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<SEC-DOCUMENT>0000101594-09-000104.txt : 20091216
<SEC-HEADER>0000101594-09-000104.hdr.sgml : 20091216
<ACCEPTANCE-DATETIME>20091215201144
ACCESSION NUMBER:		0000101594-09-000104
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20091211
ITEM INFORMATION:		Entry into a Material Definitive Agreement
FILED AS OF DATE:		20091216
DATE AS OF CHANGE:		20091215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			US ENERGY CORP
		CENTRAL INDEX KEY:			0000101594
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL MINING [1000]
		IRS NUMBER:				830205516
		STATE OF INCORPORATION:			WY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-06814
		FILM NUMBER:		091243066

	BUSINESS ADDRESS:	
		STREET 1:		877 NORTH 8TH WEST
		STREET 2:		GLEN L LARSEN BLDG
		CITY:			RIVERTON
		STATE:			WY
		ZIP:			82501
		BUSINESS PHONE:		3078569271

	MAIL ADDRESS:	
		STREET 1:		877 NORTH 8TH WEST
		CITY:			RIVERTON
		STATE:			WY
		ZIP:			82501

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	WESTERN STATES MINING INC
		DATE OF NAME CHANGE:	19851229
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8_k.htm
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>
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    <div style="TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font>

      <div>
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    <div>&#160;</div>
    <div>&#160;</div>
    <div style="MARGIN: 0in 0.1in 0pt 0in; mso-pagination: none"><font size="3">&#160;</font></div>
    <div>&#160;</div>
    <div><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;UNITED
STATES</font></font></div>
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    <div style="TEXT-ALIGN: center; MARGIN: 0in 0.1in 0pt 0in" align="center"><font size="3">&#160;</font></div>
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20549</font></div>
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    <div style="TEXT-ALIGN: center; MARGIN: 0in 0.1in 0pt 0in; mso-outline-level: 1" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font size="3">FORM
8-K </font></font></div>
    <div>&#160;</div>
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    <div>&#160;</div>
    <div style="TEXT-ALIGN: center; MARGIN: 0in 0.1in 0pt 0in; mso-outline-level: 1" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font size="3">CURRENT REPORT</font></font></div>
    <div>&#160;</div>
    <div style="MARGIN: 0in 0.1in 0pt 0in"><font size="3">&#160;</font></div>
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    <div style="TEXT-ALIGN: center; MARGIN: 0in 0.1in 0pt 0in; mso-outline-level: 1" align="center">Pursuant to Section 13 or 15(d) of the</div>
    <div>&#160;</div>
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    <div>&#160;</div>
    <div style="MARGIN: 0in 0.1in 0pt 0in; mso-outline-level: 1">Date of Report
(date of earliest event reported): December 16, 2009 (December 11, 2009)</div>
    <div>&#160;</div>
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              <div style="TEXT-ALIGN: center; MARGIN: 0in 0.1in 0pt 0in" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold">U.S. ENERGY
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    <div>&#160;</div>
    <div>
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              <div>&#160;</div>
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              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align="center">(State
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              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align="center">(Commission File No.)</div>
              <div>&#160;</div>
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      Employer</div>
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              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align="center">incorporation or organization)</div>
              <div>&#160;</div>
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              <div>&#160;</div>
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              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align="center">Identification No.)</div>
              <div>&#160;</div>
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              <div>&#160;</div>
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              <div>&#160;</div>
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              <div>&#160;</div>
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              <div>&#160;</div>
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              <div style="MARGIN: 0in 0in 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">877 North 8<font style="FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font>
      West</font></div>
              <div>&#160;</div>
              <div style="MARGIN: 0in 0in 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Riverton, WY</font></div>
              <div>&#160;</div>
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              <div>&#160;</div>
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              <div style="MARGIN: 0in 0in 0pt">(Address of principal executive
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              <div>&#160;</div>
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              <div>&#160;</div>
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              <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
              <div>&#160;</div>
            </td>
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              <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
              <div>&#160;</div>
            </td>
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              <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
              <div>&#160;</div>
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              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align="center">Registrant's telephone number, including area code: <font size="3"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(307)
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              <div>&#160;</div>
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    <div style="MARGIN: 0in 0in 0pt">&#160;</div>
    <div>&#160;</div>
    <div style="MARGIN: 0in 0in 0pt">&#160;</div>
    <div>&#160;</div>
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<tr style="MSO-YFTI-IROW: 0; MSO-YFTI-FIRSTROW: yes;">
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              <div>&#160;</div>
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registrant under any of the following provisions (see General Instruction
A.2):</div>
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underwriting agreement (the "<font style="DISPLAY: inline; TEXT-DECORATION: underline">Underwriting
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representative of the underwriters named therein (the "<font style="DISPLAY: inline; TEXT-DECORATION: underline">Underwriters"</font>),
pursuant to which USE agreed to sell 5,000,000 shares of its common stock, $0.01
par value per share (the "<font style="DISPLAY: inline; TEXT-DECORATION: underline">Common Stock"</font>), at an
initial price to the public of $5.25 per share, in a firm commitment
underwritten offering pursuant to an effective Registration Statement on Form
S-3 (File No. 333-162607), as amended (the "<font style="DISPLAY: inline; TEXT-DECORATION: underline">Registration
Statement"</font>), as amended and supplemented by a prospectus supplement dated
December 11, 2009.&#160; The prospectus supplement and accompanying prospectus
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pursuant to the Underwriting Agreement is expected to close on December 16,
2009, subject to the satisfaction of customary closing conditions.&#160; Net
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banking and other transactions with USE in the ordinary course of
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(d)&#160;&#160; Exhibits</div>
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Agreement, dated as of December 11, 2009, between U.S. Energy Corp. and Madison
Williams and Company LLC.</div>
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Opinion of Davis Graham &amp; Stubbs LLP.</div>
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Consent of Davis Graham &amp; Stubbs LLP. (included in Exhibit 5.1)</div>
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its behalf by the undersigned hereunto duly authorized.</div>
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<DOCUMENT>
<TYPE>EX-1.1
<SEQUENCE>2
<FILENAME>exhibit1_1.htm
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>
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Copy</font></font></font></div>
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CORP.</font></font></div>
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      <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 20pt" align="center"><font size="3">(Wyoming corporation)</font></div>
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      <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 20pt" align="center"><font size="3">5,000,000 Shares of Common Stock</font></div>
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AGREEMENT</font></font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 1.25in 0in 12pt"><font size="3">Dated:&#160; December 11, 2009</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt"><font size="3">______________________________________________________________________________</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt"><font size="3">______________________________________________________________________________</font></div>
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      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">U.S. ENERGY CORP.</font><br><font size="3">(Wyoming
corporation)<br>5,000,000 Shares of Common Stock<br>(Par Value $0.01 Per
Share)<br>UNDERWRITING AGREEMENT</font></div>
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      <div style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align="right"><font size="3">December 11, 2009</font></div>
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      <div style="TEXT-INDENT: -58.5pt; MARGIN: 0in 0in 0pt 58.5pt; mso-hyphenate: none"><font size="3">Madison Williams and Company LLC</font></div>
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      <div style="MARGIN: 0in 0in 0pt 0.5in"><font size="3">as Representative of the
several Underwriters</font></div>
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      <div style="TEXT-INDENT: -63pt; MARGIN: 0in 0in 0pt 63pt; mso-hyphenate: none"><font size="3">c/o&#160; Madison Williams and Company LLC</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; mso-hyphenate: none"><font size="3">600 Travis, Suite 5800</font></div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">Houston, Texas 77002</font></div>
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      <div style="MARGIN: 12pt 0in"><font size="3">Ladies and Gentlemen:</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">U.S. Energy Corp., a Wyoming corporation (the &#8220;Company&#8221;), confirms its
agreement with Madison Williams and Company LLC (&#8220;MWC&#8221;) and each of the other
Underwriters named in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font> hereto
(collectively, the &#8220;Underwriters,&#8221; which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom MWC is
acting as representative (in such capacity, the &#8220;Representative&#8221;), with respect
to the issue and sale by the Company and the purchase by the Underwriters,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $0.01 per share, of the Company (&#8220;Common Stock&#8221;) set forth in
said <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule
A</font>, and with respect to the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of 750,000 additional shares of Common Stock to
cover overallotments, if any.&#160; The aforesaid 5,000,000 shares of Common
Stock (the &#8220;Initial Securities&#8221;) to be purchased by the Underwriters and all or
any part of the 5,750,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the &#8220;Option Securities&#8221;) are hereinafter called,
collectively, the &#8220;Securities.&#8221;</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The Company has filed with the Securities and Exchange Commission (the
&#8220;Commission&#8221;) a shelf registration statement on Form S&#8209;3 (No. 333-162607),
including the related prospectus, which registration statement became effective
upon the Commission&#8217;s granting of effectiveness on November 6, 2009 under Rule
461(b)4 of the rules and regulations of the Commission (the &#8220;1933 Act
Regulations&#8221;) under the Securities Act of 1933, as amended (the &#8220;1933
Act&#8221;).&#160; Such registration statement covers the registration of the
Securities under the 1933 Act along with other shares.&#160; Promptly after
execution and delivery of this Agreement, the Company will prepare and file a
prospectus in accordance with the provisions of Rule 430B (&#8220;Rule 430B&#8221;) of the
1933 Act Regulations and Rule 424(b) of the 1933 Act Regulations.&#160; Any
information included in such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be part of and
included in such registration statement pursuant to Rule 430B is referred to as
&#8220;Rule 430B Information.&#8221;&#160; Each prospectus used in connection with the
offering of the Securities that omitted Rule 430B Information, is herein called
a &#8220;preliminary prospectus.&#8221;&#160; Such registration statement, at any given
time, including the amendments thereto to such time, the exhibits and any
schedules thereto at such time, the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act at such time and the
documents otherwise deemed to be a part thereof or included therein by 1933 Act
Regulations, is herein called the &#8220;Registration Statement.&#8221; The Registration
Statement at the time it originally became effective is herein </font></div>
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      </div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt"><font size="3">called the &#8220;Original Registration Statement.&#8221;&#160; The final prospectus
in the form first furnished to the Underwriters for use in connection with the
offering of the Securities, including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the
execution of this Agreement is herein called the &#8220;Prospectus.&#8221;&#160; For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
(&#8220;EDGAR&#8221;).</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">All references in this Agreement to financial statements and schedules
and other information which is &#8220;contained,&#8221; &#8220;included&#8221; or &#8220;stated&#8221; in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in or otherwise deemed by 1933 Act Regulations to be a part of or
included in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the &#8220;1934 Act&#8221;) which is
incorporated by reference in or otherwise deemed by 1933 Act Regulations to be a
part of or included in the Registration Statement, such preliminary prospectus
or the Prospectus, as the case may be.</font></div>
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      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 1.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Representations and
Warranties.</font></font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Representations and
Warranties by the Company.&#160; The Company represents and warrants to each
Underwriter as of the date hereof, the Applicable Time referred to in Section
1(a)(i) hereof and as of the Closing Time referred to in Section 2(c) hereof,
and as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Registration Statement,
Prospectus and Disclosure at Time of Sale</font>.&#160; The Original
Registration Statement became effective on November 6, 2009.&#160; No stop order
suspending the effectiveness of the Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information has
been complied with.&#160; The Company has paid the required Commission filing
fees relating to the Securities.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; At the
respective times the Original Registration Statement became effective, at each
deemed effective date with respect to the Underwriters pursuant to Rule
430B(f)(2) of the 1933 Act Regulations and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), the Registration
Statement complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">Neither the Prospectus nor any amendments or supplements thereto
(including any prospectus wrapper), at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.</font></div>
      <div>&#160;</div>
      <div>&#160;</div>
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      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">Each preliminary prospectus (including the prospectus filed as part of
the Original Registration Statement or any amendment thereto) complied when so
filed in all material respects with the 1933 Act Regulations, and each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">As of the Applicable Time, neither (x) the Issuer General Use Free
Writing Prospectus(es) (as defined below) issued at or prior to the Applicable
Time (as defined below), the Statutory Prospectus (as defined below) and the
information included on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule B</font> hereto,
all considered together (collectively, the &#8220;General Disclosure Package&#8221;), nor
(y) any individual Issuer Limited Use Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">As used in this subsection and elsewhere in this Agreement:</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#8220;Applicable Time&#8221; means 7:00 a.m. (Eastern time) on December 11, 2009 or
such other time as agreed by the Company and MWC<font style="DISPLAY: inline; TEXT-DECORATION: underline"><font color="#0000ff">.</font></font></font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#8220;Issuer Free Writing Prospectus&#8221; means any &#8220;issuer free writing
prospectus,&#8221; as defined in Rule 433 of the 1933 Act Regulations (&#8220;Rule 433&#8221;),
relating to the Securities that (i) is required to be filed with the Commission
by the Company, (ii) is a &#8220;road show that is a written communication&#8221; within the
meaning of Rule 433(d)(8)(i), whether or not required to be filed with the
Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because
it contains a description of the Securities or of the offering that does not
reflect the final terms, in each case in the form filed or required to be filed
with the Commission or, if not required to be filed, in the form retained in the
Company&#8217;s records pursuant to Rule 433(g).</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#8220;Issuer General Use Free Writing Prospectus&#8221; means any Issuer Free
Writing Prospectus that is intended for general distribution to prospective
investors (other than a Bona Fide Electronic Road Show (as defined below)), as
evidenced by its being specified in Schedule D hereto.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#8220;Statutory Prospectus&#8221; as of any time means the prospectus relating to
the Securities that is included in the Registration Statement immediately prior
to that time, including any document incorporated by reference therein and any
preliminary or other prospectus deemed to be a part thereof.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">The Company has made available a &#8220;bona fide electronic road show,&#8221; as
defined in Rule 433, in compliance with Rule 433(d)(8)(ii) (the &#8220;Bona Fide
Electronic Road Show&#8221;) such that no filing of any &#8220;road show&#8221; (as defined in
Rule 433(h)) is required in connection with the offering of the
Securities.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities or until any earlier date that the issuer notified or notifies MWC as
described in Section 3(e), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any
document incorporated </font></div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#160;</font></div>
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      <div style="TEXT-ALIGN: left; TEXT-INDENT: 36pt; MARGIN: 0in 0pt 12pt"><font size="3">by reference therein, and any preliminary or other prospectus deemed to
be a part thereof that has not been subperseded or modified.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">The representations and warranties in this subsection (i) shall not apply
to statements in or omissions from the Registration Statement, the Prospectus or
any Issuer Free Writing Prospectus made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through MWC
expressly for use therein.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Incorporated
Documents</font>.&#160; The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the &#8220;1934 Act Regulations&#8221;) and, when
read together with the other information in the Prospectus, (a) at the time the
Original Registration Statement became effective, (b) at the earlier of time the
Prospectus was first used and the date and time of the first contract of sale of
Securities in this offering and (c) at the Closing Time (and if any Option
Securities are purchased, at the Date of Delivery), did not and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(iii)&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Independent
Accountants</font>.&#160; Each of Hein &amp; Associates LLP and Moss Adams LLP,
the accounting firms that have issued an opinion on the financial statements
filed with or incorporated by reference in and as a part of the Registration
Statement, is an independent registered public accounting firm within the
meaning of the 1933 Act and the 1933 Act Regulations and the rules and
regulations of the Public Company Accounting Oversight Board of the United
States.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(iv)&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Financial
Statements</font>.&#160; The condensed financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates indicated
and their results of of operations and cash flows for the periods specified;
said financial statements have been prepared in conformity with generally
accepted accounting principles (&#8220;GAAP&#8221;) applied on a consistent basis throughout
the periods involved.&#160; The supporting schedules, if any, present fairly in
accordance with GAAP the information required to be stated therein.&#160; The
selected financial data and the summary financial information included in the
General Disclosure Package and the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement. All
disclosures contained in the Registration Statement, the General Disclosure
Package or the Prospectus regarding &#8220;non-GAAP financial measures&#8221; (as such term
is defined by the rules and regulations of the Commission) comply with
Regulation G under the 1934 Act and Item 10 of Regulation S-K of the 1933 Act
Regulations, to the extent applicable.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">No Material Adverse Change
in Business</font>.&#160; Since the respective dates as of which information is
given in the Registration Statement, the General Disclosure Package or the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a &#8220;Material Adverse Effect&#8221;), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one </font></div>
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      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.5in"><font size="3">enterprise, and (C) except for regular dividends on the Common Stock in
amounts per share that are consistent with past practice, there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.&#160; </font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(vi)&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Good Standing of the
Company</font>.&#160; The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Wyoming and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the General Disclosure
Package and the Prospectus and to enter into and perform its obligations under
this Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse
Effect.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(vii)&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Good Standing of
Subsidiaries</font>.&#160; Each &#8220;significant subsidiary&#8221; of the Company (as such
term is defined in Rule 1-02 of Regulation S-X) (each a &#8220;Subsidiary&#8221; and,
collectively, the &#8220;Subsidiaries&#8221;) has been duly organized and is validly
existing as a corporation or other entity in good standing under the laws of the
jurisdiction of its incorporation, has corporate or other power and authority to
own, lease and operate its properties and to conduct its business as described
in the General Disclosure Package and the Prospectus and is duly qualified as a
foreign corporation or other entity to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock or other form of
ownership of each such Subsidiary has been duly authorized and validly issued,
is fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of capital
stock or other form of ownership of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.&#160;
The only subsidiaries of the Company are (a) the subsidiaries listed on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule F</font> hereto and
(b) certain other subsidiaries which, considered in the aggregate as a single
Subsidiary, do not constitute a &#8220;significant subsidiary&#8221; as defined in Rule 1-02
of Regulation S-X.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(viii)&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Capitalization</font>.&#160;
The authorized, issued and outstanding capital stock of the Company is as set
forth in the General Disclosure Package and the Prospectus in the column
entitled &#8220;Actual&#8221; under the caption &#8220;Capitalization&#8221; (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the General Disclosure
Package and the Prospectus or pursuant to the exercise of convertible
securities, options or warrants referred to in the General Disclosure Package
and the Prospectus).&#160; The shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(ix)&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Authorization of
Agreement</font>.&#160; This Agreement has been duly authorized, executed and
delivered by the Company.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(x)&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Authorization and
Description of Securities</font>.&#160; The Securities have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment
of the consideration </font></div>
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        </div>
      </div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.5in"><font size="3">set forth herein, will be validly issued, fully paid and non-assessable;
the Common Stock conforms to all statements relating thereto contained in the
General Disclosure Package and the Prospectus and such description conforms to
the rights set forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company or any restriction
upon the voting or transfer thereof pursuant to applicable law or the Company&#8217;s
certificate of incorporation, by-laws or governing documents or any agreement to
which the Company or any of its Subsidiaries is a party or by which any of them
may be bound.&#160; All corporate action required to be taken by the Company for
the authorization and issuance of the Securities has been duly and validly
taken.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xi)&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Absence of Defaults and
Conflicts</font>.&#160; Neither the Company nor any of its Subsidiaries is in
violation of its charter or by-laws, certificate of formation or limited
liability company agreement or comparable organizational documents, or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, &#8220;Agreements and Instruments&#8221;) except for
such defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the General Disclosure Package
and the Prospectus under the caption &#8220;Use of Proceeds&#8221;) and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or Repayment Events
or liens, charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary or comparable organizational
document, or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations.&#160; As used herein, a &#8220;Repayment
Event&#8221; means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder&#8217;s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any
subsidiary.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xii)&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Absence of Labor
Dispute</font>.&#160; No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or any subsidiary&#8217;s principal suppliers, manufacturers,
customers or contractors, which, in either case, would result in a Material
Adverse Effect.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xiii)&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Absence of
Proceedings</font>.&#160; There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which might result in a Material Adverse Effect, or which might
</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">&#160;</font></div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
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        <div id="HDR">
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      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.5in"><font size="3">materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder, except where the
aggregate of all pending legal or governmental proceedings to which the Company
or any subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could not
result in a Material Adverse Effect.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xiv)&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Accuracy of
Exhibits</font>.&#160; There are no contracts or documents which are required to
be described in the Registration Statement, the General Disclosure Package and
the Prospectus or the documents incorporated by reference therein or to be filed
as exhibits thereto which have not been so described and filed as
required.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xv)&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Possession of Intellectual
Property</font>.&#160; The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, &#8220;Intellectual Property&#8221;) necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xvi)&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Absence of
Manipulation</font>.&#160; Neither the Company nor any affiliate of the Company
has taken, nor will the Company or any affiliate take, directly or indirectly,
any action which is designed to or which has constituted or which would be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xvii)&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Absence of Further
Requirements</font>.&#160; No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by
the Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except (i) such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and (ii) such as have been obtained under
the laws and regulations of jurisdictions outside the United States in which the
Securities are offered.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xviii)&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Possession of Licenses and
Permits</font>.&#160; The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
&#8220;Governmental Licenses&#8221;) issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them as described in the Registration Statement, the General
Disclosure Package and the Prospectus, except where the failure so to possess
would not, singly or in the aggregate, result in a Material </font></div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">&#160;</font></div>
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        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
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          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
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          </div>
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      </div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.5in"><font size="3">Adverse Effect; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, result in a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not, singly
or in the aggregate, result in a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xix)&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Title to
Property</font>.&#160; The Company is not the operator of any of its producing
natural gas and oil properties, and has relied on the operators (i) of the
leases wherein wells have been drilled, to determine if the Company has good and
Defensible (as defined below) title to all its interests in its producing
natural gas and oil properties (including oil and gas wells, producing leasehold
interests and appurtenant personal property) as described in the General
Disclosure Package and the Prospectus as owned by it, and (ii)&#160;to
investigate title in accordance with customary industry procedures prior to
acquiring any non-producing leasehold properties (including undeveloped
locations or leases held by production, and those leases not held by production
and including exploration prospects, referred to hereafter as the &#8220;oil and gas
properties&#8221;) described in the Disclosure Package and the Prospectus as owned by
it.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">To the Company&#8217;s knowledge, based solely upon information provided by the
operators, the Company has good and indefeasible title to its oil and gas
properties as described in the General Disclosure Package and the Prospectus as
owned by it as described in the General Disclosure Package and the Prospectus as
owned by it, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the General Disclosure Package and the Prospectus or (b)
do not, singly or in the aggregate, materially affect the value of such
properties and do not interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries; and all of the leases
and subleases for the Company&#8217;s oil and gas properties which are material to the
business of the Company and its subsidiaries, considered as one enterprise, and
under which the Company or any of its subsidiaries holds properties described in
the General Disclosure Package and the Prospectus, are in full force and effect,
and neither the Company nor any subsidiary has any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease.&#160; </font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">As used herein, &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Defensible</font>&#8221; means,
with respect to title to the producing properties (including oil and gas wells
and producing leasehold interests) described in the General Disclosure Package
and the Prospectus as being owned by the Company or its subsidiaries, that the
Company and its subsidiaries (1) are entitled to receive not less than the net
revenue interests of such properties as set forth in the reserve report of Ryder
Scott Company, L.P., petroleum engineers, dated as of March 12, 2009 (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Reserve Report</font>&#8221;) of
all hydrocarbons and minerals produced, saved and marketed from such properties,
and proceeds thereof, all without reduction, suspension or termination of such
interests throughout the productive life of such properties, and (2) are
obligated to bear a share of the costs and expenses relating to the maintenance,
exploration, drilling, completion, development, operation, plugging and
abandonment of such properties not greater than the working interests of such
properties as set forth in the Reserve Report, without increase throughout the
life of such properties.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">The Company and its Subsidiary Remington Village, LLC have good and
marketable title to the real property and&#160; personal property (other than
the Company&#8217;s oil and gas properties) as described in the General Disclosure
Package and the Prospectus as owned by the Company and Remington Village,
LLC&#160; and as described in the General Disclosure Package and the Prospectus
as owned by them, in each case, free and clear of all mortgages, pledges, liens,
security interests, </font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 6pt 36pt"><font size="3">claims, restrictions or encumbrances of any kind except such as (a) are
described in the General Disclosure Package and the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases for the
Company&#8217;s real property and personal property (other than the Company&#8217;s oil and
gas properties) which are material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or any
of its subsidiaries holds properties described in the General Disclosure Package
and the Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any subsidiary under
any of the leases or subleases mentioned in this paragraph, or affecting or
questioning the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.</font></div>
      <div>&#160;</div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xx)&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Investment Company
Act</font>.&#160; The Company is not required, and upon the issuance and sale of
the Securities as herein contemplated and the application of the net proceeds
therefrom as described in the General Disclosure Package and the Prospectus will
not be required, to register as an &#8220;investment company&#8221; under the Investment
Company Act of 1940, as amended (the &#8220;1940 Act&#8221;).</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxi)&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Environmental
Laws</font>.&#160; Except as described in the Registration Statement and except
as would not, singly or in the aggregate, result in a Material Adverse Effect,
(A) neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products, asbestos-containing materials or
mold (collectively, &#8220;Hazardous Materials&#8221;) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, &#8220;Environmental Laws&#8221;), (B) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the Company&#8217;s knowledge,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or circumstances
of which the Company is aware that would reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.</font></div>
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Disclosure Controls</font>.&#160; The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (1) transactions are executed in accordance with
management&#8217;s general or specific authorization; (2) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (3) access to assets is permitted
only in accordance with management&#8217;s general or specific authorization; and (4)
the recorded accountability for assets is compared with the existing assets at
reasonable </font></div>
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        <div id="FTR">
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          </div>
        </div>
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          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
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      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.5in"><font size="3">intervals and appropriate action is taken with respect to any
differences.&#160; Except as described in the General Disclosure Package and the
Prospectus, since the end of the Company&#8217;s most recent audited fiscal year,
there has been (I) no material weakness in the Company&#8217;s internal control over
financial reporting (whether or not remediated) and (II) no change in the
Company&#8217;s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company&#8217;s internal
control over financial reporting.&#160; The Company and its consolidated
subsidiaries employ disclosure controls and procedures that are designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission&#8217;s rules and
forms, and is accumulated and communicated to the Company&#8217;s management,
including its principal executive officer or officers and principal financial
officer or officers, as appropriate, to allow timely decisions regarding
disclosure.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxiii)&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Compliance with the
Sarbanes-Oxley Act</font>.&#160; There is and has been no failure on the part of
the Company or any of the Company&#8217;s directors or officers, in their capacities
as such, to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the &#8220;Sarbanes-Oxley Act&#8221;), including Section 402 related
to loans and Sections 302 and 906 related to certifications.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxiv)&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Pending Proceedings and
Examinations</font>.&#160; The Registration Statement is not the subject of a
pending proceeding or examination under Section 8(d) or 8(e) of the 1933 Act,
and the Company is not the subject of a pending proceeding under Section 8A of
the 1933 Act in connection with the offering of the Securities.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxv)&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Payment of
Taxes</font>.&#160; All United states federal income tax returns of the Company
and its subsidiaries required by law to be filed have been filed (taking into
account timely filed extensions) and all taxes shown by such returns or
otherwise assessed, which are due and payable, have been paid, except
assessments against which appeals have been or will be promptly taken and as to
which adequate reserves have been provided.&#160; The United States federal
income tax returns of the Company were last audited and cleared by the Internal
Revenue Service for the fiscal year ended May 31, 2000 (the Company later
changed its fiscal year to the calendar year), and no unpaid assessment in
connection therewith has been made against the Company.&#160; The Company and
its subsidiaries have filed all other tax returns that are required to have been
filed (taking into account timely filed extensions) by them pursuant to
applicable foreign, state, local or other law except insofar as the failure to
file such returns would not result in a Material Adverse Effect, and has paid
all taxes due pursuant to such returns or pursuant to any assessment received by
the Company and its subsidiaries, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
provided.&#160; The charges, accruals and reserves on the books of the Company
in respect of any income and other tax liability for any years (including the
tax liability for any year for which a return has not been filed because of an
unexpired extension) not finally determined are adequate to meet any assessments
or re-assessments for additional income tax for any years not finally
determined, except to the extent of any inadequacy that would not result in a
Material Adverse Effect.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxvi)&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Insurance</font>.&#160; The
Company and its subsidiaries carry or are entitled to the benefits of insurance,
with financially sound and reputable insurers, in such amounts and covering such
risks as is generally maintained by companies of established repute engaged in
the same or similar business, and all such insurance is in full force and
effect.&#160; The Company has no reason to believe that it or any subsidiary
will not be able (A) to renew its existing insurance coverage as and when such
policies expire or (B) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that </font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.5in"><font size="3">would not result in a Material Adverse Change. Neither of the Company nor
any subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxvii)&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Statistical and
Market-Related Data</font>.&#160; Any statistical and market-related data
included in the Registration Statement, the General Disclosure Package and the
Prospectus are based on or derived from sources that the Company believes to be
reliable and accurate, and the Company has obtained the written consent to the
use of such data from such sources.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxviii) <font style="DISPLAY: inline; TEXT-DECORATION: underline">Engineering
Firm</font>.&#160; Ryder Scott Company, L.P. (&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Ryder Scott</font>&#8221;) is a
petroleum engineering firm from whose reserve reports information is contained
or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus, and acts as independent natural gas
engineers with respect to the Company.&#160; Other than (i) the production of
reserves in the ordinary course of business, (ii) intervening price fluctuations
or (iii) as described in the General Disclosure Package, the Company is not
aware of any facts or circumstances that would result in a material adverse
change in its proved reserves in the aggregate, or the aggregate present value
of estimated future net revenues of the Company or the standardized measure of
discounted future net cash flows therefrom, as described in the General
Disclosure Package and reflected in the reserve information as of the respective
dates such information is given.&#160; Except as described in each of the
General Disclosure Package and the Prospectus, the General Disclosure Package,
including the oil and natural gas production and reserve information and
estimates of future net revenues and discounted future net cash flows, complies
and the Prospectus, including the oil and natural gas production and reserve
information and estimates of future net revenues and discounted future net cash
flows, will comply, in all material respects with the applicable requirements of
Regulation S-X of the 1933 Act Rules and Regulations, Industry Guide 2 under the
1933 Act and Statement of Financial Accounting Standards Board No. 69,
Disclosures about Oil and Petroleum Producing Activities, as amended to date
(&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">SFAS
69</font>&#8221;).</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxix)&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Foreign Corrupt Practices
Act</font>.&#160; Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee, affiliate or other person acting on behalf
of the Company or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the &#8220;FCPA&#8221;), including without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in the
furtherance of an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any &#8220;foreign official&#8221; (as such term is defined
in the FCPA) or any foreign political party or official therof or any candidate
for foreign political office, in contravention of the FCPA and the Company and
to the knowledge of the Company, its affiliates have conducted their businesses
in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure and which are reasonable expected to continue to
ensure, continued compliance therewith.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxx)&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Money Laundering
Laws</font>.&#160; The operations of the Company are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the &#8220;Money Laundering Laws&#8221;) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company, threatened.</font></div>
      <div>&#160;</div>
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      <div>&#160;</div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xxxi)&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">OFAC</font>.&#160; Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or person acting on behalf of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasure Department (&#8220;OFCA&#8221;); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFCA.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">(xxxii)&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Commission
Comments</font>.&#160; The Company has received no written comments from the SEC
staff regarding its periodic or current reports under the 1934 Act that remain
unresolved, other than comments disclosed in the Registration Statement, General
Disclosure Package and Prospectus.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">(xxxiii) <font style="DISPLAY: inline; TEXT-DECORATION: underline">Relationships</font>.&#160;
No relationship, direct or indirect, exists between or among the Company and any
director, officer or stockholder of the Company, or any member of his or her
immediate family, or any customers or suppliers that is required to be described
in the Registration Statement, the General Disclosure Package or the Prospectus
and that is not so described and described as required in material compliance
with such requirement.&#160; There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any member of their respective immediate
families, except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">(xxxiv) <font style="DISPLAY: inline; TEXT-DECORATION: underline">Change
in Law</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
To the knowledge of the Company, no change in any laws or regulations is pending
that could reasonably be expected to be adopted and if adopted, is reasonably
expected to have, individually or in the aggregate with all such changes, a
Material Adverse Effect, except as set forth in or contemplated in each of the
General Disclosure Package and the Prospectus.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">(xxxv)&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Customers</font>.&#160; No
customer of or supplier to the Company or any of its subsidiaries has ceased
purchases or shipments of merchandise to the Company or indicated, to the
Company&#8217;s knowledge, an interest in decreasing or ceasing its purchases from the
Company or otherwise modifying its relationship with the Company, other than in
the normal and ordinary course of business consistent with past practices in a
manner which would not, singly or in the aggregate, result in a Material Adverse
Effect.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 6pt 0.5in"><font size="3">(xxxvi) <font style="DISPLAY: inline; TEXT-DECORATION: underline">ERISA</font>.<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160; </font>To the Company&#8217;s
knowledge, the Company and its Subsidiaries are in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">ERISA</font>&#8221;); no
&#8220;reportable event&#8221; (as defined in ERISA) has occurred with respect to any
&#8220;pension plan&#8221; (as defined in ERISA) for which the Company and its Subsidiaries
would have any liability; the Company and its Subsidiaries have not incurred and
do not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any &#8220;pension plan&#8221; or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Code</font>&#8221;); and each
&#8220;pension plan&#8221; for which the Company or any of its Subsidiaries would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects, and nothing has occurred, whether by
action or by failure to act, that would cause the loss of such
qualification.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in"><font size="3">(xxxvii) <font style="DISPLAY: inline; TEXT-DECORATION: underline">Minute
Books</font>.&#160; The minute books of each of the Company and its subsidiaries
have been made available to the Representative and contain a complete summary of
all meetings </font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in"><font size="3">&#160;</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 0pt 36pt"><font size="3">and other actions of the directors and shareholders of each such entity
in all material respects, and reflect all transactions referred to in such
minutes accurately in all material respects.</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Officer&#8217;s
Certificates.&#160; Any certificate signed by any officer of the Company or any
of its subsidiaries delivered to the Representative or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.</font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 2.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Sale and Delivery to
Underwriters; Closing</font>.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Initial Securities.&#160;
On the basis of the representations and warranties herein contained and subject
to the terms and conditions herein&#160; set forth, the Company agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company, at the price per share set
forth in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule
C</font>, the number of Initial Securities set forth in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font> opposite
the name of such Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Option Securities.&#160; In
addition, on the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company hereby
grants an option to the Underwriters, severally and not jointly, to purchase up
to an additional 750,000 shares of Common Stock at the price per share set forth
in Schedule C, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not payable on
the Option Securities.&#160; The option hereby granted will expire 30 days after
the date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering overallotments which may be made in connection with
the offering and distribution of the Initial Securities upon notice by MWC to
the Company setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities.&#160; Any such time and date of
delivery (a &#8220;Date of Delivery&#8221;) shall be determined by MWC, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined.&#160; If the option
is exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font> opposite
the name of such Underwriter bears to the total number of Initial Securities,
subject in each case to such adjustments as MWC in its discretion shall make to
eliminate any sales or purchases of fractional shares.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Payment.&#160; Payment of
the purchase price for, and delivery of certificates for, the Initial Securities
shall be made at the offices of MWC at 527 Madison Avenue, 15th Floor, New York,
New York 10022, or at such other place as shall be agreed upon by the
Representative and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representative and the Company
(such time and date of payment and delivery being herein called &#8220;Closing
Time&#8221;).</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Company, on each Date of Delivery as specified in the notice from the
Representative to the Company.</font></div>
      <div>&#160;</div>
      <div>&#160;</div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them.&#160; It is understood
that each Underwriter has authorized the Representative, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase.&#160; MWC, individually and not as representative of the Underwriters,
may (but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Denominations;
Registration.&#160; Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names
as the Representative may request in writing at least one full business day
before the Closing Time or the relevant Date of Delivery, as the case may
be.&#160; The certificates for the Initial Securities and the Option Securities,
if any, will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.&#160; </font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 3.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Covenants of the
Company</font>.&#160; The Company covenants with each Underwriter as
follows:</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(a)&#160; Compliance with Securities Regulations and Commission
Requests.&#160; The Company, subject to Section 3(b), will comply with the
requirements of Rule 430B and will notify the Representative immediately, and
confirm the notice in writing, (i)&#160;when any post-effective amendment to the
Registration Statement or new registration statement relating to the Securities
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii)&#160;of the receipt of any comments from
the Commission, (iii)&#160;of any request by the Commission for any amendment to
the Registration Statement, the filing of a new registration statement or any
amendment or supplement to the Prospectus, or any document incorporated by
reference therein or otherwise deemed to be a part thereof or for additional
information, (iv)&#160;of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or such new
registration statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes or of any examination
pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement,
and (v) if the Company becomes the subject of a proceeding under Section 8A of
the 1933 Act in connection with the offering of the Securities.&#160; The
Company will effect the filings required under Rule 424(b), in the manner and
within the time period required by Rule 424(b) (without reliance on Rule
424(b)(8)), and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule&#160;424(b) was
received for filing by the Commission and, in the event that it was not, it will
promptly file such prospectus.&#160; The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible
moment.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(b)&#160; Filing of Amendments and Exchange Act Documents.&#160; The
Company will give the Representative notice of its intention to file or prepare
any amendment to the Registration Statement or new registration statement
relating to the Securities or any amendment, supplement or revision to either
any preliminary prospectus (including any prospectus included in the Original
Registration Statement or amendment thereto at the time it became effective) or
to the </font></div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">&#160;</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.25in"><font size="3">Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
and the Company will furnish the Representative with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall object.&#160; The Company
has given the Representative notice of any filings made pursuant to the 1934 Act
or 1934 Act Regulations within 48 hours prior to the execution of this
Agreement; the Company will give the Representative notice of its intention to
make any such filing from the execution of this Agreement to the Closing Time
and will furnish the Representative with copies of any such documents a
reasonable amount of time prior to such proposed filing and will not file or use
any such document to which the Representative or counsel for the Underwriters
shall object.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(c)&#160; Delivery of Registration Statements.&#160; The Company has
furnished or will deliver to the Representative and counsel for the
Underwriters, without charge, signed copies of the Original Registration
Statement and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein or otherwise deemed to be a part thereof) and
signed copies of all consents and certificates of experts, and will also deliver
to the Representative, without charge, a conformed copy of the Original
Registration Statement and of each amendment thereto (without exhibits) for each
of the Underwriters.&#160; The copies of the Original Registration Statement and
each amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(d)&#160; Delivery of Prospectuses.&#160; The Company has delivered to
each Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act.&#160; The Company
will furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request.&#160; The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(e)&#160; Continued Compliance with Securities Laws.&#160; The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution of
the Securities as contemplated in this Agreement and in the Prospectus.&#160; If
at any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or to file a new registration statement to amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment, supplement or new
registration statement as may be necessary to correct such statement or omission
or to comply with such requirements, the Company will use its best efforts to
have such amendment or new registration statement declared effective as soon as
practicable, and the Company will furnish to the Underwriters such number of
copies of such amendment, supplement or new registration statement as the
</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.25in"><font size="3">Underwriters may reasonably request.&#160; If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement (or any other registration statement relating to the Securities) or
the Statutory Prospectus or any preliminary prospectus or included or would
include an untrue statement of a material fact or omitted or would omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances prevailing at that subsequent time, not misleading, the
Company will promptly notify MWC and will promptly amend or supplement, at its
own expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(f)&#160; Blue Sky Qualifications.&#160; The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representative may designate and to
maintain such qualifications in effect for a period of not less than one year
from the date hereof; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(g)&#160; Rule 158.&#160; The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide to the Underwriters the benefits contemplated by,
the last paragraph of Section 11(a) of the 1933 Act.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(h)&#160; Use of Proceeds.&#160; The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under &#8220;Use of Proceeds.&#8221;</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(i)&#160;&#160; Listing.&#160; The Company will use its best efforts to
obtain approval for, and maintain the listing of the Securities for trading on,
the NASDAQ Capital Market.&#160; </font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(j)&#160;&#160; Restriction on Sale of Securities.&#160; During a period
of 90 days from the date of the Prospectus, the Company will not, without the
prior written consent of MWC, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.&#160; The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder, (B) any shares of Common Stock
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectus, (C) any shares of Common Stock issued or options to purchase Common
Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus or (D) any shares of Common Stock issued pursuant
to any non-employee director stock plan or dividend reinvestment plan.
&#160;Notwithstanding the foregoing, if (1) during the last 17 days of the
90-day restricted period the Company issues an earnings release or material news
or a material event relating to the Company occurs or (2) prior to the
expiration of the 90-day restricted period, the Company announces that it will
release earnings results or becomes aware that material news or a </font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.25in"><font size="3">material event will occur during the 16-day period beginning on the last
day of the 90-day restricted period, the restrictions imposed in this clause (j)
shall continue to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the occurrence of the material news or
material event.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(k)&#160; Reporting Requirements.&#160; The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act, will file
all documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act
Regulations.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(l)&#160;&#160; Issuer Free Writing Prospectuses.&#160; The Company
represents and agrees that, unless it obtains the prior consent of the
Representative, and each Underwriter represents and agrees that, unless it
obtains the prior consent of the Company and the Representative, it has not made
and will not make any offer relating to the Securities that would constitute an
&#8220;issuer free writing prospectus,&#8221; as defined in Rule 433, or that would
otherwise constitute a &#8220;free writing prospectus,&#8221; as defined in Rule 405,
required to be filed with the Commission.&#160; Any such free writing prospectus
consented to by the Representative or by the Company and the Representative, as
the case may be, is hereinafter referred to as a &#8220;Permitted Free Writing
Prospectus.&#8221;&#160; The Company represents that it has treated or agrees that it
will treat each Permitted Free Writing Prospectus as an &#8220;issuer free writing
prospectus,&#8221; as defined in Rule 433,&#160; and has complied and will comply with
the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 4.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Payment of
Expenses</font>.&#160; (a)&#160; Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company&#8217;s counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Permitted Free Writing Prospectus, and of the
Prospectus and any amendments or supplements thereto and any costs associated
with electronic delivery of any of the foregoing by the Underwriters to
investors, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the costs
and expenses of the Company relating to investor presentations on any &#8220;road
show&#8221; undertaken in connection with the marketing of the Securities, including
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations, travel and lodging expenses of the representatives
and officers of the Company and any such consultants, and the cost of aircraft
and other transportation chartered in connection with the road show, (x) the
fees and expenses incurred in connection with the inclusion of the Securities in
the NASDAQ Capital Market; (xi) the fees and expenses incurred in connection
with any filing for review of the offering of the Securities by the FINRA,
including filing fees, legal fees and other </font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt"><font size="3">disbursements of counsel to the Company and to the Underwriters; and (xi)
all out-of-pocket costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, not to exceed 2% of the gross
proceeds from the offering of the Securities at the initial public offering
price.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Termination of
Agreement.&#160; If this Agreement is terminated by the Representative in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 5.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Conditions of Underwriters&#8217;
Obligations</font>.&#160; The obligations of the several Underwriters hereunder
are subject to the accuracy of the representations and warranties of the Company
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(a)&#160; Effectiveness of Registration Statement; Filing of Prospectus;
Payment of Filing Fee.&#160; The Registration Statement has become effective and
at Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters.&#160; A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in the manner and within the time period required by Rule 424(b) without
reliance on Rule 424(b)(8) (or a post-effective amendment providing such
information shall have been filed and become effective in accordance with the
requirements of Rule 430B).&#160; The Company shall have paid the required
Commission filing fees relating to the Securities under Rule 456(a)of the 1933
Act Regulations.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(b)&#160; Opinion of Counsel for Company.&#160; At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Davis, Graham &amp; Stubbs, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit A-1</font> hereto,
and Stephen E. Rounds, Esq., counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit A-2</font>
hereto, and to such further effect as counsel to the Underwriters may reasonably
request.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(c)&#160; Opinion of Counsel for Underwriters.&#160; At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Andrews Kurth LLP, counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters with
respect to the matters set forth in clause (i) and the penultimate paragraph of
<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit A-2</font>
hereto.&#160; In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of Texas
and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representative.&#160; Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(d)&#160; Officers&#8217; Certificate.&#160; At Closing Time, there shall not
have been, since the date hereof, since the Applicable Time or since the
respective dates as of which information is given in the Prospectus or the
General Disclosure Package, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary </font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">&#160;</font></div>
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      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.25in"><font size="3">course of business, and the Representative shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i)&#160;there has been no such material adverse change,
(ii)&#160;the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and as of
Closing Time, (iii)&#160;the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv)&#160;no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or, to their knowledge, contemplated by the
Commission.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(e)&#160; Accountant&#8217;s Comfort Letter.&#160; At the time of the execution
of this Agreement, the Representative shall have received from each of Hein
&amp; Associates LLP and Moss Adams LLP a letter dated such date, in form and
substance satisfactory to the Representative, together with signed or reproduced
copies of such letter for each of the other Underwriters containing statements
and information of the type ordinarily included in accountants&#8217; &#8220;comfort
letters&#8221; to underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(f)&#160; Bring-down Comfort Letter.&#160; At Closing Time, the
Representative shall have received from each of Hein &amp; Associates LLP and
Moss Adams LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (e)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(g)&#160; Engineer&#8217;s Comfort
Letter.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; At the
time of the execution of this Agreement, the Representative shall have received
from Ryder Scott a letter dated such date, (A)&#160;confirming that they are an
independent petroleum engineering firm, (B)&#160;confirming, as of such date,
their estimates contained in the Reserve Report, as of its date, with respect
to: (i) the estimated quantities of the Company&#8217;s proved net reserves, (ii) the
future net revenues from those reserves, (iii) their present value as set forth
in the General Disclosure Package and the Prospectus and (iv) such related
matters as the Representative shall reasonably request.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(h)&#160; Approval of Listing.&#160; At Closing Time, the Securities
shall have been approved for inclusion in the NASDAQ Capital Market, subject
only to official notice of issuance.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(i)&#160;&#160; Lock-up Agreements.&#160; At the date of this Agreement,
the Representative shall have received an agreement substantially in the form of
<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit B</font>
hereto signed by the persons listed on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule E</font>
hereto.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(j)&#160;&#160; Conditions to Purchase of Option Securities.&#160; In the
event that the Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any subsidiary of the
Company hereunder shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Representative shall have
received:</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 1in"><font size="3">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Officers&#8217;
Certificate</font>.&#160; A certificate, dated such Date of Delivery, of the
President and of the Chief Executive Officerthe Company, and of the Chief
Financial Officer of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.</font></div>
      <div>&#160;</div>
      <div>&#160;</div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 1in"><font size="3">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Opinion of Counsel for
Company</font>.&#160; The favorable opinions of Davis, Graham &amp; Stubbs, and
Stephen E. Rounds, counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b) hereof.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 1in"><font size="3">(iii)&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Opinion of Counsel for
Underwriters</font>.&#160; The favorable opinion of Andrews Kurth LLP, counsel
for the Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c) hereof.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 1in"><font size="3">(iv)&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Bring-down Accounting
Comfort Letter</font>.&#160; A letter from each of Hein &amp; Associates LLP and
Moss Adams LLP, in form and substance satisfactory to the Representative and
dated such Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representative pursuant to Section 5(f) hereof, except
that the &#8220;specified date&#8221; in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date of
Delivery.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(k)&#160; Additional Documents.&#160; At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.25in"><font size="3">(l)&#160;&#160; Termination of Agreement.&#160; If any condition
specified in this Section shall not have been fulfilled when and as required to
be fulfilled, this Agreement, or, in the case of any condition to the purchase
of Option Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representative by notice to the Company at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such&#160; termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and
effect.</font></div>
      <div>&#160;</div>
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      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt; tab-stops: 1.0in"><font size="3">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Indemnification of
Underwriters.&#160; The Company agrees to indemnify and hold harmless each
Underwriter, its affiliates, as such term is defined in Rule 501(b) under the
1933 Act (each, an &#8220;Affiliate&#8221;), its selling agents and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.0in"><font size="3">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; against any and all
loss, liability, claim, damage and expense whatsoever, as incurred, arising out
of any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), including the Rule
430B Information, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein
not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus, Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement thereto),
or </font></div>
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          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
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          </div>
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        <div id="HDR">
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      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt 36pt; tab-stops: 1.0in"><font size="3">the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.0in"><font size="3">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160; against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company;</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.0in"><font size="3">(iii)&#160;&#160;&#160;&#160;&#160;&#160; against any and all expense
whatsoever, as incurred (including the fees and disbursements of counsel chosen
by MWC), reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii)
above;</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3"><font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that this
indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through MWC
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430B Information, or any preliminary prospectus, any Issuer
Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto).</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt; tab-stops: 1.0in"><font size="3">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Indemnification of Company,
Directors and Officers.&#160; Each Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430B Information or any preliminary prospectus, any Issuer
Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through MWC expressly for use
therein.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt; tab-stops: 1.0in"><font size="3">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Actions against Parties;
Notification.&#160; Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement.&#160; In the
case of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by MWC , and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Company.&#160; An indemnifying party may participate at
its own expense in the defense of any such action; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party.&#160; In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.&#160; No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or </font></div>
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          </div>
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        </div>
        <div id="HDR">
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt; tab-stops: 1.0in"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt; tab-stops: 1.0in"><font size="3">proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Settlement without Consent
if Failure to Reimburse.&#160; If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(ii) or settlement of
any claim in connection with any violation referred to in Section 6(d) effected
without its written consent if (i)&#160;such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii)&#160;such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and
(iii)&#160;such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Indemnification for
Reserved Securities.&#160; In connection with the offer and sale of the Reserved
Securities, the Company agrees to indemnify and hold harmless the Underwriters,
their Affiliates and selling agents and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the 1933 Act or Section
20 of the 1934 Act, from and against any and all loss, liability, claim, damage
and expense (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending, investigating or settling any
such action or claim), as incurred, (i) arising out of the violation of any
applicable laws or regulations of foreign jurisdictions where Reserved
Securities have been offered; (ii) arising out of any untrue statement or
alleged untrue statement of a material fact contained in any prospectus wrapper
or other material prepared by or with the consent of the Company for
distribution to Invitees in connection with the offering of the Reserved
Securities or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (iii) caused by the failure of any Invitee to pay for
and accept delivery of Reserved Securities which have been orally confirmed for
purchase by any Invitee by the end of the first business day after the date of
the Agreement; or (iv) related to, or arising out of or in connection with, the
offering of the Reserved Securities.</font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 7.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Contribution</font>.&#160;
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Securities pursuant to this Agreement
or (ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions, or in connection with any violation of the
nature referred to in Section 6(d) hereof, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount </font></div>
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          </div>
        </div>
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          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
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          </div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt"><font size="3">received by the Underwriters, in each case as set forth on the cover of
the Prospectus bear to the aggregate initial public offering price of the
Securities as set forth on the cover of the Prospectus.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties&#8217; relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or any violation of the nature referred to in Section 6(e)
hereof.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7.&#160; The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter&#8217;s Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.&#160; The Underwriters&#8217; respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font> hereto and
not joint.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 8.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Representations, Warranties
and Agreements to Survive</font>.&#160; All representations, warranties and
agreements contained in this Agreement or in certificates of officers of the
Company or any of its subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made
by or on behalf of any Underwriter or its Affiliates or selling agents, any
person controlling any Underwriter, its officers or directors or any person
controlling the Company and (ii) delivery of and payment for the
Securities.</font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 9.&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Termination of
Agreement</font>.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Termination; General.&#160;
The Representative may terminate this Agreement, by notice to the Company, at
any time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus (exclusive </font></div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
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        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
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          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
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          </div>
        </div>
        <div id="HDR">
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          </div>
        </div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt"><font size="3">of any supplement thereto) or the General Disclosure Package, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representative, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii)&#160;if trading in
any securities of the Company has been suspended or materially limited by the
Commission or the NASDAQ Capital Market, or if trading generally on the American
Stock Exchange or the New York Stock Exchange, the NASDAQ National Market or the
NASDAQ Capital Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv)&#160;a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States, or (v) if a banking moratorium has been declared by either Federal or
New York authorities.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160; Liabilities.&#160; If this
Agreement is terminated pursuant to this Section, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 10.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Default by One or More of
the Underwriters</font>.&#160; If one or more of the Underwriters shall fail at
Closing Time or a Date of Delivery to purchase the Securities which it or they
are obligated to purchase under this Agreement (the &#8220;Defaulted Securities&#8221;), the
Representative shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160; if the number of Defaulted
Securities does not exceed 10% of the number of Securities to be purchased on
such date, each of the non-defaulting Underwriters shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160; if the number of Defaulted
Securities exceeds 10% of the number of Securities to be purchased on such date,
this Agreement or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting
Underwriter.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representative or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
</font></div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt"><font size="3">arrangements.&#160; As used herein, the term &#8220;Underwriter&#8221; includes any
person substituted for an Underwriter under this Section 10.</font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 11.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Tax Disclosure</font>.&#160;
Notwithstanding any other provision of this Agreement, from the commencement of
discussions with respect to the transactions contemplated hereby, the Company
(and each employee, representative or other agent of the Company) may disclose
to any and all persons, without limitation of any kind, the tax treatment and
tax structure (as such terms are used in Sections 6011, 6111 and 6112 of the
U.S. Code and the Treasury Regulations promulgated thereunder) of the
transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided relating to such
tax treatment and tax structure.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 12.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Notices</font>.&#160; All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication.&#160; Notices to the Underwriters shall be directed to the
Representative at Madison Williams and Company LLC, 600 Travis, Suite 5800,
Houston, Texas 77002, attention: General Counsel, facsimile number (713)
220-5182, with a copy to Madison Williams and Company LLC, 527 Madison Avenue,
15th Floor, New York, New York 10022, attention: Head of Investment Banking,
facsimile number (212) 317-2710; and notices to the Company shall be directed to
it at 877 North 8th West, Riverton, WY 82501, attention of Robert Scott Lorimer,
Chief Financial Officer.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 13.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">No Advisory or Fiduciary
Relationship</font>.&#160; The Company acknowledges and agrees that (a) the
purchase and sale of the Securities pursuant to this Agreement, including the
determination of the public offering price of the Securities and any related
discounts and commissions, is an arm&#8217;s-length commercial transaction between the
Company, on the one hand, and the several Underwriters, on the other hand, (b)
in connection with the offering contemplated hereby and the process leading to
such transaction each Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company, or its stockholders,
creditors, employees or any other party, (c) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company with
respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising
the Company on other matters) and no Underwriter has any obligation to the
Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (d) the Underwriters and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company, and (e) the Underwriters have
not provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed
appropriate.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 14.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Integration</font>.&#160;
This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company and the Underwriters, or any of them, with
respect to the subject matter hereof, including, without limitation, the
advisory agreements between the Company and SMH Capital, Inc. (as predecessor in
interest), dated March 2, 2009 and October 9, 2009, to the extent either of such
agreements would relate to any other compensation on or after the date hereof
required in connection with the offering of the Securities.&#160; </font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 15.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Parties</font>.&#160; This
Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Company and their respective successors.&#160; Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained.&#160; This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive </font></div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 12pt"><font size="3">benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation.&#160; No purchaser of Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 16.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Trial by Jury</font>.&#160;
The Company (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) and each of the Underwriters hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 17.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">GOVERNING LAW</font>.&#160;
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 18.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">TIME</font>.&#160; TIME
SHALL BE OF THE ESSENCE OF THIS AGREEMENT.&#160; EXCEPT AS OTHERWISE SET FORTH
HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 19.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Counterparts</font>.&#160;
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">SECTION 20.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Effect of
Headings</font>.&#160; The Section headings herein are for convenience only and
shall not affect the construction hereof.</font></div>
      <div>&#160;</div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
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      <div>&#160;</div>
      <div>&#160;</div><br clear="all">
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its
terms.</font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 12pt 3.25in"><font size="3">Very truly yours,</font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 12pt 3.25in"><font size="3"><font style="FONT-STYLE: italic; DISPLAY: inline">U.S. ENERGY
CORP.</font></font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-INDENT: -0.25in; MARGIN: 24pt 0in 12pt 3.5in; mso-pagination: widow-orphan lines-together; tab-stops: right 6.5in"><font size="3">By <font style="DISPLAY: inline; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;/s/&#160;Keith
G.
Larsen&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</font><br>Title: Keith G. Larsen, Chief Executive Officer</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: -13.7pt; MARGIN: 0in 0in 0.25in 13.7pt"><font size="3">CONFIRMED AND ACCEPTED,<br>as of the date first above
written:</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; mso-hyphenate: none"><font size="3">Madison Williams and Company LLC</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: -1in; MARGIN: 0in 0in 0.25in 1in; tab-stops: right 3.5in"><font size="3">By </font><font size="3"><font style="DISPLAY: inline; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;/s/
Ric
Saalwachter&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
<br></font>Authorized Signatory</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt"><font size="3">C.K. Cooper
&amp; Company, Inc.</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: -1in; MARGIN: 0in 0in 0.25in 1in; tab-stops: right 3.5in"><font size="3">By </font><font size="3"><font style="DISPLAY: inline; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;/s/&#160;
Alexander G.
Montano&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
<br></font>Authorized Signatory</font></div>
      <div>&#160;</div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
    </div>
    <div><br clear="all"></div>
    <div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">SCHEDULE A</font></div>
      <div>&#160;</div>
      <table border="0" cellpadding="0" cellspacing="0" style="MARGIN: auto auto auto 6pt; BORDER-COLLAPSE: collapse; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; mso-padding-alt: 0in 6.0pt 0in 6.0pt; mso-table-layout-alt: fixed; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr style="PAGE-BREAK-INSIDE: avoid; MSO-YFTI-IROW: 0; MSO-YFTI-FIRSTROW: yes;">
            <td valign="bottom" width="494" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 370.2pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: -0.5in; MARGIN: 0in 0in 0pt 0.5in; mso-hyphenate: none" align="center"><font size="3"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Name of
      Underwriter</font></font></div>
              <div>&#160;</div>
            </td>
            <td valign="top" width="130" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 97.8pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; mso-hyphenate: none" align="center"><font size="3">Number of<br>Initial</font><font style="DISPLAY: inline; TEXT-DECORATION: underline"><br><font size="3">Securities</font></font></div>
              <div>&#160;</div>
            </td>
          </tr><tr style="PAGE-BREAK-INSIDE: avoid; MSO-YFTI-IROW: 1;">
            <td valign="top" width="494" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 370.2pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="MARGIN: 0in 0in 0pt; mso-hyphenate: none"><font size="3">&#160;</font></div>
              <div>&#160;</div>
            </td>
            <td valign="top" width="130" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 97.8pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; mso-hyphenate: none" align="right"><font size="3">&#160;</font></div>
              <div>&#160;</div>
            </td>
          </tr><tr style="PAGE-BREAK-INSIDE: avoid; MSO-YFTI-IROW: 2;">
            <td valign="top" width="494" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 370.2pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="TEXT-INDENT: -58.5pt; MARGIN: 0in 0in 0pt 57pt; mso-hyphenate: none; tab-stops: right dotted 358.2pt"><font size="3">Madison Williams and Company LLC</font></div>
              <div>&#160;</div>
            </td>
            <td valign="top" width="130" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 97.8pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; mso-hyphenate: none" align="center"><font size="3">4,000,000</font></div>
              <div>&#160;</div>
            </td>
          </tr><tr style="PAGE-BREAK-INSIDE: avoid; MSO-YFTI-IROW: 3;">
            <td valign="top" width="494" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 370.2pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="MARGIN: 0in 0in 0pt; mso-hyphenate: none; tab-stops: right dotted 358.2pt"><font size="3">C.K. Cooper &amp; Company, Inc.</font></div>
              <div>&#160;</div>
            </td>
            <td valign="top" width="130" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 97.8pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; mso-hyphenate: none" align="center"><font style="DISPLAY: inline; TEXT-DECORATION: underline"><font size="3">1,000,000</font></font></div>
              <div>&#160;</div>
            </td>
          </tr><tr style="PAGE-BREAK-INSIDE: avoid; MSO-YFTI-IROW: 4; MSO-YFTI-LASTROW: yes;">
            <td valign="top" width="494" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 370.2pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="MARGIN: 0in 0in 0pt; mso-hyphenate: none; tab-stops: right dotted 358.2pt"><font size="3">Total</font></div>
              <div>&#160;</div>
            </td>
            <td valign="top" width="130" bgcolor="transparent" style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; PADDING-LEFT: 6pt; WIDTH: 97.8pt; PADDING-RIGHT: 6pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 0in">
              <div style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; mso-hyphenate: none" align="center"><font size="3">5,000,000</font></div>
              <div>&#160;</div>
            </td>
          </tr></table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
        </div>
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="2">
        </div>
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      <div id="HDR">
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offering price per share for the Securities is $5.25.</font></div>
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Securities purchased by the Underwriters is 5,000,000 shares.</font></div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
    </div>
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    <div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">SCHEDULE C</font></div>
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      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3"><font style="FONT-STYLE: italic; DISPLAY: inline">U.S.
ENERGY CORP.</font></font></div>
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      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">5,000,000 Shares of Common Stock</font></div>
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      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">(Par Value $0.01 Per Share)</font></div>
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offering price per share for the Securities, determined as provided in said
Section 2, shall be $5.25.</font></div>
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share for the Securities to be paid by the several Underwriters shall be $4.935,
being an amount equal to the initial public offering price set forth above less
$0.315 per share; provided that the purchase price per share for any Option
Securities purchased upon the exercise of the overallotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities.</font></div>
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      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">SCHEDULE D</font></div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">Issuer Free Writing Prospectus
dated December 11, 2009 (attached hereto as Schedule D-1)</font></div>
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        <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
        <div>&#160;</div>
        <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
        <div>&#160;</div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">Keith G. Larsen</font></div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
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Subsidiary</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
<font style="DISPLAY: inline; TEXT-DECORATION: underline">State or other
Jurisdiction of Incorporation or Organization</font></font></div>
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LLC&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Wyoming</font></div>
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      <div>&#160;</div>
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      <div style="TEXT-ALIGN: right; MARGIN: 0in 0in 30pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font style="DISPLAY: inline; TEXT-DECORATION: underline"><font size="3">Exhibit
A-1</font></font></font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">FORM OF OPINION OF COMPANY&#8217;S COUNSEL<br>TO BE
DELIVERED PURSUANT TO<br>SECTION 5(b)<br>[Davis, Graham &amp;
Stubbs]</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Wyoming.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Company has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the General Disclosure Package and the Prospectus and
to enter into and perform its obligations under the Underwriting
Agreement.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(iii)&#160;&#160;&#160;&#160;&#160;&#160; The Company is duly qualified
as a foreign corporation to transact business and is in good standing under the
laws of the jurisdictions set forth on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit 1</font> to this
opinion.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(iv)&#160;&#160;&#160;&#160;&#160;&#160; The authorized capital stock of
the Company is as set forth in the Prospectus under the caption
&#8220;Capitalization,&#8221; and the issued and outstanding shares of Common Stock of the
Company as of December 10, 2009 is as set forth in the Issuer Free Writing
Prospectus dated December 11, 2009 (except for subsequent issuances, if any,
pursuant to the Underwriting Agreement or pursuant to reservations, agreements
or employee benefit plans referred to in the General Disclosure Package and the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the General Disclosure Package and the Prospectus); the shares of
Common Stock of the Company issued since __________, 20__ have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company
arising under the Company&#8217;s articles of incorporation, bylaws, the Wyoming
Business Corporation Act or, to our knowledge, any other agreement or instrument
to which the Company was or is a party.</font></div>
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duly authorized for issuance and sale to the Underwriters pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth in the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable.</font></div>
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is not subject to the preemptive or other similar rights of any securityholder
of the Company arising under the Company&#8217;s articles of incorporation, bylaws,
Wyoming law or, to our knowledge, any other agreement or instrument to which the
Company is a party.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(vii)&#160;&#160;&#160;&#160;&#160; Remington Village, LLC, as the sole
Subsidiary of the Company (as defined for the opinions below, the &#8220;Subsidiary&#8221;),
has been duly organized as a Wyoming limited liability company and is validly
existing as a limited liability company in good standing under the laws of the
State of Wyoming, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the General
Disclosure Package and the Prospectus and is duly qualified as a foreign
corporation or entity to transact business and is in good standing in under the
laws of the jurisdictions set forth on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit 1</font> to this
opinion.</font></div>
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issued and outstanding membership interests in the Subsidiary and such
membership interests have been duly authorized and validly issued in accordance
with the articles of organization and operating agreement of the Subsidiary and
are fully paid (to the extent required under the Subsidiary&#8217;s operating
agreement) and non-assessable (except as set forth in the Subsidiary&#8217;s operating
agreement); and the Company owns such membership interests free and clear of all
liens, encumbrances, security interests, equities, charges or claims, other than
liens described in the General Disclosure Package and the
Prospectus.</font></div>
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been duly authorized, executed and delivered by the Company.</font></div>
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used to evidence the Securities complies in all material respects with all
applicable statutory requirements, with any applicable requirements of the
charter and by-laws of the Company.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xi)&#160;&#160;&#160;&#160;&#160;&#160; The statements made in the
Prospectus under the captions &#8220;Description of Capital Stock&#8221; and in the
Registration Statement under Item 15, to the extent that they constitute
summaries of the terms of the Common Stock or the Company&#8217;s charter and bylaws
or relate to summaries of legal matters, have been reviewed by us and are
correct in all material respects.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xii)&#160;&#160;&#160;&#160;&#160; No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, a supplemental listing notice to
be filed with Nasdaq after Closing or as may be required under the securities or
blue sky laws of the various states, as to which we need express no opinion) is
necessary or required by or on behalf of the Company in connection with the due
authorization, execution and delivery of the Underwriting Agreement or for the
offering, issuance, sale or delivery of the Securities.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in; tab-stops: 1.5in"><font size="3">(xiii)&#160;&#160;&#160;&#160; The execution, delivery and performance of
the Underwriting Agreement and the consummation of the transactions contemplated
in the Underwriting Agreement and in the Prospectus (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption &#8220;Use Of Proceeds&#8221;)
and compliance by the Company with its obligations under the Underwriting
Agreement do not and will not, whether with or without the giving of notice or
lapse of time or both, result in any violation of the provisions of the articles
of incorporation or by-laws of the Company, or similar organizational documents
of the Subsidiary, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or the Subsidiary or any of their respective properties, assets or
operations.</font></div>
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giving effect to the issuance and sale of the Securities and the use of proceeds
as set forth in the Prospectus will be, an &#8220;investment company&#8221; under the 1940
Act.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">(xix)&#160;&#160;&#160;&#160; The Rights under the Company&#8217;s Shareholder
Rights Plan to which holders of the Securities will be entitled have been duly
authorized and, when issued with the Securities as contemplated in the
Underwriting Agreement against payment of the consideration set forth in the
Underwriting Agreement, will be validly issued.</font></div>
      <div>&#160;</div>
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      <div>&#160;</div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">(xx)&#160;&#160;&#160;&#160;&#160; The opinion of such counsel that is
filed as Exhibit 5.1 to the Form 8-K of the Company filed on December __, 2009,
and incorporated by reference into the Registration Statement with respect to
the Securities, is confirmed and the Underwriters may rely upon such opinion as
if it were addressed to them.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">In rendering such opinion, such counsel may rely (x)&#160;as to matters
involving the application of laws of any jurisdiction other than the State of
Wyoming, the State of Colorado or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (y)&#160;as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.&#160;
Such opinion shall not state that it is to be governed or qualified by, or that
it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).</font></div>
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A-2</font></font></font></div>
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      <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">FORM OF OPINION OF COMPANY&#8217;S COUNSEL<br>TO BE
DELIVERED PURSUANT TO<br>SECTION 5(b)<br>[Stephen E. Rounds, Esq.]</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
(i).&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Registration Statement has
become effective under the 1933 Act; any required filing of each prospectus
relating to the Securities (including the Prospectus) pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule 424(b)
(without reference to Rule 424(b)(8)); any required filing of each Issuer Free
Writing Prospectus pursuant to Rule 433 has been made in the manner and within
the time period required by Rule 433(d); and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
(ii).&#160;&#160;&#160;&#160;&#160;&#160; The Registration Statement, including
without limitation the Rule 430B Information, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (including without limitation each deemed effective date with respect to
the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations), other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which we need express no opinion complied as to form in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
(iii)&#160;&#160;&#160;&#160;&#160;&#160; The documents incorporated by
reference in the Prospectus (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we need express no
opinion), when they were filed with the Commission complied as to form in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder.</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
(iv)&#160;&#160;&#160;&#160;&#160;&#160; To my knowledge, except as set forth in
the General Disclosure Package, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
is subject, before or brought by any court or governmental agency or body,
domestic or foreign, which would reasonably be expected to result in a Material
Adverse Effect, or which would reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in the
Underwriting Agreement or the performance by the Company of its obligations
thereunder.</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160; All descriptions in the
Registration Statement of contracts and other documents to which the Company or
its subsidiaries are a party are accurate in all material respects; to the best
of our knowledge, there are no franchises, contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as exhibits to the
Registration Statement or to the documents incorporated by reference to the
Registration Statement other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto.</font></div>
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(vi)&#160;&#160;&#160;&#160;&#160;&#160; No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency, domestic or foreign (other than under
the 1933 Act and the 1933 Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of the various states, as to
which we need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of the Underwriting Agreement or
for the offering, issuance, sale or delivery of the Securities.</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 0.5in"><font size="3">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
(vii)&#160;&#160;&#160;&#160;&#160; The execution, delivery and performance of
the Underwriting Agreement and the consummation of the transactions contemplated
in the Underwriting Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption &#8220;Use Of
Proceeds&#8221;) and compliance by the Company with its obligations under the
Underwriting Agreement do not and will not, whether with or without the giving
of notice or lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xii) of the Underwriting
Agreement) under or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches, defaults or
Repayment Events or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">In addition, I have participated in conferences with officers and other
representatives of the Company and the independent public accountants of the
Company and your representatives, at which the contents of the Original
Registration Statement, the General Disclosure Package and the Prospectus and
related matters were discussed, and although I have not independently verified,
are not passing upon, and am not assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in, the Registration
Statement, the General Disclosure Package and the Prospectus (except to the
extent specified in this opinion), based on the foregoing, no facts have come to
my attention that would lead me to believe that:</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">(A) the Registration Statement, including the Rule 430B Information, at
each deemed effective date with respect to the Underwriters pursuant to Rule
430B(f)(2) of the 1933 Act Regulations, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">(C) the Prospectus, at the time the Prospectus was issued and as of the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; or</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt 0.5in"><font size="3">(D) the General Disclosure Package, as of the Applicable Time, contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of circumstances
under which they were made, not misleading;</font></div>
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      <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 0.5in"><font size="3">it
being understood that such counsel expresses no statement or belief in this
letter with respect to (i) the financial statements and related schedules,
including the notes and schedules thereto and the auditor&#8217;s report thereon, any
other financial, accounting, estimated oil and gas reserve information or
related statistical data, included or incorporated or deemed incorporated by
reference in, or excluded from, the Registration Statement or the Prospectus or
the Disclosure Package, and (ii) representations and warranties and other
statements of fact included in the exhibits to the Registration
Statement.</font></div>
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      <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">In rendering such opinion, such counsel may rely (x)&#160;as to matters
involving the application of laws of any jurisdiction other than the State of
Colorado or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters and (y)&#160;as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.&#160; Such opinion shall not state
that it is to be governed or qualified by, or that it is otherwise subject to,
any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).</font></div>
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B</font></font></font></div>
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    <div style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 12pt; mso-pagination: widow-orphan lines-together" align="center"><font size="3">December 11, 2009</font></div>
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    <div style="TEXT-INDENT: -58.5pt; MARGIN: 0in 0in 0pt 58.5pt"><font size="3">Madison Williams and Company LLC,</font></div>
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    <div style="MARGIN: 0in 0in 0pt 9pt"><font size="3">as Representative of the
several<br>Underwriters to be named in the<br>within-mentioned Underwriting
Agreement</font></div>
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    <div style="MARGIN: 0in 0in 0pt"><font size="3">c/o Madison Williams and Company
LLC</font></div>
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    <div style="MARGIN: 0in 0in 0pt"><font size="3">600 Travis, Suite
5800</font></div>
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    <div style="MARGIN: 0in 0in 12pt"><font size="3">Houston, TX 77002</font></div>
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    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">Re:&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Proposed Public Offering by
U.S. Energy Corp.</font></font></div>
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    <div style="MARGIN: 12pt 0in"><font size="3">Dear Sirs:</font></div>
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    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The undersigned, a stockholder and an officer and/or director of U.S.
Energy Corp, a Wyoming corporation (the &#8220;Company&#8221;), understands that Madison
Williams and Company LLC (&#8220;MWC&#8221;) propose(s) to enter into a Underwriting
Agreement (the &#8220;Underwriting Agreement&#8221;) with the Company providing for the
public offering of shares (the &#8220;Securities&#8221;) of the Company&#8217;s common stock, par
value $0.01 per share (the &#8220;Common Stock&#8221;).&#160; In recognition of the benefit
that such an offering will confer upon the undersigned as a stockholder and an
officer and/or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Underwriting
Agreement that, during a period of 90 days from the date of the Underwriting
Agreement, the undersigned will not (and will cause any spouse or immediate
family member of the undersigned or spouse living in the undersigned&#8217;s household
whose shares are treated as indirectly beneficially owned by the undersigned not
to), without the prior written consent of MWC, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company&#8217;s
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file, or cause to be filed, any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing
(collectively, the &#8220;Lock-Up Securities&#8221;) or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Lock-Up Securities,
whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise.</font></div>
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    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">Notwithstanding the foregoing, and subject to the conditions below, the
undersigned may transfer the Lock-Up Securities without the prior written
consent of MWC, provided that (1) MWC receives a signed lock-up agreement for
the balance of the lockup period from each donee, trustee, distributee, or
transferee, as the case may be, (2) any such transfer shall not involve a
disposition for value, (3) such transfers are not required to be reported in any
public report or filing with the Securities and Exchange Commission, or
otherwise and (4) the undersigned does not otherwise voluntarily effect any
public filing or report regarding such transfers:</font></div>
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or gifts; or</font></div>
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    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt; tab-stops: .5in"><font size="3">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160; to any trust for the
direct or indirect benefit of the undersigned or the immediate family of the
undersigned (for purposes of this lock-up agreement, &#8220;immediate family&#8221; shall
mean any relationship by blood, marriage or adoption, not more remote than first
cousin).</font></div>
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    <div style="TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt"><font size="3">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160; during the last 17 days of
the 90-day lock-up period, the Company issues an earnings release or material
news or a material event relating to the Company occurs; or</font></div>
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    <div style="TEXT-INDENT: 1in; MARGIN: 0in 0in 12pt"><font size="3">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160; prior to the expiration of
the 90-day lock-up period, the Company announces that it will release earnings
results or becomes aware that material news or a material event will occur
during the 16-day period beginning on the last day of the 90-day lock-up
period,</font></div>
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    <div style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt"><font size="3">the
restrictions imposed by this lock-up agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless MWC waives, in writing, such extension.</font></div>
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    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The undersigned hereby acknowledges and agrees that written notice of any
extension of the 90-day lock-up period pursuant to the previous paragraph will
be delivered by MWC to the Company (in accordance with Section 12 of the
Underwriting Agreement) and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this lock-up agreement during the period
from the date of this lock-up agreement to and including the 34th day following
the expiration of the initial 90-day lock-up period, it will give notice thereof
to the Company and will not consummate such transaction or take any such action
unless it has received written confirmation from the Company that the 90-day
lock-up period (as may have been extended pursuant to the previous paragraph)
has expired.</font></div>
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    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 12pt"><font size="3">The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company&#8217;s transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.</font></div>
    <div>&#160;</div>
    <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
    <div>&#160;</div>
    <div style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 24pt 3.25in"><font size="3">Very truly yours,</font></div>
    <div>&#160;</div>
    <div style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 12pt 3.25in; tab-stops: right 6.5in"><font size="3">Signature:<font style="DISPLAY: inline; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</font></font></div>
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    <div style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 12pt 3.25in; tab-stops: right 6.5in"><font size="3">Print Name:<font style="DISPLAY: inline; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
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      <div style="TEXT-ALIGN: center; MARGIN: 57pt 0in 0pt" align="center"><font size="3">December 15, 2009</font></div>
      <div>&#160;</div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">U.S. Energy Corp.</font></div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">877 North 8<font style="FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> West</font></div>
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      <div style="MARGIN: 0in 0in 0pt"><font size="3">Riverton, Wyoming
82501</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 12pt"><font size="3">Dear Sirs:</font></div>
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      <div style="TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"><font size="3">We have acted
as special counsel to U.S. Energy Corp. (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Company</font>&#8221;) with
respect to certain legal matters relating to (i) the Registration Statement on
Form S-3 (Registration No. 333-162607), as amended (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Registration
Statement</font>&#8221;), including the base prospectus contained therein (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Base Prospectus</font>&#8221;),
filed by the Company with the Securities and Exchange Commission (the
&#8220;Commission&#8221;) under the Securities Act of 1933, as amended (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Securities Act</font>&#8221;), for
the purpose of registering under the Securities Act shares of the common stock
of the Company, par value $0.01 per share (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Common Stock</font>&#8221;) and
(ii) the final prospectus supplement, dated December 11, 2009 (together with the
Base Prospectus, the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Final Prospectus</font>&#8221;),
in connection with the offer and sale of up to an aggregate of 5,000,000 shares
of Common Stock (5,750,000 shares if the over-allotment option is exercised)
(the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Shares</font>&#8221;),
to be issued by the Company and sold pursuant to the terms of an underwriting
agreement between the Company, Madison Williams and Company LLC and C.K. Cooper
&amp; Company, Inc. dated December 11, 2009 (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Underwriting
Agreement</font>&#8221;).</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"><font size="3">We have
examined originals or certified copies of (i) the Underwriting Agreement and
(ii) such corporate records of the Company and other certificates and documents
of officials of the Company, public officials and others as we have deemed
appropriate for purposes of this letter. We have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all copies submitted to us as
conformed and certified or reproduced copies.</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"><font size="3">Based upon the
foregoing and subject to the assumptions, exceptions, qualifications and
limitations set forth hereinafter, we are of the opinion that when the Shares
have been issued and delivered in accordance with the terms of the Underwriting
Agreement and upon payment of the consideration therefore provided for in the
Underwriting Agreement, such Shares will be duly authorized and validly issued
and will be fully paid and non-assessable.</font></div>
      <div>&#160;</div>
      <div style="MARGIN: 0in 0in 0pt"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"><font size="3">The opinions
and other matters in this letter are qualified in their entirety and subject to
the following:</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; mso-pagination: none; mso-layout-grid-align: none"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; mso-pagination: none; mso-layout-grid-align: none"><font size="3">A)&#160;&#160;&#160;&#160;&#160;&#160;&#160; We have assumed that the
Shares will be issued and sold in the manner stated in the Registration
Statement and the Final Prospectus, and in accordance with the terms of the
Underwriting Agreement.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN: 0in 0pt 0pt; mso-layout-grid-align: none"><font size="3">&#160;</font></div>
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            <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; COLOR: #000000; FONT-SIZE: 8pt">U.S.
Energy Corp.</font></div>
            <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; COLOR: #000000; FONT-SIZE: 8pt">December15,
2009</font></div>
            <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; COLOR: #000000; FONT-SIZE: 8pt">Page
2 of 2</font></div>
          </div>
        </div>
      </div>
      <div style="MARGIN: 0in 0in 0pt; mso-layout-grid-align: none"><font size="3">&#160;</font></div>
      <div style="MARGIN: 0in 0in 0pt; mso-layout-grid-align: none"><font size="3">&#160;</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 36pt; MARGIN: 0in 0pt 12pt"><font size="3">B)&#160;&#160;&#160;&#160;&#160;&#160;&#160; The opinions expressed
herein are limited to matters governed by the federal laws of the United States
of America and the Wyoming Business Corporation Act.&#160; Except as expressly
stated above, we express no opinion with respect to the laws of any other
jurisdiction.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 36pt; MARGIN: 0in 0pt 12pt"><font size="3">This opinion letter has been prepared to be filed by the Company as an
exhibit to a Current Report on Form 8-K (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Form 8-K</font>&#8221;). The Form
8-K will be incorporated by reference in the Registration Statement. We assume
no obligation to advise you of any changes in the foregoing subsequent to the
delivery of this opinion letter.</font></div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 36pt; MARGIN: 0in 0pt 12pt"><font size="3">We hereby consent to the filing of this opinion letter as Exhibit 5.1 to
the Form 8-K.&#160; We also consent to the reference to this firm under the
heading &#8220;Legal Matters<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8221;</font>
in the Final Prospectus. &#160;In giving this consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act or the rules of the Securities and Exchange Commission
thereunder.</font></div>
      <div>&#160;</div>
      <div style="PAGE-BREAK-AFTER: avoid; TEXT-INDENT: 0in; MARGIN: 0in 0in 48pt 3in"><font size="3"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Very truly
yours,<br><br><br><br><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;DAVIS GRAHAM&#160;&amp; STUBBS
LLP</font></div>
      <div>&#160;</div>
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