IN WITNESS WHEREOF, the parties execute this Agreement to be effective as of the date first above written.
Exhibit
10.4
Between
U.S.
Energy Corp. and Crested Corp.
And
Certain Shareholders of Crested Corp.
This
Voting Agreement (“Agreement”) is entered into on July 31, 2007, but is
to be effective as of January 23, 2007, by and between U.S. Energy Corp.,
a
Wyoming corporation (“USEG”), and the individual shareholders
(each, an “Individual Shareholder”) of Crested Corp., a Colorado
corporation (“Crested”) identified on the signature page. Each
of USEG and the Individual Shareholders are individually referred to
as a
“Shareholder;” and collectively those parties are referred to as the
“Shareholders.”
WHEREAS,
USEG and Crested have entered into an Agreement and Plan of Merger (the
“Merger Agreement”) providing for the merger of Crested with and into
USEG (the “Merger”), dated as of the date hereof. Terms not
defined in this Agreement have the meanings defined in the Merger
Agreement.
WHEREAS,
the Merger Agreement requires that the Shareholders, in their capacities
as
holders of Crested common stock, enter into, and the Shareholders have
agreed to
enter into, this Agreement.
NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereby agree as follows:
1. Representations
and Warranties of the Shareholders. The Shareholders represent
and warrant to Crested as follows:
(a) Authority;
Binding Obligation. The Shareholder has all necessary power and
authority to enter into this Agreement and perform all of the Shareholder’s
obligations hereunder. This Agreement has been duly and validly executed
and
delivered by the Shareholder and constitutes a valid and legally binding
obligation of the Shareholder, enforceable against the Shareholder in
accordance
with its terms.
(b) Ownership
of Shares. The Shareholder is the beneficial owner or record holder of the
number of shares of Crested listed under the Shareholder’s name on the signature
page (the “Existing Shares” and, together with any shares of Crested
common stock the record or beneficial ownership of which is acquired
by the
Shareholder after the date hereof, the “Shares” including (only for the
individual Shareholders) any shares of common stock of Crested which
are
acquired pursuant to exercise of options to buy Crested common stock
(the
“Option Shares”) and, as of the date hereof, the Existing Shares and
Option Shares constitute all the shares of Crested common stock owned
of record
or beneficially by the Shareholder). Provided, however, that
the Existing Shares shown for each individual Shareholder does not reflect
that
person’s beneficial ownership (as defined in Rule 13d-3 promulgated under the
’34 Act) of shares of Crested common stock which he holds indirectly as
an
officer or director of USEG.
With respect to the Existing Shares, the Shareholder has (and with respect to the Options Shares, will have), without any restrictions, except as imposed by law and this Agreement, (i) sole voting power and sole power to issue instructions with respect to or otherwise engage in the actions set forth in Section 2; (ii) sole power of disposition; and (iii) sole power to demand dissenters rights under Article 113 of the Colorado Business Corporation Act (subclause (iii) applies only to the Existing Shares).
(c) No
Conflicts. Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby
will
conflict with or constitute a violation of, or a default under, (with
or without
notice, lapse of time, or both) any contract, agreement, voting agreement,
shareholders’ agreement, trust agreement, voting trust, proxy, power of
attorney, pooling arrangement, note, mortgage, indenture, instrument,
arrangement or other obligation or restriction of any kind to which the
Shareholder is a party or to which the Shareholder or Shareholder’s Shares are
subject to or bound.
2. Voting
Agreement and Agreement Not to Transfer.
|
(a)
|
The
Shareholder agrees to vote or cause to be voted all of the
Shareholder’s
Shares:
|
(i) consistent
with the vote of holders of a majority of the shares of Crested common
stock not
held by the Shareholders (the “Majority Vote of the Minority Holders”),
whether in favor of, or against, the approval of the Merger Agreement
at a
meeting of the Crested shareholders, as well as any other matters required
to be
approved by the Crested shareholders at the meeting wherein the Merger
is voted
upon by the Crested shareholders. Provided, however,
that USEG may elect not to vote in favor of the Merger, even if the Merger
Agreement has been approved by a Majority Vote of the Minority Holders,
to the
extent such election is permitted pursuant to the termination provisions
of the
Merger Agreement.
(ii) against
any action or agreement that would result in a breach in any material
respect of
any covenant, representation or warranty or any other obligation or agreement
of
Crested under the Merger Agreement; and
(iii)
against the following actions (other than the Merger or the consummation
of any
actions contemplated by the Merger Agreement):
(A)
any
extraordinary corporate transactions, such as a merger, consolidation
or other
business combination involving Crested;
(B)
any
sale, lease, transfer or disposition of a material amount of the assets
of
Crested, except as may be contemplated by the Company SEC Reports;
(C)
any
change in the majority of the board of directors of Crested;
(D)
any
material change in the present capitalization of Crested;
(E)
any
amendment of Crested’s articles of incorporation or bylaws;
2
(F)
any
other change in the corporate structure, business, assets or ownership
of
Crested, provided, however, a vote in favor of amending the Crested Incentive
Stock Option Plan to allow for cashless exercise shall be permitted;
or
(G)
any
other action which is intended, or could reasonably be expected to, impede,
interfere with, delay, postpone, discourage or adversely affect the contemplated
economic benefits to Crested of the Merger and the transactions contemplated
by
the Merger Agreement.
(b) The
Shareholder(s) agree not to (i) sell, transfer, convey, assign or otherwise
dispose of any of his, her or its Existing Shares, or any of the Option
Shares
if an Individual Shareholder exercises his or her Option before the Effective
Date; or (ii) pledge, mortgage or otherwise encumber such Existing or
Option Shares.
3. Cooperation. The
Shareholder(s) agree that he, she or it will not (directly or indirectly)
initiate, solicit, encourage or facilitate any Takeover Proposal.
4. Shareholder
Capacity. Each Individual Shareholder is entering this Agreement in his
or
her capacity as the record or beneficial owner of the Shares and the
Option
Shares, and not in his or her capacity as a director or officer of Crested.
Nothing in this Agreement shall be deemed in any manner to limit the
discretion
of any Shareholder to take any action, or fail to take any action, in
his or her
capacity as a director or officer of Crested that may be either
(a) required of the Shareholder under applicable law or (b) is
otherwise permitted by the Merger Agreement.
5. Termination.
The obligations of the Shareholder(s) hereunder shall terminate upon
the
consummation of the Merger. If the Merger is not consummated, the
obligations of the Shareholder shall terminate upon the termination of
the
Merger Agreement.
6. Specific
Performance. The Shareholder(s) acknowledges that it would be impossible to
determine the amount of damages that would result from any breach of
any of its
obligations under this Agreement, and that the remedy at law for any
breach, or
threatened breach, would likely be inadequate. Accordingly, the
Shareholder agrees that Crested shall, in addition to any other rights
or
remedies which it may have at law or in equity, be entitled to seek such
equitable and injunctive relief as may be available from any court of
competent
jurisdiction to restrain the Shareholder from violating any of his, her,
or its
obligations under this Agreement. In connection with any action or
proceeding for such equitable or injunctive relief, the Shareholder hereby
waives any claim or defense that a remedy at law alone is adequate and
agrees,
to the maximum extent permitted by law, to have the obligations of the
Shareholder under this Agreement specifically enforced against him, her
or it,
without the necessity of posting bond or other security, and consents
to the
entry of equitable or injunctive relief against the Shareholder enjoining
or
restraining any breach or threatened breach of this Agreement.
3
7. Indemnification.
(a) If
and only if the Merger is consummated in accordance with the Merger Agreement,
USEG and its successors and assigns (the “Indemnifying Party”) shall, to
the fullest extent permitted by law, indemnify, defend and hold harmless
each
Individual Shareholder (as incurred to the extent incurred subsequent
to the
Effective Date) against all costs or expenses (including reasonable attorneys’
fees), judgments, fines, losses, claims, damages or liabilities incurred
by each
Individual Shareholder, regardless of whether incurred prior to or after
the
Effective Date (collectively, “Costs”) in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of this Agreement other
than an
action for specific performance under Section 6. A Shareholder
wishing to claim indemnification under this Section 7, upon learning of any
claim, action, suit, proceeding or investigation described above, shall
promptly
notify Indemnifying Party thereof; provided that the failure so to notify
shall
not affect the obligations of Indemnifying Party under this Section 7
unless and to the extent that Indemnifying Party is actually and materially
prejudiced as a result of such failure. In case any such action shall
be brought against an Individual Shareholder, he or she shall promptly
notify
the Indemnifying Party of the commencement thereof, and the Indemnifying
Party
shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Shareholder, and after notice from the Indemnifying Party
to
Shareholder of its election to so assume the defense thereof, the Indemnifying
Party shall not be liable to Shareholder for any legal expenses of other
counsel
or any other expenses, in each case subsequently incurred by
Shareholder.
(b) If
USEG or any of its successors or assigns shall consolidate with or merge
into
any other entity and shall not be the continuing or surviving entity
of such
consolidation or merger or transfers all or substantially all of its
assets to
any other entity, then and in each case, USEG shall cause proper provision
to be
made so that its successors and assigns shall assume the obligations
set forth
in this Section 7.
(c) The
provisions of this Section 7 shall survive termination of this
Agreement.
8. Miscellaneous.
(a) Entire
Agreement. This Agreement (and the Merger Agreement) constitutes
the entire agreement of the parties with reference to the
transactions contemplated hereby and supersedes all other prior agreements,
understandings, representations and warranties, both written and oral,
between
the parties or their respective representatives, agents or attorneys,
with
respect to the subject matters hereof.
(b) Parties
in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and the other parties to the
Merger
Agreement and their respective successors, assigns, estate, heirs, executors,
administrators and other legal representatives, as the case may
be. Nothing in this Agreement, express or implied, is intended to
confer upon any other person, other than parties hereto or their respective
successors, assigns, estate, heirs, executors, administrators and other
legal
representatives, as the case may be, any rights, remedies, obligations
or
liabilities under or by reason of this Agreement.
4
(c)
Modifications;
Waivers. This Agreement shall not be amended, altered or modified in any
manner except in writing. No waiver of breach hereunder shall be
considered valid unless in writing, and no waiver shall be deemed a waiver
of
any subsequent breach.
(d) Severability. Any
term or provision of this Agreement which is invalid or unenforceable
in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of
such invalidity and unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
(e) Governing
Law. This Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance
with
the laws of the State of Wyoming, without regard to the conflict of law
principles thereof.
(f) Jurisdiction
and Venue. Any legal action or proceeding with respect to this Agreement
may be brought only in Fremont County, Wyoming, or in the courts of the
United
States of America for Wyoming. By this Agreement, each party (i)
accepts for itself the jurisdiction of and venue in such courts; and
(ii)
irrevocably consents to the service of process out of such courts by
the
delivery of notice as provided below, such service to become effective
10 days after delivery.
(g) Attorney’s
Fees. The prevailing party in any litigation, arbitration, mediation,
bankruptcy, insolvency or other proceeding (“Proceeding”) relating to the
enforcement or interpretation of this Agreement may recover from the
unsuccessful party all fees and disbursements of counsel (including expert
witness and other consultants’ fees and costs) relating to or arising out of
(a) the Proceeding (whether or not the Proceeding results in a judgment)
and (b) any post-judgment or post-award Proceeding including, without
limitation, one to enforce or collect any judgment or award resulting
from any
Proceeding. All such judgments and awards shall contain a specific
provision for the recovery of all such subsequently incurred costs, expenses,
fees and disbursements of counsel.
(h) Counterparts.
This Agreement may be executed in one or more counterparts (including
by
facsimile), each of which shall be deemed to be an original, but all
of which
shall constitute one and the same instrument.
(i) Notices.
All notices, requests, instructions and other communications to be given
hereunder shall be in writing and shall be deemed given if personally
delivered,
telecopied (with confirmation) or mailed by registered or certified mail,
postage prepaid (return receipt requested), to such party at its address
set
forth below or such other address as such party may specify to the other
party
by notice:
If
to
USEG:
U.S.
Energy Corp.
▇▇▇
▇.
▇▇▇
▇.
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax
▇▇▇.▇▇▇.▇▇▇▇
5
With
copy
(which shall not constitute notice) to:
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Attorney
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax
▇▇▇.▇▇▇.▇▇▇▇
If
to
Crested:
Crested
Corp.
▇▇▇
▇.
▇▇▇
▇.
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax
▇▇▇.▇▇▇.▇▇▇▇
With
copy
(which shall not constitute notice) to:
▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax
▇▇▇.▇▇▇.▇▇▇▇
If
to an
Individual Shareholder, to the address on the signature page
(j) Advice
of Counsel. Each Individual shareholder acknowledges that he or
she has had the opportunity to seek the advice of independent legal counsel,
and
has read and understood all of this Agreement. This Agreement shall
not be construed against any party by reason of the drafting
hereof.
[remainder
of page intentionally left blank]
6
IN
WITNESS WHEREOF, the parties execute this Agreement to be effective as of
the
date first above written.
|
Existing
Shares
|
||||
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Crested
Corp.
|
||||
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Co-Chairman
|
||||
|
U.S.
Energy Corp.
|
12,024,733
|
|||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇, Chairman, CEO
|
||||
|
Plateau
Resources, Ltd.
|
60,000
|
|||
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, President
|
||||
|
▇▇▇▇▇▇
Gold Mining, Inc.
|
100,000
|
|||
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, President
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||||
7
|
Individual
Shareholders*
|
||||||
|
Option
Shares for which
|
||||||
|
Existing
Shares
|
USEG
Shares will be issued
|
|||||
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
147,850
|
200,000
|
||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
15,000
|
200,000
|
||||
|
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
3,466
|
200,000
|
||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
-
|
200,000
|
||||
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ |
200,000
|
|||||
|
▇▇▇▇
▇. ▇▇▇▇▇▇
|
||||||
|
30,000
|
||||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
30,000
|
|||||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
30,000
|
|||||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
|
||||||
| /s/ H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
30,000
|
|||||
|
H.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ |
50,000
|
|||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
41,722
|
|||||
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
||||||
| /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
14,203
|
|||||
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
||||||
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*
Notice for each individual shareholder will be delivered to the
USEG
address.
|
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8