EXHIBIT 4.32
CLASS A WARRANT TO PURCHASE COMMON SHARES
U.S. ENERGY CORP.
This is to certify that, for value
received, Bourne Capital, LLC (the "Holder"),
is entitled to purchase, subject to the
terms set forth below, from U.S. Energy
Corp., a Wyoming corporation (the "Company"
or "we"), at any time until 5:00
P.M., Mountain Time, on March 2, 2007 (the
"Expiration Date," subject to earlier
termination as provided in paragraph (a))
50,000 shares (the "Common Shares") of
the Company's common stock (the "Common
Stock") at a purchase price per share of
$3.00. The number of Common Shares to be
received upon the exercise of this
Warrant and the price to be paid for a
Common Share may be adjusted from time to
time as hereinafter set forth. The purchase
price of a Common Share in effect at
any time and as adjusted from time to time
is hereinafter sometimes referred to
as the "Exercise Price." The Common Shares,
as adjusted from time to time,
underlying the Warrant are hereinafter
sometimes referred to as "Warrant Shares"
and include all Common Shares that have
been issued upon the exercise of the
Warrants and all unissued Common Shares
underlying the Warrants.
(A) EXERCISE OF WARRANT. This Warrant may
be exercised in whole or in part at
any time or from time to time until the
Expiration Date or if the Expiration
Date is a day on which banking institutions
are authorized by law to close, then
on the next succeeding day which shall not
be such a day, by presentation and
surrender hereof to the Company or at the
office of its stock transfer agent, if
any, with the Purchase Form annexed hereto
duly executed and accompanied by cash
payment of the Exercise Price for the
number of shares specified in such Form,
together with all federal and state taxes
applicable upon such exercise;
provided, however, that if the closing
stock market price for the Company's
Common Stock is at or more than $7.50 for
any 10 consecutive trading days, this
Warrant shall expire on the 30th calendar
day (or if that day is a Saturday or a
day when banks in New York, New York are
closed or authorized to be closed, then
the next business day) after such 10th
trading day. The Company shall be under
no obligation to inform the Holder of the
Company's stock market price at any
time.
The Company agrees not to merge, reorganize
or take any action that would
terminate this Warrant unless provisions
are made as part of such merger,
reorganization or other action which would
provide the Holder with an equivalent
of this Warrant as specified in Section (i)
hereof; provided, however, that if
reasonably required by the other party or
parties to such merger, reorganization
or other action, the Company may accelerate
the Expiration Date to a date prior
to such merger, reorganization or other
action, provided further, however, that
the Company shall give the Holder written
notice of such acceleration at least
30 days prior to such accelerated
Expiration Date. The Company agrees to provide
notice to the Holder that any tender offer
is being made for Common Shares no
later than three business days after the
day the Company becomes aware that any
tender offer is being made for outstanding
Common Shares. If this Warrant should
be exercised in part only, the Company
shall, upon surrender of this Warrant for
cancellation, execute and deliver a new
Warrant evidencing the right of the
Holder to purchase the balance of the
Common Shares purchasable hereunder. Upon
receipt by the Company of this Warrant at
the office of the Company or at the
office of the Company's stock transfer
agent, in proper form for exercise and
accompanied by the Exercise Price, the
Holder shall be deemed to be
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the holder of record of the Common Shares
issuable upon such exercise,
notwithstanding that the stock transfer
books of the Company shall then be
closed or that certificates representing
such Common Shares shall not then be
actually delivered to the Holder.
(B) RESERVATION OF SHARES. The Company
hereby agrees that at all times there
shall be reserved for issuance and/or
delivery upon exercise of this Warrant
such number of Common Shares as shall be
required for issuance or delivery upon
exercise of this Warrant.
(C) FRACTIONAL SHARES. No fractional shares
or scrip representing fractional
shares shall be issued upon the exercise of
this Warrant. With respect to any
fraction of a Common Share called for upon
any exercise hereof, the Company
shall, upon receipt by the Company or the
Company's stock transfer agent of the
Exercise Price on such fractional share,
pay to the Holder an amount in cash
equal to such fraction multiplied by the
current market value of such fractional
share, determined as follows:
(1) If the Common Shares are listed on a
national securities exchange, are
admitted to unlisted trading privileges on
such an exchange, or are listed for
trading on a trading system of The Nasdaq
Stock Market, Inc., then the current
value shall be the last reported sale price
of the Common Shares on such an
exchange or system on the last business day
prior to the date of exercise of
this Warrant or if no such sale is made on
such day, the average of the closing
bid prices for the Common Shares for such
day on such exchange or such system
shall be used; or
(2) If the Common Shares are not so listed
on such exchange or system or
admitted to unlisted trading privileges,
the current value shall be the average
of the last reported bid prices reported by
the National Quotation Bureau, Inc.
on the last business day prior to the date
of the exercise of this Warrant; or
(3) If the Common Shares are not so listed
or admitted to unlisted trading
privileges and if bid and asked prices are
not so reported, the current value
shall be an amount, not less than book
value, determined in such reasonable
manner as may be prescribed by the board of
directors of the Company.
(D) EXCHANGE, ASSIGNMENT OR LOSS OF
WARRANT. This Warrant is exchangeable,
without expense, at the option of the
Holder, upon presentation and surrender
hereof to the Company or at the office of
its stock transfer agent, if any, for
other Warrants of different denominations
entitling the Holder thereof to
purchase (under the same terms and
conditions as provided by this Warrant) in
the aggregate the same number of Common
Shares purchasable hereunder. This
Warrant may not be sold, transferred,
assigned, or hypothecated except in
compliance with the Securities Act of 1933.
Any such transfer or assignment
shall be made by surrender of this Warrant
to the Company or at the office of
its stock transfer agent, if any, with the
Assignment Form annexed hereto duly
executed and with funds sufficient to pay
any transfer tax; whereupon the
Company shall, without charge, execute and
deliver a new Warrant in the name of
the assignee named in such instrument of
assignment and this Warrant shall
promptly be canceled. This Warrant may be
divided or combined with other
Warrants which carry the same rights upon
presentation hereof at the office of
the Company or at the office of its stock
transfer agent, if any, together with
a written notice specifying the names and
denominations in which new Warrants
are to be issued and signed by the Holder
hereof. The term "Warrant" as used
herein includes
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any warrants issued in substitution for or
replacement of this Warrant, or into
which this Warrant may be divided or
exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss,
theft, destruction or mutilation of
this Warrant, and (in the case of loss,
theft or destruction) of reasonably
satisfactory indemnification, and upon
surrender and cancellation of this
Warrant, if mutilated, the Company will
execute and deliver a new Warrant of
like tenor and date. Subject to such right
of indemnification, any such new
Warrant executed and delivered shall
constitute an additional contractual
obligation on the part of the Company,
whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
(E) RIGHTS OF THE HOLDER. The Holder shall
not, by virtue hereof, be entitled to
any rights of a shareholder in the Company,
either at law or equity, and the
rights of the Holder are limited to those
expressed in the Warrant and are not
enforceable against the Company except to
the extent set forth herein.
(F) ADJUSTMENT PROVISIONS.
(1) ADJUSTMENTS OF
THE EXERCISE PRICE.
(A) If the Company subdivides the
outstanding Common Shares into a greater
number of Common Shares, the Exercise Price
in effect immediately prior to such
subdivision shall be proportionately
reduced. Conversely, if the Company
combines its outstanding Common Shares into
a lesser number of Common Shares,
the Exercise Price in effect immediately
prior to such combination shall be
proportionally increased. In case of a
subdivision or combination, the
adjustment of the Exercise Price shall be
made as of the effective date of the
applicable event. A distribution on Common
Shares, including a distribution of
Convertible Securities (as that term is
defined herein), to shareholders of the
Company on a pro rata basis shall be
considered a subdivision of Common Shares
for the purposes of this subsection (1)(A),
except that the adjustment will be
made as of the record date for such
distribution and any such distribution of
Convertible Securities shall be deemed to
be a distribution of the Common Shares
underlying such Convertible Securities. As
used herein, the term "Convertible
Securities" shall mean options or warrants
or rights for the purchase of Common
Shares or for the purchase of any stock or
other securities convertible into or
exchangeable for Common Shares.
(B) If the Company shall at any time
distribute or cause to be distributed to
its shareholders, on a pro rata basis,
cash, assets, or securities of any entity
other than the Company, then the Exercise
Price in effect immediately prior to
such distribution shall automatically be
reduced by an amount determined by
dividing (x) the amount (if cash) or the
value (if assets or securities) of the
holders' of Warrants (as such term is
defined in the first paragraph hereof) pro
rata share of such distribution determined
assuming that all holders of Warrants
had exercised their Warrants on the day
prior to such distribution, by (y) the
number of Common Shares issuable upon the
exercise of this Warrant by the Holder
on the day prior to such distribution.
(2) ADJUSTMENTS OF EXERCISE PRICE - ON
ISSUE AT LESS THAN EXERCISE PRICE.
Excepted from the adjustment for
anti-dilution provisions of this Section (2)
and Section (3) hereof are the Company's
issuance of Excluded Common Shares (as
that term is defined herein), and also all
Common Shares or Convertible
Securities in the form of stock options to
the Company's employees or
non-executive directors at exercise prices
not less than the Company's stock
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market price as of the date of grant, or
Common Shares issued to acquire a
subsidiary or its assets, provided such
Common Shares are issued at prices not
less than the Company's market price as of
the date of such issuance.
If the Company should at any time or from
time to time hereafter issue or sell
any of its Common Shares (other than Common
Shares issued upon the exercise of
Convertible Securities outstanding on March
2, 2004 (provided such Convertible
Securities have not been amended after
March 2, 2004), which Common Shares shall
be referred to herein as the "Excluded
Common Shares") without consideration or
for a consideration per share less than the
Exercise Price in effect immediately
prior to the time of such issue or sale,
then forthwith upon such issue or sale,
the Exercise Price shall be automatically
adjusted to a price (computed to the
nearest cent) determined by dividing (i)
the sum of (x) the number of Common
Shares outstanding immediately prior to
such issue or sale multiplied by the
Exercise Price in effect immediately prior
to such issue or sale, and (y) the
consideration, if any, received by the
Company upon such issue or sale, by (ii)
the total number of Common Shares
outstanding immediately after such issue or
sale. For purposes of this Section (2) and
Section (3) hereof, the following
provisions (A) and (B) shall also be
applicable:
(A) RIGHTS, OPTIONS OR WARRANTS. In case at
any time hereafter the Company shall
in any manner grant any right to subscribe
for or to purchase, or any option or
warrant for the purchase of Common Shares
or for the purchase of any stock or
securities convertible or exchangeable for
Common Shares (such convertible or
exchangeable stock or securities being
hereinafter referred to as the
"Underlying Convertible Securities") and if
the minimum price per share for
which Common Shares are issuable, pursuant
to such rights, options, warrants or
upon conversion or exchange of such
Underlying Convertible Securities
(determined by dividing (i) the total
amount, if any, received or receivable by
the Company as consideration for the
granting of such rights, options, or
warrants plus the minimum aggregate amount
of additional consideration payable
to the Company upon the exercise of such
rights, options, or warrants under the
terms of such rights, options, or warrants
at the time of making such
computation, plus, in the case of such
Underlying Convertible Securities, the
minimum aggregate amount of additional
consideration, if any, payable upon the
conversion or exchange thereof under the
terms of such Underlying Convertible
Securities at the time of making such
computation, by (ii) the total maximum
number of Common Shares issuable pursuant
to such rights, options, or warrants
or upon the conversion or exchange of the
total maximum amount of such
Underlying Convertible Securities issuable
upon the exercise of such rights,
options, or warrants or Underlying
Convertible Securities at the time of making
such computation) shall be less than the
Exercise Price in effect immediately
prior to the time of the granting of such
rights or options, then the total
maximum number of Common Shares issuable
pursuant to such rights, options,
warrants or upon conversion or exchange of
the total maximum amount of such
Underlying Convertible Securities issuable
upon the exercise of such rights,
options, or warrants under the terms of
such rights, options, warrants or
Underlying Convertible Securities at the
time of making such computation shall
(as of the date of granting of such rights,
options, or warrants) be deemed to
be outstanding and to have been issued for
said price per share as so
determined; provided, that no further
adjustment of the Exercise Price shall be
made upon the actual issue of Common Shares
so deemed to have been issued unless
the price per share received by the Company
upon the actual issuance of Common
Shares so deemed to be issued differs from
the price per share which was last
used to adjust the Exercise Price or unless
by the terms of such rights,
options, or
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warrants or Underlying Convertible
Securities the price per share which the
Company will receive upon any such issuance
of Common Shares differs from the
price per share which was last used to
adjust the Exercise Price, in either of
which events the Exercise Price shall be
adjusted upon the occurrence of either
such event to reflect the new price per
share of Common Stock; and further
provided, that, upon the expiration of such
rights (including rights to convert
or exchange), options or warrants (a) the
number of shares of Common Stock
deemed to have been issued and outstanding
by reason of the fact that they were
issuable pursuant to such rights, options,
or warrants (including rights to
convert or exchange) that were not
exercised, shall no longer be deemed to be
issued and outstanding, and (b) the
Exercise Price shall forthwith be adjusted
to the price which would have prevailed had
all adjustments been made on the
basis of the issue only of the Common
Shares actually issued upon the exercise
of such rights, options, or warrants or
upon conversion or exchange of such
Underlying Convertible Securities. Such
adjustments upon expiration shall have
no effect on Warrants exercised prior to
such expirations.
(B) CONVERTIBLE SECURITIES. If the Company
shall in any manner issue or sell any
Convertible Securities other than the
rights, options, or warrants described in
this Section (2) or Section (3) hereof and
if the minimum price per share for
which Common Shares are issuable upon
conversion or exchange of such Convertible
Securities (determined by dividing (i) the
total amount received or receivable
by the Company as consideration for the
issue or sale of such Convertible
Securities, plus the minimum aggregate
amount of additional consideration, if
any, payable to the Company upon the
conversion or exchange thereof under the
terms of such Convertible Securities at the
time of making such computation, by
(ii) the total maximum number of Common
Shares issuable upon the conversion or
exchange of all such Convertible Securities
under the terms of such Convertible
Securities at the time of making such
computation) shall be less than the
Exercise Price in effect immediately prior
to the time of such issue or sale,
then the total maximum number of Common
Shares issuable upon conversion or
exchange of all such Convertible Securities
at the time of making such
computation shall (as of the date of the
issue or sale of such Convertible
Securities) be deemed to be outstanding and
to have been issued for said price
per share as so determined; provided, that
no further adjustment of the Exercise
Price shall be made upon the actual issue
of Common Shares so deemed to have
been issued unless the price per share
received by the Company upon the actual
issuance of Common Shares so deemed to be
issued differs from the price per
share which was last used to adjust the
Exercise Price or unless by the terms of
such Convertible Securities the price per
share which the Company will receive
upon any such issuance of Common Shares
differs from the price per share which
was last used to adjust the Exercise Price,
in either of which events the
Exercise Price shall be adjusted upon the
occurrence of either such event to
reflect the new price per share of Common
Shares; and, further provided that if
any such issue or sale of such Convertible
Securities is made upon exercise of
any right to subscribe for or to purchase
or any option to purchase any such
Convertible Securities for which an
adjustment of the Exercise Price has been or
is to be made pursuant to the provisions of
this Section (2) or Section (3)
hereof, then no further adjustment of the
Exercise Price shall be made by reason
of such issue or sale unless the price per
share received by the Company upon
the conversion or exchange of such
Convertible Securities when actually issued
differs form the price per share which was
last used to adjust the Exercise
Price or unless by the terms of uch
Convertible Securities the price per share
which the Company will receive upon any
such issuance of Common Shares upon
conversion or exchange of such Convertible
Securities differs from the price per
share which was last used to adjust the
Exercise Price, in either of which
events the Exercise Price shall be
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adjusted upon the occurrence of either of
such events to reflect the new price
per share of Common Shares; and, further
provided, that, upon the termination of
the right to convert or to exchange of any
such Convertible Securities, which
were not so converted or exchange, shall no
longer be deemed to be issued and
outstanding, and the Exercise Price shall
forthwith be adjusted to the price
which would have prevailed had all
adjustments been made on the basis of the
issue only of the number of Common Shares
actually issued upon conversion or
exchange of such Convertible Securities.
Such adjustments upon expiration shall
have no effect on Warrants exercised prior
to such expiration.
(3) DETERMINATION OF ISSUE PRICE. In case
any Common Shares or Convertible
Securities which shall be issued for cash,
the consideration received therefor,
which shall be the gross sales price for
such security without deducting
therefrom any commission or other expenses
paid or incurred by the Company for
any underwriting of, or otherwise in
connection with, the issuance thereof,
shall be deemed to be the amount received
by the Company therefor. In case any
Common Shares or Convertible Securities
shall be issued for a consideration part
or all of which shall be other than cash,
then the board of directors of the
Company shall determine the fair value of
such consideration, irrespective of
accounting treatment, and such Common
Shares or Convertible Securities shall be
deemed to have been issued for an amount of
cash equal to the value so
determined by the board of directors. The
reclassification of securities other
than Common Shares into securities
including Common Shares shall be deemed to
involve the issuance for a consideration
other than cash of such Common Shares
immediately prior to the close of business
on the date fixed for the
determination of security holders entitled
to receive such Common Shares. In
case any Common Shares or Convertible
Securities shall be issued together with
other stock or securities or other assets
of the Company for consideration, the
board of directors of the Company shall
determine what part of the consideration
so received is to be deemed to be
consideration for the issue of such Common
Shares or Convertible Securities.
(4) DETERMINATION OF DATE OF ISSUE. In case
the Company shall take a record of
the holders of Common Shares for the
purpose of entitling them (i) to receive a
dividend or other distribution payable in
Common Shares or in Convertible
Securities or (ii) to subscribe for or
purchase Common Shares or Convertible
Securities, then such record date shall be
deemed to be the date of the issue or
sale of the Common Shares deemed to have
been issued or sold upon the
declaration of such dividend or the making
of such other distribution or the
date of the granting of such right of
subscription or purchase, as the case may
be.
(5) TREASURY SHARES. For the purpose of
this Section (f), Common Shares at any
relevant time owned or held by, or for the
account of, the Company shall not be
deemed outstanding.
(G) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required above, the Company
shall forthwith file in the custody of
its Secretary or an Assistant Secretary at
its principal office, and with its
stock transfer and warrant agent, if any,
an officer's certificate showing the
adjusted Exercise Price determined as
herein provided and setting forth in
reasonable detail the facts requiring such
adjustment. Each such officer's
certificate shall be made available at all
reasonable times for inspection by
the Holder and the Company shall, forthwith
after each such adjustment, deliver
a copy of such certificate to the
Holder.
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(H) NO ADJUSTMENT FOR SMALL AMOUNTS. Anything in Sections (2) or
(3)
hereof to the contrary notwithstanding, the
Company shall not be required to
give effect to any adjustment in the
Exercise Price unless and until the net
effect of one or more adjustments,
determined as above provided, shall have
required a change of the Exercise Price by
at least five cents, but when the
cumulative net effect of more than one
adjustment so determined shall be to
change the actual Exercise Price by at
least five cents, such change in the
Exercise Price shall thereupon be given
effect.
(I) NUMBER OF SHARES ADJUSTED. Upon any adjustment of the
Exercise
Price, the Holder of this Warrant shall
thereafter (until another such
adjustment) be entitled to purchase, at the
new Exercise Price, the number of
Common Shares, calculated to the nearest
full share, obtained by multiplying the
number of Common Shares initially issuable
upon exercise of this Warrant by the
Exercise, Price specified in the first
paragraph hereof and dividing the product
so obtained by the new Exercise Price.
(J) NOTICES TO HOLDERS. So long as this Warrant shall be
outstanding
and unexercised (i) if the Company shall
pay any dividend or make/any
distribution upon the Common Shares or (ii)
if the Company shall offer to the
holders of Common Shares for subscription
or purchase by them any shares of
stock of any class or any other rights or
(iii) if any capital reorganization of
the Company, reclassification of the
capital stock of the Company, consolidation
or merger of the Company with or into
another corporation, sale, lease or
transfer of all or substantially all of the
property and assets of the Company
to another corporation, or voluntary or
involuntary dissolution, liquidation or
winding up of the Company shall be
effected, then, in any such case, the Company
shall cause to be delivered to the Holder,
at least 10 days prior to the date
specified in (x) or (y) below, as the case
may be, a notice containing a brief
description of the proposed action and
stating the date on which (x) a record is
to be taken for the purpose of such
dividend, distribution or rights, or (y)
such reclassification, reorganization,
consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is
to take place and the date, if any is
to be fixed, as of which the holders of
Common Shares of record shall be
entitled to exchange their Common Shares
for securities or other property
deliverable upon such reclassification,
reorganization, consolidation, merger,
conveyance, dissolution, liquidation or
winding up.
(K) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or
other change of outstanding Common
Shares of the Company (other than a change
in par value, or from par value to no
par value, or from no par value to par
value, or as a result of an issuance of
Common Shares by way of dividend or other
distribution or of a subdivision or
combination), or in case of any
consolidation or mer
