Document:

EMPLOYMENT
AGREEMENT

 

This
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into effective as of November 21, 2018 (the “Effective
Date”), by and between U.S. Energy Corp., a Wyoming corporation (the “Company”), and Ryan Smith (“Employee”).

 

W
I T N E S S E T H :

 

WHEREAS,
the Company desires to employ Employee and Employee desires to be employed by the Company in accordance with the terms and conditions
set forth herein; and

 

NOW,
THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and Employee hereby agree as follows:

 

Section
1. Definitions.

 

(a)
“2012 Equity Incentive Plan” shall mean the U.S. Energy Corp. 2012 Equity Incentive Plan, including all amendments
and restatements, and as may be amended going forward from time to time.

 

(b)
“Accrued Obligations” shall mean (i) all accrued but unpaid Base Salary through the date of termination of Employee’s
employment, (ii) any unpaid or unreimbursed expenses incurred in accordance with Section 7 below, (iii) any benefits provided
under the Company’s employee benefit plans upon a termination of employment, in accordance with the terms contained therein,
and (iv) reasonable relocation costs, to the extent unpaid or unreimbursed, payable to Employee by the Company, in accordance
with written Company policy.

 

(c)
“Affiliate” shall mean any person controlling, controlled by, or under common control with, another Person.

 

(d)
“Aggregate Change of Control Payments” shall have the meaning set forth in Section 8(g).

 

(e)
“Annual Bonus” shall mean the aggregate value of the Annual Cash Bonus and the Annual Equity Bonus.

 

(f)
“Annual Cash Bonus” shall have the meaning set forth in Section 4(b).

 

(g)
“Annual Equity Bonus” shall have the meaning set forth in Section 4(c).

 

(h)
“Agreement” shall have the meaning set forth in the preamble hereto.

 

(i)
“Base Salary” shall mean the salary provided for in Section 4(a) or any increased salary granted to Employee pursuant
to Section 4(a).

 

(j)
“Board” shall mean the Board of Directors of the Company.

 

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(k)
“Cause” shall mean (i) a material breach of the terms and conditions of Employee’s employment agreement with
the Company, (ii) Employee’s act(s) of gross negligence or willful misconduct in the course of Employee’s employment
hereunder that is injurious to the Company or any other member of the Company Group, (iii) willful failure or refusal by Employee
to perform in any material respect Employee’s duties or responsibilities, (iv) misappropriation by Employee of any assets
of the Company or any other member of the Company Group, (v) embezzlement or fraud committed by Employee, or at Employee’s
direction, (vi) Employee’s conviction of, or pleading “guilty” or “no contest” to a felony under
state or federal law.

 

(l)
“Change of Control” shall mean the first to occur of any of the following:

 

(i)
“change of control event” with respect to the Company, within the meaning of Treas. Reg. §1.409A-3(i)(5);

 

(ii)
during any period of two years, individuals who at the beginning of such period constitute the Board (and any new director whose
election by the Company’s shareholders was approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of the period or whose election or nomination for election was so approved) cease for
any reason to constitute a majority thereof; or

 

(iii)
a merger, consolidation, or reorganization of the Company with or involving any other entity, other than a merger, consolidation,
or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50%
of the combined voting power of the securities of the Company (or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.

 

(iv)
not withstanding the foregoing, Section 1 (l) “Change of Control” shall exclude the transaction(s) of any conversion(s)
of current debt in whole or part controlled by Angelus Private Equity Group and any acquisition(s) of assets from Angelus Private
Equity Group from the provisions of Section 8.

 

(m)
“COBRA” shall mean the health care continuation provisions of Section 4980B(f) of the Code.

 

(n)
“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(o)
“Company” shall have the meaning set forth in the preamble hereto, and shall include any of its successors or assigns.

 

(p)
“Company Business” shall have the meaning in set forth in Section 12(a).

 

(q)
“Company Group” shall mean the Company together with any direct or indirect subsidiaries of the Company or any of
its Affiliates.

 

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(r)
“Compensation Committee” shall mean the committee of the Board designated to make compensation decisions relating
to senior executive officers of the Company Group.

 

(s)
“Confidential Information” shall have the meaning in set forth in Section 11(b).

 

(t)
“Disability” shall mean any physical or mental disability or infirmity of the Employee that has prevented the performance
of Employee’s duties for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days
during any six (6) month period. Any question as to the existence, extent, or potentiality of Employee’s Disability upon
which Employee and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company
and approved by Employee (which approval shall not be unreasonably withheld). The determination of any such physician shall be
final and conclusive for all purposes of this Agreement.

 

(u)
“Dodd-Frank Act” shall have the meaning in set forth in Section 23

 

(v)
“Effective Date” shall have the meaning set forth in the preamble hereto.

 

(w)
“Employee” shall have the meaning set forth in the preamble hereto.

 

(x)
“Good Reason” shall mean, without Employee’s consent, (i) a material diminution in Employee’s title, duties,
or responsibilities, (ii) the failure of the Company to pay any compensation hereunder when due or to perform any other obligation
of the Company under this Agreement, or (iii) the relocation of Employee’s Principal Place of Employment by more than fifty
(50) miles from those cities identified in 1(cc).

 

(y)
“Non-Exempt Deferred Compensation” shall have the meaning set forth in Section 14(d).

 

(z)
“Original Agreement” shall have the meaning set forth in the recitals hereto.

 

(aa)
“Performance Criteria” shall have the meaning set forth in Section 4(b).

 

(bb)
“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association,
joint-stock company, trust (charitable or non-charitable), unincorporated organization, or other form of business entity.

 

(cc)
“Principal Place of Employment” shall mean, The Principle Corporate Offices of U.S. Energy Corp, Denver, Colorado,
Houston, Texas or any future geographic location that is mutually agreed upon by the Company and Employee.

 

(dd)
“Required Delay Period” shall have the meaning in set forth in Section 13(d)(i).

 

(ee)
“Restricted Territory” shall have the meaning set forth in Section 12(a).

 

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(ff)
“Rules” shall have the meaning set forth in Section 24.

 

(gg)
“Specified Employee” shall have the meaning set forth in Section 13(d).

 

(hh)
“Term” shall mean the period specified in Section 2.

 

(ii)
“Work Product” shall have the meaning set forth in Section 11.

 

Section
2. Acceptance and Term. The Company agrees to employ Employee, and Employee agrees to serve the Company, on the terms and
conditions set forth herein. The “Term” shall mean the period commencing on the Effective Date and, unless terminated
sooner as provided in Section 8 hereof, continuing until January 1, 2020. Following the end of the Term, the Employee shall be
employed on an “at-will” basis, and the provisions of this Agreement shall no longer apply except to the extent that
a provision hereunder specifically continues to apply after the end of the Term, including but not limited to Sections 10, 11
and 12.

 

Section
3. Position, Duties, and Responsibilities; Place of Performance.

 

(a)
During the Term, Employee shall be employed and serve as Chief Financial Officer of the Company and shall have such duties and
responsibilities as are commensurate with such title. In addition, Employee shall serve as the “principal accounting officer”
of the Company as that term is designated under Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended, except as may
otherwise be determined by the Board. The Employee shall report to the Board of Directors and Chief Executive Officer of the Company
and shall carry out and perform all orders, directions and policies given to Employee by the Board of Directors and Chief Executive
Officer of the Company consistent with his position and title.

 

(b)
Employee shall devote his best efforts to the performance of his duties under this Agreement and shall not engage in any other
business or occupation during the Term that interferes with Employee’s exercise of judgment in the Company’s best
interests. Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) serving as a member of the boards of
directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses, (ii) engaging
in charitable activities and community affairs, and (iii) managing his personal investments and affairs; provided, however,
that the activities set out in clauses (i), (ii), and (iii) shall be limited by Employee so as not to materially interfere, individually
or in the aggregate, with the performance of his duties and responsibilities hereunder. Any relevant industry related involvement
through ownership, board representation or investments shall be disclosed by the Employee.

 

Section
4. Compensation. During the Term, Employee shall be entitled to the following compensation:

 

(a)
Base Salary. Employee shall be paid an annualized Base Salary, payable in United States dollars and less applicable taxes
and deductions and in accordance with the regular payroll practices of the Company, of Two Hundred Forty Thousand Dollars ($240,000)
with increases, if any, as may be approved in writing by the Compensation Committee.

 

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(b)
Annual Cash Bonus. During the Company’s 2019 fiscal year starting January 1, 2019 and ending December 31, 2019, and
subject to the satisfaction of applicable Performance Criteria (as defined below) and any other conditions required by the Compensation
Committee, the Employee shall be entitled to an annual bonus cash award (“Annual Cash Bonus”) with a minimum Annual
Cash Bonus equal to one-half (0.5) times the Base Salary and a maximum amount of two and a half (2.5) times the Base Salary for
the 2019 fiscal year of the Company as determined by the Compensation Committee in its sole discretion; provided, however,
that the Annual Cash Bonus for the 2019 fiscal year will be paid to the Employee within the period necessary to satisfy the exemption
from Code Section 409A (as defined below) for short term deferrals set forth in Treas. Reg. §1.409A-1(b)(4) (which generally
requires that payment be made not later than 2-1/2 months after the end of the year in which the amount becomes vested). A minimum
threshold level of performance predetermined by the Compensation Committee for such Performance Criteria must be achieved or no
Annual Cash Bonus will be paid during the performance period. The Annual Cash Bonus shall be based on the Compensation Committee’s
evaluation of the condition of Company’s business, the results of operations, Employee’s individual performance for
the performance period, the satisfaction by Employee or the Company of goals and milestones, including goals based on Performance
Objectives (as that term is defined in the 2012 Equity Incentive Plan or any applicable successor plan), as may be established
by the Compensation Committee, or any combination thereof (collectively, “Performance Criteria”). The performance
period for the Annual Cash Bonus shall be the 2019 fiscal year of the Company or such other performance period as established
by the Compensation Committee in its sole discretion, with the applicable Annual Cash Bonus amounts adjusted for such performance
period in proportion to the annual amounts set above.

 

(c)
Annual Equity Bonus Grants. During the Company’s 2019 fiscal year starting January 1, 2019 and ending December 31,
2019, and subject to the satisfaction of applicable Performance Criteria and any other conditions required by the Compensation
Committee, the Employee shall be eligible to receive an annual equity grant (“Annual Equity Bonus”) pursuant to the
2012 Equity Incentive Plan (or any applicable successor plan subject to applicable limitations in such plan(s)) with a minimum
value equal to one (1.0) times the Base Salary and a maximum value of three (3.0) times the Base Salary for the 2019 fiscal year
of the Company as determined by the Compensation Committee in its sole discretion. A minimum threshold level of performance predetermined
by the Compensation Committee for such Performance Criteria must be achieved or no Annual Equity Bonus will be paid during such
performance period. For an Annual Equity Bonus grant that is intended to constitute performance-based compensation exempt from
the deduction limitations of Section 162(m) of the Code (other than grants of options or stock appreciation rights), the amount
of the Annual Equity Bonus payable shall be contingent upon the achievement of reasonable, pre-established, and objective performance
goals established by the Compensation Committee in accordance with Treas. Reg. §1.162-27(e) for the taxable year and communicated
to Employee and shall be subject to applicable limitations as specified in the 2012 Equity Incentive Plan (or any applicable successor
plan).

 

Section
5. Employee Benefits.

 

(a)
General. During the Term, Employee shall be entitled to participate in health insurance, retirement plans, directors’
and officers’ insurance coverage and other benefit programs provided to other senior executives of the Company, as in effect
from time to time and subject to prescribed eligibility waiting periods.

 

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(b)
Vacation and Time Off. During each calendar year of the Term, Employee shall be eligible for fifteen (15) days paid vacation,
as well as sick pay and other paid and unpaid time off in accordance with the policies and practices of the Company, as in effect
from time to time.

 

Section
6. Key-Man Insurance. At any time during the Term, the Company shall have the right to insure the life of Employee for
the sole benefit of the Company, in such amounts, and with such terms, as it may determine. All premiums payable thereon shall
be the obligation of the Company. Employee shall have no interest in any such policy, but agrees to cooperate with the Company
in procuring such insurance by submitting to physical examinations, supplying all information required by the insurance company,
and executing all necessary documents, provided that no financial obligation is imposed on Employee by any such documents. Upon
the termination of his employment for any reason, Company will allow Employee to convert the insurance policy to a permanent personal
life insurance policy.

 

Section
7. Reimbursement of Business Expenses. Employee is authorized to incur reasonable business expenses in carrying out his
duties and responsibilities under this Agreement, and the Company shall promptly reimburse Employee for all such reasonable business
expenses, subject to documentation in accordance with written Company policy, as in effect from time to time.

 

Section
8. Termination of Employment.

 

(a)
General. The Term shall terminate earlier than as provided in Section 2 hereof upon the earliest to occur of (i) Employee’s
death, (ii) a termination by reason of a Disability, (iii) a termination by the Company with or without Cause, or (iv) a termination
by Employee with or without Good Reason.

 

(b)
Termination Due to Death or Disability. Employee’s employment shall terminate automatically upon his death. The Company
may terminate Employee’s employment immediately upon the occurrence of a Disability. In the event Employee’s employment
is terminated during the Term due to his death or Disability, subject to Section 8(h) of this Agreement for a termination due
to Disability, Employee or his estate or his beneficiaries, as the case may be, shall be entitled to:

 

(i)
The Accrued Obligations, which amount shall be paid within thirty (30) days from the date of such termination; and

 

(ii)
Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such
amount determined based on actual performance during such fiscal year as determined by the Compensation Committee, which amount
shall be paid on the sixtieth (60th) day following the date of such termination; and

 

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(iii)
Any Annual Bonus that would have been payable based on actual performance with respect to the year of termination in the absence
of the Employee’s death or Disability, pro-rated for the period the Employee worked prior to his death or Disability, and
payable at the same time as the bonus would have been paid in the absence of the Employee’s death or Disability; and

 

(iv)
Immediate vesting of any and all equity or equity-related awards previously awarded to the Employee, irrespective of type of award.

 

Following
such termination of Employee’s employment by reason of death or Disability, except as set forth in this Section 8(b), Employee
shall have no further rights to any compensation or any other benefits under this Agreement.

 

(c)
Termination by the Company for Cause.

 

(i)
The Company may terminate Employee’s employment at any time for Cause; provided, however, that with respect
to any Cause of termination relying on clause (i) or (ii) of the definition of Cause set forth in Section 1(l) hereof, to the
extent such act or acts are curable, Employee shall be given not less than sixty (60) days’ written notice by the Board
of the Company’s intention to terminate Employee’s employment for Cause, such notice to state in detail the particular
act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Cause is based, and
such termination shall be effective at the expiration of such sixty (60) day notice period, unless Employee has substantially
cured, to the Company’s satisfaction, such act or acts or failure or failures to act that give rise to Cause during such
period.

 

(ii)
In the event the Company terminates Employee’s employment for Cause, Employee shall be entitled only to the Accrued Obligations,
which amount shall be paid within thirty (30) days from the date of such termination, and any equity awards or equity-related
awards that are not vested as of the date of termination shall be cancelled. Following such termination of Employee’s employment
for Cause, except as set forth in this Section 8(c)(ii), Employee shall have no further rights to any compensation or any other
benefits under this Agreement (including, but not limited to, any payment of any bonus that has not been paid as of the date of
Employee’s termination of employment).

 

(d)
Termination by the Company without Cause. The Company may terminate Employee’s employment at any time without Cause.
In the event Employee’s employment is terminated during the Term by the Company without Cause (other than due to death or
Disability) and subject to the terms of Section 8(h), Employee shall be entitled to:

 

(i)
The Accrued Obligations; and

 

(ii)
Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such
amount determined based on actual performance during such fiscal year as determined by the Compensation Committee; and

 

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(iii)
A lump sum cash payment equal to twelve (12) months the Employee’s Base Salary; and

 

(iv)
A lump sum cash payment equal to twelve (12) times the “applicable percentage” of the monthly COBRA premium cost applicable
to Employee if Employee (or his dependents) were to elect COBRA coverage, or similar coverage as provided by similar state law,
in connection with such termination, (for purposes hereof, the “applicable percentage” shall be the percentage of
Employee’s health care premium costs covered by the Company as of the date of termination); and

 

(v)
Immediate vesting of any and all equity or equity-related awards previously awarded to the Employee, irrespective of type of award.

 

Any
amounts payable to Employee under clause (i), (ii), or (iii) of this Section 8(d) shall be paid in lump sum on the sixtieth (60th)
day following the date of Employee’s termination of employment, subject to Section 8(h) of this Agreement. Following such
termination of Employee’s employment by the Company without Cause, except as set forth in this Section 8(d), Employee shall
have no further rights to any compensation or any other benefits under this Agreement.

 

(e)
Termination by Employee with Good Reason. Employee may terminate Employee’s employment during the Term with Good
Reason by providing the Company thirty (30) days’ written notice setting forth in reasonable specificity the event that
constitutes Good Reason (which notice must be given no later than ninety (90) days after the initial occurrence of such event).
During such thirty (30) day notice period, the Company shall have a cure right (if curable), and if not cured within such period,
Employee’s termination will be effective upon the expiration of such cure period, and, subject to the terms of Section 8(h),
Employee shall be entitled to:

 

(i)
The Accrued Obligations; and

 

(ii)
Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such
amount determined based on actual performance during such fiscal year as determined by the Compensation Committee; and

 

(iii)
A lump sum cash payment equal to twelve (12) times the “applicable percentage” of the monthly COBRA premium cost applicable
to Employee if Employee (or his dependents) were to elect COBRA coverage, or similar coverage as provided by similar state law,
in connection with such termination, (for purposes hereof, the “applicable percentage” shall be the percentage of
Employee’s health care premium costs covered by the Company as of the date of termination).

 

Any
amounts payable to Employee under clause (i), (ii), or (iii) of this Section 8(e) shall be paid in lump sum on the sixtieth (60th)
day following the date of Employee’s termination of employment, subject to Section 8(h) of this Agreement. Following such
termination of Employee’s employment by Employee with Good Reason, except as set forth in this Section 8(e), Employee shall
have no further rights to any compensation or any other benefits under this Agreement.

 

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(f)
Termination by Employee without Good Reason. Employee may terminate Employee’s employment without Good Reason by
providing the Company sixty (60) days’ written notice of such termination. In the event of a termination of employment by
Employee under this Section 8(f), Employee shall be entitled only to the Accrued Obligations, and any equity awards or equity-related
awards that are not vested as of the date of termination shall be cancelled. In the event of termination of Employee’s employment
under this Section 8(f), the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination
without changing the characterization of such termination as a termination by Employee without Good Reason. Following such termination
of Employee’s employment by Employee without Good Reason, except as set forth in this Section 8(f), Employee shall have
no further rights to any compensation or any other benefits under this Agreement.

 

(g)
Termination Following Change of Control. If, upon a Change of Control of the Company or during the twelve (12) month period
following such Change of Control, Employee is terminated by the Company without Cause or Employee terminates Employee’s
employment with Good Reason, Employee shall be entitled to the same payments and benefits as provided in Section 8(d) (i),(ii),(iv)&(v)
above for a termination by the Company without Cause, subject to the same conditions on payment and benefits as described in Section
8(d) above, plus a lump-sum cash payment equal to one (1.0) times the total of (i) Employee’s Base Salary plus (ii) an amount
equal to the total value of the Annual Bonus amounts paid during the fiscal year immediately preceding the year of such termination
pursuant to Section 4 (or the amount of cash bonus and equity compensation paid employee during fiscal 2016 if a Change of Control
occurs the initial year of this Agreement). Following such termination of Employee’s employment by the Company without Cause
or by Employee with Good Reason, except as set forth in this Section 8(g), Employee shall have no further rights to any compensation
or any other benefits under this Agreement.

 

(h)
Release. Notwithstanding any provision herein to the contrary, and as a condition precedent to payment of any amount or
provision of any benefit pursuant to subsection 8(b), (d), (e) or (g) (other than payment of any Accrued Obligations) (the “Severance
Benefits”), Employee or Employee’s estate, as applicable, shall execute and shall not rescind, a release in favor
of the Company Group and all related companies, individuals, and entities, in a form satisfactory to the Company, and any revocation
period applicable to such release must have expired as of the sixtieth (60th) day following Employee’s termination
of employment. If Employee fails to execute the release in such a timely manner so as to permit any revocation period to expire
prior to the end of such sixty (60) day period, or timely revokes his acceptance of such release following its execution, Employee
shall not be entitled to any of the applicable Severance Benefits. Further, to the extent that (i) such termination of employment
occurs within sixty (60) days of the end of any calendar year, and (ii) any of the Severance Benefits constitutes “nonqualified
deferred compensation” for purposes of Section 409A, any payment of any amount or provision of any benefit otherwise scheduled
to occur prior to the sixtieth (60th) day following the date of Employee’s termination of employment hereunder,
but for the condition on executing the release as set forth herein, shall not be made prior to the first day of the second calendar
year, after which any remaining Severance Benefits shall thereafter be provided to Employee according to the applicable schedule
set forth herein.

 

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Section
9. Representations and Warranties of Employee. Employee represents and warrants to the Company that:

 

(a)
Employee is entering into this Agreement voluntarily and that Employee’s employment hereunder and compliance with the terms
and conditions hereof will not conflict with or result in the breach by Employee of any agreement to which Employee is a party
or by which Employee may be bound;

 

(b)
Employee has not violated, and in connection with Employee’s employment with the Company will not violate, any non-solicitation,
non-competition, or other similar covenant or agreement of a prior employer by which Employee is or may be bound; and

 

(c)
in connection with Employee’s employment with the Company, Employee will not use any confidential or proprietary information
Employee may have obtained in connection with employment with any prior employer.

 

Section
10. Nondisclosure and Nonuse of Confidential Information.

 

(a)
Employee will not disclose or use at any time, either during the Term or thereafter, any Confidential Information (as defined
below) of which Employee is or becomes aware, whether or not such information is developed by him, except to the extent that such
disclosure or use is directly related to and required by Employee’s performance in good faith of duties assigned to Employee
by the Company. Employee will take all appropriate steps to safeguard Confidential Information and to protect it against disclosure,
misuse, espionage, loss and theft. Employee shall deliver to the Company at the termination of the Term, or at any time the Company
may request, all memoranda, notes, plans, records, reports, disks, computer tapes and software and other documents and data (and
copies thereof, regardless of the form thereof, including electronic copies) relating to the Confidential Information or the Work
Product (as defined below) of the business of the Company or any of the Company’s Affiliates, which Employee may then possess
or have under his control.

 

(b)
As used in this Agreement, the term “Confidential Information” means confidential, proprietary, trade secret, proprietary,
scientific, technical, business or financial information that is not generally known to the public and that is used, developed
or obtained by the Company or any Affiliate, in connection with their respective businesses, including, but not limited to, information,
observations and data obtained or learned by Employee while employed by the Company or any of its Affiliates (including those
obtained or learned prior to the date of this Agreement) concerning (i) the business or affairs of the Company or any Affiliate,
(ii) products or services, (iii) geologic data, (iv) seismic data, (v) analyses, (vi) drawings, photographs and reports, (vii)
computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation,
(ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice, (xii) customers, clients, suppliers and subcontractors and
customer, client, supplier and subcontractor lists, (xiii) other copyrightable works, (xiv) all drilling methods, processes, technology
and trade secrets, (xv) business strategies, acquisition plans and target properties, financial or other performance data and
personnel lists and data, and (xvi) all similar and related information in whatever form. All such Confidential Information is
extremely valuable and is intended to be kept secret to the Company and its clients and customers, is the sole and exclusive property
of the Company or its clients and customers, and is subject to the restrictive covenants set forth herein.

 

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Notwithstanding
anything to the contrary contained herein, Employee shall not be required to maintain as confidential any information or material
which:

 

(i)
is now, or hereafter becomes, through no act or failure to act on the part of Employee which would constitute a breach of this
Section 11, generally known or available to the public;

 

(ii)
is furnished to Employee by a third party who, to the knowledge of Employee, is not under obligations of confidentiality to the
Company or any of its Affiliates, without restriction on disclosure;

 

(iii)
is disclosed with the written approval of the Company;

 

(iv)
is required to be disclosed by law, court order, or similar compulsion; provided, however, that such disclosure shall be
limited to the extent so required or compelled; and provided, further, that Employee shall give the Company notice of such
disclosure and cooperate (without cost to Employee) with the Company in seeking suitable protection; or

 

(v)
is disclosed pursuant to or in connection with any legal proceeding involving Employee and/or the Company or any Affiliate thereof.

 

Section
11. Inventions, Discoveries and Patents. Employee agrees that all inventions, discoveries, innovations, improvements, technical
information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names,
logos and all similar or related information (whether patentable or unpatentable) which relate to the Company’s or any of
its Affiliates’ business or research and development and any existing or future products or services and which are or were
discovered, conceived, developed or made by Employee (whether or not during usual business hours or on the premises of the Company
and whether or not alone or in conjunction with any other person) while employed by the Company or any Affiliate (including those
conceived, developed or made prior to the date of this Agreement) together with all patent applications, letters patent, trademark,
trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any
of the foregoing (collectively referred to herein as, the “Work Product”), belong in all instances to the Company
or such Affiliate. Employee will promptly disclose such Work Product to the Board and assign to and otherwise perform (without
cost to Employee) all actions reasonably requested by the Board (whether during or after the employment period) to establish and
confirm the Company’s or Affiliate’s exclusive ownership of such Work Product (including, without limitation, the
execution and delivery of assignments, consents, oaths, powers of attorney and other instruments) and to provide reasonable assistance
to the Company or any of its Affiliates in connection with the prosecution of any applications for patents, trademarks, trade
names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product.

 

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Section
12. Post-Termination Non-Compete, Non-Solicitation.

 

(a)
If Employee’s employment terminates pursuant to Sections 8(c), 8(d), 8(e), 8(f) or 8(g) hereof during the Term or for any
reason thereafter, Employee agrees that, for a period ending six 6 months from the date of his termination of employment, Employee
shall not (except on behalf of the Company or with the prior written consent of the Company), directly or indirectly, (i) engage
in the business in which the Company is engaged or proposes to be engaged (the “Company Business”), within the Restricted
Territory (as defined below), (ii) interfere with the Company Business or the business of any Affiliate, or (iii) own, manage,
control, participate in, consult with, render services for or in any manner engage in or represent any business within the Restricted
Territory that is competitive with the Company Business or the business of any Affiliate thereof or any product of the Company
or any Affiliate, as such business is conducted or proposed to be conducted from and after the date of this Agreement. As used
in this Agreement, the term “Restricted Territory” means any county in the United States where the company holds mineral
lease interests. Nothing herein shall prohibit Employee from being a passive owner of not more than five percent (5%) of the outstanding
stock of any class of a corporation that is competitive with the Company Business and which is publicly traded, so long as Employee
has no active participation in the business of such corporation.

 

(b)
If Employee’s employment terminates pursuant to Sections 8(c), 8(d), 8(e), 8(f) or 8(g) hereof during the Term or for any
reason thereafter, Employee agrees that, for a period ending one (1) year from the date of his termination of employment, Employee
shall not directly or indirectly through another person or entity (i) induce or attempt to induce any employee of the Company
or any Affiliate of the Company to leave the employ of the Company or such Affiliate, or in any way interfere with the relationship
between the Company or any such Affiliate, on the one hand, and any employee or consultant thereof, on the other hand, (ii) hire
or engage as a consultant or otherwise any person who is or was an employee or consultant of the Company or any Affiliate thereof
until six (6) months after such individual’s employment or consulting relationship with the Company or such Affiliate has
been terminated or (iii) induce or attempt to induce any customer, supplier, subcontractor, licensee or other business relation
of the Company or any Affiliate to cease doing business with the Company or such Affiliate, or in any way interfere with the relationship
between any such customer, supplier, subcontractor, licensee or business relation, on the one hand, and the Company or any Affiliate,
on the other hand.

 

(c)
Employee acknowledges that the covenants contained in this Section 13, including those related to duration, geographic scope,
and the scope of prohibited conduct, are reasonable and necessary to protect the legitimate interests of the Company. Employee
acknowledges that he is an executive and management level employee as referenced in, and governed by, C.R.S. § 8-2-113(2)(d).
Employee further acknowledges that the covenants contained in this Section 13 are necessary to protect, and reasonably related
to the protection of, the Company’s trade secrets, to which Employee will be exposed and with which Employee will be entrusted.

 

(d)
Employee shall inform any prospective or future employer of any and all restrictions contained in this Agreement and provide such
employer with a copy of such restrictions (but no other terms of this Agreement), prior to the commencement of that employment.

 

    	12

    	 

    

 

Section
13. Taxes.

 

(a)
Withholding. The Company may withhold and deduct from any payments made under this Agreement all applicable taxes, including
but not limited to income, employment, and social security taxes, as shall be required by applicable law. Employee acknowledges
and represents that the Company has not provided any tax advice to Employee in connection with this Agreement and that Employee
has been advised by the Company to seek tax advice from Employee’s own tax advisors regarding this Agreement and payments
that may be made, and the benefits to be provided, to Employee pursuant to this Agreement, including specifically, the application
of the provisions of Section 409A of the Code to such payments.

 

(b)
Section 409A – General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit
payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section
409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder.

 

(c)
Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, no payment that is due upon Employee’s
termination of employment shall be made unless and until Employee has incurred a “separation from service,” as defined
under Treas. Reg. §1.409A-1(h).

 

(d)
Six-Month Delay in Certain Circumstances. Notwithstanding any other provision of this Agreement, if Employee is a Specified
Employee (as defined below) at the time of termination of employment, then, to the extent that payments and benefits under this
Agreement constitute “deferred compensation” under Section 409A of the Code and are not eligible for any exemption
thereunder (“Non-Exempt Deferred Compensation”), and payment of cash or provision of his benefits is pursuant to a
termination of employment, then:

 

(i)
the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following
Employee’s separation from service will be accumulated through and paid or provided on the first day of the seventh month
following Employee’s separation from service (or, if Employee dies during such period, within 30 days after Employee’s
death) (in either case, the “Required Delay Period”); and

 

(ii)
the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required
Delay Period.

 

For
purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Treas. Reg. §1.409A-1(i).

 

(e)
Treatment of Installment Payments. Each payment of termination benefits under Section 8 of this Agreement shall be considered
a separate payment, as described in Treas. Reg. §1.409A-2(b)(2), for purposes of Section 409A of the Code.

 

    	13

    	 

    

 

(f)
Timing of Reimbursements and In-kind Benefits. If Employee is entitled to be paid or reimbursed for any taxable expenses
under Section 7, and such payments or reimbursements are includible in Employee’s federal gross taxable income, the amount
of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, the
reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was
incurred, and the right of Employee to reimbursement of such expenses shall not be subject to exchange or liquidation for any
other benefit or payment.

 

(g)
Permitted Acceleration. The Company shall have the sole authority to make any accelerated distribution permissible under
Treas. Reg. Section 1.409A-3(j)(4) to Employee of deferred amounts, provided that such distribution meets the requirements of
Treas. Reg. §1.409A-3(j)(4).

 

Section
14. Set Off; Mitigation. The Company’s obligation to pay Employee the amounts provided and to make the arrangements
provided hereunder shall be subject to set-off, counterclaim, or recoupment of amounts owed by Employee to the Company or its
Affiliates, provided that such amounts owed have been acknowledged by Employee in writing. To the extent any amount so subject
to set-off, counterclaim, or recoupment is payable in installments hereunder, such set-off, counterclaim, or recoupment shall
not modify the applicable payment date of any installment, and to the extent an obligation cannot be satisfied by reduction of
a single installment payment, any portion not satisfied shall remain an outstanding obligation of Employee and shall be applied
to the next installment only at such time the installment is otherwise payable pursuant to the specified payment schedule.

 

Section
15. Successors and Assigns; No Third-Party Beneficiaries.

 

(a)
The Company. This Agreement shall inure to the benefit of the Company and its respective successors and assigns. In the
event of change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets
of the Company, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor,
and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

 

(b)
Employee. Employee’s rights and obligations under this Agreement shall not be transferable by Employee by assignment
or otherwise, without the prior written consent of the Company; provided, however, that if Employee shall die, all
amounts then payable to Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee,
legatee, or other designee, or if there be no such designee, to Employee’s estate.

 

(c)
No Third-Party Beneficiaries. Except as otherwise set forth in Section 16(a) or Section 16(b) hereof, nothing expressed
or referred to in this Agreement will be construed to give any Person other than the Company, the other members of the Company
Group, and Employee any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of
this Agreement.

 

(d)
Enforcement. Because Employee’s services are unique and because Employee has access to Confidential Information and
Work Product, the parties hereto agree that money damages would be an inadequate remedy for any breach of Sections 10, 11 and
12 of this Agreement. Therefore, in the event of a breach or threatened breach of Sections 10, 11 and 12 of this Agreement, all
parties hereto and their respective successors or assigns will be entitled to injunctive relief, in addition to other rights and
remedies existing in their favor at law or in equity in order to enforce, or prevent any violations of, the provisions hereof
without posting a bond or other security.

 

    	14

    	 

    

 

Section
16. Waiver and Amendments. Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall
be valid only if made in writing and signed by each of the parties hereto. No waiver by either of the parties hereto of their
rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless
such waiver specifically states that it is to be construed as a continuing waiver.

 

Section
17. Severability. If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable
by a final determination of a court of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired,
and (b) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof.

 

Section
18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado,
without regard to its conflicts of law or choice of law provisions which would result in the application of the law of any other
jurisdiction.

 

Section
19. Arbitration. Any controversy or claim arising out of or relating to this Agreement or any transactions provided for
herein, or the breach thereof, other than a claim for injunctive relief for a breach of Sections 10, 11 and 12, will be settled
by arbitration in accordance with the commercial Arbitration Rules of the American Arbitration Association (the “Rules”)
in effect at the time demand for arbitration is made by any party. The evidentiary and procedural rules in such proceedings will
be kept to the minimum level of formality that is consistent with the Rules. The Company and Employee shall agree on a sole arbitrator
of the controversy or claim. The arbitrator must be experienced in the matters in dispute. If the sole arbitrator cannot be agreed
upon by the Company and the Employee within 10 business days, either the Company or Employee may request the American Arbitration
Association to name a sole arbitrator. Arbitration will occur in Houston, TX, or such other location agreed to by the Company
and the Employee. The award made by the arbitrator will be final and binding, and judgment may be entered in any court of law
having competent jurisdiction. The award is subject to confirmation, modification, correction or vacation only as explicitly provided
in Title 9 of the United States Code. The prevailing party will be entitled to an award of pre- and post-award interest as well
as reasonable attorneys’ fees incurred in connection with the arbitration and any judicial proceedings related thereto and
any costs incurred paying the fees or expenses of the arbitrator.

 

Section
20. Notices.

 

(a)
Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the
party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered
to the other party as herein provided; provided, that unless and until some other address be so designated, all notices
and communications by Employee to the Company shall be mailed or delivered to the Company at its principal executive office at
4643 S. Ulster St., Suite 970 Denver, Colorado 80237, and all notices and communications by the Company to Employee may be given
to Employee personally or may be mailed to Employee at Employee’s last known address, as reflected in the Company’s
records.

 

    	15

    	 

    

 

(b)
Any notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if mailed by
courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered
or certified mail, on the third business day after the date of such mailing.

 

Section
21. Section Headings; Mutual Drafting.

 

(a)
The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute
a part thereof or affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

(b)
The parties are sophisticated and have been represented (or have had the opportunity to be represented) by their separate attorneys
throughout the transactions contemplated by this Agreement in connection with the negotiation and drafting of this Agreement and
any agreements and instruments executed in connection herewith. As a consequence, the parties do not intend that the presumptions
of laws or rules relating to the interpretation of contracts against the drafter of any particular clause should be applied to
this Agreement or any document or instrument executed in connection herewith, and therefore waive their effects.

 

Section
22. Entire Agreement. This Agreement, together with any exhibits attached hereto, constitutes the entire understanding
and agreement of the parties hereto regarding the employment of Employee. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings, and agreements between the parties relating to the subject matter of this Agreement.

 

Section
23. Dodd-Frank Act and Other Applicable Law Requirements. Employee agrees (i) to abide by any compensation recovery, recoupment,
anti-hedging or other policy applicable to executives of the Company and its Affiliates, as may be in effect from time to time,
as approved by the Board or a duly authorized committee thereof or as required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (“Dodd-Frank Act”) or other applicable law, and (ii) that the terms and conditions of this
Agreement shall be deemed automatically amended as may be necessary from time to time to ensure compliance by Employee and this
Agreement with such policies, the Dodd-Frank Act, or other applicable law.

 

Section
24. Survival of Operative Sections. Upon any termination of Employee’s employment, the provisions of this Agreement
(together with any related definitions set forth in Section 1 hereof) shall survive to the extent necessary to give effect to
the provisions thereof, including but not limited to Sections 10, 11 and 12.

 

Section
25. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile
signature.

 

    	16

    	 

    

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

 

	 	COMPANY: 
	 	 	 
	 	U.S. ENERGY CORP.
	 	 	 
	 	By:
    	/s/
    David A. Veltri
	 	Name: 	David
    A. Veltri
	 	Title:	CEO
    & President
	 	Date:	November
    21, 2018
	 	 	 
	 	EMPLOYEE:
	 	 	 
	 	By:	/s/
    Ryan L. Smith
	 	Name:	Ryan
    L. Smith
	 	Date:	November
    21, 2018

 

    	17Exhibit

Exhibit 4.2

CIM INCOME NAV, INC. 
AMENDED AND RESTATED MULTIPLE CLASS PLAN
Effective as of November 27, 2018
I.    Introduction
As required by Section 5.2.5 of CIM Income NAV, Inc.’s (the “Corporation”) Second Articles of Amendment and Restatement, as amended (“Charter”) and effective as of the date set forth above, the Corporation’s board of directors (the “Board”) adopted this Amended and Restated Multiple Class Plan (the “Plan”) to establish certain features of the Class D Shares, the Class T Shares, the Class S Shares and the Class I Shares.  Each capitalized term in this Plan not otherwise defined herein has the same meaning as that set forth in the Charter.
In addition to the terms of the Class D Shares, the Class T Shares, the Class S Shares and the Class I Shares described in the Charter, each class of Common Shares shall have the features described below.
II.    Multiple Class Structure
		
	A.
	Commissions and Fees Payable to the Dealer Manager and Financial Intermediaries

		
	1.
	Upfront Selling Commissions.  

		
	a.
	Each Class D Share issued in an Offering may be subject to a Selling Commission of up to 1.5% of the transaction price of each Class D Share sold in the primary offering. 

		
	b.
	Each Class T Share issued in an Offering may be subject to a Selling Commission of up to 3.0% of the transaction price of each Class T Share sold in the primary offering.  

		
	c.
	Each Class S Share issued in an Offering may be subject to a Selling Commission of up to 3.5% of the transaction price of each Class S Share sold in the primary offering.

		
	d.
	Stockholders will not pay a Selling Commission on Class D Shares, Class T Shares, Class S Shares or Class I Shares when purchasing shares of any such class pursuant to the Corporation’s distribution reinvestment plan.

		
	e.
	No Class I Share sold in an Offering shall be subject to a Selling Commission.

		
	2.
	Upfront Dealer Manager Fees.  With respect to each Class T Share, CCO Capital, LLC (the “Dealer Manager”) may be entitled to an upfront fee (as described in the Corporation’s Prospectus, the “Dealer Manager Fee”) of 0.5% of the transaction price per Class T Share.  The sum of the Selling Commission and the Dealer Manager Fee with respect to the Class T Shares will not exceed 3.5% of the transaction price. No Class D Share, Class S Share or Class I Share sold in an Offering shall be subject to a Dealer Manager Fee. Stockholders will not pay a Dealer Manager Fee with respect to the Class D Shares, Class T Shares, Class S Shares or Class I Shares when purchasing shares of any such class pursuant to the Corporation’s distribution reinvestment plan. 

		
	3.
	Annual Stockholder Servicing Fees.  

		
	a.
	With respect to the Class D Shares, the Dealer Manager may be entitled to a stockholder servicing fee (as described in the Corporation’s Prospectus, the “Stockholder Servicing Fee”) equal to 0.25% per annum of the aggregate Net Asset Value per Class D Share.

		
	b.
	With respect to the Class T Shares, the Dealer Manager may be entitled to a Stockholder Servicing Fee equal to 0.85% per annum of the aggregate NAV of our outstanding Class T Shares, consisting of an advisor Stockholder Servicing Fee of 0.65% per annum, and a Stockholder Servicing Fee of 0.20% per annum, of the aggregate Net Asset Value per Class T Share.

		
	c.
	With respect to the Class S Shares, the Dealer Manager may be entitled to a Stockholder Servicing

Fee equal to 0.85% per annum of the aggregate Net Asset Value per Class S Share.
		
	d.
	No Class I Share sold in an Offering shall be subject to a Stockholder Servicing Fee. 

		
	4.
	Fee Limit.  The Dealer Manager will not be entitled to any additional Stockholder Servicing Fees with respect to any Class D Shares, Class T Shares and Class S Shares held in a stockholder’s account at the end of the month in which the Dealer Manager, in conjunction with the transfer agent, determines that total Selling Commissions, upfront fees, and Stockholder Servicing Fees paid with respect to such Common Shares would exceed, in the aggregate, 8.75% (or, in the case of Shares sold through certain participating broker-dealers, a lower limit as set forth in any applicable agreement between the Dealer Manager and a participating broker-dealer) of the gross proceeds from the sale of such shares (including the gross proceeds of any shares issued under the Company’s distribution reinvestment plan with respect thereto).

		
	5.
	Fees Prior to Reclassification.  For sales of the Corporation’s Class W shares, Class A shares and Class I shares prior to the reclassification of such shares on November 27, 2018, for which the Corporation previously agreed to pay the Dealer Manager (i) an ongoing dealer manager fee equal to 0.55% per annum of the aggregate NAV of the outstanding Class W shares, (ii) an ongoing dealer manager fee equal to 0.55% per annum of the aggregate NAV of outstanding Class A shares and a distribution fee equal to 0.50% per annum of the aggregate NAV of the outstanding Class A shares and (iii) an ongoing dealer manager fee equal to 0.25% per annum of the aggregate NAV of the outstanding Class I shares, pursuant to the Second Amended and Restated Dealer Manager Agreement dated as of February 10, 2017 (the “Prior Agreement”), the Corporation and the Dealer Manager agree that the stockholder servicing fees payable to the Dealer Manager with respect to the Shares under the Third Amended and Restated Dealer Manager Agreement dated as of the date hereof shall fully satisfy the Corporation’s obligations with respect to the payment of ongoing fees to the Dealer Manager under the Prior Agreement. For the avoidance of doubt, if such stockholder servicing fees do not cover the full amount of the Company’s obligations with respect to the payment of ongoing fees to the Dealer Manager under the Prior Agreement, then the Dealer Manager will not be entitled to any additional compensation in respect of any such fees payable to the Dealer Manager under the Prior Agreement.

		
	B.
	Expense Allocation

		
	1.
	General.  Subject to Part II.B.2. hereof, the officers of the Corporation, or a person duly appointed by the officers of the Corporation, will track all expenses of the Corporation and allocate expenses to a specific class of Common Shares if (i) an expense is actually incurred in a different amount by such class of Common Shares or (ii) such class of Common Shares receives services of a different kind or to a different degree than the other classes of Common Shares (the expenses described in clauses (i) and (ii) shall hereinafter be referred to as “Class Specific Expenses”).  For example, certain organizational and offering expense reimbursements that are Class Specific Expenses will be allocated to the class of Common Shares that incurred such expense.  Such expenses include, but are not limited to, costs to print and mail a prospectus regarding a class of Common Shares, legal costs to authorize a class of Common Shares and legal costs to register a class of Common Shares.  Class Specific Expenses may also include fees and expenses for services for a class of Common Shares such as account setup, maintenance and recordkeeping.  All other expenses that are not Class Specific Expenses will be allocated to each class of Common Shares as described below; provided, however, that no expense not expressly provided for herein shall be treated as a Class Specific Expense if the officers of the Corporation, or a person duly appointed by the officers of the Corporation, determines after consultation with the Corporation’s tax advisors that such treatment as a Class Specific Expense could jeopardize the Corporation’s ability to qualify as a REIT.  In no event shall Class Specific Expenses include expenses described in Part II.B.2. hereof.

		
	2.
	Non-Class Specific Expenses.

		
	a.
	Non-Class Specific organization and offering expense reimbursements.  Organizational and offering expense reimbursements that are not Class Specific Expenses will be allocated to each class of Common Shares on a pro rata basis based on the net asset value attributable to each class

    
2

       of Common Shares.  Such expenses include, but are not limited to, costs to advertise an Offering, costs to print and mail marketing materials, and costs to sponsor broker-dealer educational seminars.
		
	b.
	Advisory fee.  The amount of advisory fee accrued daily, and payable monthly in arrears, to each class of Common Shares will be determined by applying the advisory fee rate to the Net Asset Value of each class of Common Shares.

		
	c.
	Performance fee. 

		
	(1)
	For periods prior to January 1, 2019, the Advisor will be entitled to a performance fee calculated on the basis of the total return to Stockholders of each class of Common Shares, payable annually in arrears, such that for any year in which the total return on the Stockholders’ capital, which will be calculated separately for each class of Common Shares, exceeds 6.00% per annum, the Advisor will be entitled to 25.00% of the amount by which such total return exceeds any un-recouped negative total return in previous years, but not to exceed 10.00% of the aggregate total return for that class of Common Share for such year.  The amount of the performance fee allocated to a class of Common Shares will be the amount of the performance fee calculated for such class of Common Shares described in the previous sentence.

		
	(2)
	Beginning January 1, 2019, the Advisor will be entitled to a performance fee calculated on the basis of the total return to Stockholders of each class of Common Shares, payable annually in arrears, such that for any year in which the total return on the Stockholders’ capital, which will be calculated separately for each class of Common Shares, exceeds 5.00% per annum, the Advisor will be entitled to 12.50% of the amount by which such total return exceeds any un-recouped total return in previous years, and as more fully described in the Second Amended and Restated Advisory Agreement dated November 27, 2018 by and among the Corporation, CIM Income NAV Operating Partnership, LP and the Advisor. The amount of the performance fee allocated to a class of Common Shares will be the amount of the performance fee calculated for such class of Common Shares described in the previous sentence.

		
	d.
	Acquisition and operating expense reimbursements.  All acquisition and operating expense reimbursements, or other fees and expenses related to the management of the Corporation’s assets, will be allocated to each class of Common Shares on a pro rata basis based on the Net Asset Value attributable to each class of Common Shares. 

		
	3.
	Other expenses.  The Corporation may incur other expenses (the “Other Expenses”) not specifically addressed herein.  In such cases, the officers of the Corporation, or a person duly appointed by the officers of the Corporation, will allocate Other Expenses to a specific class of Common Shares if such expenses are Class Specific Expenses.  Class Specific Expenses will not include advisory or custodial fees or other fees and expenses related to the management of the Corporation’s assets.  Other Expenses that are not Class Specific Expenses will be allocated to each class of Common Shares on a pro rata basis based on the Net Asset Value attributable to each class of Common Shares.

		
	4.
	Timing of Allocation.  Expenses shall be allocated to each class of Common Shares at the same time as all other classes of Common Shares.

III.    Amendments
The Plan may not be materially amended unless approved by a majority of the entire Board, including a majority of the Independent Directors.

    
3

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