Company or such indemnified person of the Company
        may
        become subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
        or
        any other federal or state law or regulation, common law or otherwise, arising
        out of or based upon (i) the material
        breach of any representation, warranty, covenant or agreement made by the
        Placement Agent in this Agreement, or (ii)
        any
        false or misleading information provided to the Company in
        writing by
        

       

       

       

      
        
           

        

        
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      one
        of
        the Placement Agent’s indemnified persons
        specifically for inclusion in the Offering Materials.

       

      C.  Promptly
        after receipt by an indemnified party of notice of commencement of any action
        covered by Section 7(A) or (B), the party to be indemnified shall, within
        five
        (5) business days, notify the indemnifying party of the commencement thereof;
        the omission by one (1) indemnified party to so notify the indemnifying
        party shall not relieve the indemnifying party of its obligation to indemnify
        any other indemnified party that has given such notice and shall not relieve
        the
        indemnifying party of any liability outside of this indemnification if not
        materially prejudiced thereby. In the event that any action is brought against
        the indemnified party, the indemnifying party will be entitled to participate
        therein and, to the extent it may desire, to assume and control the defense
        thereof with counsel chosen by it which is reasonably acceptable to the
        indemnified party. After notice from the indemnifying party to such indemnified
        party of its election to so assume the defense thereof, the indemnifying
        party
        will not be liable to such indemnified party under such Section 7(A) or (B),
        for
        any legal or other expenses subsequently incurred by such indemnified party
        in
        connection with the defense thereof, but the indemnified party may, at its
        own
        expense, participate in such defense by counsel chosen by it, without, however,
        impairing the indemnifying party’s control of the defense. Subject to the
        proviso of this sentence and notwithstanding any other statement to the contrary
        contained herein, the indemnified party or parties shall have the right to
        choose its or their own counsel and control the defense of any action, all
        at
        the expense of the indemnifying party if (i) the employment of such counsel
        shall have been authorized in writing by the indemnifying party in connection
        with the defense of such action at the expense of the indemnifying party,
        or
        (ii) the indemnifying party shall not have employed counsel reasonably
        satisfactory to such indemnified party to have charge of the defense of such
        action within a reasonable time after notice of commencement of the action,
        or
        (iii) such indemnified party or parties shall have reasonably concluded that
        there may be defenses available to it or them which are different from or
        additional to those available to one or all of the indemnifying parties (in
        which case the indemnifying parties shall not have the right to direct the
        defense of such action on behalf of the indemnified party or parties), in
        any of
        which events such fees and expenses of one additional counsel shall be borne
        by
        the indemnifying party; provided, however, that the indemnifying party shall
        not, in connection with any one action or separate but substantially similar
        or
        related actions in the same jurisdiction arising out of the same general
        allegations or circumstance, be liable for the reasonable fees and expenses
        of
        more than one separate firm of attorneys at any time for all such indemnified
        parties. No settlement of any action or proceeding against an indemnified
        party
        shall be made without the consent of the indemnifying party.

       

      D.  In
        order
        to provide for just and equitable contribution in circumstances in which
        the
        indemnification provided for in Section 7(A) or 7(B) is due in accordance
        with
        its terms but is for any reason held by a court to be unavailable on grounds
        of
        policy or otherwise, the Company and the Placement Agent shall contribute
        to the
        aggregate losses, claims, damages and liabilities (including legal or other
        expenses reasonably incurred in connection with the investigation or defense
        of
        same) which the other may incur in such proportion so that the Placement
        Agent
        shall be responsible for such percent of the aggregate of such losses, claims,
        damages and liabilities as shall equal the percentage of the gross proceeds
        paid
        to the Placement Agent and the Company shall be responsible for the balance;
        provided, however, that no person guilty of fraudulent misrepresentation
        within
        the meaning of Section 11(f) of the 1933 Act shall 

       

       

       

      
        
           

        

        
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      be
        entitled to contribution from any person who was not guilty of such fraudulent
        misrepresentation. For purposes of this Section 7(D), any person controlling,
        controlled by or under common control with the Placement Agent, or any partner,
        director, officer, employee, representative or any agent of any thereof,
        shall
        have the same rights to contribution as the Placement Agent and each person
        controlling, controlled by or under common control with the Company within
        the
        meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
        officer of the Company and each director of the Company shall have the same
        rights to contribution as the Company. Any party entitled to contribution
        will,
        promptly after receipt of notice of commencement of any action, suit or
        proceeding against such party in respect of which a claim for contribution
        may
        be made against the other party under this Section 7(D), notify such party
        from
        whom contribution may be sought, but the omission to so notify such party
        shall
        not relieve the party from whom contribution may be sought from any obligation
        they may have hereunder or otherwise if the party from whom contribution
        may be
        sought is not materially prejudiced thereby. 

       

      E.  The
        indemnity and contribution agreements contained in this Section 7 shall remain
        operative and in full force and effect regardless of any investigation made
        by
        or on behalf of any indemnified person or any termination of this
        Agreement.

       

      F.  The
        Company hereby waives, to the fullest extent permitted by law, any right
        to or
        claim of any punitive, exemplary, incidental, indirect, special, consequential
        or other damages (including, without limitation, loss of profits) against
        the
        Placement Agent and each officer, director, shareholder, employee or
        representative of the placement agent and each person controlling, controlled
        by
        or under common control with the Placement Agent within the meaning of Section
        15 of the 1933 Act or Section 20 of the 1934 Act or the Rules and Regulations
        arising out of any cause whatsoever (whether such cause be based in contract,
        negligence, strict liability, other tort or otherwise). Notwithstanding anything
        to the contrary contained herein, the aggregate liability of the Placement
        Agent
        and each officer, director, shareholder, employee or representative of the
        Placement Agent and each person controlling, controlled by or under common
        control with the Placement Agent within the meaning of Section 15 of the
        1933
        Act or Section 20 of the 1934 Act or the Rules and Regulations shall not
        exceed
        the compensation received by the Placement Agent pursuant to Section 2 hereof.
        This limitation of liability shall apply regardless of the cause of action,
        whether contract, tort (including, without limitation, negligence) or breach
        of
        statute or any other legal or equitable obligation.

       

      7. Payment
        of Expenses.

       

      The
        Company hereby agrees to bear all of the expenses in connection with the
        Offering, including, but not limited to the following: filing fees, printing
        and
        duplicating costs, advertisements, postage and mailing expenses with respect
        to
        the transmission of Offering Materials, registrar and transfer agent fees,
        escrow agent fees and expenses, fees of the Company’s counsel and accountants,
        issue and transfer taxes, if any. 

       

      8. Termination.

       

      This
        Agreement shall be co-terminus with, and terminate upon the same terms and
        conditions as those set forth in the Standby Equity Distribution Agreement.
        

       

       

       

      
        
           

        

        
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      9. Miscellaneous.

       

      A.  This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        deemed to be an original, but all which shall be deemed to be one and the
        same
        instrument.

       

      B.  Any
        notice required or permitted to be given hereunder shall be given in writing
        and
        shall be deemed effective when deposited in the United States mail, postage
        prepaid, or when received if personally delivered or faxed (upon confirmation
        of
        receipt received by the sending party), addressed as follows
        to such
        other address of which written notice is given to the others):

       

      
        	
                If
                  to Placement Agent, to:

              	
                Newbridge
                  Securities Corporation

              
	 	
                1451
                  Cypress Creek Road, Suite 204

              
	 	
                Fort
                  Lauderdale, Florida 33309

              
	 	
                Attention: Doug
                  Aguililla

              
	 	
                Telephone: (954)
                  334-3450

              
	 	
                Facsimile: (954)
                  229-9937

              
	 	 
	
                If
                  to the Company, to:

              	
                U.S.
                  Energy Corp. 

              
	 	
                877
                  North 8th
                  West

              
	 	
                Glen
                  L. Larsen Building

              
	 	
                Riverton,
                  WY 82501

              
	 	
                Attention:
                  Mark J. Larsen

              
	 	
                Telephone:
                  (307)
                  856-9271

              
	 	
                Facsimile:
                  (307)
                  857-3050

              
	 	 
	
                With
                  a copy to:

              	
                The
                  Law Office of Stephen E. Rounds

              
	 	
                1544
                  York Street, Suite 110

              
	 	
                Denver,
                  CO 80206

              
	 	
                Attention
                  : Stephen E. Rounds

              
	 	
                Telephone:
                  (303) 377-6997

              
	 	
                Facsimile:
                  (303) 377-0231

              
	 	 
	 	 


      

      


      C.  This
        Agreement shall be governed by and construed in all respects under the laws
        of
        the State of New Jersey, without reference to its conflict of laws rules
        or
        principles. Any suit, action, proceeding or litigation arising out of or
        relating to this Agreement shall be brought and prosecuted in such federal
        or
        state court or courts located within the State of New Jersey as provided
        by law.
        The parties hereby irrevocably and unconditionally consent to the jurisdiction
        of each such court or courts located within the State of New Jersey and to
        service of process by registered or certified mail, return receipt requested,
        or
        by any other manner provided by applicable law, and hereby irrevocably and
        unconditionally waive any right to claim that any suit, action, proceeding
        or
        litigation so commenced has been commenced in an inconvenient
        forum.

       

       

       

      
        
           

        

        
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      D.  This
        Agreement and the other agreements referenced herein contain the entire
        understanding between the parties hereto and may not be modified or amended
        except by a writing duly signed by the party against whom enforcement of
        the
        modification or amendment is sought.

       

      E.  If
        any
        provision of this Agreement shall be held to be invalid or unenforceable,
        such
        invalidity or unenforceability shall not affect any other provision of this
        Agreement.

       

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      IN
        WITNESS WHEREOF,
        the
        parties hereto have executed this Placement Agent Agreement as of the date
        first
        written above.

       

      
        	 	 
	 	
                U.S.
                  Energy Corp.

              
	 	 
	 	
                By: /s/
                  Mark J. Larsen   

              
	 	
                Name: 
                  Mark J. Larsen

              
	 	
                Title: 
                  President

              
	 	 
	 	 
	 	 
	 	
                Newbridge
                  Securities Corporation

              
	 	 
	 	
                By: /s/
                  Guy S. Amico   

              
	 	
                Name: Guy
                  S. Amico

              
	 	
                Title: President

              
	 	 
	 	 


      

      


      


      
        
           

        

        
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