8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 3, 2019

Camber Energy, Inc.

(Exact name of registrant as specified in its charter)

Nevada	001-32508	20-2660243
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1415 Louisiana, Suite 3500, Houston, Texas 77002

(Address of principal executive offices)

(210) 998-4035

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value Per Share	CEI	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

On July 8, 2019 (the “Closing Date”), Camber Energy, Inc. (the “Company”, “we” and “us”), entered into, and closed the transactions contemplated by, an Agreement and Plan of Merger (the “Plan of Merger” and the merger contemplated therein, the “Merger”), by and between the Company, Camber Energy Merger Sub 2, Inc., the Company’s newly formed wholly-owned subsidiary (“Merger Sub”), Lineal Star Holdings, LLC (“Lineal”), and the Members of Lineal (the “Lineal Members”). Pursuant to the Plan of Merger, the Company acquired 100% of the ownership of Lineal from the Lineal Members in consideration for newly issued shares of Series E Redeemable Convertible Preferred Stock and Series F Redeemable Preferred Stock, as described in greater detail below.

Lineal, based in Houston, Texas, is the parent company of (a) 64-year-old Lineal Industries Inc. (“Lineal Industries”), based in Pittsburgh, Pennsylvania, and (b) Lineal Star Incorporated (“Lineal Star”), headquartered in Houston, each of which were acquired by the Company as part of the Merger. Lineal Industries has provided over six decades of upstream, midstream, and utilities pipeline maintenance, specialty construction and integrity services to Fortune 500 companies located in the states of Ohio, Pennsylvania, Virginia, West Virginia, Maryland and New York.

Moving forward the Company plans to expand the Lineal brand by acquiring and developing complementary specialty engineering, procurement and construction energy infrastructure service businesses, as well as generating organic growth in downstream field services in Lineal Star, Lineal’s newly formed Gulf Coast based operation. The Company’s strategy will be a balanced approach to acquire and grow energy service businesses that focus in upstream, midstream and downstream sectors that are not severely affected by wide swings in the commodity price of oil and natural gas.

In connection with the Plan of Merger the Company entered into several other agreements, described below, including (a) a Security Exchange Agreement dated July 8, 2019 (the “Exchange Agreement”), by and between the Company and Discover Growth Fund LLC (“Discover”); (b) a Termination Agreement dated July 8, 2019, by and between the Company and Discover Growth Fund (“Discover Growth”); and (c) a Funding and Loan Agreement dated July 8, 2019, by and among the Company, Lineal, and certain of the Lineal Members who also acquired shares of the Company’s preferred stock as a result of the Merger (the “Funding Agreement”), which provided for the Company to loan $1,050,000 to Lineal, which loan was evidenced by a Promissory Note entered into by Lineal, as borrower, in favor of the Company, as lender, dated July 8, 2019 (the “Note”).

Also as part of the Merger, the Company designated three new series of preferred stock, (1) Series D Convertible Preferred Stock (the “Series D Preferred Stock” and the certificate of designations setting forth the rights thereof, the “Series D Designation”); (2) Series E Redeemable Convertible Preferred Stock (the “Series E Preferred Stock” and the certificate of designation setting forth the rights thereof (the “Series E Designation”); and (3) Series F Redeemable Preferred Stock (the “Series F Preferred Stock” and the certificate of designation setting forth the rights thereof, the “Series F Designation”, and the Series E Preferred Stock and the Series F Preferred Stock, collectively, the “Series E and F Preferred Stock”). Additionally, with the approval of the holders thereof, the Company amended and restated the designation of its Series C Redeemable Convertible Preferred Stock (the “Series C Preferred Stock” and the amended and restated designation setting forth the rights thereof, the “Series C Designation”). All of the preferred stock and related designations are described in greater detail below under “Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year”.

The result of the Plan of Merger, Series D Designation and Series E Designation, each as described in greater detail below, will be that, effective upon the Shareholder Approval Date (as defined below under “Plan of Merger”), and subject to the Closing Conditions of the Exchange Agreement (defined and discussed below under “Exchange Agreement”), (a) the common stock holders of the Company will hold 6.67% of the Company’s fully-diluted capitalization; (b) Discover will hold Series D Preferred Stock convertible into 26.67% of the Company’s fully-diluted capitalization, subject to the terms of the Series D Preferred Stock; and (c) the Lineal Members, who hold the Series E Preferred Stock, will have the right to convert such Series E Preferred Stock, subject to the terms thereof, as discussed below, into 66.67% of the Company’s fully-diluted capitalization, subject to the 3% Increase described below under “Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year” – “Series E Redeemable Convertible Preferred Stock”. In the event the Shareholder Approval Date does not occur, the Series E Preferred Stock will not convertible, the Series C Preferred Stock will not be exchanged for Series D Preferred Stock, no Series D Preferred Stock will not be outstanding and as a result, the terms of the Series C Preferred Stock, as set forth in the Series C Designation, will continue to apply.

Currently the Company does not anticipate holding a meeting to seek the Shareholder Approval (described below under “Plan of Merger”) until the later of November 4, 2019, and the date that the Board of Directors reasonably believes that the Company will meet the NYSE American’s initial listing requirements on the date of such Shareholder Approval, which the Company believes will be required, as a result of prior conversations with the NYSE American, due to the fact that upon Shareholder Approval, a ‘reverse merger’ under the NYSE American rules will be deemed to have occurred and the combined company (the Company and Lineal) will be required to re-meet the initial listing requirements of the NYSE American.

Plan of Merger

Pursuant to the Plan of Merger, Merger Sub merged with and into Lineal, with Lineal continuing as the surviving entity in the Merger and as a wholly-owned subsidiary of the Company.

As a result of the Merger, (b) each outstanding common share of Lineal (the “Lineal Common Shares”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) was converted into 0.95 shares of newly designated Series E Preferred Stock (i.e., into an aggregate of 950,000 shares of Series E Preferred Stock); and (b) (i) 1,140,000 preferred shares of Lineal (“Lineal Preferred Shares”) issued and outstanding prior to the Effective Time, were converted into 50,000 shares of Series E Preferred Stock; and (ii) 535,000 Lineal Preferred Shares, issued and outstanding immediately prior to the Effective Time, were converted into 1,675 shares of newly designated Series F Preferred Stock. The Company issued to the members of Lineal a total of 1,000,000 shares of Series E Preferred Stock (“Series E Shares”) and 1,675 shares of Series F Preferred Stock (“Series F Shares”), pursuant to the Plan of Merger. The Series E Preferred Stock and Series F Preferred Stock have the rights and privileges described below in Item 5.03. The completion of the Merger was not subject to the approval of the shareholders of the Company, however, as discussed below, the conversion rights of the Series E Preferred Stock, are subject to shareholder approval.

At the Effective Time, by virtue of the Merger, all shares of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time were converted into and became 1,000,000 validly issued, fully paid and nonassessable Lineal Common Shares and 1,675,000 validly issued, fully paid and nonassessable Lineal Preferred Shares, all of which are held by the Company.

The Plan of Merger contains customary representations and warranties of each party for a transaction of this type. The Plan of Merger also contains customary covenants and indemnification obligations of the parties.

The Plan of Merger contained certain post-closing requirements. Those include:

● Requiring the Company to prepare and file a proxy statement on Schedule 14A with the Securities and Exchange Commission (“SEC”) in order to seek shareholder approval of the issuance of the shares of common stock upon conversion of the Series E Preferred Stock, the terms of the Plan of Merger and such other matters that the holders of the Series E Preferred Stock may reasonably request and/or that are required to be approved by the shareholders of Company pursuant to applicable NYSE American rules and regulations in accordance with applicable rules and requirements of the SEC and the NYSE American (the “Shareholder Approval” and the date of such Shareholder Approval, the “Shareholder Approval Date”) at a duly called meeting of shareholders of the Company (the “Shareholder Meeting”) which Shareholder Approval shall be received prior to November 22, 2019, or if a Lineal Transaction has not occurred prior to September 23, 2019, a date which is 60 days after the closing of a Lineal Transaction, or such other later date which is approved by the Company and a majority in interest of the Series E Preferred Stock (a “Majority Interest”). “Lineal Transaction” means an acquisition by Lineal of assets or securities which results in the Company, immediately after such acquisition, being able to meet the initial listing requirements of the NYSE American.

● Notwithstanding the above, the Shareholder Approval is not to be received, and the Shareholder Meeting shall be adjourned, extended, delayed, abandoned or re-scheduled, if the NYSE American determines that a “back-door listing”/“reverse merger” is deemed to occur upon receipt of such Shareholder Approval, until or unless the Company, upon receipt of the Shareholder Approval (or immediately prior to such anticipated date of Shareholder Approval), in the reasonable determination of the Company, qualifies for initial listing of the Company’s common stock on the NYSE American, pursuant to the applicable guidance and requirements of the NYSE American.

● After the Closing Date, until the Shareholder Approval is received, the executive officers and directors of Company, shall not, in aggregate, be paid, or accrue, compensation in excess of $78,333 per month, not including the reimbursement of certain expenses, unless such compensation is approved with the consent of a Majority Interest.

Additionally, pursuant to the Plan of Merger, and the letter of intent entered into in connection therewith, we agreed to pay for the audits required in connection with the filings required to be made by the Company, post-closing, and to reimburse Lineal for its reasonable and actual expenses incurred in connection with the transactions contemplated by the Plan of Merger, up to a maximum of $200,000, upon receipt by the Company of documentation of the same.

Securities Exchange Agreement

Pursuant to the Exchange Agreement, Discover agreed, that on the Approval Date (which also requires that the shares of common stock issuable upon conversion of the Series D Preferred Stock and the terms of the Exchange Agreement are approved by the Company’s shareholders), subject to the terms and conditions of the Exchange Agreement, that all shares of Series C Preferred Stock held by Discover as of the Approval Date will be exchanged for a number of shares of Series D Preferred Stock equal to four (4) times the total number of shares of common stock outstanding as of such date, divided by 1,000, rounded up to the nearest whole share (the “Exchange Shares”). For example only, if the total number of shares of common stock outstanding are 3,000,000, the number of Series D Preferred Stock shares due to Discover would equal 12,000 (3,000,000 x 4 = 12,000,000, divided by 1,000 = 12,000).

The closing of the transactions contemplated by the Exchange Agreement is subject to the satisfaction of certain closing conditions, including the following (the “Closing Conditions”):

●

(i) the shareholders of the Company have provided the Shareholder Approval and approved (a) the transactions contemplated by the Exchange Agreement; and (b) the issuance of shares of common stock upon the conversion of the Series D Preferred Stock; (ii) the Company has received approval by the NYSE American of the supplemental listing of shares of common stock issuable upon conversion of the Series E Preferred Stock; and (iii) the shareholders have approved such other terms and conditions as may be required to be approved by the NYSE American, including for the continued listing of the Company’s common stock after the transactions contemplated by the Plan of Merger (collectively, the “Approval”). “Approval Date” means the first business day after the date that all of the requirements of Approval are met;

●

Immediately following the issuance of the Exchange Shares, such Exchange Shares will be convertible into 26.67% of the Company’s shares of common stock on a fully-diluted basis; and

●

The Company’s common stock is listed for and trading on the NYSE American on the Approval Date.

Effective on the Approval Date, the November 23, 2018 Stock Purchase Agreement (the “November 2018 Stock Purchase”) entered into between the Company and Discover will be deemed terminated and Discover will be deemed to have released the Company from any and all obligations under such November 2018 Stock Purchase including, but not limited to obligations or liabilities for past defaults or failures to comply with the terms of such November 2018 Stock Purchase or the securities issued in connection therewith.

The Exchange Agreement also includes indemnification obligations requiring the Company to indemnify Discover against certain breaches by the Company of the terms of the Exchange Agreement and from actions to challenge the Exchange Agreement.

The Exchange Agreement included provisions whereby Discover (a) agreed to vote any shares of common stock of the Company which it holds in favor of and “for” approval of the Plan of Merger and the terms thereof, and the securities issuable upon conversion of preferred stock issued therewith, and those other proposals which are recommended by approval by the Board of Directors of the Company in the proxy statement filed by the Company in connection with the Shareholder Meeting to approve such items; (b) consented to the terms of the Plan of Merger and related transactions; (c) agreed not to transfer ownership of the shares of Series C Preferred Stock which it held prior to the earlier of the Approval Date and the date the Exchange Agreement is terminated; and (d) agreed not to short the Company’s common stock (collectively, the “Discover Obligations”). The Company also provided Discover and its affiliates a general release in connection with Discover’s entry into the Exchange Agreement.

The Exchange Agreement terminates if the Approval Date has not been received before December 31, 2020.

Finally, the Exchange Agreement amended the terms of the November 2018 Purchase Agreement to delete the terms thereof relating to future sales of additional shares of Series C Preferred Stock under such agreement. As a result, Discover has no obligation to sell, and we have no right to purchase, any additional shares of Series C Preferred Stock under the November 2018 Purchase Agreement.

Termination Agreement

Pursuant to the Termination Agreement, Discover LLC agreed, that effective as of the Approval Date, all of its rights under the (a) Preferred Stock Purchase Agreement between Discover LLC and the Company, dated April 6, 2016; (b) Securities Purchase Agreement between Discover LLC and the Company, dated April 6, 2016; (c) Stock Purchase Agreement between Discover LLC and the Company, dated October 5, 2017; and (d) Stock Purchase Agreement between Discover LLC and the Company, dated October 26, 2018, each of (a) through (d), as amended from time to time (collectively, the “Purchase Agreements”), and all of Discover LLC’s rights under the Redeemable Convertible Subordinated Debenture from the Company in the original principal amount of $530,000 (“Debenture”), and all rights to true-ups thereunder, would be terminated, along with all rights thereunder.

The Termination Agreement is subject to the same Closing Conditions as the Exchange Agreement (discussed above). The Termination Agreement also included obligations of Discover LLC substantially similar to the Discover Obligations. The Company also provided Discover LLC and its affiliates a general release in connection with Discover’s entry into the Exchange Agreement.

Funding and Loan Agreement

The Funding Agreement required the Company, promptly following the Closing Date, to deposit into a newly opened and dedicated bank account, $4,000,000 (the “Deposit”), which is intended to be used for acquisitions. The disbursement of the Deposit from the account is required to be approved by (i) a person designated by the holders of the Series E Preferred Stock; and (ii) the Company. The entire amount of the Deposit and all interest thereon, is to be held in the account until the earlier of (a) the receipt of a final, non appealable order of any court or arbitrator of competent jurisdiction with written payment instructions of the prevailing party to effectuate such order; and (b) the written agreement executed by (a) Majority In Interest and the holder of the Series F Preferred Stock (collectively, a “Preferred Majority”); and (b) the Company, setting forth the disbursement of all or a portion of the Deposit for acquisitions of assets and/or securities of complementary businesses of Lineal (the “Release Approval”). Each Release Approval is also required to set forth the structure of the acquisition, including the ownership breakdown of any acquired entity, business or assets, between Lineal and the Company.

The Funding Agreement also required the Company to wire $1,050,000 in immediately available funds to Lineal (the “Loan”). The Loan was documented by the Note (described below).

The Funding Agreement terminates on the first to occur of (a) the distribution of all of the amounts in the account in accordance with the agreement; (b) the consent of a Preferred Majority; and (c) delivery to the former holders of the Series E and F Preferred Stock, by the Company, of a notice of termination, in the event the Series E and F Preferred Stock have been fully redeemed by the Company.

Promissory Note

The Note, issued by Lineal as borrower, in the amount of $1,050,000, accrues interest, compounded monthly, at 10% per annum (18% upon the occurrence of an event of default), beginning upon the date, if ever, that the Company no longer owns at least 50% of the voting securities of Lineal (the “Interest Effective Date”), and is either to be (a) forgiven on the Shareholder Approval Date; or (b) payable in full together with accrued interest thereon, two (2) years from the Interest Effective Date, or earlier upon acceleration upon the occurrence of an event of default under the Note. The Note contains standard and customary events of default. The amount loaned by the Company to Lineal pursuant to the Note was, or will be, promptly paid to affiliates of Lineal in order to satisfy amounts owed to such affiliates as of the Closing.

In the event the Shareholder Approval has been received, the Note and all principal and interest due thereunder will be automatically forgiven by the Company.

Indemnification Agreements

On July 3, 2019, the Company entered into an Indemnification Agreement with each of its then officers and directors. The Indemnification Agreements provide for certain indemnification obligations and requirements of the Company as to each officer and director, including contractual rights of indemnification, which are in addition to and which do not limit, the rights to indemnification provided in the Company’s Articles of Incorporation (as amended) and Bylaws (as amended), and expense advancement obligations of the Company in connection therewith. The rights to indemnification are subject to certain exceptions contained in the Indemnification Agreement, including for claims brought by the indemnitee, claims under Section 16(b) of the Securities Exchange Act of 1934, as amended, and claims which include assertions made by an indemnitee which a court of competent jurisdiction determines were not made in good faith or were frivolous.

* * * * *

The foregoing descriptions of the Plan of Merger, Exchange Agreement, Termination Agreement, Funding Agreement, Note and Indemnification Agreements do not purport to be complete and are qualified in their entirety by reference to the Plan of Merger, Exchange Agreement, Termination Agreement, Funding Agreement, Note, and form of Indemnification Agreement, copies of which are incorporated by reference as Exhibits 2.1, 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information and disclosures in Item 1.01 above relating to the Plan of Merger, the Merger, the related documents, agreements and disclosures, are incorporated by reference in this Item 2.01 in their entirety.

Item 3.02 Unregistered Sales of Equity Securities.

In connection with the Plan of Merger, as discussed in Item 1.01, above, the Company issued the prior Members of Lineal, the Series E Shares and Series F Shares. We claim an exemption from registration for the issuances described above pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), since: the foregoing issuances did not involve a public offering, the recipients were (a) “accredited investors”; and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act, and the recipients acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by us or our representatives. No underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions. The securities sold are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

Item 3.03 Material Modification to Rights of Security Holders.

To the extent required by Item 3.03 of Form 8-K, the information contained in Item 5.03 of this Current Report on Form 8-K is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Amended and Restated Series C Redeemable Convertible Preferred Stock

The Series C Designation, which was approved by the Board of Directors of the Company on July 2, 2019, and the holders of the Series C Preferred Stock on July 8, 2019, and filed by the Company with the Secretary of State of Nevada on July 8, 2019, amended and restated the prior designation of the Company’s Series C Preferred Stock to clarify that such preferred stock was junior to the Series E Redeemable Convertible Preferred Stock and Series F Redeemable Convertible Preferred Stock, as to the securities and assets of Lineal and its existing and future subsidiaries (the “Lineal Assets”), but senior to the Series E and F Preferred as to all other assets of the Company; to provide that the Merger was not a deemed liquidation event under the Series C Designation, and to provide the Series E Preferred Stock and Series F Preferred Stock holders priority rights to the Lineal Assets upon a liquidation of the Company (through the redemption of such Series E Preferred Stock and Series F Preferred Stock).

Other than as described above, there were no material changes to the previous rights of the Series C Preferred Stock, as described in the Company’s Annual Report on Form 10-K for the year ended March 31, 2019, as filed with the Securities and Exchange Commission on July 1, 2019, under “Part II” – “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” – “Preferred Stock” – “Series C Redeemable Convertible Preferred Stock”.

Series D Convertible Preferred Stock

The Series D Designation, which was approved by the Board of Directors of the Company on July 2, 2019, and filed by the Company with the Secretary of State of Nevada on July 3, 2019, designates 50,000 shares of Series D Preferred Stock, $0.001 par value per share. The issuance of the Series D Preferred Stock is subject to certain closing conditions as discussed above in Item 1.01 in connection with the Exchange Agreement. The Series D Preferred Stock has the following rights:

Dividend Rights. The Series D Preferred Stock does not accrue dividends.

Liquidation Preference. The Series D Designation provides that the Series D Preferred Stock is (a) senior to the Company’s common stock; (b) pari passu with respect to the Series E and F Preferred Stock; and (c) junior to all existing and future indebtedness of the Company (provided that the consent of the Series D Preferred Stock holders is required for the Company to issue any securities senior to the Series D Preferred Stock, other than the Series E and F Preferred Stock). If the Company determines to liquidate, dissolve or wind-up its business and affairs, or upon closing or occurrence of any Deemed Liquidation Event (defined below), the Company will prior to or concurrently with the closing, effectuation or occurrence any such action, redeem the Series D Preferred Stock for cash, by wire transfer of immediately available funds to an account designated by Holder, at an amount equal to the Liquidation Value per share of Series D Preferred Stock. The “Liquidation Value” is equal to $10 million divided by the total number of shares of Series D Preferred Stock issued pursuant to the terms of the Exchange Agreement. The $10 million liquidation preference of the Series D Preferred Stock will be a significant decrease from the aggregate liquidation preference which currently applies to the Series C Preferred Stock, which is approximately $75 million.

A “Deemed Liquidation Event” includes: (a) a merger or consolidation in which the Company is a constituent party or a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, subject to certain exceptions described in the Series D Designation; (b) Company issues convertible or equity securities that are senior to the Series D Preferred Stock in any respect; (c) the holders do not receive the number of shares stated in a notice of conversion within 5 trading days; (d) trading of the Common Stock is halted or suspended by the NYSE American or whatever is at the applicable time, the principal U.S. trading exchange or market for the common stock or any U.S. governmental agency for 10 or more consecutive trading days; (e) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly-owned subsidiary of the Company.

Conversion Rights. Each share of Series D Preferred Stock may be converted into 1,000 shares of common stock (“Conversion Shares”) at any time at the option of the holder. The Series D Preferred Stock is subject to a beneficial ownership limitation, which prevents any holder of the Series D Preferred Stock from converting such Series D Preferred Stock into common stock, if upon such conversion, the holder would beneficially own greater than 4.99% of all common stock outstanding immediately after giving effect to such issuance, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder; provided, however, that any holder may increase such amount to 9.99% upon not less than 61 days’ prior notice to the Company. 

Voting Rights. The Series D Preferred Stock has no voting rights on general corporate matters, provided that the Series D Designation does contain customary protective provisions restricting the Company’s ability to amend or modify the rights of the Series D Preferred Stock without the consent of the holders thereof. The Series D Preferred Stock has no right to vote on any matters except: (a) on an amendment to the Series D Designation, (b) on a proposal to reduce the Company’s share capital; (c) on a resolution to approve the terms of a buy-back agreement; (d) on a proposal to wind up the Company; (e) on a proposal for the disposal of all or substantially all the Company’s property; and (f) during the winding-up of the Company.

Redemption Rights. The Company may, in its sole and absolute discretion, redeem any or all shares of Series D Preferred Stock then outstanding at any time by paying Holder in cash an amount per share equal to the Redemption Value for the shares redeemed. The “Redemption Value” equals $12 million divided by the total number of shares of Series D Preferred Stock issued pursuant to the terms of the Exchange Agreement.

Series E Redeemable Convertible Preferred Stock

The Series E Designation, which was approved by the Board of Directors of the Company on July 2, 2019, and filed by the Company with the Secretary of State of Nevada on July 3, 2019, designates one million shares of Series E Preferred Stock, $0.001 par value per share of the Company. The Series E Preferred Stock has the following rights:

Dividend Rights. The Series E Preferred Stock does not accrue any dividends, provided that, subject to the rights of the holders, if any, of any shares of the Series C Preferred Stock, Series D Preferred Stock, Series F Preferred Stock or other securities senior to or pari passu with, the Series E Preferred Stock, the holders of Series E Preferred Stock are entitled to such dividends paid and distributions made to the holders of common stock to the same extent as if such holders had converted the Series E Preferred Stock into common stock at the Conversion Rate (described below under “Conversion Rights”)(without regard to any limitations on conversion herein or elsewhere) and had held such shares of common stock on the record date for such dividends and distributions.

Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary (each a “Liquidation Event”), the holders of Series E Preferred Stock are entitled to receive prior to the holders of the Company’s other security holders, except in the case of the Series C Preferred Stock, which is junior in ranking only to the first distributions up until $2,000 per share of Series E Preferred Stock (the original issue price per share), and the Series F Preferred Stock, the Company’s capital leases as may be in place from time to time and other senior debt approved by a Majority In Interest, and then is entitled to pari passu ranking, and pro rata with the holders of the Company’s Series D Preferred Stock, an amount per share for each share of Series E Preferred Stock held by them equal to the greater of (a) $2,000 per share and (b) the amount of cash that would have been received had such share of Series E Preferred Stock been converted into common stock immediately prior to such Liquidation Event based on the Conversion Rate.

Conversion Rights. Each share of Series E Preferred Stock is convertible, at the option of the holder thereof, at any time following the Approval Date, into that number of shares of common stock as equal the Conversion Rate. For the purposes of the following sentence:

● “Approval Date” means the later of (a) the first business day after the date that all of the requirements of Shareholder Approval are met; and (b) the business day that the Company has affected a reverse stock split of its outstanding common stock subsequent to the Shareholder Approval, to the extent such reverse stock split is deemed necessary by a Majority In Interest in writing prior to the date of Shareholder Approval.

● “Conversion Rate” means that number of shares of common stock as equals 67% of the Company’s fully-diluted shares (including all common stock and all shares of common stock issuable upon conversion of the Series D Preferred Stock)(“Fully-Diluted Shares”), unless (a) the 30-day average trading price of the Company’s common stock, as calculated pursuant to applicable NYSE American rules and requirements, following the Shareholder Approval date is below $0.20 per share (which value is not subject to adjustment in connection with any recapitalizations or splits); or (b) the failure of the Company, on the date that the Company’s shareholders have approved the transactions contemplated by the Plan of Merger and the issuance of shares of common stock upon the conversion of the Series E Preferred Stock, or the first business day immediately following such date, to meet the listing standards for the listing of the Company’s common stock on the NYSE American, at which time the applicable percentage shall be 70% of the Fully-Diluted Shares (the “3% Increase”), in each case divided by the 1,000,000 shares of Series E Preferred Stock issued in connection with the Merger.

Voting Rights. Except as otherwise expressly provided in the Series E Designation, the holders of Series E Preferred Stock and common stock vote together as a single class and not as separate classes. Each outstanding share of Series E Preferred Stock is entitled to vote a number of voting shares equal to the Voting Shares on all shareholder matters to come before the shareholders of the Company (whether at a meeting of the shareholders of the Company, by written action of shareholders in lieu of a meeting or otherwise) (the “Voting Rights”); provided that the Voting Rights shall not apply, and the Holders shall not be allowed to vote on, the Shareholder Approval. “Voting Shares” means (i) 18.9% of the total shares of common stock issued and outstanding on the date the Plan of Merger was agreed to by the parties, prior to the Approval Date; and (b) 76.0% of the Company’s total voting shares on, and following, the Approval Date, divided by the 1 million shares of Series E Preferred Stock issued in connection with the Plan of Merger.

Additionally, for so long as the outstanding Series E Preferred Stock shares have the right to vote at least 5% of the Company’s total voting shares, the Series E Preferred Stock, voting as a group, have the right to (a) appoint one member to the Company’s Board of Directors; (b) appoint four (4) members of Lineal’s Board of Directors (i.e., the managers of Lineal) (prior to Shareholder Approval); and one (1) member to Lineal’s Board of Directors (subsequent to Shareholder Approval), provided that unless approved by a Majority In Interest, the Board of Directors of Lineal shall have no more than five (5) members; (c) nominate an individual to serve as the Chief Operating Officer of the Company (“COO”); and (d) nominate individuals to serve as the executive officers of Lineal. The Company anticipates Lineal nominating its appointee on the Company’s Board of Directors and the COO shortly after the filing of this report, which appointees will be disclosed in a subsequent Form 8-K filing. The Company plans to appoint its Interim Chief Executive Officer, Louis G. Schott as the Company’s appointee on the Lineal Board of Directors.

Until the earlier of (a) the fifth (5^th) anniversary of the Closing Date; and (b) the date that 5% or less of the 1 million shares of Series E Preferred Stock issued in connection with the Merger are outstanding (the “Protective Provision Termination Date”), the Company is not authorized to affect any Material Asset Transfer or change of control, as described in the Series E Designation (collectively, a “Material Transaction”), without the consent of a Majority In Interest. “Material Asset Transfer” means (i) the sale, license, distribution or transfer, of more than 20% of the assets of (a) the Company; or (b) Lineal, in a single transaction or a series of related transactions, subject to certain exceptions; or (ii) the merger, consolidation or reorganization of the Company or Lineal with another corporation, partnership or other entity and as a result of such merger, consolidation or reorganization less than 50% of the outstanding voting securities of the surviving or resulting corporation, partnership or other entity shall be owned in the aggregate by the shareholders of the Company (as to the Company) or the Company (as to Lineal), as determined immediately prior to the consummation of such merger, consolidation or reorganization.

Additionally, until the Protective Provision Termination Date, the Company shall not, without first obtaining the approval of a Majority In Interest: (a) issue any shares of Preferred Stock, other than as contemplated by the Plan of Merger; issue any Lineal Common Shares or Lineal Preferred Shares; or (c) issue any shares of common stock or convertible securities, except for: (i) shares of common stock issued upon conversion of the Series F Preferred Stock; (ii) shares of common stock issued upon conversion of the Series C Preferred Stock and Series D Preferred Stock, or as otherwise provided for in the Series C Designation or Series D Designation; (iv) shares of Series D Preferred Stock pursuant to the Exchange Agreement; (v) shares of common stock issuable pursuant to the terms of agreements or understandings which were in place as of the Closing Date, and which have not been amended, modified or revised after such Closing Date, except to make such terms more favorable to the Company; and (vi) shares of common stock issuable upon the exercise of options or upon the conversion or exchange of convertible securities, outstanding as of the Closing Date, in each case provided such issuance is pursuant to the terms of such option or convertible security as was in effect as of the Closing Date, except to the extent such terms are amended or revised to make such terms more favorable to the Company.

The Series E Designation also provides the Series E Preferred Stock holders customary protective provisions requiring the consent of the Series E Preferred Stock holders for certain matters, including amending the Lineal Company Agreement, which would adversely affect the rights of the Series E Preferred Stock holders and/or the Series E Preferred Stock.

Redemption Rights. The Holders, with the consent of a Majority In Interest, have the option, exercisable from time to time after November 22, 2019, or if a Lineal Transaction (as described and defined above under “Item 1.01 Entry into a Material Definitive Agreement” – “Plan of Merger”), has not occurred prior to September 23, 2019, a date which is 60 days after the closing of a Lineal Transaction, or such other later date which is approved by the Company and a Majority In Interest, provided that the Shareholder Approval has not been received by such date, to require that the Company redeem shares of the outstanding Series E Preferred Stock (a “Redemption”). Each Redemption shall be on a one-for-one basis between Series E Preferred Stock and Lineal Common Shares and shall be subject to applicable law. No redemption of the Series E Preferred Stock is allowed unless there is a pro rata redemption of the Series F Preferred Stock. In the event the Series E Preferred Stock was fully-redeemed, the Series E Preferred holders and Series F Preferred Stock holders would be able to re-acquire 100% of the securities of Lineal.

Series F Redeemable Preferred Stock

The Series F Designation, which was approved by the Board of Directors of the Company on July 2, 2019, and filed by the Company with the Secretary of State of Nevada on July 3, 2019, designates 16,750 shares of Series F Preferred Stock, $0.001 par value per share of the Company. The Series F Preferred Stock has the following rights:

Dividend Rights. Dividends accrue on the Series F Preferred Stock at the end of each calendar quarter, beginning at the end of the first calendar quarter following the Closing Date, based on a price per share of Series F Preferred Stock of $100, at the rate of 8% per annum, until such Series F Preferred Stock is no longer outstanding (“Dividends” and once accrued “Accrued Dividends”). If the Company is prohibited from paying the Accrued Dividends in cash pursuant to applicable law, such Accrued Dividends shall continue to accrue until such time as the Company is legally able to pay such Accrued Dividends, during which period such Accrued Dividends shall accrue interest, compounded monthly, at the end of each month that such Accrued Dividends remain unpaid, at 12% per annum.

Liquidation Preference. In the event of a Liquidation Event, the holders of Series F Preferred Stock are entitled to receive prior to the holders of the Company’s securities other than the Series D Preferred Stock, and pro rata with the holders of the Series D Preferred Stock, but not prior to any holders of the Company’s senior securities (as described in the designation), an amount per share for each share of Series F Preferred Stock held by them equal to $100, then, after any distributions to any other shares of preferred stock, the holders are entitled to eight percent (8%) of any remaining assets left for distribution to the holders of the common stock.

Conversion Rights. The Series F Preferred Stock have no conversion rights.

Voting Rights. Except as otherwise provided in the Series F Designation or as required by law, the holders of Series E Preferred Stock and the holders of common stock shall vote together as a single class and not as separate classes. Each outstanding share of Series F Preferred Stock is entitled to vote a number of voting shares equal to (i) 1% of the total shares of common stock issued and outstanding on the date the Plan of Merger was agreed to by the parties, prior to the Approval Date; and (b) 4% of the Company’s total voting shares on the Approval Date, divided by the 1,675 shares of Series F Preferred Stock issued in connection with the Plan of Merger; provided that the Series F Preferred Stock shall not be allowed to vote on the Shareholder Approval.

The Series F Designation also provides the Series F Preferred Stock holders customary protective provisions requiring the consent of the Series F Preferred Stock holders for certain matters, including amending the Lineal Company Agreement, which would adversely affect the rights of the Series F Preferred Stock holders and/or the Series F Preferred Stock.

Until the earlier of (a) the fifth (5^th) anniversary of the Closing Date; (b) the date that 5% or less of the 1,675 shares of Series F Preferred Stock issued in connection with the Merger are outstanding, the Company is not authorized to affect any Material Transaction without the consent of a majority in interest of the Series F Preferred Stock holders.

Redemption Rights. The holders of the Series F Preferred Stock have the option, exercisable from time to time after the Redemption Date, provided that the Shareholder Approval has not been received by November 22, 2019, or if a Lineal Transaction (as described and defined above under “Item 1.01 Entry into a Material Definitive Agreement” – “Plan of Merger”), has not occurred prior to September 23, 2019, a date which is 60 days after the closing of a Lineal Transaction, or such other later date which is approved by the Company and a majority in interest of the holders of the Series F Preferred Stock, or if Shareholder Approval has been received, then only after the date following the Closing Date when the Company has received net proceeds from the issuance of equity securities of at least $6,750,000, to require that the Company redeem all or any portion of the outstanding shares of Series F Preferred Stock for cash, by requiring the Company pay each applicable holder, an amount equal to $100 per Series F Preferred Stock share multiplied by the number of Series F Preferred Stock shares held by each applicable holder, subject to redemption. In the event the Company is prohibited from completing a redemption due to applicable law, the Company is required to redeem that number of shares of Series F Preferred Stock which is able to be redeemed under applicable law.

Additionally, concurrently with any Series E Preferred Stock redemption (discussed above under the description of the Series E Preferred Stock), the holders of the Series F Preferred Stock are required to redeem the pro rata portion of Series F Preferred Stock for shares of Lineal’s Preferred Stock, with each share of Series F Preferred Stock being redeemed in consideration for 100 shares of Lineal Preferred Stock.

* * * * *

The foregoing descriptions of the Series C Designation, Series D Designation, Series E Designation and Series F Designation do not purport to be complete and are qualified in their entirety by reference to the Series C Designation, Series D Designation, Series E Designation (as corrected by the Certificate of Correction filed as Exhibit 3.4 hereto) and Series F Designation, copies of which are incorporated by reference as Exhibits 3.1, 3.2, 3.3 and 3.5, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On July 8, 2019, the Company filed a press release announcing the closing of the Merger and related transactions. A copy of the press release is included herewith as Exhibit 99.1. 

The information in this Item 7.01 (i) is furnished pursuant to Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of such section; and (ii) shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 8.01 Other Events.

Amendments to IR Agreements

On July 8, 2019, the Company amended the terms of (a) that certain amended consulting agreement with Regal Consulting, as originally entered into on November 15, 2018 and amended on February 13, 2019, and effective January 31, 2019; and (b) that certain letter agreement with SylvaCap Media, entered into on February 13, 2019, to change the terms thereof to be through October 1, 2019 and November 12, 2019, respectively (i.e., to terminate the prior language which provided for such agreements to terminate upon an acquisition transaction).

Letter to Record Shareholders Regarding Ratification

On July 8, 2019, the Company finalized a letter to its record shareholders, which will be mailed throughout the remainder of this week. The letter is to notify such record shareholders of the ratification, by the Board of Directors of the Company on July 2, 2019, pursuant to Nevada Revised Statutes (“NRS”) Section 78.0296, of the validly issued and fully paid and nonassessable status of the Company’s issued and outstanding shares of common and preferred stock as of such date, in accordance with NRS 78.0296. The letter to shareholders is included herewith as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(a)  Financial Statements of Businesses Acquired

The financial statements of Lineal required by this Item 9.01 are not included in this Current Report on Form 8-K. Such financial statements will be filed no later than 71 calendar days after the date that this Current Report on Form 8-K is required to be filed.

(b)  Pro Forma Financial Information

Pro forma financial information relative to the acquired business is not included in this Current Report on Form 8-K. Such pro forma financial information will be filed no later than 71 calendar days after the date that this Current Report on Form 8-K is required to be filed.

(d)  Exhibits.

Exhibit Number	Description of Exhibit
2.1*	Agreement and Plan of Merger by and between Camber Energy, Inc., Camber Energy Merger Sub 2, Inc., Lineal Star Holdings, LLC, and the Members party thereto dated as of July 8, 2019
3.1*	Camber Energy, Inc. Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 8, 2019
3.2*	Camber Energy, Inc. Certificate of Designations of Preferences, Powers, Rights and Limitations of Series D Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 3, 2019
3.3*	Certificate of Designation of Camber Energy, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series E Redeemable Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 3, 2019
3.4*	Certificate of Correction to Series E Redeemable Convertible Preferred Stock Designation, filed with the Secretary of State of Nevada on July 8, 2019
3.5*	Certificate of Designation of Camber Energy, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series F Redeemable Preferred Stock as filed with the Secretary of State of Nevada on July 3, 2019
10.1*	Security Exchange Agreement dated July 8, 2019, by and between Camber Energy, Inc., and the investor party thereto
10.2*	Termination Agreement dated July 8, 2019, by and between Camber Energy, Inc., and the investor party thereto
10.3*	Funding and Loan Agreement dated July 8, 2019, by and among Camber Energy, Inc., Lineal Star Holdings, LLC, and the preferred shareholders party thereto
10.4*	$1,050,000 Promissory Note by Lineal Star Holdings, LLC as borrower in favor of Camber Energy, Inc. as lender, dated July 8, 2019
10.5*	Form of Indemnification Agreement of Officers and Directors
10.6*	Second Amendment to Consulting Agreement with Regal Consulting effective July 1, 2019
10.7*	July 8, 2019 Letter Agreement with Sylva International LLC dba SylvaCap Media
99.1**	Press release dated July 9, 2019
99.2**	Letter to Shareholders in Accordance with NRS 78.0296

* Filed herewith.

** Furnished herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CAMBER ENERGY, INC.
By:	/s/ Robert Schleizer
Name:	Robert Schleizer
Title:	Chief Financial Officer

Date: July 9, 2019 

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
2.1*	Agreement and Plan of Merger by and between Camber Energy, Inc., Camber Energy Merger Sub 2, Inc., Lineal Star Holdings, LLC, and the Members party thereto dated as of July 8, 2019
3.1*	Camber Energy, Inc. Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 8, 2019
3.2*	Camber Energy, Inc. Certificate of Designations of Preferences, Powers, Rights and Limitations of Series D Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 3, 2019
3.3*	Certificate of Designation of Camber Energy, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series E Redeemable Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 3, 2019
3.4*	Certificate of Correction to Series E Redeemable Convertible Preferred Stock Designation, filed with the Secretary of State of Nevada on July 8, 2019
3.5*	Certificate of Designation of Camber Energy, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series F Redeemable Preferred Stock as filed with the Secretary of State of Nevada on July 3, 2019
10.1*	Security Exchange Agreement dated July 8, 2019, by and between Camber Energy, Inc., and the investor party thereto
10.2*	Termination Agreement dated July 8, 2019, by and between Camber Energy, Inc., and the investor party thereto
10.3*	Funding and Loan Agreement dated July 8, 2019, by and among Camber Energy, Inc., Lineal Star Holdings, LLC, and the preferred shareholders party thereto
10.4*	$1,050,000 Promissory Note by Lineal Star Holdings, LLC as borrower in favor of Camber Energy, Inc. as lender, dated July 8, 2019
10.5*	Form of Indemnification Agreement of Officers and Directors
10.6*	Second Amendment to Consulting Agreement with Regal Consulting effective July 1, 2019
10.7*	July 8, 2019 Letter Agreement with Sylva International LLC dba SylvaCap Media
99.1**	Press release dated July 9, 2019
99.2**	Letter to Shareholders in Accordance with NRS 78.0296

* Filed herewith.

** Furnished herewith.

EX-2.1

Camber Energy, Inc. 8-K

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

BY AND BETWEEN

CAMBER ENERGY, INC.,

CAMBER ENERGY MERGER SUB 2, INC.,

LINEAL STAR HOLDINGS, LLC, AND

THE MEMBERS PARTY HERETO

DATED AS OF JULY 8, 2019

TABLE OF CONTENTS

ARTICLE I. DEFINITIONS		1
Section 1.1.	Certain Definitions	1
Section 1.2.	Other Definitional Provisions	7
ARTICLE II. THE MERGER		8
Section 2.1.	The Merger	8
Section 2.2.	Closing	8
Section 2.3.	Effective Time	8
Section 2.4.	Effects of the Merger	8
Section 2.5.	Certificate of Formation and Operating Agreement of the Surviving Company	9
Section 2.6.	Directors	9
Section 2.7.	Officers	9
ARTICLE III. CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES		9
Section 3.1.	Effect on Company Membership Interests	9
Section 3.2.	[Reserved]	10
Section 3.3.	Deliveries by the Parent	10
Section 3.4.	Deliveries by the Company	11
Section 3.5.	Deliveries by the Members	11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY		11
Section 4.1.	Qualification, Organization, Subsidiaries, etc.	11
Section 4.2.	Capital Stock	12
Section 4.3.	Subsidiaries and Joint Ventures	12
Section 4.4.	Authority Relative to This Agreement; No Violation	13
Section 4.5.	Reports and Financial Statements	14
Section 4.6.	Internal Controls and Procedures	14
Section 4.7.	No Undisclosed Liabilities	14
Section 4.8.	Compliance with Laws; Permits	15
Section 4.9.	Environmental Laws and Regulations	16
Section 4.10.	Employee Benefit Plans	16
Section 4.11.	Interested Party Transactions	17
Section 4.12.	Absence of Certain Changes or Events	17
Section 4.13.	Investigations; Litigation	17
Section 4.14.	Tax Matters	18
Section 4.15.	Labor Matters	18
Section 4.16.	Intellectual Property; Data Collection and Privacy Policies	20
Section 4.17.	Information Technology	20
Section 4.18.	Property	21
Section 4.19.	Insurance	22
Section 4.20.	Required Vote of the Company’s Members and Board	22
Section 4.21.	Material Contracts	22
Section 4.22.	Finders or Brokers; Transaction Fees	23
Section 4.23.	Reserved	23
Section 4.24.	Foreign Corrupt Practices Act	23
Section 4.25.	No Violation of Laws	24
Section 4.26.	Data Room; Information Supplied	24
Section 4.27.	Disclaimer	24
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB		25
Section 5.1.	Qualification, Organization, Subsidiaries, etc.	25
Section 5.2.	Parent Capitalization	25
Section 5.3.	Ownership and Operations of Merger Sub	26

Section 5.4.	Corporate Authority Relative to This Agreement	27
Section 5.5.	Parent SEC Reports; Financial Statements	27
Section 5.6.	NYSE American Stock Market Quotation	29
Section 5.7.	Investment Company Act; JOBS Act	29
Section 5.8.	Opinions of Financial Advisors	29
Section 5.9.	No Undisclosed Liabilities	29
Section 5.10.	Compliance with Laws; Permits	30
Section 5.11.	Environmental Matters	31
Section 5.12.	Employee Benefits	33
Section 5.13.	Affiliate Transactions	33
Section 5.14.	Absence of Certain Changes or Events	34
Section 5.15.	Investigations; Litigation	34
Section 5.16.	Tax Matters	34
Section 5.17.	Labor Matters	35
Section 5.18.	Intellectual Property; Data Collection and Privacy Policies	36
Section 5.19.	Information Technology	37
Section 5.20.	Property	38
Section 5.21.	Insurance	38
Section 5.22.	Parent Contracts	38
Section 5.23.	Finders or Brokers; Transaction Fees	39
Section 5.24.	Tax-Free Reorganization	39
Section 5.25.	No Integrated Offering	39
Section 5.26.	Foreign Corrupt Practices Act	40
Section 5.27.	Data Room; Information Supplied	40
Section 5.28.	Disclaimer	40
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF THE MEMBERS		40
Section 6.1.	Authority	40
Section 6.2.	Representations Regarding the Merger Consideration	41
ARTICLE VII. COVENANTS AND AGREEMENTS		43
Section 7.1.	Section 16 Matters	43
Section 7.2.	Public Announcements	43
Section 7.3.	Indemnification and Insurance	43
Section 7.4.	Notification of Certain Matters	46
Section 7.5.	Third-Party Consents and Encumbrance Terminations	46
Section 7.6.	Post-Closing Requirements/Matters	46
ARTICLE VIII. MISCELLANEOUS		48
Section 8.1.	No Survival of Representations and Warranties	48
Section 8.2.	Expenses	48
Section 8.3.	Execution	48
Section 8.4.	Governing Law	48
Section 8.5.	Jurisdiction; Enforcement; No Special Damages	49
Section 8.6.	WAIVER OF JURY TRIAL	49
Section 8.7.	Notices	50
Section 8.8.	Waiver of Conflicts	51
Section 8.9.	Assignment; Binding Effect	52
Section 8.10.	Severability	52
Section 8.11.	Entire Agreement; No Third-Party Beneficiaries	52
Section 8.12.	Amendments; Waivers	52
Section 8.13.	Disclosure Schedules	52
Section 8.14.	Headings	53
Section 8.15.	Interpretation	53
Section 8.16.	No Recourse	53

LIST OF EXHIBITS

Exhibit A	Certificate of Designation Establishing the Designation, Preferences, Limitations and Relative Rights of the Parent’s Series E Preferred Stock
Exhibit B	Certificate of Designation Establishing the Designation, Preferences, Limitations and Relative Rights of the Parent’s Series F Preferred Stock
Exhibit C	Stock Registration Form
Exhibit D	Stock Power and Assignment of Uncertificated Membership Interests

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of July 8, 2019 (this “Agreement”), is by and among Camber Energy, Inc., a Nevada corporation (“Parent”), Camber Energy Merger Sub 2, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Parent (“Merger Sub”), Lineal Star Holdings, LLC, a Delaware limited liability company (the “Company”) and each of the Members of the Company set forth on the signature pages hereto under the heading “Members” (the “Members”). Each of the Parent, Merger Sub, Company and the Members are referred to herein as the “Parties” or “parties”, and individually as a “Party” or a “party”.

W I T N E S S E T H:

WHEREAS, the Parties intend that Merger Sub be merged with and into the Company, with the Company surviving that merger on the terms and subject to the conditions set forth in this Agreement (the “Merger”);

WHEREAS, the Board of Directors of the Company (the “Board”) and the Members, have (i) determined that it is in the best interests of the Company and the Members to enter into this Agreement, and (ii) approved this Agreement and the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby, including the Merger;

WHEREAS, the Board of Directors of Merger Sub, the Members, the Board and the Board of Directors of Parent have each unanimously approved this Agreement; and

WHEREAS, Parent, Merger Sub, the Company and the Members desire to make certain representations, warranties, covenants and agreements in connection with the Merger and the transactions contemplated by this Agreement and also to prescribe certain conditions to the Merger as specified herein.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

ARTICLE I.
DEFINITIONS

Section 1.1.        Certain Definitions. In addition to other terms defined throughout this Agreement, the following terms have the following meanings when used herein:

(a)       “Accredited Member” means each of the Preferred Holder, Brian Shanklin, Blain Shanklin, Mario Salinas, Craig Crawford and Tim J. Connolly.

(b)       “Act” means the Delaware Limited Liability Company Act.

Agreement and Plan of Merger

Page 1 of 53 

(c)       “Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

(d)       “Affiliates” means, as to any person, any other person which, directly or indirectly, controls, or is controlled by, or is under common control with, such person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

(e)       “Business Day” means any day other than a Saturday, Sunday or a day on which the banks in Texas are authorized by law or executive order to be closed.

(f)        “COBRA” means Title I, Part 6, of ERISA.

(g)       “Code” means the Internal Revenue Code of 1986, as amended.

(h)       “Contracts” means any contracts, agreements, licenses, notes, bonds, mortgages, indentures, leases or other binding instruments or obligations.

(i)        “DGCL” means the Delaware General Corporation Law.

(j)        “Environmental Law” means any Law relating to the protection of the environment, natural resources, or public or employee health and safety, including without limitation any Law pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or Hazardous Substances, or solid or hazardous waste, including without limitation emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangered and threatened species; (vi) storage tanks, vessels, containers, abandoned or discarded barrels, and other closed receptacles; (vii) the reclamation of mines; (viii) health and safety of employees and other persons; and (ix) manufacturing, processing, using, distributing, treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste. As used above, the terms “release” and “environment” shall have the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as amended.

(k)       “ERISA Affiliate” means any entity which is (or at any time was) a member of a controlled group, that would be deemed a single employer within the meaning of Section 4001(b) of ERISA.

(l)        “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

Agreement and Plan of Merger

Page 2 of 53 

(m)      “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(n)       “GAAP” means generally accepted accounting principles as in effect in the United States of America from time to time.

(o)       “Governing Documents” of an entity shall mean the (i) articles or certificate of incorporation or association, certificate of formation, articles of organization or certificate of limited partnership or similar instrument under which an entity is formed; and (ii) the other documents or agreements, including bylaws, partnership agreements of partnerships, operating agreements of limited liability companies, or similar documents, adopted by the entity to govern the formation and internal affairs of the entity, as such may be amended from time to time.

(p)       “Governmental Entity” means federal, state, local or foreign governmental or regulatory agency, commission, court, body, entity or authority.

(q)       “Hazardous Substance” means any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any Environmental Law. Hazardous Substance includes any substance to which exposure is regulated by any Governmental Entity or any Environmental Law including any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste or petroleum or any derivative or byproduct thereof, radon, radioactive material, asbestos or asbestos containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls.

(r)        “Joint Venture” means any corporation, partnership, association, trust or other form of legal entity of which 50% or less of the outstanding voting securities are on the date hereof directly or indirectly owned by such party.

(s)       “Knowledge” means (x) with respect to Parent, the actual knowledge, after reasonable inquiry, of the following individuals: Louis G. Schott and/or Robert Schleizer and (y) with respect to the Company, the actual knowledge, after reasonable inquiry, of the following individuals: Brian Shanklin, Tim Connolly, Craig Crawford and/or Manuel Mondragon.

(t)        “Law” or “Laws” means all federal, state, local or foreign or provincial law, statute, ordinance, rule, regulation, judgment, order, injunction, decree or agency requirement having the force of law of or undertaking to or agreement with any Governmental Entity, including common law.

(u)       “Liens” mean all liens, claims, deeds of trust, options, rights of first refusal, restrictive covenants, pledges, charges, mortgages, encumbrances, adverse rights or claims and security interests of any kind or nature whatsoever (including any restriction on the right to vote or transfer the same, except for such transfer restrictions of general applicability as may be provided under applicable Law, including the Securities Act, and the “blue sky” laws of the various states of the United States).

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(v)       “Lineal Transaction” means an acquisition by Lineal of assets or securities which results in the Corporation, immediately after such acquisition, being able to meet the initial listing requirements of the NYSE American.

(w)      “Made Available” or “made available”, as to information made available by the Parent or its Representatives to the Company or its Representatives, means that such information, document or material was (i) publicly filed on the SEC EDGAR database as part of a Parent SEC Report, including as an exhibit thereto (or expressly incorporated by reference into a Parent SEC Report) prior to the date hereof or (ii) made available for review by Company or Company’s Representatives by the Parent or the Parent’s Representatives prior to the date hereof.

(x)        “Majority Interest” means holders of the Series E Preferred Stock who collectively own more than fifty percent (50%) of all of the then outstanding Series E Preferred Stock shares.

(y)       “Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects or occurrences, has had or would be reasonably likely to have a material adverse effect on the assets, properties, business, results of operation or financial condition of the Party and its Subsidiaries, taken as a whole, or that would be reasonably likely to prevent or materially delay or materially impair the ability of the Party to perform its obligations hereunder or to consummate the Merger or the other transactions contemplated hereby, but shall not include facts, circumstances, events, changes, effects or occurrences generally affecting the industry in which the Party operates or the economy or the financial, credit or securities markets in the United States or elsewhere in the world, including any changes in interest rates, any political conditions or developments, or any outbreak or escalation of hostilities, declared or undeclared acts of war, terrorism or insurrection, except to the extent any fact, circumstance, event, change, effect or occurrence that, relative to other industry participants, materially and disproportionately adversely affects the assets, properties, business, results of operation or financial condition of the Party and its Subsidiaries, taken as a whole.

(z)        “NYSE American” means the NYSE American LLC, a national securities exchange registered with the SEC.

(aa)      “Orders” or “orders” means any orders, judgments, injunctions, awards, decrees or writs handed down, adopted or imposed by, including any consent decree, settlement agreement or similar written agreement with, any Governmental Entity.

(bb)     “Parent Material Agreement” means (i) a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), (ii) a loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, contract, lease, license or other binding commitment (other than those between Parent and its Subsidiaries) relating to indebtedness (for the avoidance of doubt, including sale and leaseback transactions) or other binding obligation to make payment with respect to indebtedness in an amount in excess of $100,000 individually, and with respect to binding obligations other than with respect to indebtedness, in an amount in excess of $50,000 individually on an annual basis with a term of greater than five years, (iii) a contract which purports to materially limit the right of Parent or any of its Subsidiaries to engage or compete in any line of business or to compete with any person or operate in any location, (iv) a contract that creates a partnership or Joint Venture or similar arrangement with respect to any significant portion of the business of Parent or its Subsidiaries taken as a whole, or (v) a settlement or similar agreement with any Governmental Entity or order or consent of a Governmental Entity to which Parent or any of its Subsidiaries is subject involving future performance by Parent or any of its Subsidiaries which is material to Parent and any of its Subsidiaries taken as a whole.

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(cc)     “Parent Merger Preferred Stock” means the shares of Series E Preferred Stock and Series F Preferred Stock of the Parent issuable to the holders of Company Common Shares pursuant to Section 3.1.1 hereof.

(dd)     “Person” or “person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, group (as such term is used in Section 13 of the Exchange Act) or organization, including a Governmental Entity, and any permitted successors and assigns of such person.

(ee)     “Preferred Holder” means JShan Energy, LLC.

(ff)       “Representatives” means a party’s respective officers, directors, employees, agents and other representatives, including any investment banker, attorney or accountant retained by it or any of its Subsidiaries.

(gg)     “Required Shareholder Approval Date” means November 22, 2019, or if a Lineal Transaction has not occurred prior to September 23, 2019, a date which is 60 days after the closing of a Lineal Transaction, or such other later date which is approved by the Corporation and a Majority In Interest

(hh)     “SEC EDGAR” means the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval system) database located at www.sec.gov.

(ii)       “SEC Guidance” means (a) any publicly available written or oral interpretations, questions and answers, guidance and forms of the SEC, (b) any oral or written comments, requirements or requests of the SEC or its staff, (c) the Securities Act and the Exchange Act, and (d) any other rules, bulletins, releases, manuals and regulations of the SEC.

(jj)       “SEC” means the United States Securities and Exchange Commission.

(kk)     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(ll)       “Series C Preferred Stock” means the Series C Redeemable Convertible Preferred Stock of the Parent.

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(mm)   “Series C Settlement Agreements” means that Security Exchange Agreement, that Termination Agreement and any other agreement entered into between the Parent and the holder of the Series C Preferred Stock, to (i) exchange the Series C Preferred Stock for Series D Preferred Stock of the Parent, which fixes the number of shares of Parent Common Stock issuable upon conversion thereof (including for conversion premiums and dividends); (ii) to waive or forgive any other shares of Parent Common Stock then due to such holder under the terms of any other securities held, or previously held, by such holder, including shares due for true-ups on previously converted/exercised securities, (iii) to approve the terms and conditions of this Agreement, and (iv) for such holder of the Series C Preferred Stock to agree to vote any shares of Parent Common Stock which it holds as of the record date for the Parent Shareholder Meeting (as defined below in Section 7.6.1), in favor of the approval of this Agreement, the conversion of the Series E Preferred Stock and Series F Preferred Stock into Parent Common Stock, and such other matters as the Parent may reasonably request, at such Parent Shareholder Meeting.

(nn)     “Series E Preferred Stock” means the Series E Convertible Preferred Stock of the Parent to be designated prior to Closing, with the rights and preferences as set forth in the Certificate of Designation Establishing the Designation, Preferences, Limitations and Relative Rights of the Parent’s Series E Convertible Preferred Stock in the form of Exhibit A hereof.

(oo)     “Series F Preferred Stock” means the Series F Preferred Stock of the Parent to be designated prior to Closing, with the rights and preferences as set forth in the Certificate of Designation Establishing the Designation, Preferences, Limitations and Relative Rights of the Parent’s Series F Preferred Stock in the form of Exhibit B hereof.

(pp)     “Stock Power and Assignment” means the Stock Power and Assignment of Uncertificated Membership Interests in the form of Exhibit D hereto.

(qq)     “Stock Registration Form” means the Stock Registration Form in the form of Exhibit C hereto.

(rr)       “Subsidiaries” means, with respect to any Person, any corporation, partnership, limited liability company, association, trust or other business entity of which a majority of the outstanding shares of capital stock or other equity interests having ordinary voting power for the election of directors or their equivalent is at the time owned by such Person directly or through one or more Subsidiaries.

(ss)      “Tax Return” means any return, report or similar filing (including any attached schedules, supplements and additional or supporting material) required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes (and including any amendments with respect thereto).

(tt)       “Tax” or “Taxes” means (A) any and all federal, state, local or foreign or provincial taxes, charges, fees, imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, including any and all interest, penalties, fines, additions to tax or additional amounts imposed by any Governmental Entity in connection with respect thereto, and (B) any liability in respect of any items described in clause (A) payable by reason of contract, assumption, transferee liability, operation of Law, Treasury Regulation Section 1.1502-6 (or any predecessor or successor thereof or any analogous or similar provision of Law) or otherwise.

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(uu)     “Transaction Documents” means this Agreement, the designations of the Parent Merger Preferred Stock and the Series C Settlement Agreement.

Section 1.2.        Other Definitional Provisions. The Parties acknowledge, confirm and agree that:

(a)       The language in all parts of this Agreement shall be construed, in all cases, according to its fair meaning.

(b)       Each Party and its counsel have reviewed and revised this Agreement and any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement.

(c)       Terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa.

(d)       References to any gender include the other genders.

(e)       The words “include,” “includes” and “including” do not limit the preceding terms or words and shall be deemed to be followed by the words “without limitation”.

(f)        The terms “hereof”, “herein”, “hereunder”, “hereto” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.

(g)       The terms “day” and “days” mean and refer to calendar day(s).

(h)       The terms “year” and “years” mean and refer to calendar year(s).

(i)        All references in this Agreement to “dollars” or “$” shall mean United States Dollars.

(j)        References in this Agreement to specific laws or to specific provisions of laws shall include all rules and regulations promulgated thereunder.

(k)        Unless otherwise set forth herein, references in this Agreement to (i) any document, instrument or agreement (including this Agreement) (A) includes and incorporates all exhibits, schedules and other attachments thereto, (B) includes all documents, instruments or agreements issued or executed in replacement thereof and (C) means such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or supplemented from time to time in accordance with its terms and in effect at any given time, and (ii) a particular Law means such Law as amended, modified, supplemented or succeeded, from time to time and in effect at any given time.

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(l)         In the event of any conflict between the provisions of this Agreement and any such Exhibit, the provisions of this Agreement shall control.

ARTICLE II.
THE MERGER

Section 2.1.        The Merger.  At the Effective Time (as hereinafter defined), upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the Act, Merger Sub shall be merged with and into the Company, whereupon the separate corporate existence of Merger Sub shall cease, and the Company shall continue its corporate existence under the Act as the surviving limited liability company in the Merger (the “Surviving Company”) and a direct wholly-owned subsidiary of Parent. The Parties intend the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and this Agreement is intended to be, and is adopted as, a “plan of reorganization” within the meaning of Section 368 of the Code; provided that the Parties each acknowledge and agree that each Party has relied upon the advice of its own Tax advisors in connection with the transactions contemplated by this Agreement and that no Party makes any representation or warranty as to the Tax treatment of the Merger or any other transaction contemplated by this Agreement, except as explicitly set forth herein.

Section 2.2.       Closing.  The closing of the Merger (the “Closing”) shall take place at 10:00 a.m., local time, at the offices of Camber Energy, Inc. 1415 Louisiana Street, Suite 3500, Houston, Texas 77002 on the date of this Agreement set forth above; provided that the Parties may agree that the Closing will occur through the electronic transfer of documents and each Party may rely on each document sent electronically as an original (such date, the “Closing Date”), or at such other time and place as the Parties may mutually agree upon.

Section 2.3.       Effective Time.  On the Closing Date, the Company shall cause the Merger to be consummated by executing and filing a certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the Act and shall make all other filings or recordings required under the Act. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such later date or time as may be agreed by Parent and the Company in writing and specified in the Certificate of Merger in accordance with the Act (such time as the Merger becomes effective is referred to herein as the “Effective Time”).

Section 2.4.        Effects of the Merger.  At the Effective Time, the Merger shall have the effects set forth in this Agreement and the applicable provisions of the Act. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all of the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Company, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Company.

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Section 2.5.        Certificate of Formation and Operating Agreement of the Surviving Company.

2.5.1     At the Effective Time, the Certificate of Formation of the Company, as in effect immediately prior to the Effective Time, shall be the Certificate of Formation of the Surviving Company until thereafter amended in accordance with the provisions thereof and applicable Law.

2.5.2     At the Effective time, the Operating Agreement of the Company as in effect immediately prior to the Effective Time shall be the Operating Agreement of the Surviving Company until thereafter amended in accordance with the provisions thereof, hereof and applicable Law, in each case consistent with the obligations set forth in Section 7.3.

Section 2.6.        Directors.  Subject to applicable Law, the directors of Merger Sub immediately prior to the Effective Time shall be designated by the Company and the Parent, with the Parent designating one (1) director and the Company designating three (3) directors prior to the Effective Time. From and after the Effective Time, the directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Company. The initial directors of the Surviving Company shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

Section 2.7.        Officers.  The officers of the Company (each vice president and each other more senior officer) immediately prior to the Effective Time shall be the initial officers of the Surviving Company and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

ARTICLE III.
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES

Section 3.1.        Effect on Company Membership Interests.  At the Effective Time, by virtue of the Merger and without any action on the part of the Parent, Merger Sub, the Company or the holders of any securities of the Company or Merger Sub:

3.1.1     Conversion of Company Common Shares.  Each common share of the Company as set forth on Section 3.1.1 of the Company Disclosure Schedule issued and outstanding immediately prior to the Effective Time (such shares, collectively, “Company Common Shares”), shall thereupon be cancelled and converted automatically into and shall thereafter represent the right to receive 0.95 fully paid and nonassessable shares of Series E Preferred Stock. (i) One million one hundred and forty thousand (1,140,000) preferred shares of the Company held by the Preferred Holder, issued and outstanding immediately prior to the Effective Time, shall thereupon be cancelled and converted automatically into and shall thereafter represent the right to receive 50,000 fully paid and nonassessable shares of Series E Preferred Stock and (ii) five hundred thirty-five thousand (535,000) preferred shares of the Company held by the Preferred Holder, issued and outstanding immediately prior to the Effective Time (such company preferred shares described in (i) and (ii), collectively, “Company Preferred Shares” and together with the Company Common Shares, the “Membership Interests”) shall thereupon be cancelled and converted automatically into and shall thereafter represent the right to receive 16,750 fully paid and nonassessable shares of Series F Preferred Stock (collectively, the consideration issuable pursuant to this Section 3.1.1, the “Merger Consideration”).

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All Membership Interests that have been converted into the right to receive the Merger Consideration as provided in this Section 3.1 shall be automatically cancelled and shall cease to exist, and the holders of certificates which immediately prior to the Effective Time represented such Membership Interests or evidenced by way of book-entry in the register of shareholders of the Company, shall cease to have any rights with respect to such Membership Interests other than the right to receive the applicable Merger Consideration.

3.1.2    Company Held Membership Interests. Each Membership Interest that is held by the Company immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and shall cease to exist, and no consideration shall be delivered in exchange for such cancellation and retirement.

3.1.3    Conversion of Merger Sub Common Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, all shares of common stock, par value $0.001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become 1,000,000 validly issued, fully paid and nonassessable Company Common Shares of the Surviving Company and 1,675,000 validly issued, fully paid and nonassessable Company Preferred Shares of the Surviving Company.

Section 3.2.       [Reserved].

Section 3.3.       Deliveries by the Parent.  At the Closing, the Parent shall, unless waived by the Company, deliver to the Company:

(a)       Confirmation of the approval of the NYSE American of the terms of the Merger as contemplated herein, subject in all cases to the Parent Shareholder Approval.

(b)       The fully executed Series C Settlement Agreements.

(c)       Evidence of filing and the effectiveness of the rights and preferences of the Series E Preferred Stock and Series F Preferred Stock with the Secretary of State of Nevada.

(d)       A certificate signed by a duly authorized representative of the Parent certifying as to the consent of the Board of Directors of the Parent authorizing this Agreement and the transactions contemplated hereby and thereby.

(e)       Evidence that all investor relation services undertaken by Parent have been fully paid as of the date of the Parent Shareholder Meeting, with no balances due or further obligation from Parent remaining thereafter.

(f)        Duly executed counterparts of Indemnification Agreements entered into with the Parent’s current officers and directors, in such form reasonably acceptable to such officers and directors.

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Section 3.4.       Deliveries by the Company.  At the Closing, the Company shall, unless waived by the Parent, deliver to the Parent:

(a)       A certificate signed by a duly authorized representative of the Company certifying as to the consent of the Board of Directors of the Company authorizing this Agreement and the transactions contemplated hereby and thereby.

(b)       A copy of a unanimous consent signed by the Members approving the terms of this Agreement and the transactions contemplated herein, including the Merger.

Section 3.5.       Deliveries by the Members.  At the Closing, each of the Members shall, unless waived by the Parent, deliver to the Parent:

(a)       A duly endorsed certificate evidencing the Interests held by the Member, or if such Interests are uncertificated and held in book entry form, a duly executed Stock Power and Assignment.

(b)       A completed and executed Stock Registration Form.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as disclosed in the disclosure schedule delivered by the Company to Parent immediately prior to the execution of this Agreement (the “Company Disclosure Schedule,” it being understood and agreed that the lack of any specific reference to a Company Disclosure Schedule in this Agreement shall not limit the Company’s right to qualify any representation or warranty in the Company Disclosure Schedules), the Company represents and warrants to Parent and Merger Sub as follows:

Section 4.1.       Qualification, Organization, Subsidiaries, etc.

(a)       Each of the Company and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of the Company and its Subsidiaries has all requisite corporate, partnership, limited liability company, trust or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted, except where the failure to have such power or authority would not have, individually or in the aggregate, a Material Adverse Effect on the Company or its Subsidiaries.

(b)       Each of the Company and its Subsidiaries is qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect on the Company or its Subsidiaries. The organizational or governing documents of the Company and each of its Subsidiaries, as previously provided to Parent, are in full force and effect. Neither the Company nor any Subsidiary is in violation of its organizational or governing documents.

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Section 4.2.       Capital Stock.

(a)       The authorized capital stock of the Company consists of (i) two million (2,000,000) Company Common Shares and (ii) two million (2,000,000) Company Preferred Shares. As of July 8, 2019, (i) one million (1,000,000) Company Common Shares were issued and outstanding and (ii) 1,675,000 of Company Preferred Shares were issued and outstanding. All outstanding Membership Interests are duly authorized, validly issued, fully paid and non-assessable and free of pre-emptive rights. No Membership Interests are owned by any Subsidiaries of the Company. The Members hold all of the Membership Interests.

(b)       There are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of capital stock or other equity interests to which the Company or any of its Subsidiaries is a party obligating the Company or any of its Subsidiaries to (A) issue, transfer or sell any shares of capital stock or other equity interests of the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (C) redeem or otherwise acquire any such shares of capital stock or other equity interests (including securities or obligations convertible into or exchangeable or exercisable for any shares of capital stock) or (D) provide a material amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary.

(c)       Neither the Company nor any of its Subsidiaries has outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders of the Company on any matter.

(d)       Except as set forth on Section 4.2(d) of the Company Disclosure Schedule, there are no shareholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or of which the Company is otherwise aware with respect to the voting of the capital stock or other equity interest of the Company or any of its Subsidiaries.

(e)       There are no outstanding phantom stock awards or similar rights of the Company or any of its Subsidiaries.

(f)        No holder of securities in the Company or any of its Subsidiaries has any right to have such securities registered by the Company or any of its Subsidiaries, as the case may be.

Section 4.3.       Subsidiaries and Joint Ventures. Section 4.3 of the Company Disclosure Schedule lists all Subsidiaries and Joint Ventures of the Company together with the jurisdiction of organization of each such Subsidiary and Joint Venture. All the outstanding shares of capital stock of, or other equity interests in, each Subsidiary of the Company have been duly authorized and validly issued and are fully paid and nonassessable and are owned directly or indirectly by the Company free and clear of all Liens. All of the outstanding shares of capital stock of, or other equity interests in, each Joint Venture of the Company owned directly or indirectly by the Company have been duly authorized and, if applicable, are validly issued, fully paid and nonassessable. Other than the Subsidiaries and the Joint Ventures, the Company does not own, directly or indirectly, any capital stock, voting securities or equity interests in any Person.

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Section 4.4.       Authority Relative to This Agreement; No Violation.

(a)       The Company has the requisite limited liability power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board and, except for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and adoption of this Agreement by the Members, no other corporate proceedings on the part of the Company are necessary to authorize the consummation of the transactions contemplated hereby. The Board has resolved to recommend that the Members approve this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting or relating to the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at law or in equity, and any implied covenant of good faith and fair dealing (the “Bankruptcy and Equity Exception”).

(b)       Other than in connection with or in compliance with (i) the Act, and (ii) applicable state and local statutes and regulations as listed in Section 4.4(b) of the Company Disclosure Schedule (collectively, the “Company Approvals”), no material authorization, consent or approval of, or filing with, any Governmental Entity is necessary, under applicable Law, for the consummation by the Company of the transactions contemplated by this Agreement. In the case of the Company Approvals referred to in clause (ii) above, no approvals shall not be considered Company Approvals, if the failure to obtain any authorization, consent or approval of, or to make any filing with, any Governmental Entity that is necessary, under applicable Law, for the consummation by the Company of the transactions contemplated by this Agreement would not reasonably be expected to have a Material Adverse Effect on the Company or its Subsidiaries or result in a criminal penalty imposed by any Governmental Entity.

(c)       Except as set forth on Section 4.4(c) of the Company Disclosure Schedule, the execution and delivery by the Company of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof by the Company will not, (i) result in any material violation of, or material default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation or acceleration of any material obligation, payment for any material consent or similar fee, or to the loss of any material benefit under any material loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon the Company or any of its Subsidiaries or result in the creation of any material Lien upon any of the properties or assets of the Company or any of its Subsidiaries, (ii) conflict with or result in any violation of any provision of the Governing Documents of the Company or any of its Subsidiaries or (iii) assuming that the consents and approvals referred to in Section 4.4(b) are duly obtained, conflict with or violate in any material respect any applicable Laws.

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Section 4.5.       Reports and Financial Statements.

(a)       The Company has provided the Parent unaudited financial statements and financial information as of and for the three months ended March 31, 2019 (the “Company Financial Statements”). As of their respective dates, the Company Financial Statements did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b)       As of their respective dates, the financial statements (including all related notes and schedules) of the Company and its Subsidiaries included in or incorporated by reference into the Company Financial Statements fairly presented, in all material respects, the consolidated financial position of the Company and its Subsidiaries, as of the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows and changes in shareholders’ equity for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including the notes thereto).

Section 4.6.       Internal Controls and Procedures.

(a)       The Company has established and maintains disclosure controls and procedures and internal control over financial reporting.

(b)       Since January 1, 2018, to the Knowledge of the Company, neither the Company nor any of its Subsidiaries nor any director or officer of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries in the Company’s internal controls over financial reporting.

Section 4.7.      No Undisclosed Liabilities. Except (i) as disclosed on Section 4.7 of the Company Disclosure Schedule, (ii) as reflected or reserved against in the Company’s consolidated balance sheets (or the notes thereto) included in the Company Financial Statements, (iii) for liabilities and obligations arising under this Agreement or the performance by the Company of its obligations in accordance with the terms of this Agreement, (iv) for liabilities and obligations incurred in the ordinary course of business consistent with past practice since March 31, 2019, (v) for liabilities or obligations under Company Material Contracts (as defined in Section 4.21(a)), other than in the case of breaches or defaults by the Company that could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Company or its Subsidiaries, and (vi) for liabilities or obligations which have been discharged or paid in full in the ordinary course of business, neither the Company nor any Subsidiary of the Company has any material liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, whether known or unknown and whether due or to become due.

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Section 4.8.      Compliance with Laws; Permits.

(a)       Except as set forth on Section 4.8 of the Company Disclosure Schedule, the Company and each of its Subsidiaries (i) are, and since the later of January 1, 2017 and their respective dates of formation or organization have been, in compliance in all material respects with and are not in material default under or in material violation of any applicable Law, and (ii) since January 1, 2017 have not received written notice of any material violation of Law from any Governmental Entity.

(b)       Neither the Company, nor any of its Subsidiaries, nor any of their directors or officers or any other Persons acting on behalf of the Company or any of its Subsidiaries has, in connection with the operation of their respective businesses, (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of any applicable foreign, federal or state Law, or (ii) paid, accepted or received any unlawful contributions, payments, expenditures or gifts.

(c)       Company has no licenses, permits and certificates from federal, state, local and foreign authorities (including, without limitation, federal and state agencies regulating occupational health and safety), and none are necessary to its operations and business, other than as set forth on Section 4.8 of the Company Disclosure Schedules.

(d)       (i) The Company and its Subsidiaries are in possession of all material franchises, tariffs, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity necessary for the Company and its Subsidiaries to own, lease and operate their properties and assets or to carry on their material lines of business in all material respects as they are now being conducted (the “Permits”) except where the failure to have such Permits in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company or its Subsidiaries; (ii) to the Knowledge of the Company, all Permits are in full force and effect; (iii) to the Knowledge of the Company, no suspension or cancellation of any of the Permits is pending or threatened; (iv) the Company and its Subsidiaries are not, and since January 1, 2017 have not been, in material violation or breach of, or material default under, any Company Permit; and (v) no event or condition has occurred or exists which would reasonably be expected to result in a material violation of, material breach of or loss of a material benefit under, any Company Permit (in each case, with or without notice or lapse of time or both).

(e)       The representations and warranties set forth in this Section 4.8 shall not apply to Environmental Law (which is the subject of Section 4.9) or Laws relating to Taxes (which are the subject of Section 4.14).

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Section 4.9.        Environmental Laws and Regulations. Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company or its Subsidiaries and to the Company’s Knowledge, (i) the Company and each of its Subsidiaries have conducted their respective businesses and are in compliance with all applicable Environmental Laws and, while owned by the Company, each former Subsidiary, if any, conducted their respective businesses in compliance with all applicable Environmental Laws and (ii) there has been no release of any Hazardous Substance by the Company or by any of its Subsidiaries, or by former Subsidiaries, if any, while owned by the Company, or from any properties while owned by the Company or any of its Subsidiaries or former Subsidiaries while owned by the Company, or as a result of any operations or activities of the Company or any of its Subsidiaries or former Subsidiaries while owned by the Company, in any manner or for which the Company or any of its Subsidiaries would be responsible that could reasonably be expected to give rise to any remedial obligation, corrective action requirement or other liability of any kind under applicable Environmental Laws. Neither the Company nor any of its Subsidiaries has received any written notices, demand letters or written requests for information from any federal, state, local or foreign or provincial Governmental Entity asserting that the Company or any of its Subsidiaries may be in violation of, or liable under, any Environmental Law, and neither the Company, its Subsidiaries nor any of their respective properties are, or, to the Knowledge of the Company, are threatened to become, subject to any liabilities relating to any suit, settlement, court order, administrative order, regulatory requirement, judgment or written claim asserted or arising under any Environmental Law. To the knowledge of the Company, there is no material environmental liability of any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by the Company or any of its Subsidiaries.

Section 4.10.      Employee Benefit Plans.  There are no benefit plans sponsored or participated in by the Company or its Subsidiaries or any of their Affiliates in effect as of the date hereof which are employee pension benefit plans, as defined in Section 3(2) of ERISA, medical and life insurance plans and employee welfare benefit plans as defined in Section 3(1) of ERISA and, in each case, in which any employees participate (collectively, the “Benefit Plans”), except as set forth on Section 4.10 of the Company Disclosure Schedule. Neither the Company or its Subsidiaries nor their Affiliates have incurred any liability under Title IV of ERISA. There have been no prohibited transactions, breaches of fiduciary duty or other breaches or violations of any law applicable to the Benefit Plans and related funding arrangements that could subject the Surviving Company to any liability. There are no pending claims, lawsuits or actions relating to any Benefit Plan (other than ordinary course claims for benefits) and, to the Knowledge of the Company, none are threatened. The consummation of the transactions contemplated by this Agreement will not accelerate the time of vesting or payment, or increase the amount, of compensation to any employee, or former employee of the Company or its Subsidiaries. No Benefit Plans or other contracts or arrangements provide for payments that would be triggered by the consummation of the transactions contemplated by this Agreement that would subject any current or former employee of the Company or its Subsidiaries to excise Tax under Section 4999 of the Code. No Benefit Plans provide for, and no written or oral agreements have been entered into promising or guaranteeing the continuation of medical, dental, vision, life or disability insurance coverage for any current or former employee of the Company or its Subsidiaries or their beneficiaries for any period of time beyond the earlier of (i) termination of employment or (ii) the end of the current plan year (except to the extent of coverage required under COBRA). All contributions to the Benefit Plans, including salary deferrals, which have been required to be made in accordance with the terms of the Benefit Plans and applicable law have been duly and timely made. Further, as of the Closing Date, the Company will have paid in full all liabilities or accrued on their books the appropriate outstanding liability with respect to each employee or former employee of the Company and its Subsidiaries in each Benefit Plan in accordance with GAAP. Company and its ERISA Affiliates have complied in all respects with the continuation coverage provisions of COBRA with respect to all current employees and former employees. The Company has made available to the Parent a list of all current and former employees of the Company and its Subsidiaries who are eligible for and/or have elected continuation coverage under COBRA. To the Company’s Knowledge, no lien, security interests or other encumbrances exist with respect to any of the assets of the Company or its Subsidiaries, which were imposed pursuant to the terms of the Code or ERISA.

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Section 4.11.     Interested Party Transactions. Section 4.11 of the Company Disclosure Schedule sets forth a correct and complete list of the material contracts and agreements that are in existence as of the date of this Agreement or transactions under which the Company or any of its Subsidiaries has any existing or future material liabilities, between the Company or any of its Subsidiaries, on the one hand, and, on the other hand, any (A) present named executive officer or director of the Company or any person that has served as such a named executive officer or director within the past two years or any of such named executive officer’s or director’s immediate family members, (B) record or beneficial owner of more than 5% of the Shares as of the date hereof, or (C) to the Knowledge of the Company, any Affiliate of any such named executive officer, director or owner (other than the Company or any of its Subsidiaries).

Section 4.12.      Absence of Certain Changes or Events. Since January 1, 2019, except as otherwise required or expressly contemplated by this Agreement, (a) the businesses of the Company and its Subsidiaries have been conducted, in all material respects, in the ordinary course of business, (b) there have not been any facts, circumstances, events, changes, effects or occurrences that have had or could reasonably be expected to have, individually or in the aggregate a Material Adverse Effect on the Company or its Subsidiaries, and (c) prior to the date hereof, neither the Company nor any of its Subsidiaries has implemented or adopted any material change in their respective Tax or financial accounting policies, principles, practices or methods.

Section 4.13.      Investigations; Litigation. Except as have not and that could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Company or its Subsidiaries, as of the date of this Agreement, there are no (i) investigations or proceedings pending (or, to the Knowledge of the Company, threatened in writing) by any Governmental Entity with respect to the Company or any of its Subsidiaries, or (ii) except as those (x) involving less than $50,000 in total potential damages, actions, suits or proceedings pending (or, to the Knowledge of the Company, threatened in writing) against the Company or any of its Subsidiaries, or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, or before, any Governmental Entity against the Company or any of its Subsidiaries.

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Section 4.14.     Tax Matters. (i) The Company and each of its Subsidiaries has prepared and timely filed (taking into account any valid extension of time within which to file) all Tax Returns required to be filed by any of them and all such Tax Returns are complete and accurate in all material respects, (ii) the Company and each of its Subsidiaries have timely paid all material Taxes that are required to be paid by any of them (whether or not shown on any Tax Return), except with respect to matters contested in good faith and for which adequate reserves have been established on the financial statements of the Company and its Subsidiaries in accordance with GAAP, (iii) Section 4.14(iii) of the Company Disclosure Schedule sets forth (A) all Tax Returns filed by the Company for any taxable period beginning after December 31, 2016 that have been audited or examined, (B) the taxable periods for which such Tax Returns have been audited or examined, and (C) the taxing authority that conducted such audit or examination, (iv) all assessments for Taxes due with respect to completed and settled examinations or any concluded litigation have been fully paid, (v) there are no audits, examinations, investigations or other proceedings pending or threatened in writing in respect of Taxes or Tax matters of the Company or any of its Subsidiaries, (vi) there are no Liens for Taxes on any of the assets of the Company or any of its Subsidiaries other than statutory Liens for Taxes not yet due and payable, (vii) the Company and each of its Subsidiaries has timely withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor, shareholder or other third party and is in material compliance with all applicable rules and regulations regarding the solicitation, collection, filing and maintenance of any forms, certifications and other information required in connection therewith, (viii) none of the Company or any of its Subsidiaries has been a party to any “reportable transaction” within the meaning of Treasury Regulation 1.6011-4(b)(1), (ix) neither the Company nor any of its Subsidiaries is a party to any agreement or arrangement relating to the apportionment, sharing, assignment or allocation of any Tax or Tax asset (other than an agreement or arrangement solely among members of a group the common parent of which is the Company or any commercial agreement the primary purpose of which does not relate to Taxes) nor does the Company have any liability for Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any predecessor or successor thereof or any analogous or similar provision of Law), by contract, agreement or otherwise (other than any commercial agreement the primary purpose of which does not relate to Taxes), (x) no waivers or extensions of any statute of limitations have been granted or requested with respect to any Taxes of the Company or any of its Subsidiaries, (xi) no issue has been raised in writing by a taxing authority in any prior examination of the Company or any of its Subsidiaries which, by application of the same or similar principles, could reasonably be expected to result in a material Tax deficiency for any subsequent taxable period, (xii) no claim has been made in writing by a taxing authority in a jurisdiction where either the Company or any of its Subsidiaries does not file Tax Returns such that it is or may be subject to taxation by that jurisdiction, and (xiii) neither the Company nor any of its Subsidiaries (A) is subject to any private letter ruling of the IRS or comparable rulings of any taxing authority with respect to income Taxes or (B) has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision of Law, in each case, within the preceding three taxable years or that may otherwise be in effect at any time after the Effective Time of the Merger with respect to income Taxes.

Section 4.15.     Labor Matters.

(a)       Except as set forth on Section 4.15 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has received written notice during the past two years or such shorter period since the formation of the Company of the intent of any Governmental Entity responsible for the enforcement of labor, employment, occupational health and safety or workplace safety and insurance/workers compensation laws (collectively, “Employment Laws”) to conduct an investigation of the Company or any of its Subsidiaries and, to the Knowledge of the Company, no such investigation is in progress. To the Knowledge of the Company, the Company and its Subsidiaries are in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours and unfair labor practices. To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has any liabilities under any state or local Employment Law as a result of any action taken by, or any action not taken by, the Company.

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(b)       All individuals that have been or that are classified by the Company as independent contractors have been and are correctly so classified, and none of such individuals could reasonably be classified as an employee of the Company, except for any failure to be so correctly classified as could not reasonably be expected to result, individually or in the aggregate, in a material liability to the Company or any of its material Subsidiaries.

(c)       To the Knowledge of the Company, there does not currently exist, and is not currently threatened, any grievance, arbitration proceeding, charge or complaint filed by or on behalf of any employee in their capacity as an employee, past or present, or any labor organization, before the National Labor Relations Board, the Equal Employment Opportunity Commission, any state or local civil rights agencies, any federal or state departments of labor or occupational health and safety agencies, against the Company or any of its Subsidiaries, arising out of the activities or conduct of the Company or any of its Subsidiaries, except for such grievances, arbitration proceedings, charges and complaints as could not reasonably be expected to result, individually or in the aggregate, in a material liability to the Company or any of its material Subsidiaries.

(d)       To the Knowledge of the Company, (i) neither the Company nor any of its Subsidiaries has entered into any collective bargaining agreement or other contract, contingent or otherwise, with a labor union, and (ii) no employee of the Company or any of its Subsidiaries are covered by a collective bargaining agreement or other contract with a union, or otherwise represented by any union. There is no collective bargaining agreement binding on the Company or any of its Subsidiaries that restricts it from relocating or closing any or all of its business or operations. To the Knowledge of the Company, there are no organizational efforts currently being made or threatened by or on behalf of any labor union with respect to any employees of the Company or any of its Subsidiaries. There is not currently pending any strike, lockout, picketing, slow-downs or work stoppages with respect to the Company or any of its Subsidiaries, and to the Knowledge of the Company, no such strikes, picketing, lockouts, slow-downs or work stoppages have been threatened in writing. To the Knowledge of the Company, there is not currently pending any campaign to solicit cards or authorization from employees of the Company or any of its Subsidiaries to be represented by any labor organization, and, to the Knowledge of the Company, no such campaign has been threatened in writing.

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Section 4.16.     Intellectual Property; Data Collection and Privacy Policies.

(a)       Either the Company or a Subsidiary of the Company owns, or is licensed or otherwise possesses adequate rights to use, all material trademarks, trade names, service marks, service names, mark registrations, logos, assumed names, registered and unregistered copyrights, patents or applications and registrations, domain names, Internet addresses and other computer identifiers, web sites and web pages, computer software programs and related documentation, trade secrets, know-how, customer information, confidential business information and technical information for or material to their respective businesses as currently conducted (collectively, the “Intellectual Property”). There are no pending or, to the Knowledge of the Company, threatened claims by any person alleging infringement in any material respect by the Company or any of its Subsidiaries or with regard to the ownership, validity or use of any Intellectual Property. To the Knowledge of the Company, the conduct of the business of the Company and its Subsidiaries does not infringe any material intellectual property rights of any person in any material respect. Neither the Company nor any of its Subsidiaries has made any claim of a violation or infringement in any material respect by others of its rights to or in connection with the Intellectual Property. To the Knowledge of the Company, no person is infringing in any material respect any of the material Intellectual Property. To the Knowledge of the Company, upon the consummation of the transactions contemplated herein, the Surviving Company shall own or have the right to use all material Intellectual Property on the same terms and conditions as the Company and its Subsidiaries enjoyed prior to such transactions.

(b)       The Company has used commercially reasonable efforts to ensure that the collection, use, storage, transfer and disclosure of any personally identifiable information (“Information Practices”) by the Company and its Subsidiaries, and use by third parties having authorized access to the websites or other records of the Company and its Subsidiaries, conforms in all material respects, and at all times has conformed in all material respects, to all Laws and all contractual commitments governing information practices of the Company and each of its Subsidiaries to its customers, the viewers of the Company’s websites (and the websites of any Subsidiary), and third parties relating to such practices. The Information Practices of the Company and its Subsidiaries have been materially consistent with all statements or representations (as they may have been amended or supplemented) made to customers, potential customers and third parties regarding such practices. Since January 1, 2017, the Company and its Subsidiaries (i) have not received any written notification alleging that the Company and/or the Subsidiaries have violated any regulation relating to the collection, storage and onward transfer of personally identifiable information collected by the Company or any of its Subsidiaries or by third parties having authorized access to databases or other records of the Company and its Subsidiaries, and (ii) have no Knowledge of any material violations of any regulation relating to the collection, storage and onward transfer of personally identifiable information collected by the Company or any of its Subsidiaries or by third parties having authorized access to the databases or other records of the Company and its Subsidiaries.

Section 4.17.     Information Technology.

(a)       The Company has taken all commercially reasonable precautions to preserve and document the Company’s and its Subsidiaries’ material proprietary products, technology and trade secrets and to protect the secrecy, confidentiality and value of its material proprietary products, technology and trade secrets.

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(b)       To the Knowledge of the Company, on the date hereof, the Company and its Subsidiaries either own or hold valid leases and/or licenses to the Company Systems which are used by or necessary for the Company and/or its Subsidiaries to conduct their respective businesses as currently conducted. To the Knowledge of the Company, upon the consummation of the transactions contemplated hereunder, the Company and its Subsidiaries shall have the right to use and access the Company Systems as required to carry on their respective businesses as currently conducted.

(c)       In the 12 months preceding the date hereof, none of the Company, any of its Subsidiaries nor, to the Knowledge of the Company, any IT Contract Supplier has been in material default of any IT Contract with respect to the provision of information and communications technology services to the Company or any of its Subsidiaries.

(d)       Other than as could not reasonably be expected to result in a material adverse effect on the operations of the Company and any of its material Subsidiaries, the Company maintains and each IT Contract Supplier who manages the Company Systems maintains, appropriate disaster recovery plans and security procedures with respect to the services being provided by any such IT Contract Supplier to the Company and its Subsidiaries.

(e)       Since January 1, 2018, there have been no material interruptions, data losses or similar incidents attributable to the Company Systems owned or used by the Company or its Subsidiaries. To the Knowledge of the Company, the Company Systems owned or used by the Company and its Subsidiaries have the capacity and performance necessary to meet in all material respects the requirements of their respective businesses as currently conducted, with respect to their usage of the Company Systems.

(f)        As used herein, “Company Systems” means the material computer and data processing systems, material maintenance service agreements, and material information and material communications technologies used in the businesses of the Company and its Subsidiaries.

(g)       As used herein, “IT Contract” means any material contract for the provision of information and communications technology (including hardware, software, databases) services and maintenance services to the Company or any of its Subsidiaries. “IT Contract Supplier” means any material third party supplier that is contractually obliged to provide information and communications technology services (including services with respect to hardware, software and databases) and maintenance services to the Company or any of its Subsidiaries under any IT Contract.

Section 4.18.     Property. Except as could not have, individually or in the aggregate, a Material Adverse Effect on the Company or its Subsidiaries, the Company or a Subsidiary of the Company owns and has good and indefeasible title to all of its owned real property and good title to all its personal property and has valid leasehold interests in all of its leased properties free and clear of all Liens, other than for (i) Liens reserved against or identified in the financial statements contained in the Company Financial Statements, to the extent so reserved or reflected or described in the notes thereto (if any), (ii) Liens for Taxes not yet due and payable, (iii) Liens existing pursuant to, or that constitute “Permitted Liens” (or other similar term) under, credit or loan facilities of the Company and its Subsidiaries, and in each case in effect as of the date of this Agreement, and (iv) those Liens that, individually or in the aggregate with all other Liens described in clauses (i), (ii) and (iii) of this sentence, do not, and are not reasonably likely to, materially interfere with the use or value of the properties or assets of the Company and its Subsidiaries. Except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company or its Subsidiaries, (a) all leases under which the Company or any of its Subsidiaries lease any real or personal property are valid and effective against the Company or the applicable Subsidiaries and, to the Company’s Knowledge, the counterparties thereto, in accordance with their respective terms, and (b) there is not, under any of such leases, (i) any existing default by the Company or any of its Subsidiaries or, to the Company’s Knowledge, the counterparties thereto, or (ii) any event which, with notice or lapse of time or both, would become a default by the Company or any of its Subsidiaries or, to the Company’s Knowledge, the counterparties thereto. The representations and warranties set forth in this Section 4.18 shall not apply to Intellectual Property, which is the subject of Section 4.16.

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Section 4.19.    Insurance. Except as could not have, individually or in the aggregate, a Material Adverse Effect on the Company or its Subsidiaries, the Company and its Subsidiaries maintain, or are entitled to the benefits of, insurance covering their properties, operations, personnel and businesses in the amounts set forth on Section 4.19 of the Company Disclosure Schedule. None of the Company or its Subsidiaries has received written notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force on the date hereof and will be (or substantially equivalent replacement insurance will be) outstanding and duly in force on the Closing Date. Neither the Company nor any of its Subsidiaries is in breach or default under, or has taken any action which could permit termination or material modification of, any material insurance policies, and no notice in writing of cancellation or termination has been received by the Company or any of its Subsidiaries with respect to any material insurance policy and no such policy shall terminate or give rise to a right of cancellation by reason of the execution, delivery and performance of this Agreement.

Section 4.20.    Required Vote of the Company’s Members and Board. The Members and Board have provided their approval and consent of this Agreement, the Merger and the other transactions contemplated hereby and no other vote of holders of securities of the Company are required to approve this Agreement, the Merger and the other transactions contemplated hereby.

Section 4.21.    Material Contracts.

(a)       As of the date of this Agreement, except for this Agreement and as set forth on Section 4.21(a) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to or bound by, as of the date hereof, any Contract (whether written or oral) which is (i) a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), (ii) a loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, contract, lease, license or other binding commitment (other than those between the Company and its Subsidiaries) relating to indebtedness (for the avoidance of doubt, including sale and leaseback transactions) or other binding obligation to make payment with respect to indebtedness in an amount in excess of $100,000 individually, and with respect to binding obligations other than with respect to indebtedness, in an amount in excess of $50,000 individually on an annual basis with a term of greater than five years, (iii) a contract which purports to materially limit the right of the Company or any of its Subsidiaries to engage or compete in any line of business or to compete with any person or operate in any location, (iv) a contract that creates a partnership or Joint Venture or similar arrangement with respect to any significant portion of the business of the Company or its Subsidiaries taken as a whole, or (v) a settlement or similar agreement with any Governmental Entity or order or consent of a Governmental Entity to which the Company or any of its Subsidiaries is subject involving future performance by the Company or any of its Subsidiaries which is material to the Company and any of its Subsidiaries taken as a whole (all contracts of the type described in this Section 4.21(a), being referred to herein as “Company Material Contracts”).

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(b)        Other than as a result of the expiration or termination of any Company Material Contract in accordance with its terms, (i) assuming the validity with respect to and binding effect on the applicable counterparty thereto, each Company Material Contract is valid and binding on the Company and any of its Subsidiaries that is a party thereto, as applicable, and in full force and effect, subject to the Bankruptcy and Equity Exception, (ii) the Company and each of its Subsidiaries has in all material respects performed all material obligations required to be performed by it to date under each Company Material Contract, and (iii) neither the Company nor any of its Subsidiaries has Knowledge of, or has received written notice of, the existence of any event or condition which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of the Company or any of its Subsidiaries or their counterparties under any such Company Material Contract. As of the date of this Agreement, since January 1, 2017, neither the Company nor any of its Subsidiaries has received any written notice that any counterparty to a Company Material Contract has sought to terminate or amend the terms of a Company Material Contract.

Section 4.22.      Finders or Brokers; Transaction Fees. Except as disclosed on Section 4.22 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Merger or the other transactions contemplated herein (“Company Broker Fees”). The Company will be responsible for paying any such fee and will indemnify and hold the Parent harmless against from any Company Broker Fees.

Section 4.23.       Reserved.

Section 4.24.      Foreign Corrupt Practices Act. Neither the Company nor its Subsidiaries, nor to the Company’s knowledge, any agent or other person acting on behalf of the Company or its Subsidiaries, has: (a) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (c) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (d) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

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Section 4.25.      No Violation of Laws. Neither the Company nor its Subsidiaries, nor to the Company’s knowledge, any agent or other person acting on behalf of the Company or its Subsidiaries, has directly or indirectly, violated any laws or regulations pertaining to the import and/or export of technical data, data privacy, employment, immigration, human slavery, labor and equal opportunity, other Tax, customs, export control, other environmental, health and safety and has complied with all licensing, permitting and certification requirements; except as would not reasonably be expected to have a Material Adverse Effect on the Company or its Subsidiaries.

Section 4.26.      Data Room; Information Supplied. To Company’s Knowledge, all copies of and originals of all information, documents, financial statements, agreements and materials provided by Company (including its representatives, legal counsel and accountants) to the Parent, its Affiliates or representatives (the “Company Provided Materials”), as part of the due diligence process leading up to the Parties’ entry into this Agreement were (a) accurate when provided and as of the date of this Agreement; and (b) did not contain any untrue statement of a material fact, or omit to include any material fact necessary to make the materials provided not misleading. The Company acknowledges that the Parent (and its Affiliates) are relying on the accuracy of such Company Provided Materials in connection with its decision to enter into this Agreement and to consummate the transactions contemplated herein.

Section 4.27.      Disclaimer. Except for the representations and warranties contained in this ARTICLE IV, the Company acknowledges that neither the Parent, Merger Sub nor any other Person on behalf of the Parent makes any other express or implied representations or warranties with respect to the Parent or any of its Subsidiaries or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and the Parent hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, the Company acknowledges that neither the Parent nor any other Person makes or has made on behalf of the Parent any representation or warranty to the Company or any of its Affiliates except with respect to (a) any financial projection, forecast, estimate, budget or prospect information relating to the Parent and any of its Subsidiaries or their respective businesses or (b) except for the representations and warranties made by the Parent and Merger Sub in ARTICLE V, and any oral or written information presented to the Company or its Affiliates in the course of their due diligence investigation of the Parent and its Subsidiaries, the negotiation of this Agreement or in the course of the transactions contemplated hereby.

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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Except (i) as disclosed in the disclosure schedule delivered by Parent to the Company immediately prior to the execution of this Agreement (the “Parent Disclosure Schedule”, it being understood and agreed that the lack of any specific reference to a Parent Disclosure Schedule in this Agreement shall not limit the Parent’s right to qualify any representation or warranty in the Parent Disclosure Schedule, and the Parent Disclosure Schedule, together with the Company Disclosure Schedule, the “Disclosure Schedules”), or (ii) as disclosed in the Parent’s Annual Report on Form 10-K for the year ended March 31, 2018 (the “Parent Annual Report”) and any Parent SEC Reports (as defined below) filed with or furnished to the SEC by the Parent after the filing of the Parent Annual Report with the SEC but prior to the date hereof (other than (x) disclosures under the captions “Risk Factors,” “Forward-Looking Statements,” or similar precautionary sections and (y) any other disclosures that are predictive, cautionary, forward-looking or non-specific in nature, and in any case only to the extent that it is reasonably apparent from such disclosure that such disclosure is applicable to any section or subsection of this ARTICLE V), Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

Section 5.1.       Qualification, Organization, Subsidiaries, etc.

(a)       Each of Parent and Merger Sub is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of the Parent and Merger Sub has all requisite corporate, partnership, limited liability company, trust or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted, except where the failure to have such power or authority would not have, individually or in the aggregate, a Material Adverse Effect on the Parent or its Subsidiaries.

(b)       Each of Parent and Merger Sub is qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect on the Parent or its Subsidiaries. The organizational or governing documents of the Parent and each of its Subsidiaries are in full force and effect. Neither the Parent nor any Subsidiary is in violation of its organizational or governing documents.

Section 5.2.       Parent Capitalization.

(a)       As of immediately prior to the Effective Time, but prior to giving effect to the issuance of the Merger Consideration, the authorized capital stock of the Parent consists of 250,000,000 shares of common stock, $0.001 par value per share, of which 2,155,798 shares are issued and outstanding (such shares, collectively, “Parent Common Stock”), and 10,000,000 shares of preferred stock, $0.001 par value per share (such shares, collectively, “Parent Preferred Stock”), of which (i) 2,000 shares are designated as Series A Convertible Preferred Stock, of which no shares are issued and outstanding; (ii) 600,000 shares are designated as Series B Redeemable Convertible Preferred Stock, of which no shares are issued and outstanding; (iii) 5,000 shares are designated as Series C Redeemable Convertible Preferred Stock of which 2,305 are issued and outstanding; (iv) 50,000 are designated as Series D Preferred Stock, of which no shares are issued and outstanding; (v) 1,000,000 are designated as Series E Preferred Stock, of which no shares are issued and outstanding; and (vi) 16,750 are designated as Series F Preferred Stock, of which no shares are issued and outstanding. As was ratified by the Board of Directors of Parent on July 2, 2019, all of the shares of Parent Common Stock and Parent Preferred Stock which have been issued, have been duly authorized, validly issued, fully paid, nonassessable and free of all preemptive, anti-dilution and similar rights and have been issued in accordance with applicable laws, including, but not limited to, the Securities Act.

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(b)       Except as set forth in the Parent SEC Reports, there are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of capital stock or other equity interests to which the Company or any of its Subsidiaries is a party obligating the Parent or any of its Subsidiaries to (A) issue, transfer or sell any shares of capital stock or other equity interests of the Parent or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (C) redeem or otherwise acquire any such shares of capital stock or other equity interests (including securities or obligations convertible into or exchangeable or exercisable for any shares of capital stock) or (D) provide a material amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary. There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Parent. Neither the Parent nor any of its Subsidiaries has outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders of the Parent on any matter. Except as contemplated by the Transaction Documents, there are no shareholder agreements, voting trusts or other agreements or understandings to which the Parent or any of its Subsidiaries is a party or of which the Parent is otherwise aware with respect to the voting of the capital stock or other equity interest of the Parent or any of its Subsidiaries. No holder of securities in the Parent or any of its Subsidiaries has any right to have such securities registered under the Securities Act, or sold or transferred (including, without limitation, pre-emptive rights, rights of first refusal, co-sale rights or “drag-along” rights) of any securities of the Parent, except as set forth on Section 5.2 of the Parent Disclosure Schedule.

Section 5.3.       Ownership and Operations of Merger Sub. As of the date of this Agreement, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.001 per share, all of which are validly issued and outstanding. All of the issued and outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned directly by Parent. Merger Sub has not conducted any business other than incident to its formation and pursuant to this Agreement, the Merger and the other transactions contemplated hereby. Section 5.3 of the Parent Disclosure Schedule lists all Subsidiaries and Joint Ventures of the Parent together with the jurisdiction of organization of each such Subsidiary and Joint Venture. All the outstanding shares of capital stock of, or other equity interests in, each Subsidiary of the Parent have been duly authorized and validly issued and are fully paid and nonassessable and are owned directly or indirectly by the Parent free and clear of all Liens. All of the outstanding shares of capital stock of, or other equity interests in, each Joint Venture of the Parent owned directly or indirectly by the Parent have been duly authorized and, if applicable, are validly issued, fully paid and nonassessable. Other than the Subsidiaries and the Joint Ventures, the Parent does not own, directly or indirectly, any capital stock, voting securities or equity interests in any Person.

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Section 5.4.       Corporate Authority Relative to This Agreement.

(a)       Each of Parent and Merger Sub has all corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Parent and Merger Sub and the sole shareholder of Merger Sub, and no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming this Agreement constitutes the valid and binding agreement of the Company, this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to the Bankruptcy and Equity Exception.

(b)       Other than in connection with or in compliance with the provisions of the DGCL, no authorization, consent or approval of, or filing with, any Governmental Entity is necessary, under applicable Law, for the consummation by Parent or Merger Sub of the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, Parent and Merger Sub have received all necessary authorizations, consents and approvals necessary for the consummation by Parent or Merger Sub of the transactions contemplated by this Agreement. No vote of holders of capital stock of Parent is necessary to approve this Agreement and the Merger.

(c)       The execution and delivery by Parent and Merger Sub of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof by Parent and Merger Sub will not, (i) result in any material violation of, or material default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation or acceleration of any material obligation, payment for any material consent or similar fee, or to the loss of any material benefit under any material loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon Parent or Merger Sub or result in the creation of any material Lien upon any of the properties or assets of Parent or Merger Sub, (ii) conflict with or result in any violation of any provision of the Governing Documents of Parent or Merger Sub or (iii) assuming that the consents and approvals referred to in Section 5.4(b) are duly obtained, conflict with or violate in any material respect any applicable Laws.

Section 5.5.       Parent SEC Reports; Financial Statements.

(a)       The Parent has filed or furnished, as applicable, all forms, statements, certifications, reports, schedules, proxies, registrations and other documents required to be filed or furnished by it with the SEC pursuant to the SEC Guidance since January 1, 2017 (the “Applicable Date”) (the forms, statements, certifications, reports, schedules, proxies, registrations and other documents filed or furnished to the SEC from the Applicable Date to the date of this Agreement (whether required or filed or furnished on a voluntary basis), in each case, including any amendments thereto, and all exhibits thereto and documents incorporated therein by reference, the “Parent SEC Reports”). Since the Applicable Date, each of the Parent SEC Reports, at the time of its filing or being furnished complied (or, if amended prior to the date of this Agreement, as of the date of such amendment) in all material respects, with the applicable requirements of SEC Guidance and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and any rules and regulations promulgated thereunder applicable to the Parent SEC Reports. As of their respective dates (or, if amended prior to the date of this Agreement, as of the date of such amendment), the Parent SEC Reports filed or furnished to the SEC since the Applicable Date did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading.

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(b)       The Parent Common Stock constitutes the only outstanding class of securities of the Parent registered under the Exchange Act. Merger Sub is not subject to the periodic reporting requirements of the Exchange Act nor is it otherwise required to file or furnish any form, statement, certification, report, schedule, proxy, registration or other document with, or make any other filing with, or furnish any other material to, the SEC.

(c)       The Parent has made available to the Company all material correspondence between the SEC, on the one hand, and the Parent or any of its Subsidiaries, on the other hand, since the Applicable Date. As of the date hereof, there are no outstanding or unresolved comments from the SEC’s staff with respect to any of the Parent SEC Reports. To the Knowledge of the Parent, as of the date hereof, (i) none of the Parent SEC Reports is the subject of ongoing SEC review or outstanding SEC comment and (ii) neither the SEC nor any other Governmental Entity is conducting any investigation or review of any Parent SEC Report.

(d)       Other than as filed in the SEC reports, since the Applicable Date, the Parent has been in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act. The Parent maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15, as applicable, under the Exchange Act and as necessary to permit preparation of financial statements in accordance with GAAP. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Parent and its Subsidiaries is recorded, processed, summarized and reported within the time periods specified in the SEC Guidance, and that all such information is accumulated and communicated to the individuals responsible for the preparation of the Parent’s filings with the SEC and other public disclosure documents to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. The Parent maintains a system of internal control over financial reporting (as defined in Rule 13a-15 or 15d-15, as applicable, under the Exchange Act) that is sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and SEC Guidance. Since the Applicable Date, other than as set forth in the Parent SEC Reports, neither the Parent (including any employee thereof) nor its independent registered public accounting firm has identified or been made aware of (i) any “significant deficiencies” or “material weaknesses” (as defined by the PCAOB) in the design or operation of internal control over financial reporting of the Parent, (ii) any fraud or allegation of fraud, whether or not material, that involves (or involved) the management of the Parent or other employees who have (or had) a role in the preparation of financial statements or the internal control over financial reporting utilized by the Parent or (iii) any claim or allegation regarding any of the foregoing.

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(e)       Each of the audited financial statements and unaudited interim financial statements included in or incorporated by reference into the Parent SEC Reports (including the related notes and schedules) since the Applicable Date (i) complied, as to form in all material respects with all applicable Law, including SEC Guidance, (ii) has been prepared from, and is in accordance with, the books and records of the Parent and its consolidated Subsidiaries, (iii) were prepared in accordance with GAAP consistently applied during the periods involved, except as may be noted therein, and (iv) fairly presents (x) the consolidated financial condition of the Parent and its consolidated Subsidiaries as of its date and (y) the results of operations, earnings and changes in financial condition, as the case may be, of the Parent and its consolidated Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments, none of which are material, individually or in the aggregate).

(f)        There are no outstanding loans or other extensions of credit made by the Parent to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Parent. The Parent has not taken any action prohibited by Section 13(k) of the Exchange Act.

Section 5.6.        NYSE American Stock Market Quotation. The issued and outstanding Parent Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed for trading on the NYSE American under the symbol “CEI”. As of the date of this Agreement, the Parent is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the NYSE American, including the requirements for continued listing of the Parent Common Stock on the NYSE American (provided that the Parent is still required to maintain a Parent Common Stock trading price above $0.20 per share through and on January 2, 2020, pursuant to the requirements of the NYSE American, and, there are no Actions pending or, to the Knowledge of the Parent, threatened in writing against the Parent, and, as of the date of this Agreement, the Parent has not received any notice from the NYSE American or the SEC, in each case regarding the deregistration of the Parent Common Stock or the delisting of the Parent Common Stock, except as previously disclosed in the Parent SEC Reports. None of the Parent, Merger Sub or any of their respective Affiliates has taken any action in an attempt to deregister the Parent Common Stock under the Exchange Act.

Section 5.7.       Investment Company Act; JOBS Act. The Parent is not, and following the Closing will continue not to be, an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, in each case within the meaning of the Investment Company Act of 1940. The Parent is not an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act of 2012.

Section 5.8.       Opinions of Financial Advisors. The Company has delivered to Parent the opinion of Lehrer Financial Economic Advisory Services as to the value of the Company. Parent shall obtain a fairness opinion as to the fairness of the transaction prepared by Mercer Capital.

Section 5.9.       No Undisclosed Liabilities.  Except for liabilities and obligations (i) reflected or reserved for on the Parent’s consolidated balance sheet for the quarter ended December 31, 2018 as reported on the Quarterly Report on Form 10-Q filed by the Parent with the SEC for the quarter ended December 31, 2018 (the “Form 10-Q”), or disclosed in the notes thereto, (ii) disclosed in the Parent Disclosure Schedule, (iii) incurred in the ordinary course of business, consistent with past practice, since the date of the Parent’s consolidated balance sheet for the quarter ended December 31, 2018 as reported on the Form 10-Q, (iv) disclosed in Parent SEC Reports filed after the date of the Form 10-Q, but prior to the date of this Agreement; or (v) incurred in connection with or contemplated by this Agreement and/or the transactions contemplated hereby, the Parent does not have any liabilities of a type that are required by GAAP to be reflected or reserved against in a balance sheet of the Parent.

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Section 5.10.     Compliance with Laws; Permits.

(a)       The Parent and each of its Subsidiaries (i) are, and since the later of January 1, 2017 and their respective dates of formation or organization have been, in compliance in all material respects with and are not in material default under or in material violation of any applicable Law, and (ii) since January 1, 2017 have not received written notice of any material violation of Law from any Governmental Entity.

(b)       Neither the Parent, nor any of its Subsidiaries, nor any of their directors or officers or any other Persons acting on behalf of the Parent or any of its Subsidiaries has, in connection with the operation of their respective businesses, (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of any applicable foreign, federal or state Law, or (ii) paid, accepted or received any unlawful contributions, payments, expenditures or gifts.

(c)       Parent has no licenses, permits and certificates from federal, state, local and foreign authorities (including, without limitation, federal and state agencies regulating occupational health and safety), and none are necessary to its operations and business, other than as set forth on Section 5.10 of the Parent Disclosure Schedule.

(d)       (i) The Parent and its Subsidiaries are in possession of all material Permits except where the failure to have such Permits in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Parent or its Subsidiaries; (ii) to the Knowledge of the Parent, all Permits of the Parent are in full force and effect; (iii) to the Knowledge of the Parent, no suspension or cancellation of any of the Permits of the Parent is pending or threatened; (iv) the Parent and its Subsidiaries are not, and since January 1, 2017 have not been, in material violation or breach of, or material default under, any Permit; and (v) no event or condition has occurred or exists which would reasonably be expected to result in a material violation of, material breach of or loss of a material benefit under, any Permit (in each case, with or without notice or lapse of time or both).

(e)       The representations and warranties set forth in this Section 5.10 shall not apply to Environmental Law (which is the subject of Section 5.11) or Laws relating to Taxes (which are the subject of Section 5.16).

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Section 5.11.     Environmental Matters.

(a)       Except as disclosed on Section 5.11 of the Parent Disclosure Schedule, to the Knowledge of the Parent, each of the Parent and its Subsidiaries has been and is in compliance with all applicable Environmental Laws relating to or otherwise affecting its business and the ownership or operation of its real property and assets, except for violations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on the Parent or its Subsidiaries, and the real property and assets of Parent and its Subsidiaries are capable of consistent and continuous compliance with any existing Environmental Law and any new Environmental Law that is scheduled to become effective on a date ascertainable at Closing. There is no pending or, to the Knowledge of the Parent, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving the Parent or any of its Subsidiaries, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on the Parent or its Subsidiaries.

(b)       Except as disclosed on Section 5.11 of the Parent Disclosure Schedule, to the Knowledge of the Parent, neither Parent nor any of its Subsidiaries is subject to any liability under Environmental Law, and each of Parent and its Subsidiaries is not reasonably anticipated after Closing to suffer or incur any liability under Environmental Law, based on any facts, circumstances or conditions existing on or prior to Closing. Without limiting the foregoing, to the Knowledge of the Parent, neither Parent nor any of its Subsidiaries is subject to any liability under Environmental Law, and each of Parent and its Subsidiaries is not reasonably anticipated after Closing to suffer or incur any liability under Environmental Law, as a result of the action or inaction of any person, including: (i) the violation or noncompliance with any Environmental Law by Parent or any of its Subsidiaries, any predecessor, or any other person for whose conduct Parent or any of its Subsidiaries is or may be held responsible; (ii) the ownership or operation of, or any condition at, the real property or assets owned or operated by Parent or any of its Subsidiaries, (iii) the release, threatened release or presence of any Hazardous Substance at, on or under any real property owned or operated by Parent or any of its Subsidiaries, (iv) any hazardous or regulated activity conducted by Parent or any of its Subsidiaries, any predecessor or any other person for whose conduct Parent or any of its Subsidiaries is or may be held responsible, (v) any release by Parent or any of its Subsidiaries, any predecessor or any other person acting as agent for or on behalf of Parent or any of its Subsidiaries or any predecessor of a Hazardous Substance on any other property, (vi) any remedial, response or corrective action required to be taken by Parent or any of its Subsidiaries or any predecessor or (vii) the treatment, storage, transportation or disposal of any Hazardous Substance or the arrangement for treatment, storage, transportation or disposal of any Hazardous Substance.

(c)       Except as disclosed on Section 5.11 of the Parent Disclosure Schedule to the Knowledge of the Parent, neither Parent nor any of its Subsidiaries has treated, stored, recycled or disposed of any Hazardous Substance on any real property owned or operated by Parent or any of its Subsidiaries in violation of any Environmental Law or in a manner that could reasonably be expected to result in liability under Environmental Law. To the Knowledge of the Parent, (a) there is and has been no release or threat of release of any Hazardous Substance to the environment, and (b) there is no Hazardous Substance present, at, on or under or related to any real property owned or operated by Parent or any of its Subsidiaries in violation of any Environmental Law or that reasonably could be expected to give rise to liability under Environmental Law.

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(d)       Parent has provided to Company a list of all sites at which Parent or any of its Subsidiaries has arranged for the transportation, recycling, treatment, disposal, or other handling of any Hazardous Substance. Except as disclosed on Section 5.11 of the Parent Disclosure Schedule, neither Parent, any of its Subsidiaries nor any predecessor has arranged for the treatment or disposal, or for the transportation for treatment or disposal, of any Hazardous Substance at any site that is listed as hazardous or requiring corrective or response action under Environmental Law, including CERCLA or any similar state law.

(e)       None of the real property owned or operated by Parent or any of its Subsidiaries is listed, or to the knowledge of Parent proposed for listing on, (i) the National Priorities List under CERCLA, (ii) CERCLIS or (iii) any list established pursuant to Environmental Law of sites potentially requiring corrective or response action.

(f)       Except as disclosed on Section 5.11 of the Parent Disclosure Schedule, neither Parent nor any of its Subsidiaries is not required to place any notice or restriction relating to the presence of any Hazardous Substance at any real property or in any deed to any real property. No liens have arisen under or pursuant to any Environmental Law on any asset owned or operated by Parent or any of its Subsidiaries, and no action has been taken or threatened by any Governmental Entity that could subject any such asset to such lien.

(g)       Except as disclosed on Section 5.11 of the Parent Disclosure Schedule, neither Parent nor any of its Subsidiaries has received any request for information, notice of claim, demand or other notification or communication that Parent or any of its Subsidiaries is or may be potentially responsible with respect to any liability pursuant to Environmental Law or for any threatened or actual release of any Hazardous Substance. To the Knowledge of the Parent, there has been no past, and there is no pending, or to the knowledge of Parent contemplated, claim by or against Parent or any of its Subsidiaries under any Environmental Law. Parent has not entered into any agreement with any person regarding any liability or response or corrective action under Environmental Law or with respect to any threatened or actual release of Hazardous Substances.

(h)       Except as disclosed on Section 5.11 of the Parent Disclosure Schedule, all tanks and associated piping owned or operated by Parent or any of its Subsidiaries have been maintained, inspected and tested in compliance with applicable Environmental Law, are in sound condition and are not leaking and have not leaked. To the Knowledge of the Parent, all storage tanks on real property owned or operated by Parent or any of its Subsidiaries which were previously removed from service were properly closed in compliance with all applicable Environmental Law, and with respect to each such tank, testing and observations confirm either that there were no releases requiring environmental response actions or that any required environmental response actions have been completed.

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(i)         Parent has delivered to Company true and complete copies and results of any assessments, audits, reports, studies, analyses, tests, or monitoring possessed or initiated by Parent or any of its Subsidiaries pertaining to the matters addressed in this Section 5.11. To the knowledge of Parent, no other documents reflecting such assessments, audits, reports, studies, analyses, tests, or monitoring exist.

Section 5.12.      Employee Benefits. There are no benefit plans sponsored or participated in by the Parent or its Subsidiaries or any of their Affiliates in effect as of the date hereof which are Benefit Plans, except as set forth on Section 5.12 of the Parent Disclosure Schedule. Neither the Parent or its Subsidiaries nor their Affiliates have incurred any liability under Title IV of ERISA. There have been no prohibited transactions, breaches of fiduciary duty or other breaches or violations of any law applicable to the Benefit Plans and related funding arrangements that could subject the Surviving Company to any liability. There are no pending claims, lawsuits or actions relating to any Benefit Plan (other than ordinary course claims for benefits) and, to the Knowledge of the Parent, none are threatened. The consummation of the transactions contemplated by this Agreement will not accelerate the time of vesting or payment, or increase the amount, of compensation to any employee, or former employee of the Parent or its Subsidiaries. No Benefit Plans or other contracts or arrangements provide for payments that would be triggered by the consummation of the transactions contemplated by this Agreement that would subject any current or former employee of the Parent or its Subsidiaries to excise Tax under Section 4999 of the Code. No Benefit Plans provide for, and no written or oral agreements have been entered into promising or guaranteeing the continuation of medical, dental, vision, life or disability insurance coverage for any current or former employee of the Parent or its Subsidiaries or their beneficiaries for any period of time beyond the earlier of (i) termination of employment or (ii) the end of the current plan year (except to the extent of coverage required under COBRA). All contributions to the Benefit Plans, including salary deferrals, which have been required to be made in accordance with the terms of the Benefit Plans and applicable law have been duly and timely made. Further, as of the Closing Date, the Parent will have paid in full all liabilities or accrued on their books the appropriate outstanding liability with respect to each employee or former employee of the Parent and its Subsidiaries in each Benefit Plan in accordance with GAAP. Parent and its ERISA Affiliates have complied in all respects with the continuation coverage provisions of COBRA with respect to all current employees and former employees. The Parent has made available to the Company a list of all current and former employees of the Parent and its Subsidiaries who are eligible for and/or have elected continuation coverage under COBRA. To the Parent’s Knowledge, no lien, security interests or other encumbrances exist with respect to any of the assets of the Parent or its Subsidiaries, which were imposed pursuant to the terms of the Code or ERISA.

Section 5.13.      Affiliate Transactions. Except (i) as set forth in the Parent SEC Reports or (ii) on Section 5.13 of the Parent Disclosure Schedule, no Affiliate of the Parent (other than any Subsidiary of the Parent), nor any current or former officer, director, stockholder, trustee or member of any of the foregoing Persons or any family member (by blood or marriage) of any of the foregoing Persons is a party to or the beneficiary of any contract with the Parent or any of its Subsidiaries or has any interest in any property or assets used by the Parent or any of its Subsidiaries. Section 5.13 of the Parent Disclosure Schedule sets forth all contracts, undertakings, commitments, agreements, obligations and understandings (including, in each case, with respect to compensation) between the Parent, Merger Sub or any of their respective Affiliates, on the one hand, and any current or former officer, director, stockholder, member, trustee or Affiliate of any of the foregoing Persons or any family member (by blood or marriage) of any of the foregoing Persons, on the other hand, relating to the transactions contemplated by this Agreement or the operations of the Parent, the Company or the Company Subsidiaries after the Effective Time.

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Section 5.14.      Absence of Certain Changes or Events. Since January 1, 2019, except as otherwise required or expressly contemplated by this Agreement or set forth in the Parent SEC Reports, (a) the businesses of the Parent and its Subsidiaries have been conducted, in all material respects, in the ordinary course of business, (b) there have not been any facts, circumstances, events, changes, effects or occurrences that have had or could reasonably be expected to have, individually or in the aggregate a Material Adverse Effect on the Parent or its Subsidiaries, and (c) prior to the date hereof, neither the Parent nor any of its Subsidiaries has implemented or adopted any material change in their respective Tax or financial accounting policies, principles, practices or methods.

Section 5.15.     Investigations; Litigation. Except as set forth on Section 5.15 of the Parent Disclosure Schedule, and that have not and that could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Parent or its Subsidiaries, as of the date of this Agreement, there are no (i) investigations or proceedings pending (or, to the Knowledge of Parent, threatened in writing) by any Governmental Entity with respect to Parent or any of its Subsidiaries or (ii) actions, suits or proceedings pending (or, to the Knowledge of Parent, threatened in writing) against Parent or any of its Subsidiaries, or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, or before, any Governmental Entity against the Parent or any of its Subsidiaries.

Section 5.16.      Tax Matters. The Parent and each of its Subsidiaries has prepared and timely filed (taking into account any valid extension of time within which to file) all Tax Returns required to be filed by or including each of them and all such Tax Returns are complete and accurate in all material respects, (ii) the Parent and each of its Subsidiaries has timely paid all material Taxes that are required to be paid (whether or not shown on any Tax Return), except with respect to matters contested in good faith and for which adequate reserves have been established on the financial statements of the Parent or any of its Subsidiaries in accordance with GAAP, (iii) Section 5.16(iii) of the Parent Disclosure Schedule sets forth (A) all Tax Returns filed by the Parent and each of its Subsidiaries for any taxable period beginning after December 31, 2014 that have been audited or examined, (B) the taxable periods for which such Tax Returns have been audited or examined, and (C) the taxing authority that concluded such audit or examination, (iv) all assessments for Taxes due with respect to any completed and settled examinations or any concluded litigation have been fully paid, (v) there are no audits, examinations, investigations or other proceedings pending or threatened in writing in respect of Taxes or Tax matters of the Parent or any of its Subsidiaries, (vi) there are no Liens for Taxes on any of the assets of the Parent or any of its Subsidiaries other than statutory Liens for Taxes not yet due and payable, (vii) the Parent and each of its Subsidiaries has timely withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor, shareholder or other third party and is in material compliance with all applicable rules and regulations regarding the solicitation, collection, filing and maintenance of any forms, certifications and other information required in connection therewith, (viii) none of the Parent or any of its Subsidiaries has been a party to any “reportable transaction” within the meaning of Treasury Regulation section 1.6011-4(b)(1), (ix) none of the Parent or any of its Subsidiaries is a party to any agreement or arrangement relating to the apportionment, sharing, assignment or allocation of any Tax or Tax asset (other than an agreement or arrangement solely among members of a group the common parent of which is the Parent or any commercial agreement the primary purpose of which does not relate to Taxes) nor has any liability for Taxes of any Person (other than the Parent or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any predecessor or successor thereof or any analogous or similar provision of Law), by contract, agreement or otherwise (other than any commercial agreement the primary purpose of which does not relate to Taxes, (x) no waivers or extensions of any statute of limitations are in effect or have been requested with respect to any Taxes of the Parent or any of its Subsidiaries, (xi) no issue has been raised in writing by a taxing authority in any prior examination of the Parent or any of its Subsidiaries which, by application of the same or similar principles, could reasonably be expected to result in a material Tax deficiency for any subsequent taxable period, (xii) no claim has been made in writing by a taxing authority in a jurisdiction where the Parent or any of its Subsidiaries does not file Tax Returns such that it is or may be subject to taxation by that jurisdiction, (xiii) neither the Parent nor any of its Subsidiaries (A) is subject to any private letter ruling of the IRS or comparable rulings of any taxing authority with respect to income Taxes or (B) has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision of Law, in each case, within the preceding three taxable years or that may otherwise be in effect at any time after the Effective Time of the Merger with respect to income Taxes, and (xiv) neither the Parent nor any of its Subsidiaries is or has ever been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code.

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Section 5.17.     Labor Matters.

(a)       Neither the Parent nor any of its Subsidiaries has received written notice during the past two years of the intent of any Governmental Entity responsible for the enforcement of Employment Laws to conduct an investigation of the Parent or any of its Subsidiaries and, to the Knowledge of the Parent, no such investigation is in progress. To the Knowledge of the Parent, the Parent and its Subsidiaries are in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours and unfair labor practices. To the Knowledge of the Parent, neither the Parent nor any of its Subsidiaries has any liabilities under any state or local Employment Law as a result of any action taken by, or any action not taken by, the Parent.

(b)       All individuals that have been or that are classified by the Parent as independent contractors have been and are correctly so classified, and none of such individuals could reasonably be classified as an employee of the Parent, except for any failure to be so correctly classified as could not reasonably be expected to result, individually or in the aggregate, in a material liability to the Parent or any of its material Subsidiaries.

(c)       To the Knowledge of the Parent, there does not currently exist, and is not currently threatened, any grievance, arbitration proceeding, charge or complaint filed by or on behalf of any employee in their capacity as an employee, past or present, or any labor organization, before the National Labor Relations Board, the Equal Employment Opportunity Commission, any state or local civil rights agencies, any federal or state departments of labor or occupational health and safety agencies, against the Parent or any of its Subsidiaries, arising out of the activities or conduct of the Parent or any of its Subsidiaries, except for such grievances, arbitration proceedings, charges and complaints as could not reasonably be expected to result, individually or in the aggregate, in a material liability to the Parent or any of its material Subsidiaries.

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(d)       To the Knowledge of the Parent, (i) neither the Parent nor any of its Subsidiaries has entered into any collective bargaining agreement or other contract, contingent or otherwise, with a labor union, and (ii) no employee of the Parent or any of its Subsidiaries are covered by a collective bargaining agreement or other contract with a union, or otherwise represented by any union. There is no collective bargaining agreement binding on the Parent or any of its Subsidiaries that restricts it from relocating or closing any or all of its business or operations. To the Knowledge of the Parent, there are no organizational efforts currently being made or threatened by or on behalf of any labor union with respect to any employees of the Parent or any of its Subsidiaries. There is not currently pending any strike, lockout, picketing, slow-downs or work stoppages with respect to the Company or any of its Subsidiaries, and to the Knowledge of the Parent, no such strikes, picketing, lockouts, slow-downs or work stoppages have been threatened in writing. To the Knowledge of the Parent, there is not currently pending any campaign to solicit cards or authorization from employees of the Parent or any of its Subsidiaries to be represented by any labor organization, and, to the Knowledge of the Parent, no such campaign has been threatened in writing.

Section 5.18.     Intellectual Property; Data Collection and Privacy Policies.

(a)       Either the Parent or a Subsidiary of the Parent owns, or is licensed or otherwise possesses adequate rights to use, all material Intellectual Property. There are no pending or, to the Knowledge of the Parent, threatened claims by any person alleging infringement in any material respect by the Parent or any of its Subsidiaries or with regard to the ownership, validity or use of any Intellectual Property. To the Knowledge of the Parent, the conduct of the business of the Parent and its Subsidiaries does not infringe any material intellectual property rights of any person in any material respect. Neither the Parent nor any of its Subsidiaries has made any claim of a violation or infringement in any material respect by others of its rights to or in connection with the Intellectual Property. To the Knowledge of the Parent, no person is infringing in any material respect any of the material Intellectual Property.

(b)       The Parent has used commercially reasonable efforts to ensure that the Information Practices by the Parent and its Subsidiaries, and use by third parties having authorized access to the websites or other records of the Parent and its Subsidiaries, conforms in all material respects, and at all times has conformed in all material respects, to all Laws and all contractual commitments governing information practices of the Parent and each of its Subsidiaries to its customers, the viewers of the Parent’s websites (and the websites of any Subsidiary), and third parties relating to such practices. The Information Practices of the Parent and its Subsidiaries have been materially consistent with all statements or representations (as they may have been amended or supplemented) made to customers, potential customers and third parties regarding such practices. Since January 1, 2017, the Parent and its Subsidiaries (i) have not received any written notification alleging that the Parent and/or the Subsidiaries have violated any regulation relating to the collection, storage and onward transfer of personally identifiable information collected by the Parent or any of its Subsidiaries or by third parties having authorized access to databases or other records of the Parent and its Subsidiaries, and (ii) have no Knowledge of any material violations of any regulation relating to the collection, storage and onward transfer of personally identifiable information collected by the Parent or any of its Subsidiaries or by third parties having authorized access to the databases or other records of the Parent and its Subsidiaries.

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Section 5.19.     Information Technology.

(a)       Parent has taken all commercially reasonable precautions to preserve and document Parent’s and its Subsidiaries’ material proprietary products, technology and trade secrets and to protect the secrecy, confidentiality and value of its material proprietary products, technology and trade secrets.

(b)       To the Knowledge of Parent, on the date hereof, Parent and its Subsidiaries either own or hold valid leases and/or licenses to Parent Systems which are used by or necessary for the Parent and/or its Subsidiaries to conduct their respective businesses as currently conducted. To the Knowledge of Parent, upon the consummation of the transactions contemplated hereunder, Parent and its Subsidiaries shall have the right to use and access Parent Systems as required to carry on their respective businesses as currently conducted.

(c)       In the 12 months preceding the date hereof, none of Parent, any of its Subsidiaries nor, to the Knowledge of Parent, any IT Contract Supplier has been in material default of any IT Contract with respect to the provision of information and communications technology services to Parent or any of its Subsidiaries.

(d)       Other than as could not reasonably be expected to result in a material adverse effect on the operations of Parent and any of its material Subsidiaries, Parent maintains and each IT Contract Supplier who manages Parent Systems maintains, appropriate disaster recovery plans and security procedures with respect to the services being provided by any such IT Contract Supplier to Parent and its Subsidiaries.

(e)       Since January 1, 2018, there have been no material interruptions, data losses or similar incidents attributable to Parent Systems owned or used by Parent or its Subsidiaries. To the Knowledge of Parent, Parent Systems owned or used by Parent and its Subsidiaries have the capacity and performance necessary to meet in all material respects the requirements of their respective businesses as currently conducted, with respect to their usage of Parent Systems.

(f)        As used herein, “Parent Systems” means the material computer and data processing systems, material maintenance service agreements, and material information and material communications technologies used in the businesses of Parent and its Subsidiaries.

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Section 5.20.    Property. Except as could not have, individually or in the aggregate, a Material Adverse Effect on the Parent or its Subsidiaries, Parent or a Subsidiary of Parent owns and has good and indefeasible title to all of its owned real property and good title to all its personal property and has valid leasehold interests in all of its leased properties free and clear of all Liens, other than for (i) Liens reserved against or identified in the financial statements contained in the financial statements included in the Parent SEC Reports, to the extent so reserved or reflected or described in the notes thereto (if any), (ii) Liens for Taxes not yet due and payable, (iii) Liens existing pursuant to, or that constitute “Permitted Liens” (or other similar term) under, credit or loan facilities of Parent and its Subsidiaries, and in each case in effect as of the date of this Agreement, and (iv) those Liens that, individually or in the aggregate with all other Liens described in clauses (i), (ii) and (iii) of this sentence, do not, and are not reasonably likely to, materially interfere with the use or value of the properties or assets of Parent and its Subsidiaries. Except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Parent or its Subsidiaries, (a) all leases under which Parent or any of its Subsidiaries lease any real or personal property are valid and effective against Parent or the applicable Subsidiaries and, to Parent’s Knowledge, the counterparties thereto, in accordance with their respective terms, and (b) there is not, under any of such leases, (i) any existing default by Parent or any of its Subsidiaries or, to Parent’s Knowledge, the counterparties thereto, or (ii) any event which, with notice or lapse of time or both, would become a default by Parent or any of its Subsidiaries or, to Parent’s Knowledge, the counterparties thereto. The representations and warranties set forth in this Section 5.20 shall not apply to Intellectual Property, which is the subject of Section 5.18.

Section 5.21.     Insurance. Except as could not have, individually or in the aggregate, a Material Adverse Effect on the Parent or its Subsidiaries, Parent and its Subsidiaries maintain, or are entitled to the benefits of, insurance covering their properties, operations, personnel and businesses in the amounts set forth on Section 5.21 of Parent Disclosure Schedule. None of Parent or its Subsidiaries has received written notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force on the date hereof and will be (or substantially equivalent replacement insurance will be) outstanding and duly in force on the Closing Date. Neither Parent nor any of its Subsidiaries is in breach or default under, or has taken any action which could permit termination or material modification of, any material insurance policies, and no notice in writing of cancellation or termination has been received by Parent or any of its Subsidiaries with respect to any material insurance policy and no such policy shall terminate or give rise to a right of cancellation by reason of the execution, delivery and performance of this Agreement.

Section 5.22.     Parent Contracts.

(a)       Except for this Agreement, the agreements to be executed by Parent that are included as exhibits to this Agreement, the Transaction Documents, the agreements filed as exhibits to the Parent SEC Reports and the agreements set forth on Section 5.22 of the Parent Disclosure Schedule, Parent is not a party to any Parent Material Agreement.

(b)       Other than as a result of the expiration or termination of any Parent Material Agreement in accordance with its terms, (i) assuming the validity with respect to and binding effect on the applicable counterparty thereto, each Parent Material Agreement is valid and binding on Parent and any of its Subsidiaries that is a party thereto, as applicable, and in full force and effect, subject to the Bankruptcy and Equity Exception, (ii) Parent and each of its Subsidiaries has in all material respects performed all material obligations required to be performed by it to date under each Parent Material Agreement, and (iii) neither Parent nor any of its Subsidiaries has Knowledge of, or has received written notice of, the existence of any event or condition which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of Parent or any of its Subsidiaries or their counterparties under any such Parent Material Agreement. As of the date of this Agreement, since January 1, 2017, neither Parent nor any of its Subsidiaries has received any written notice that any counterparty to a Parent Material Agreement has sought to terminate or amend the terms of a Parent Material Agreement.

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Section 5.23.    Finders or Brokers; Transaction Fees. Neither the Parent nor any of its Subsidiaries has engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Merger or the other transactions contemplated herein (“Parent Broker Fees”). The Parent will indemnify and hold the Company harmless against from any Parent Broker Fees.

Section 5.24.     Tax-Free Reorganization.

(a)       None of the Parent or any of its Subsidiaries (or any of their Affiliates) has taken or agreed to take any action that could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code. To the Parent’s knowledge, there are no agreements, plans or other circumstances that would reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

(b)       The Merger Sub is a wholly-owned subsidiary of the Parent, formed solely for the purpose of engaging in the Merger, and carried on no business prior to the Merger.

(c)       Immediately prior to the Merger, the Parent will be in control of Merger Sub within the meaning of Section 368(c) of the Code.

(d)       The Parent has no present plan or intention to reacquire any of the Merger Consideration.

(e)       The Merger Sub will have no liabilities assumed by the Surviving Company and will not transfer to the Surviving Company any assets subject to liabilities in the Merger.

Section 5.25.     No Integrated Offering.  Neither Parent nor any Affiliates of Parent, nor any Person acting on the behalf of any of the foregoing, has, directly or indirectly, made any offers or sales of any security or solicited any offers to purchase any security, under circumstances that would require registration of any of the shares of Parent Merger Preferred Stock issuable pursuant to this Agreement under the Securities Act or cause this offering of such shares of Parent Merger Preferred Stock to be integrated with prior offerings by Parent for purposes of the Securities Act or any applicable shareholder approval requirements of any authority.

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Section 5.26.     Foreign Corrupt Practices Act.  Neither the Parent nor its Subsidiaries, nor to the Parent’s knowledge, any agent or other person acting on behalf of the Parent or its Subsidiaries, has: (a) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (c) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Parent is aware) which is in violation of law, or (d) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

Section 5.27.     Data Room; Information Supplied. To Parent’s Knowledge, all copies of and originals of all information, documents, financial statements, agreements and materials provided by Parent (including its representatives, legal counsels and accountants) to the Company, its Affiliates or representatives (the “Parent Provided Materials”), as part of the due diligence process leading up to the Parties’ entry into this Agreement were (a) accurate when provided and as of the date of this Agreement; and (b) did not contain any untrue statement of a material fact, or omit to include any material fact necessary to make the materials provided not misleading. The Parent acknowledges that the Company (and its Affiliates) are relying on the accuracy of such Parent Provided Materials in connection with its decision to enter into this Agreement and to consummate the transactions contemplated herein.

Section 5.28.      Disclaimer. Except for the representations and warranties contained in this ARTICLE V, Parent and Merger Sub acknowledge that neither the Company nor any other Person on behalf of the Company makes any other express or implied representations or warranties with respect to the Company or any of its Subsidiaries or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and the Company disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, the Parent and Merger Sub acknowledge that neither the Company nor any other Person makes or has made on behalf of the Company any representation or warranty to Parent or Merger Sub or any of its Affiliates except with respect to (a) any financial projection, forecast, estimate, budget or prospect information relating to the Company and any of its Subsidiaries or their respective businesses or (b) the representations and warranties made by the Company in ARTICLE IV, and any oral or written information presented to Parent or Merger Sub or their respective Affiliates in the course of their due diligence investigation of the Company and its Subsidiaries, the negotiation of this Agreement or in the course of the transactions contemplated hereby.

ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF THE MEMBERS

Section 6.1.       Authority. Each Member has all power and authority to enter into this Agreement and to consummate the transactions contemplated hereby as applicable to the Member. This Agreement has been duly and validly executed and delivered by each Member and constitutes the valid and binding agreement of Member, enforceable against Member in accordance with its terms, subject to the Bankruptcy and Equity Exception.

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Section 6.2.            Representations Regarding the Merger Consideration.

(a)           The Members recognize that the Parent Preferred Stock which the Member will receive in connection with the Merger Consideration (which reference to Merger Consideration as used in this Section 6.2, shall also include all shares of Parent Common Stock issuable upon conversion of such Parent Preferred Stock issued to the Member pursuant to the Merger) has not been registered under the Securities Act, nor under the securities laws of any state and, therefore, cannot be resold unless the resale of the Merger Consideration is registered under the Securities Act or unless an exemption from registration is available;

(b)           Each Member is acquiring the Merger Consideration for its own account for long-term investment and not with a view toward resale, fractionalization or division, or distribution thereof, and it does not presently have any reason to anticipate any change in its circumstances, financial or otherwise, or particular occasion or event which would necessitate or require the sale or distribution of the Merger Consideration. Each Member agrees to provide the Parent its record address and Tax id number promptly after the Closing in order to enable Parent to issue the Members the Merger Consideration;

(c)           Each Accredited Member acknowledges that it is an “accredited investor” as such term is defined in Rule 501 of Regulation D of the Securities Act of 1933, as amended;

(d)           Each Member which is not an Accredited Member:

(i)        has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the Merger Consideration, and

(ii)       is aware of, has received and had an opportunity to review and has actually read and reviewed (A) the (x) Parent’s Annual Report on Form 10-K for the year ended March 31, 2018; and (y) the Parent’s Quarterly Reports on Form 10-Q, current reports on Form 8-K and proxy statements (which filings and reports can be accessed by going to https://www.sec.gov/search/search.htm, typing “Camber Energy” in the “Company name” field, and clicking the “Search” button), from March 1, 2018, to the date of such Member’s entry into this Agreement, in each case (x) and (y), including the audited and unaudited financial statements, description of business, risk factors, results of operations, certain transactions and related business disclosures described therein and an independent investigation made by it of the Parent; and (z) the designation of the Series E Preferred Stock (collectively, (x) through (z), the “Disclosure Information”); (B) has, prior to the date of this Agreement, been given an opportunity to review material contracts and documents of the Parent and has had an opportunity to ask questions of and receive answers from the Parent’s officers and Directors and has no pending questions as of the date of this Agreement; and (C) is not relying on any oral representation of the Parent or any other person, nor any written representation or assurance from the Parent; in connection with each Member’s acceptance of the Merger Consideration and investment decision in connection therewith. As a result of the Parent’s furnishing of the Disclosure Information, each Non-Accredited Member has received information, including, but not limited to financial statements, which would be required in a registration statement filed under the Securities Act in the form the Parent would be entitled to use;

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(e)           Each Member confirms and represents that it is able (i) to bear the economic risk of its investment, (ii) to hold the Merger Consideration for an indefinite period of time, and (iii) to afford a complete loss of its investment. Each Member also represents that it has (i) adequate means of providing for its current needs and possible personal contingencies, and (ii) has no need for liquidity in this particular investment;

(f)            All information which each Member has provided to the Parent concerning such Member’s financial position and knowledge of financial and business matters is correct and complete as of the date hereof;

(g)           Each Member has not become aware of and has not been offered the Merger Consideration by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to such Member’s knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising;

(h)           Each Member confirms and acknowledges that the Parent is under no obligation to register or seek an exemption under any federal and/or state securities acts for any sale or transfer of the Merger Consideration by any Member; and

(i)            Each Member confirms and acknowledges that the Merger Consideration will bear the following restrictive legend (or a similar legend):

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED WITHOUT EITHER: i) REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR ii) SUBMISSION TO THE CORPORATION OF AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION THAT SAID SHARES AND THE TRANSFER THEREOF ARE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.”

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ARTICLE VII.
COVENANTS AND AGREEMENTS

Section 7.1.       Section 16 Matters. The Board of Directors of Parent, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), has adopted a resolution providing in substance that the receipt by the Company Insiders (as hereinafter defined) of Parent Preferred Stock in exchange for Membership Interests pursuant to the transactions contemplated by this Agreement are intended to be exempt from liability pursuant to Section 16(b) under the Exchange Act in accordance with Rule 16b-3 and interpretations of the SEC thereunder. In addition, the Board of Directors of the Company, or a committee of non-employee Directors thereof, have adopted a resolution providing in substance that the dispositions by the Company Insiders of Membership Interests in exchange for shares of Parent Preferred Stock pursuant to the transactions contemplated by this Agreement are intended to be exempt from liability pursuant to Section 16(b) under the Exchange Act in accordance with Rule 16b-3 and interpretations of the SEC thereunder. “Company Section 16 Information” shall mean information accurate in all material respects regarding Company Insiders, the number of shares of Membership Interests held by each such Company Insider and expected to be exchanged for shares of Parent Preferred Stock pursuant to the transaction contemplated by this Agreement and any other information that may be required under applicable interpretations of the SEC under Rule 16b-3. “Company Insiders” shall mean those officers and directors of the Company who will be subject to the reporting requirements of Section 16(a) of the Exchange Act following the Closing and who are listed in the Company Section 16 Information.

Section 7.2.        Public Announcements. The Company and Parent will consult with and provide each other the opportunity to review and comment upon any press release or other public statement prior to the issuance of such press release or other public statement relating to this Agreement or the transactions contemplated herein (other than routine employee communications) and shall not issue any such press release or other public statement prior to such consultation except as such party in its good faith judgment may be required by applicable Law, it being understood that the final form of any release or statement shall be at the final discretion of the issuing party. Notwithstanding the above, the Parent and the Company shall issue a joint press release, which shall be subject to the prior approval of both parties, promptly upon execution of this Agreement. Additionally, the Parent shall be authorized to file a Current Report on Form 8-K with the SEC as required by applicable rules disclosing the parties’ entry into this Agreement and the material terms hereof, and including this Agreement as an exhibit to such filing.

Section 7.3.        Indemnification and Insurance.

(a)       Parent and Merger Sub agree that all rights to exculpation, indemnification (including rights accruing under self-insurance arrangements in respect of deductibles, coverage limits or forgone third-party insurance) and advancement of expenses for acts or omissions occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, now existing in favor of the current or former directors, officers or employees (in their capacity as such or when serving at the request or for the benefit of the Company or its Subsidiaries, as a director, officer, partner, employee, agent or fiduciary of any other partnership, joint venture, trust, employee benefit plan or other entity or enterprise), as the case may be, of the Company or its Subsidiaries as provided in any agreement (copies of which have been provided to Parent and are listed in Section 7.3 of the Company Disclosure Schedule) or in the Governing Documents of the Company or its Subsidiaries shall survive the Merger and shall continue in full force and effect. For a period of six (6) years from the Effective Time, Parent and the Surviving Company shall maintain in effect the exculpation, indemnification and advancement of expenses and arrangement of self-insurance provisions of the Company’s and any of its Subsidiaries’ Governing Documents in effect immediately prior to the Effective Time or in any indemnification agreements of the Company or its Subsidiaries with any of their respective current or former directors, officers or employees in effect as of the date hereof with respect to actions or omissions taken at or prior to the Effective Time, and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any Indemnified Party; provided, however, that all rights to indemnification in respect of any Action (as hereinafter defined) pending or asserted or any claim made within such period shall continue until the disposition of such Action or resolution of such claim.

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(b)       From and after the Effective Time, Parent and the Surviving Company shall, to the fullest extent permitted under applicable Law, jointly and severally indemnify and hold harmless (and advance funds in respect of each of the foregoing) each current and former director and officer of the Company or any of its Subsidiaries (each, together with such person’s heirs, executors or administrators, an “Indemnified Party”) against any costs or expenses (including advancing reasonable attorneys’ fees, costs and expenses in advance of the final disposition of any claim, suit, proceeding or investigation to each Indemnified Party to the fullest extent permitted by Law), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened Action, arising out of, relating to or in connection with any action or omission of the Indemnified Party occurring or alleged to have occurred at or prior to the Effective Time and with respect to current and former directors occurring or alleged to have occurred whether before or after the Effective Time, in connection with such persons serving as an officer, director or other fiduciary of the Company or any other entity if such service was at the request or for the benefit of the Company or any of its Subsidiaries to the same extent as provided in the Company’s and any of its Subsidiaries’ Governing Documents in effect immediately prior to the Effective Time or in any indemnification agreements of the Company or its Subsidiaries in effect as of the date hereof; provided, however, that neither Parent nor the Surviving Company shall be liable for any settlement effected without either Parent’s or the Surviving Company’s prior written consent, and the Surviving Company shall not be obligated to pay the fees and expenses of more than one counsel (selected by a plurality of the applicable Indemnified Parties) for all Indemnified Parties in any jurisdiction with respect to any single such claim, action, suit, proceeding or investigation; provided, further, however, that if any Indemnified Party or group of Indemnified Parties is advised in writing by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party or group of Indemnified Parties and another Indemnified Party or group of Indemnified Parties, then the Surviving Company shall pay the fees and expenses of the minimum number of counsel as are required to eliminate such conflicts of interest. It shall be a condition to the advancement of any amounts to be paid in respect of legal and other fees, costs and expenses that the Surviving Company receive an undertaking by the Indemnified Party to repay such legal and other fees, costs and expenses paid in advance if it is finally judicially determined that such Indemnified Party is not entitled to be indemnified under applicable Law. Notwithstanding anything contained herein, the Surviving Company shall not amend its operating agreement as of or after the Effective Time if such action would adversely affect the rights of individuals who, at or prior to the Effective Time, were entitled to advances, indemnification, contribution or exculpation thereunder for actions or omissions by such individuals in their capacity as directors or officers of the Company or any of its Subsidiaries at any time prior to the Effective Time.

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(c)       The rights of each Indemnified Party hereunder shall be in addition to, and not in limitation of or exclusive of, any other rights such Indemnified Party may have under the Governing Documents of the Company or any of its Subsidiaries or the Surviving Company, any other indemnification arrangement, self-insurance arrangement, the Act or otherwise. The provisions of this Section 7.3 shall survive the consummation of the Merger and expressly are intended to benefit, and are enforceable by, each of the Indemnified Parties. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries or their respective current or former officers, directors and employees, it being understood and agreed that the indemnification provided for in this Section 7.3 is not prior to or in substitution for any such claims under any such policies.

(d)       This Section 7.3 shall survive the consummation of the Merger and is intended to be for the benefit of, and shall be enforceable by, present or former directors and officers of the Company or its Subsidiaries, their respective heirs and personal representatives and shall be binding on Parent and the Surviving Company and their respective successors and assigns. In the event Parent, the Surviving Company or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or Surviving Company or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Company, as the case may be, shall assume the obligations set forth in this Section 7.3. This Section 7.3 may not be amended in a manner that is adverse to an Indemnified Party (including their heirs and personal representatives) or terminated without the consent of such Indemnified Party (including their heirs and representatives).

(e)       Parent and the Surviving Company shall jointly and severally indemnify and pay in advance all reasonable expenses, including reasonable attorneys’ fees, costs and expenses, that may be incurred by any Indemnified Party in bringing any claim to enforce the indemnity, exculpation, advancement or other obligations provided in this Section 7.3, provided that any Indemnified Party shall first be obligated to provide ten (10) days’ advance written notice to Parent before bringing any such claim except if failure to so provide such notice would result in the expiration of any statute of limitations regarding such claim, no such notice shall be required.

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Section 7.4.        Notification of Certain Matters. The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, of (i) any notice or other communication received by such party from any Governmental Entity in connection with the Merger or the other transactions contemplated hereby or from any person alleging that the consent of such person is or may be required in connection with the Merger or the other transactions contemplated hereby, if the subject matter of such communication or the failure of such party to obtain such consent could reasonably be expected to be material to the Company, the Surviving Company or Parent, (ii) any actions, suits, claims, investigations or proceedings commenced or, to such party’s Knowledge, threatened against, relating to or involving or otherwise affecting such party or any of its Subsidiaries which relate to the Merger or the other transactions contemplated hereby and (iii) the discovery of any fact or circumstance that, or the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, could reasonably be expected to cause or result in any of the conditions to the Merger set forth in Error! Reference source not found. not being satisfied or satisfaction of those conditions being materially delayed in violation of any provision of this Agreement; provided, however, that the delivery of any notice pursuant to this Section 7.4 shall not (x) cure any breach of, or non-compliance with, any other provision of this Agreement or (y) limit the remedies available to the party receiving such notice. The Company shall notify Parent, and Parent shall notify the Company, on a reasonably current basis, of any events or changes of which such Party is aware with respect to any criminal or regulatory investigation or action involving such Party or any of its Affiliates (but excluding traffic violations and similar misdemeanors), and shall reasonably cooperate with the other Party in efforts to mitigate any adverse consequences to the other Party which may arise therefrom (including by coordinating and providing assistance in meeting with regulators).

Section 7.5.        Third-Party Consents and Encumbrance Terminations. The Company and the Parent shall use their, and shall cause their Subsidiaries to use their, reasonable best efforts to take or cause to be taken all actions reasonably necessary and proper or advisable on its part under this Agreement and applicable Law to give and obtain as promptly as practicable following the date of this Agreement all notices, acknowledgments, waivers, consents, amendments or other modification required under any Material Contract to which Company, Parent or any of their respective Subsidiaries is bound (the “Third-Party Consents”), and in connection therewith, neither the Company, the Parent nor any of its Subsidiaries shall (a) make any payment of a consent fee, “profit sharing” payment, “make whole” payment or other consideration (including increased or accelerated payments) or concede anything of value, (b) amend, supplement or otherwise modify any such Contract or (c) agree or commit to do any of the foregoing, in each case for the purposes of obtaining any Third-Party Consents without the prior consent of the other party hereto.

Section 7.6.        Post-Closing Requirements/Matters.

7.6.1    Shareholders Meeting.  The Parent shall prepare and file a proxy statement on Schedule 14A with the SEC in order to seek shareholder approval of the issuance of the shares of Parent Common Stock upon conversion of the Series E Preferred Stock, the terms of this Agreement and such other matters that the holders of the Series E Preferred Stock may reasonably request and/or that are required to be approved by the shareholders of Parent pursuant to applicable NYSE American rules and regulations in accordance with applicable rules and requirements of the SEC and the NYSE American (the “Parent Shareholder Approval”) at a duly called meeting of shareholders of the Parent (the “Parent Shareholder Meeting”) which Parent Shareholder Approval shall be received prior to the Required Shareholder Approval Date.

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7.6.2    Reverse Stock Split.  Prior to (with the consent of a Majority Interest and the Parent), or on the date of, the Parent Shareholder Approval, the Parent shall undertake a reverse split of the Parent Common Stock, in a ratio approved by the Parent and a Majority Interest, in the event such reverse split is required to (i) maintain the Parent’s continued listing of the Parent Common Stock on the NYSE American, and/or (ii) to meet initial listing requirements on the NYSE American pursuant to the terms of Section 7.6.3, below. Notwithstanding this Section 7.6.2, the Parent shall not be prohibited from undertaking a reverse split of the Parent Common Stock prior to such Parent Shareholder Approval, in the event such reverse split, in the reasonable determination of the Board of Directors of the Parent, is necessary in order to maintain the Parent’s continued listing of the Parent Common Stock on the NYSE American.

7.6.3    NYSE Listing.  The Parent Shareholder Approval shall not be received, and the Parent Shareholder Meeting shall be adjourned, extended, delayed, abandoned or re-scheduled, if the NYSE American determines that a “back-door listing”/”reverse merger” is deemed to occur upon receipt of such Parent Shareholder Approval, until or unless the Parent, upon receipt of the Parent Shareholder Approval (or immediately prior to such anticipated date of Parent Shareholder Approval), in the reasonable determination of the Parent, qualifies for initial listing of the Parent Common Stock on the NYSE American, pursuant to the applicable guidance and requirements of the NYSE American.

7.6.4    Executive Compensation.   From the Closing Date until the Parent Shareholder Approval is received, the executive officers and directors of Parent, shall not, in aggregate, be paid, or accrue, compensation in excess of the amounts set on Section 7.6.4 of the Parent Disclosure Schedule, unless such compensation is approved with the consent of a Majority Interest.

7.6.6    Transfer Agent. Until Parent Shareholder Approval, ClearTrust, LLC shall serve as the transfer agent for the Parent and for its subsidiaries.

7.6.7    Reorganization. Between the date hereof and the Effective Time of the Merger, each Party agrees, on behalf of itself and any of its Subsidiaries, not take or omit to take, or permit any of their respective Affiliates or any “related person” (within the meaning of such term as used in Treasury Regulation Section 1.368-1(e)) to take or omit to take, any action that would prevent the Merger from qualifying as a “reorganization” described in Section 368(a) of the Code.

7.6.8    Audit Assistance.  Following the Closing, the Company shall assist the Parent with the preparation of financial statements in accordance with GAAP, pro forma financial information and such other interim financial information as required by Item 2.01 and/or Item 9.01 of Form 8-K and Regulation S-X of the Securities Act, in acceptable form to the Parent, as applicable, as relates to the Company and the acquisition by the Parent of the Company pursuant to this Agreement.

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ARTICLE VIII.
MISCELLANEOUS

Section 8.1.       No Survival of Representations and Warranties.  None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Merger, except for any covenant or agreement that by its terms contemplates performance after the Effective Time.

Section 8.2.        Expenses.  Whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring or required to incur such costs and expenses, except that the Parent has agreed, pursuant to the terms of that certain Letter of Intent between the Parent and Company dated April 9, 2019, to pay for the audits required in connection with the Parent Proxy Statement and/or Form 8-K filings required to be filed by the Parent post-Closing, and that the Parent would reimburse the Company for its reasonable and actual expenses incurred in connection with the transactions contemplated herein, up to a maximum of $200,000, upon receipt from the Company of documentation of the same, including $75,000 which has previously been paid.

Section 8.3.        Execution.  This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail (any such delivery, an “Electronic Delivery”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party, each other party shall re execute the original form of this Agreement and deliver such form to all other parties. No party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.

Section 8.4.        Governing Law.  This Agreement, and all claims or causes of action (whether at law, in contract or in tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be governed by and construed in accordance with the laws of the State of Delaware that are applicable to contracts entered into and to be performed solely in the State of Delaware, without regard to conflicts of laws principles.

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Section 8.5.       Jurisdiction; Enforcement; No Special Damages.  Each of the parties hereto agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed, or threatened not to be performed, in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each of the parties hereto shall be entitled (in addition to any other remedy that may be available to it, whether at law or in equity, including monetary damages) to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, including Parent’s and Merger Sub’s obligation to consummate the Merger, exclusively in the applicable court located in the State of Texas, this being in addition to any other remedy which the parties hereto are entitled at law or in equity. Each of the parties hereto further agrees that the other parties hereto shall not be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referenced to in this Section 8.5 and each of the parties hereto waives any objection to the imposition of such relief or any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument. None of Parent, Merger Sub or the Company shall be relieved or released from any liabilities or damages (which the parties acknowledge and agree shall not be limited to reimbursement of expenses or out-of-pocket costs, and damages in excess of out-of-pocket costs and expenses shall not be excluded to the extent proven) arising out of the intentional and willful breach of any provision of this Agreement by the other party or parties (in the case of the Company, the other parties shall mean Parent and Merger Sub, and in the case of Parent and Merger Sub, the other party shall mean the Company) or for fraud. The provisions of this Section 8.5, shall survive any termination hereof. In addition, each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the courts located in Harris County, Texas (provided that, in the event subject matter jurisdiction is unavailable in or declined by the courts located in Harris County, Texas, then all such claims shall be brought, heard and determined exclusively in any other state or federal court sitting in the State of Texas). Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 8.5, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable law, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper, or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. IN NO EVENT SHALL ANY PARTY BE LIABLE IN RESPECT OF THIS AGREEMENT FOR EXEMPLARY, SPECIAL OR PUNITIVE DAMAGES.

Section 8.6.        WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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Section 8.7.         Notices.  All notices, approvals, consents, requests, and other communications hereunder shall be in writing and shall be delivered (i) by personal delivery, or (ii) by national overnight courier service, or (iii) by certified or registered mail, return receipt requested, or (iv) via facsimile transmission, with confirmed receipt, or (v) via email. Notice shall be effective upon receipt except for notice via fax (as discussed above) or email, which shall be effective only when the recipient, by return or reply email or notice delivered by other method provided for in this Section 8.7, acknowledges having received that email (with an automatic “read receipt” or similar notice not constituting an acknowledgement of an email receipt for purposes of this Section 8.7, but which acknowledgement of acceptance shall include cases where recipient ‘replies’ to such prior email, including the body of the prior email in such ‘reply’). Such notices shall be sent to the applicable party or parties at the address specified below, subject to notice of changes thereof from any party with at least ten (10) Business Days’ notice to the other parties:

(a) If to the Parent or Merger Sub, to:

Camber Energy, Inc.

Attn:    Louis G. Schott and Robert Schleizer

1415 Louisiana, Suite 3500

Houston, Texas 77002

Fax: ________________

Email: louisgschott@gmail.com; and bschleizer@blackbriaradvisors.com

With a copy, which shall not constitute notice to:

Dickinson Wright PLLC

Attn: Joel D. Mayersohn

350 East Las Olas Blvd.

Suite 1750

Fort Lauderdale, Florida 33301

Fax     844-670-6009

Email  JMayersohn@dickinsonwright.com

(b) If to the Company, to:

Lineal Star Holdings, LLC

Attn: Tim Connolly

123 N. Post Oak Lane Suite 440

Houston, Texas 77024

Fax: 713-586-6678

Email: tim@csbankers.com

With a copy, which shall not constitute notice to:

Hughes Arrell Kinchen LLP

Attn: Mark Hughes

1221 McKinney St., Suite 3150

Houston, Texas 77010

Fax: 713-942-2266

Email:   mhughes@hakllp.com

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K&L Gates LLP

Attn: Clayton Parker

Southeast Financial Center

200 S. Biscayne Boulevard, Suite 3900

Miami, FL 33131

Fax: 305-358-7095

Email: Clayton.Parker@klgates.com

(c)       If to any Member, to the address provided to the Parent in the Stock Registration Form.

Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

Section 8.8.       Waiver of Conflicts.  Recognizing that K&L Gates LLP has acted as legal counsel to the Company, its Subsidiaries, certain of the direct and indirect holders of shares of Membership Interests and certain of their respective Affiliates prior to date hereof, and that K&L Gates LLP intends to act as legal counsel to certain of the direct and indirect holders of shares of Membership Interests and their respective Affiliates (which will no longer include the Company and its Subsidiaries) after the Closing, each of Parent, Merger Sub and the Company hereby waives, on its own behalf and agrees to cause its Affiliates, the Surviving Company and its Subsidiaries to waive, any conflicts that may arise in connection with K&L Gates LLP representing any direct or indirect holders of the Membership Interests or their Affiliates after the Closing as such representation may relate to Parent, Merger Sub, the Company, the Surviving Company and its Subsidiaries or the transactions contemplated by the Transaction Agreements. In addition, all communications involving attorney-client confidences between direct and indirect holders of Membership Interests, the Company and its Subsidiaries and their respective Affiliates, on the one hand, and K&L Gates LLP, on the other hand, relating to the negotiation, documentation and consummation of the transactions contemplated by the Transaction Documents shall be deemed to be attorney-client confidences that belong solely to the direct and indirect holders of Membership Interests and their respective Affiliates (and not the Company, the Surviving Company or their respective Subsidiaries). Accordingly, the Surviving Company and its Subsidiaries shall not have access to any such communications or to the files of K&L Gates LLP relating to such engagement from and after the Effective Time. Without limiting the generality of the foregoing, from and after the Effective Time, (a) the direct and indirect holders of shares of Membership Interests and their respective Affiliates (and not the Surviving Company and its Subsidiaries) shall be the sole holders of the attorney-client privilege with respect to such engagement, and none of the Surviving Company or its Subsidiaries shall be a holder thereof, (b) to the extent that files of K&L Gates LLP in respect of such engagement constitute property of the client, only the direct and indirect holders of Membership Interests and their respective Affiliates (and not the Surviving Company and its Subsidiaries) shall hold such property rights and (c) K&L Gates LLP shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to the Surviving Company or any of its Subsidiaries by reason of any attorney-client relationship between K&L Gates LLP and the Company or any of its Subsidiaries or otherwise. Notwithstanding the foregoing, none of the Surviving Company or any of its Subsidiaries is waiving any attorney-client privilege (including relating to the negotiation, documentation and consummation of the transactions contemplated by the Transaction Documents) in connection with any third-party litigation.

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Section 8.9.       Assignment; Binding Effect.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that, without written consent of any party hereto, Merger Sub may assign, in its sole discretion, any of or all of its rights, interests and obligations under this Agreement to Parent or to any direct or indirect wholly-owned subsidiary of Parent, no such assignment shall relieve Merger Sub and/or Parent, as applicable, of its obligations hereunder. Subject to the preceding sentence, this Agreement shall not be binding on any party unless and until it is executed by all parties, and upon such execution this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Parent shall cause Merger Sub, or any assignee thereof, to perform its obligations under this Agreement.

Section 8.10.      Severability.  Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only as broad as is enforceable.

Section 8.11.     Entire Agreement; No Third-Party Beneficiaries.  This Agreement (including the exhibits and schedules hereto), constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and thereof and, except as set forth in Section 7.3, is not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder.

Section 8.12.      Amendments; Waivers.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Company, Parent, a Majority Interest and Merger Sub, or in the case of a waiver, by the party against whom the waiver is to be effective. Notwithstanding the foregoing, no failure or delay by the Company or Parent in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.

Section 8.13.      Disclosure Schedules.

(a)       The inclusion of any information in the Disclosure Schedules accompanying this Agreement will not be deemed an admission or acknowledgment, in and of itself, solely by virtue of the inclusion of such information in such Disclosure Schedule, that such information is required to be listed in such Disclosure Schedule or that such information is material to any party or the conduct of the business of any party.

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(b)       Any item set forth in the Disclosure Schedules with respect to a particular representation, warranty or covenant contained in the Agreement will be deemed to be disclosed with respect to all other applicable representations, warranties and covenants contained in the Agreement to the extent any description of facts regarding the event, item or matter is disclosed in such a way as to make readily apparent from such description or specified in such disclosure that such item is applicable to such other representations, warranties or covenants whether or not such item is so numbered.

Section 8.14.     Headings.  Headings of the Articles and Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretive effect whatsoever. The table of contents to this Agreement is for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

Section 8.15.      Interpretation.  When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. The word “or” shall be deemed to mean “and/or.” All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein.

Section 8.16.      No Recourse.  This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto and no past, present or future Affiliate, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any party hereto shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby.

[Remainder of page left intentionally blank. Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

“PARENT”

CAMBER ENERGY, INC.
By:	/s/ Louis G. Schott
	Name: Louis G. Schott
	Title: Interim CEO

“MERGER SUB” CAMBER ENERGY MERGER SUB 2, INC.
By:	/s/ Louis G. Schott
	Name: Louis G. Schott
	Title: Interim CEO

Signature Page to Agreement and Plan of Merger

“COMPANY” LINEAL STAR HOLDINGS LLC
By:	/s/ Timothy J. Connolly
	Name: Timothy J. Connolly
	Title: Chief Executive Officer

“MEMBERS” JSHAN ENERGY, LLC
By:	/s/ Jerry C. Shanklin
	Name: Jerry C. Shanklin
	Title: President
/s/ Brian Shanklin
Brian Shanklin
/s/ Blain Shanklin Blain Shanklin
/s/ Mario Salinas Jr. Mario Salinas Jr.
/s/ Timothy J. Connolly
Timothy J. Connolly
/s/ Craig Crawford Craig Crawford

Signature Page to Agreement and Plan of Merger

/s/ Brent Richie

Brent Richie

/s/ Jeff Bauza

Jeff Bauza

/s/ Samuel Pruneda

Samuel Pruneda

/s/ Sherry Lee Noel

Sherry Lee Noel

/s/ Manuel Mondregon

Manuel Mondregon

Signature Page to Agreement and Plan of Merger

EXHIBIT A

CERTIFICATE OF DESIGNATION ESTABLISHING THE DESIGNATION, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF THE PARENT’S SERIES E PREFERRED STOCK

EXHIBIT B

CERTIFICATE OF DESIGNATION ESTABLISHING THE DESIGNATION, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF THE PARENT’S SERIES F PREFERRED STOCK

[Attached] 

EXHIBIT C

STOCK REGISTRATION FORM

(CHECK ONE):

_____ INDIVIDUAL OWNERSHIP (one signature required)

_____ TRUST (please include name of trust, name of trustee, and date trust was formed and copy of the Trust Agreement or other authorization)

_____ PARTNERSHIP (please include a copy of the Partnership Agreement authorizing signature)

_____ CORPORATION (please include a certified corporate resolution authorizing signature)

_____ LIMITED LIABILITY COMPANY (please include a certified corporate resolution authorizing signature)

________________________________________________________________________

Please print here the exact name (registration)

Such Person desires to appear in the records of Camber Energy, Inc.

________________________________________________________________________

Please print here the exact address

Such Person desires to appear in the records of Camber Energy, Inc.

Signature:

By: _________________________

Printed Name: ______________________

If on behalf of Entity:

Entity Name: ___________________

Signatory’s Position with Entity: ___________________

Beneficial Owner(s) of Securities To Be Owned by Entity: _____________________

Address: ____________________________________________________________

SS#/Tax Id Number: ______________________________

Telephone Number: ( ) - _____ - _______

Email:____________________

EXHIBIT D

STOCK POWER AND ASSIGNMENT OF
UNCERTIFICATED MEMBERSHIP INTERESTS

FOR VALUE RECEIVED, and pursuant to that certain Agreement and Plan of Merger by and between Camber Energy, Inc., Camber Energy Merger Sub 2, Inc., Lineal Star Holdings, LLC, and the Members party thereto dated as of July 8, 2019 (the “Agreement”), the undersigned hereby sells, assigns, and transfers unto Camber Energy, Inc. [____________] [common/preferred] membership interests of Lineal Star Holdings, LLC, a Delaware limited liability company (the “Company” and the “Interests”). Such Interests are not represented by certificates, are held in book entry form and stand in the undersigned’s name on the books and records of the Company. The undersigned does hereby irrevocably constitute the Secretary of the Company as attorney-in-fact, with full power of substitution, to transfer said interests on the books of said Company.

Dated: [ ], 2019

By:______________________

_________________________

Printed Name

If Entity:

Entity Name:________________

Signatory’s Position With Entity:_________________

EX-3.1

Camber Energy, Inc. 8-K

Exhibit 3.1

  

Page 1 of 18

CAMBER ENERGY, INC.

AMENDED AND RESTATED

CERTIFICATE OF DESIGNATIONS OF PREFERENCES, POWERS,
RIGHTS AND LIMITATIONS
OF
SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK

Pursuant to Section 78.1955 of the Nevada Revised Statutes (the “NRS”), Camber Energy, Inc., a company organized and existing under the State of Nevada (the “Corporation”),

DOES HEREBY CERTIFY that, (a) the Board of Directors, by unanimous written consent of all members of the Board of Directors on July 2, 2019; and (b) the stockholders of the Series C Redeemable Convertible Preferred Stock of the Corporation, voting as a class, on June 28, 2019, duly adopted this Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock, by adoption of a resolution which reads as follows, and which shall amend, replace and supersede the Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock, previously filed by the Corporation with the Secretary of State of Nevada on August 25, 2016 and amended on July 25, 2018 (as amended to date, the “Prior Designation”), which resolution is and reads as follows:

WHEREAS, the Certificate of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, comprised of 10,000,000 shares, $0.001 par value per share (the “Preferred Stock”), issuable from time to time in one or more series;

WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, powers, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of Preferred Stock and the number of shares constituting any Series and the designation thereof, of any of them;

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WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid and as set forth in this Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock (the “Designation”), to designate the rights, preferences, restrictions and other matters relating to the Series C Redeemable Convertible Preferred Stock, which will consist of up to 5,000 shares of the Preferred Stock which the Corporation has the authority to issue, and which shall amend, supersede and replace the Prior Designation, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Preferred Stock shall have the following powers, rights, preferences, and restrictions as follows:

I.             Terms of Preferred Stock.

A.            Designation and Amount. A series of Preferred Stock is hereby designated as the Corporation’s Series C Redeemable Convertible Preferred Stock, par value of $0.001 per share (the “Series C Preferred Stock”), the number of shares of which so designated are 5,000 shares of Series C Preferred Stock; which Series C Preferred Stock will not be subject to increase without any consent of the holders of the Series C Preferred Stock (each a “Holder” and collectively, the “Holders”) that may be required by applicable law.

B.            Ranking and Voting.

1.            Ranking. The Series C Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior to the Corporation’s Common Stock, $0.001 par value per share (“Common Stock”); (b) junior to the Series E Redeemable Convertible Preferred Stock and Series F Redeemable Convertible Preferred Stock, as such may be designated as of the date of this Designation, or which may be designated by the Corporation after the date of this Designation (the “Series E and F Preferred”) as to the Lineal Star Assets but senior to the Series E and F Preferred as to all other assets of the Company; (c) senior, pari passu or junior with respect to any other series of Preferred Stock, as set forth in the Certificate of Designations of Preferences, Powers, Rights and Limitations with respect to such Preferred Stock; and (d) junior to all existing and future indebtedness of the Corporation. Without the prior written consent of the Holders of a majority of the outstanding shares of Series C Preferred Stock (voting separately as a single class), the Corporation may not issue any additional shares of Series C Preferred Stock, or any other Preferred Stock that is pari passu or senior to the Series C Preferred Stock with respect to any rights for a period of 1 year after the earlier of such date (i) a registration statement is effective and available for the resale of all Conversion Shares, or (ii) Securities Act Rule 144 is available for the immediate unrestricted resale of all Conversion Shares, other than the Series E and Series F Preferred Stock.

2.             Voting. Except as required by applicable law or as set forth herein, the holders of shares of Series C Preferred Stock will have no right to vote on any matters, questions or proceedings of this Corporation including, without limitation, the election of directors except: (a) during a period where a dividend (or part of a dividend) is in arrears; (b) on a proposal to reduce the Company’s share capital; (c) on a resolution to approve the terms of a buy-back agreement; (d) on a proposal to wind up the Company; (e) on a proposal for the disposal of all or substantially all the Company’s property, business and undertaking; and (f) during the winding-up of the entity.

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C.            Dividends.

1.            Commencing on the date of the issuance of any such shares of Series C Preferred Stock (each respectively an “Issuance Date”), each outstanding share of Series C Preferred Stock will accrue cumulative dividends (“Dividends”), at a rate equal to 6.0% per annum, subject to adjustment as provided in this Certificate of Designations (“Dividend Rate”), of the Face Value. Dividends will be payable with respect to any shares of Series C Preferred Stock upon any of the following: (a) upon redemption of such shares in accordance with Section I.F; (b) upon conversion of such shares in accordance with Section I.G; and (c) when, as and if otherwise declared by the board of directors of the Corporation.

2.            Dividends, as well as any applicable Conversion Premium payable hereunder, will be paid: (a) in the Corporation’s sole and absolute discretion, immediately in cash; or (b) if Corporation notifies Holder it will not pay all or any portion in cash, or to the extent cash is not paid and received as soon as practicable, and in any event within 1 Trading Day after the Notice Time, for any reason whatsoever, in shares of Common Stock valued at (i) if there has never been a Trigger Event, (A) 95.0% of the average of the 5 lowest individual daily volume weighted average prices of the Common Stock on the Trading Market during the applicable Measurement Period, which may be non-consecutive, less $0.05 per share of Common Stock, not to exceed (B) 100% of the lowest sales price on the last day of such Measurement Period less $0.05 per share of Common Stock (ii) following any Trigger Event, (A) 85.0% of the lowest daily volume weighted average price during any Measurement Period for any conversion by Holder, less $0.10 per share of Common Stock, not to exceed (B) 85.0% of the lowest sales price on the last day of any Measurement Period, less $0.10 per share of Common Stock. In no event will the value of Common Stock pursuant to the foregoing be below the par value per share. All amounts that are required or permitted to be paid in cash pursuant to this Certificate of Designations will be paid by wire transfer of immediately available funds to an account designated by Holder.

3.            So long as any shares of Series C Preferred Stock are outstanding, the Company will not repurchase shares of Common Stock other than as payment of the exercise or conversion price of a convertible security or payment of withholding tax, and no dividends or other distributions will be paid, declared or set apart with respect to any Common Stock, except for Purchase Rights.

D.            Protective Provision.

1.            So long as any shares of Series C Preferred Stock are outstanding, the Corporation will not, without the affirmative approval of the Holders of a majority of the shares of the Series C Preferred Stock then outstanding (voting separately as one class), (i) alter or change adversely the powers, preferences or rights given to the Series C Preferred Stock or alter or amend this Certificate of Designations, (ii) authorize or create any class of stock ranking as to distribution of dividends senior to the Series C Preferred Stock, (iii) amend its certificate of incorporation or other charter documents in breach of any of the provisions hereof, (iv) increase the authorized number of shares of Series C Preferred Stock or (v) enter into any agreement with respect to the foregoing.

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2.            A “Deemed Liquidation Event” will mean: (a) a merger or consolidation in which the Corporation is a constituent party or a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except (i) any such merger or consolidation involving the Corporation or a subsidiary in which the Corporation is the surviving or resulting corporation, (ii) any merger effected exclusively to change the domicile of the Corporation, (iii) any transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain more than 50% of the total voting power of such surviving entity, or (iv) the Merger; (b) Corporation issues convertible or equity securities that are senior to the Series C Preferred Stock in any respect, other than the securities issued in the Merger; (c) Holder does not receive the number of Conversion Shares stated in a Delivery Notice with 5 Trading Days of the Notice Time; (d) trading of the Common Stock is halted or suspended by the Trading Market or any U.S. governmental agency for 10 or more consecutive trading days; or (e) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation, other than the Merger and except otherwise agreed to by holders holding a majority of the then outstanding Series C Preferred Stock.

3.            The Corporation will not have the power to close or effect a voluntary Deemed Liquidation Event unless the agreement or plan of merger or consolidation for such transaction provides that the consideration payable to the stockholders of the Corporation will be allocated among the holders of capital stock of the Corporation in accordance with Section I.E, and the required amount is paid to Holder prior to or upon closing, effectuation or occurrence of the Deemed Liquidation Event.

E.           Liquidation.

1.             Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of debts and other liabilities of the Corporation, prior to any distribution or payment made to the holders of Preferred Stock or Common Stock by reason of their ownership thereof, the Holders of Series C Preferred Stock will be entitled to be paid out of the assets of the Corporation (other than the Lineal Star Assets) available for distribution to its stockholders an amount with respect to each share of Series C Preferred Stock equal to $10,000.00 (“Face Value”), plus an amount equal to any accrued but unpaid Dividends thereon (collectively with the Face Value, the “Liquidation Value”).

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2.            If, upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the amounts payable with respect to the shares of Series C Preferred Stock are not paid in full, the holders of shares of Series C Preferred Stock will share equally and ratably with the holders of shares of Preferred Stock and Common Stock in any distribution of assets of the Corporation (other than the Lineal Star Assets) in proportion to the liquidation preference and an amount equal to all accumulated and unpaid Dividends, if any, to which each such holder is entitled.

3.            If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation will be insufficient to make payment in full to all Holders, then the assets distributable to the Holders will be distributed among the Holders at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled.

F.            Redemption.

1.            Corporation’s Redemption Option. On the Dividend Maturity Date, the Corporation may redeem any or all shares of Series C Preferred Stock by paying Holder in cash an amount per share equal to 100% of the Liquidation Value for the shares redeemed.

2.            Early Redemption. Prior to the Dividend Maturity Date, provided that no Trigger Event has occurred, the Corporation will have the right at any time upon 30 Trading Days’ prior written notice, in its sole and absolute discretion, to redeem all or any portion of the shares of Series C Preferred Stock then outstanding by paying Holder in cash an amount per share of Series C Preferred Stock (the “Early Redemption Price”) equal to the sum of the following: (a) 100% of the Face Value, plus (b) the Conversion Premium, minus (c) any Dividends that have been paid, for each share of Series C Preferred Stock redeemed.

3.            Credit Risk Adjustment.

a.           The Dividend Rate will adjust downward by an amount equal to the Spread Adjustment for each amount, if any, equal to the Adjustment Factor that the Measuring Metric rises above the Maximum Triggering Level, down to a minimum of 0.0%.

b.           The Dividend Rate will adjust upward by an amount equal to the Spread Adjustment for each amount, if any, equal to the Adjustment Factor that the Measuring Metric falls below the Minimum Triggering Level, up to a maximum of 24.95%. In addition, the Dividend Rate will adjust upward by 10.0% following the occurrence of any Trigger Event.

c.           The adjusted Dividend Rate used for calculation of the Liquidation Value, Conversion Premium, Early Redemption Price and Dividend, as applicable, and the amount of Dividends owed will be calculated and determined based upon the Measuring Metric at close of the Trading Market immediately prior to the Notice Time.

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4.            Mandatory Redemption. If the Corporation determines to liquidate, dissolve or wind-up its business and affairs, or upon closing or occurrence of any Deemed Liquidation Event, the Corporation will after the redemption of the Series E and Series F Preferred Stock for ownership of Lineal Holdings, LLC, to the extent allowed under applicable law, but thereafter, prior to or concurrently with the closing, effectuation or occurrence any such action, redeem the Series C Preferred Stock for cash, by wire transfer of immediately available funds to an account designated by Holder, at the Early Redemption Price set forth in Section I.F.2 if the event is prior to the Dividend Maturity Date, or at the Liquidation Value if the event is on or after the Dividend Maturity Date.

5.            Mechanics of Redemption. In order to redeem any of the Holders’ Series C Preferred Stock then outstanding, the Corporation must deliver written notice (each, a “Redemption Notice”) to each Holder setting forth (a) the number of shares of Series C Preferred Stock that the Corporation is redeeming, (b) the applicable Dividend Rate, Liquidation Value and Early Redemption Price, and (c) the calculation of the amount paid. Upon receipt of full payment in cash for a complete redemption, each Holder will promptly submit to the Corporation such Holder’s Series C Preferred Stock certificates. In connection with a mandatory redemption, the notice will be delivered as soon as the number of shares can be determined, and in all other instances at least 30 Trading Days prior to payment. For the avoidance of doubt, the delivery of a Redemption Notice will not affect Holder’s rights under Section I.G until after receipt of cash payment by Holder at the required time.

G.            Conversion.

1.            Mechanics of Conversion.

a.           One or more shares of the Series C Preferred Stock may be converted, in part or in whole, into shares of Common Stock, at any time or times after the Issuance Date, in the sole and absolute discretion of Holder or, subject to the terms and conditions hereof, the Corporation; (i) if at the option of Holder, by delivery of one or more written notices to the Corporation or its transfer agent (each, a “Holder Conversion Notice”), of the Holder’s election to convert any or all of its Series C Preferred Stock; or (ii) if at the option of the Corporation, if the Equity Conditions are met, delivery of written notice to Holder (each, a “Corporation Conversion Notice,” with the Holder Conversion Notice, each a “Conversion Notice,” and with the Redemption Notice, each an “Initial Notice”), of the Corporation’s election to convert the Series C Preferred Stock.

b.           Each Delivery Notice will set forth the number of shares of Series C Preferred Stock being converted, the minimum number of Conversion Shares and the amount of Dividends and any applicable Conversion Premium due as of the time the Delivery Notice is given (the “Notice Time”), and the calculation thereof.

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b.           If the Corporation notifies Holder by 10:00 a.m. Eastern time on the Trading Day after the Notice Time that it is paying all or any portion of Dividends or Conversion Premium, and actually pays in cash by the next Trading Day, time being of the essence, the full amount of Dividends and Conversion Premium stated in the Delivery Notice, no further amount will be due with respect thereto.

c.           As soon as practicable, and in any event within 1 Trading Day of the Notice Time, time being of the essence, the Corporation will do all of the following: (i) transmit the Delivery Notice by facsimile or electronic mail to the Holder, and to the Corporation’s transfer agent (the “Transfer Agent”) with instructions to comply with the Delivery Notice; (ii) either (A) if the Corporation is approved through The Depository Trust Corporation (“DTC”), authorize and instruct the credit by the Transfer Agent the aggregate number of Conversion Shares set forth in the Delivery Notice, to Holder’s or its designee’s balance account with the DTC Fast Automated Securities Transfer (FAST) Program, through its Deposit/Withdrawal at Custodian (DWAC) system, or (B) only if the Corporation is not approved through DTC, issue and surrender to a common carrier for overnight delivery to the address as specified in the Delivery Notice a certificate registered in the name of Holder or its designee, for the number of Conversion Shares set forth in the Delivery Notice, bearing no restrictive legend unless a registration statement covering the Conversion Shares is not effective and neither Company nor Investor provides an opinion of counsel to the effect that Conversion Shares may be issued without restrictive legend; and (iii) if it contends that the Delivery Notice is in any way incorrect, a through explanation of why and its own calculation, or the Delivery Notice will conclusively be deemed correct for all purposes. The Corporation will at all times diligently take or cause to be taken all actions reasonably necessary to cause the Conversion Shares to be issued as soon as practicable.

d.           If during the Measurement Period the Holder is entitled to receive additional Conversion Shares with regard to an Initial Notice, Holder may at any time deliver one or more additional written notices to the Corporation or its transfer agent (each, an “Additional Notice” and with the Initial Notice, each a “Delivery Notice”) setting forth the additional number of Conversion Shares to be delivered, and the calculation thereof.

e.           If the Corporation for any reason does not issue or cause to be issued to the Holder within 3 Trading Days after the date of a Delivery Notice, the number of Conversion Shares stated in the Delivery Notice, then, in addition to all other remedies available to the Holder, as liquidated damages and not as a penalty, the Corporation will pay in cash to the Holder on each day after such 3rd Trading Day that the issuance of such Conversion Shares is not timely effected an amount equal to 2% of the product of (i) the aggregate number of Conversion Shares not issued to the Holder on a timely basis and to which the Holder is entitled and (ii) the highest Closing Price of the Common Stock between the date on which the Corporation should have issued such shares to the Holder and the actual date of receipt of Conversion Shares by Holder. It is intended that the foregoing will serve to reasonably compensate Holder for any delay in delivery of Conversion Shares, and not as punishment for any breach by the Corporation. The Corporation acknowledges that the actual damages likely to result from delay in delivery are difficult to estimate and would be difficult for Holder to prove.

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f.            Notwithstanding any other provision: all of the requirements of Section I.F and this Section I.G are each independent covenants; the Corporation’s obligations to issue and deliver Conversion Shares upon any Delivery Notice are absolute, unconditional and irrevocable; any breach or alleged breach of any representation or agreement, or any violation or alleged violation of any law or regulation, by any party or any other person will not excuse full and timely performance of any of the Corporation’s obligations under these sections; and under no circumstances may the Corporation seek or obtain any temporary, interim or preliminary injunctive or equitable relief to prevent or interfere with any issuance of Conversion Shares to Holder.

g.          If for any reason whatsoever Holder does not timely receive the number of Conversion Shares stated in any Delivery Notice, Holder will be entitled to a compulsory remedy of immediate specific performance, temporary, interim and, preliminary and final injunctive relief requiring Corporation and its transfer agent, attorneys, officers and directors to immediately issue and deliver the number of Conversion Shares stated by Holder, which requirement will not be stayed for any reason, without the necessity of posting any bond, and which Corporation may not seek to stay or appeal.

h.          No fractional shares of Common Stock are to be issued upon conversion of Series C Preferred Stock, but rather the Corporation will issue to Holder scrip or warrants registered on the books of the Corporation (certificated or uncertificated) which will entitle Holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share. The Holder will not be required to deliver the original certificates for the Series C Preferred Stock in order to effect a conversion hereunder. The Corporation will pay any and all taxes which may be payable with respect to the issuance and delivery of any Conversion Shares.

2.            Holder Conversion. In the event of a conversion of any Series C Preferred Stock pursuant to a Holder Conversion Notice, the Corporation will (a) satisfy the payment of Dividends and Conversion Premium with respect to the shares of Series C Preferred Stock converted as provided in Section I.C.2, and (b) issue to the Holder of such Series C Preferred Stock a number of Conversion Shares equal to (i) the Face Value multiplied by (ii) the number of such Series C Preferred Stock subject to the Holder Conversion Notice divided by (iii) the applicable Conversion Price with respect to such Series C Preferred Stock; all in accordance with the procedures set forth in Section I.G.1.

3.             Corporation Conversion. The Corporation will have the right to send the Holder a Corporation Conversion Notice at any time in its sole and absolute discretion, if the Equity Conditions are met as of the time such Corporation Conversion Notice is given. Upon any conversion of any Series C Preferred Stock pursuant to a Corporation Conversion Notice, the Corporation will on the date of such notice (a) satisfy the payment of Dividends and Conversion Premium with respect to the shares of Series C Preferred Stock converted as provided in Section I.C.2, and (b) issue to the Holder of such Series C Preferred Stock a number of Conversion Shares equal to (i) the Face Value multiplied by (ii) the number of such Series C Preferred Stock subject to the Holder Conversion Notice divided by (iii) the applicable Conversion Price with respect to such Series C Preferred Stock; all in accordance with the procedures set forth in Section I.G.1.

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4.            Stock Splits. If the Corporation at any time on or after the filing of this Certificate of Designations subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the applicable Conversion Price, Adjustment Factor, Maximum Triggering Level, Minimum Triggering Level, and other share based metrics in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock issuable will be proportionately increased. If the Corporation at any time on or after such Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the applicable Conversion Price, Adjustment Factor, Maximum Triggering Level, Minimum Triggering Level, and other share based metrics in effect immediately prior to such combination will be proportionately increased and the number of Conversion Shares will be proportionately decreased. Any adjustment under this Section will become effective at the close of business on the date the subdivision or combination becomes effective.

5.            Rights. In addition to any adjustments pursuant to Section I.G.4, if at any time the Corporation grants, issues or sells any options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which Holder could have acquired if Holder had held the number of shares of Common Stock acquirable upon conversion of all Preferred Stock held by Holder immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

6.            Notices. The holders of shares of Series C Preferred Stock are entitled to the same rights as the holders of Common Stock with respect to rights to receive notices, reports and audited accounts from the Company and with respect to attending stockholder meetings.

7.            Definitions. The following terms will have the following meanings:

a.            “Adjustment Factor” means $0.10 per share of Common Stock.

b.            “Acquisition” means the closing of the acquisition of assets contemplated by that certain Asset Purchase Agreement dated December 30, 2015 between Company and the sellers named therein, as disclosed in the current report on Form 8-K filed with the Securities & Exchange Commission on December 31, 2015.

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c.             “Closing Price” means, for any security as of any date, the last closing bid price for such security on the Trading Market, or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00 p.m., Eastern time, or, if the Trading Market is not the principal securities exchange or trading market for such security, the last closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security, or, if no closing bid price is reported for such security, the average of the bid prices of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).

d.             “Conversion Premium” for each share of Series C Preferred Stock means the Face Value, multiplied by the product of (i) the applicable Dividend Rate, and (ii) the number of whole years between the Issuance Date and the Dividend Maturity Date.

e.             “Conversion Price” means a price per share of Common Stock equal to $3.25 per share of Common Stock, subject to adjustment as otherwise provided herein.

f.             “Conversion Shares” means all shares of Common Stock that are required to be or may be issued upon conversion of Series C Preferred Stock.

g.            “Dividend Maturity Date” means the date that is 7 years after the Issuance Date.

h.            “Equity Conditions” means on each day during the Measurement Period, (i) the Common Stock is not under chill or freeze from DTC, the Common Stock is designated for trading on OTCQB or higher market and will not have been suspended from trading on such market, and delisting or suspension by the Trading Market has not been threatened or pending, either in writing by such market or because Company has fallen below the then effective minimum listing maintenance requirements of such market; (ii) the Corporation has delivered Conversion Shares upon all conversions or redemptions of the Series C Preferred Stock in accordance with their terms to the Holder on a timely basis; (iii) the Corporation will have no knowledge of any fact that would cause both of the following (A) a registration statement not to be effective and available for the resale of all Conversion Shares, and (B) Section 3(a)(9) under the Securities Act of 1933, as amended, not to be available for the issuance of all Conversion Shares, or Regulation S or Securities Act Rule 144 not to be available for the resale of all the Conversion Shares underlying the Series C Preferred Stock without restriction; (iv) there has been a minimum of $5 million in aggregate trading volume over the last 20 consecutive Trading Days; (v) all shares of Common Stock to which Holder is entitled have been timely received into Holder’s designated account in electronic form fully cleared for trading; (vi) the Corporation otherwise will have been in compliance with and will not have breached any provision, covenant, representation or warranty of any Transaction Document; (vii) the Measuring Metric is at least $1.50; (viii) no Trigger Event will have occurred; (ix) the Corporation will have been assigned all right and title to the properties being acquired in the Acquisition, or cumulative assignments representing not less than 90% of the value of the assets described; and (x) the properties being assigned to the Corporation in the Acquisition will have daily production of not less than 700 barrels of oil equivalent per day as of the most recent production data available, not more than 75 days old.

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i.              “Lineal Star Assets” means the securities and assets of Lineal Star Holdings, LLC and its existing and future subsidiaries.

j.             “Maximum Triggering Level” means $3.75 per share of Common Stock.

k.            “Measurement Period” means the period beginning, if no Trigger Event has occurred 30 Trading Days, and if a Trigger Event has occurred 60 Trading Days, before the Notice Date, and ending, if no Trigger Event has occurred 30 Trading Days, and if a Trigger Event has occurred 60 Trading Days, after the number of Conversion Shares stated in the initial Notice have actually been received into Holder’s designated brokerage account in electronic form and fully cleared for trading; provided that for each day during the Measurement Period on which less than all of the conditions set forth in Section I.G.6.h exist, 1 Trading Day will be added to what otherwise would have been the end of the Measurement Period.

l.             “Measuring Metric” means the volume weighted average price of the Common Stock on any Trading Day following the Issuance Date of the Series C Preferred Stock.

m.           “Merger” means any combination, through any sale of securities or merger, between the Company and Lineal Star Holdings, LLC, a Delaware limited liability company or its affiliates.

n.            “Minimum Triggering Level” means $2.75 per share of Common Stock.

o.             “Spread Adjustment” means 100 basis points.

p.            “Stock Purchase Agreement” means the Stock Purchase Agreement or other agreement pursuant to which any share of Series C Preferred Stock is issued, including all exhibits thereto and all related Transaction Documents as defined therein.

q.             “Trading Day” means any day on which the Common Stock is traded on the Trading Market.

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r.           “Trading Market” means the NYSE American or whatever is at the applicable time, the principal U.S. trading exchange or market for the Common Stock. All Trading Market data will be measured as provided by the appropriate function of the Bloomberg Professional service of Bloomberg Financial Markets or its successor performing similar functions.

s.           “Transaction Documents” means Preferred Stock Purchase Agreement dated April 6, 2016; Securities Purchase Agreement dated April 6, 2016; Stock Purchase Agreement dated October 5, 2017; Stock Purchase Agreement dated October 26, 2018; and Stock Purchase Agreement dated November 23, 2018 each as amended from time to time, and all documents ancillary thereto.

7.           Issuance Limitation.

a.            Beneficial Ownership. Notwithstanding any other provision, at no time may the Corporation issue shares of Common Stock to Holder which, when aggregated with all other shares of Common Stock then deemed beneficially owned by Holder, would result in Holder owning more than 4.99% of all Common Stock outstanding immediately after giving effect to such issuance, as determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that Holder may increase such amount to 9.99% upon not less than 61 days’ prior notice to the Corporation. To the extent that any conversion would otherwise result in exceeding the beneficial ownership limitation set forth in the preceding sentence, the Delivery Notice will specify the number of shares that may be delivered without exceeding the limitation, and any issuance beyond such extent will be held in abeyance until such time as it would not result in Holder exceeding the beneficial ownership limitation. No provision of this paragraph may be waived by Holder or the Corporation.

b.            Principal Market Regulation. Company will not issue any Conversion Shares under this Certificate of Designations, the Warrant issued to Holder on the Issuance Date, the Securities Purchase Agreement with Investor dated the Issuance Date, the Debenture or the Common Stock Purchase Warrant issued to Investor pursuant thereto, if the issuance would exceed the aggregate number of shares of Common Stock the Company may issue without breaching Company’s obligations under NYSE American rules, except that such limitation will not apply following stockholder approval in accordance with the requirements of NYSE American rules or a waiver from NYSE American (“Approval”).

8.          Conversion at Maturity. On the Dividend Maturity Date, all remaining outstanding Series C Preferred Stock will automatically be converted into shares of Common Stock.

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H.            Trigger Event.

1.            Any occurrence of any one or more of the following will constitute a “Trigger Event”:

(a)         Holder does not timely receive the number of Conversion Shares stated in any Conversion Notice pursuant to this Certificate of Designations or any other agreement with Holder for any reason whatsoever, time being of the essence, including without limitation the issuance of restricted shares if counsel for Corporation or Holder provides a legal opinion that shares may be issued without restrictive legend;

(b)         Any violation of or failure to timely perform any covenant or provision of this Certificate of Designations, the Stock Purchase Agreement, any Transaction Document or any other agreement with Holder, related to payment of cash, registration or delivery of Conversion Shares, time being of the essence;

(c)         Any violation of or failure to perform any covenant or provision of this Certificate of Designations, the Stock Purchase Agreement, any Transaction Document or any other agreement with Holder, which in the case of a default that is curable, is not related to payment of cash, registration or delivery of Conversion Shares, and has not occurred before, is not cured within 5 Trading Days of written notice thereof;

(d)         Any representation or warranty made in the Securities Purchase Agreement, any Transaction Document or any other agreement with Holder will be untrue, incorrect, or misleading in any material respect as of the date when made or deemed made;

(e)         The occurrence of any default or event of default under any material agreement, lease, document or instrument to which the Corporation or any subsidiary other than CATI Operating LLC, a Texas limited liability company (“CATI”) is obligated, including without limitation of an aggregate of at least $500,000 of indebtedness;

(f)          While any Registration Statement is required to be maintained effective, the effectiveness of the Registration Statement lapses for any reason, including, without limitation, the issuance of a stop order, or the Registration Statement, or the prospectus contained therein, is unavailable to Holder sale of all Conversion Shares for any 5 or more Trading Days, which may be non-consecutive;

(g)          The suspension from trading or the failure of the Common Stock to be trading or listed on the Trading Market;

(h)         The Corporation notifies Holder, including without limitation, by way of public announcement or through any of its attorneys, agents or representatives, of its intention not to comply, as required, with a Conversion Notice pursuant to this Certificate of Designations or any other agreement with Holder, at any time, including without limitation any objection or instruction to its transfer agent not to comply with any notice from Holder;

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(i)          Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors will be instituted by or against the Corporation or any subsidiary other than CATI and, if instituted against the Corporation or any subsidiary other than CATI by a third party, an order for relief is entered or the proceedings are not dismissed within 30 days of their initiation;

(j)          The appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, or other similar official of the Corporation or any subsidiary other than CATI or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Corporation or any subsidiary other than CATI in furtherance of any such action or the taking of any action by any person to commence a foreclosure sale or any other similar action under any applicable law;

(k)         A final judgment or judgments for the payment of money aggregating in excess of $500,000 are rendered against the Corporation or any of its subsidiaries other than CATI and are not stayed or satisfied within 30 days of entry;

(l)          The Corporation does not for any reason timely comply with the reporting requirements of the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder, including without limitation timely filing when first due all periodic reports;

(m)        Any regulatory, administrative or enforcement proceeding is initiated against Corporation or any subsidiary (except to the extent an adverse determination would not have a material adverse effect on the Company’s business, properties, assets, financial condition or results of operations or prevent the performance by the Company of any material obligation under the Transaction Documents); or

(n)         Any material provision of this Certificate of Designations shall at any time for any reason, other than pursuant to the express terms thereof, cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof will be contested by any party thereto, or a proceeding will be commenced by the Corporation or any subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Corporation or any subsidiary denies that it has any liability or obligation purported to be created under this Certificate of Designations.

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2.            It is intended that all adjustments made following a Trigger Event will serve to reasonably compensate Holder for the consequences and increased risk following a Trigger Event, and not as a penalty or punishment for any breach by the Corporation. The Corporation acknowledges that the actual damages likely to result from a Trigger Event are difficult to estimate and would be difficult for Holder to prove.

II.            General.

A.            Notices. Any and all notices to the Corporation will be addressed to the Corporation’s Chief Executive Officer at the Corporation’s principal place of business on file with the Secretary of State of the State of Nevada. Any and all notices or other communications or deliveries to be provided by the Corporation to any Holder hereunder will be in writing and delivered personally, by electronic mail or facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the electronic mail, facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such electronic mail, facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder will be deemed given and effective on the earliest of (1) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail prior to 5:30 p.m. Eastern time, (2) the date after the date of transmission, if such notice or communication is delivered via facsimile or electronic mail later than 5:30 p.m. but prior to 11:59 p.m. Eastern time on such date, (3) the second business day following the date of mailing, if sent by nationally recognized overnight courier service, or (4) upon actual receipt by the party to whom such notice is required to be given, regardless of how sent.

B.           Lost or Mutilated Preferred Stock Certificate. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered Holder will be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing shares of Series C Preferred Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the Holder is a financial institution or other institutional investor its own agreement will be satisfactory) or in the case of any such mutilation upon surrender of such certificate, the Corporation will, at its expense, execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

C.            Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and will not be deemed to limit or affect any of the provisions hereof.

NOW THEREFORE BE IT RESOLVED, that the Designation is hereby approved, affirmed, confirmed, and ratified; and it is further

RESOLVED, that each officer of the Corporation be and hereby is authorized, empowered and directed to execute and deliver, in the name of and on behalf of the Corporation, any and all documents, and to perform any and all acts necessary to reflect the Board of Directors approval and ratification of the resolutions set forth above; and it is further

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RESOLVED, that in addition to and without limiting the foregoing, each officer of the Corporation and the Corporation’s attorney be and hereby is authorized to take, or cause to be taken, such further action, and to execute and deliver, or cause to be delivered, for and in the name and on behalf of the Corporation, all such instruments and documents as he may deem appropriate in order to effect the purpose or intent of the foregoing resolutions (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments, as the case may be) and all action heretofore taken by such officer in connection with the subject of the foregoing recitals and resolutions be, and it hereby is approved, ratified and confirmed in all respects as the act and deed of the Corporation; and it is further

RESOLVED, that this Designation may be executed in several counterparts, each of which is an original; that it shall not be necessary in making proof of this Designation or any counterpart hereof to produce or account for any of the other.

[Remainder of page left intentionally blank. Signature page follows.]

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IN WITNESS WHEREOF, the Corporation has caused this “Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock” to be duly executed and approved this 8th day of July 2019.

By:	/s/ Louis G. Schott
	Name:  Louis G. Schott
	Its:  Interim CEO

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EX-3.2

Camber Energy, Inc. 8-K

Exhibit 3.2

 

CAMBER ENERGY, INC. 

CERTIFICATE OF DESIGNATIONS OF PREFERENCES, POWERS,
RIGHTS AND LIMITATIONS
OF
SERIES D CONVERTIBLE PREFERRED STOCK

Pursuant to Section 78.1955 of the Nevada Revised Statutes (the “NRS”), Camber Energy, Inc., a company organized and existing under the State of Nevada (the “Corporation”),

DOES HEREBY CERTIFY that, the Board of Directors, by unanimous written consent of all members of the Board of Directors on July 2, 2019, duly adopted this Certificate of Designations of Preferences, Powers, Rights and Limitations of Series D Convertible Preferred Stock, by adoption of a resolution which reads as follows:

WHEREAS, the Certificate of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, comprised of 10,000,000 shares, $0.001 par value per share (the “Preferred Stock”), issuable from time to time in one or more series;

WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, powers, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of Preferred Stock and the number of shares constituting any Series and the designation thereof, of any of them;

WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid and as set forth in this Certificate of Designations of Preferences, Powers, Rights and Limitations of Series D Convertible Preferred Stock, to designate the rights, preferences, restrictions and other matters relating to the Series D Convertible Preferred Stock, which will consist of up to 50,000 shares of the Preferred Stock which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Preferred Stock shall have the following powers, rights, preferences, and restrictions as follows: 

I.             Terms of Preferred Stock.

A.            Designation and Amount. A series of Preferred Stock is hereby designated as the Corporation’s Series D Convertible Preferred Stock, par value of $0.001 per share (the “Series D Preferred Stock”), the number of shares of which so designated are 50,000 shares of Series D Preferred Stock; which Series D Preferred Stock will not be subject to increase without any consent of the holders of the Series D Preferred Stock (each a “Holder” and collectively, the “Holders”) that may be required by applicable law.

B.           Ranking and Voting.

1.             Ranking. The Series D Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior to the Corporation’s Common Stock, $0.001 par value per share (“Common Stock”); (b) pari passu with respect to the Series E and Series F Preferred Stock; and (c) junior to all existing and future indebtedness of the Corporation. Without the prior written consent of the Holders of a majority of the outstanding shares of Series D Preferred Stock (voting separately as a single class), the Corporation may not issue any additional shares of Series D Preferred Stock or any other Preferred Stock that is senior to the Series D Preferred Stock with respect to any rights other than the Series E and Series F Preferred Stock.

2.            Voting. Except as required by applicable law or as set forth herein, the holders of shares of Series D Preferred Stock will have no right to vote on any matters, questions or proceedings of this Corporation including, without limitation, the election of directors except: (a) on an amendment to this Certificate of Designations, (b) on a proposal to reduce the Company’s share capital; (c) on a resolution to approve the terms of a buy-back agreement; (d) on a proposal to wind up the Company; (e) on a proposal for the disposal of all or substantially all the Company’s property, business and undertaking; and (f) during the winding-up of the entity. 

C.           Dividends. No dividends shall be due or payable on the Series D Preferred Stock.

D.           Protective Provisions.

1.             So long as any shares of Series D Preferred Stock are outstanding, the Company will not repurchase shares of Common Stock other than as payment of the exercise or conversion price of a convertible security or payment of withholding tax, and no dividends or other distributions will be paid, declared or set apart with respect to any Common Stock, except for Purchase Rights.

2.             So long as any shares of Series D Preferred Stock are outstanding, the Corporation will not, without the affirmative approval of the Holders of a majority of the shares of the Series D Preferred Stock then outstanding (voting separately as one class), (i) alter or change adversely the powers, preferences or rights given to the Series D Preferred Stock or alter or amend this Certificate of Designations, (ii) authorize or create any class of stock ranking as to distribution of dividends senior to the Series D Preferred Stock, (iii) amend its certificate of incorporation or other charter documents in breach of any of the provisions hereof, (iv) increase the authorized number of shares of Series D Preferred Stock or (v) enter into any agreement with respect to the foregoing.

Designation of Camber Energy, Inc.’s Series D Convertible Preferred Stock

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3.             A “Deemed Liquidation Event” will mean: (a) a merger or consolidation in which the Corporation is a constituent party or a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except (i) any such merger or consolidation involving the Corporation or a subsidiary in which the Corporation is the surviving or resulting corporation, (ii) any merger effected exclusively to change the domicile of the Corporation, or (iii) any transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain more than 50% of the total voting power of such surviving entity; (b) Corporation issues convertible or equity securities that are senior to the Series D Preferred Stock in any respect, (c) Holder does not receive the number of Conversion Shares stated in a Delivery Notice with 5 Trading Days of the Notice Time; (d) trading of the Common Stock is halted or suspended by the Trading Market or any U.S. governmental agency for 10 or more consecutive trading days; (e) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation.

4.             The Corporation will not have the power to close or effect a voluntary Deemed Liquidation Event unless the agreement or plan of merger or consolidation for such transaction provides that the consideration payable to the stockholders of the Corporation will be allocated among the holders of capital stock of the Corporation in accordance with Section I.E, and the required amount is paid to Holder prior to or upon closing, effectuation or occurrence of the Deemed Liquidation Event.

E.            Liquidation.

1.             Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of debts and other liabilities of the Corporation, prior to any distribution or payment made to the holders of Preferred Stock or Common Stock by reason of their ownership thereof, the Holders of Series D Preferred Stock will be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders an amount with respect to each share of Series D Preferred Stock equal to the Liquidation Value on a pari passu basis with the holders of the Series E and Series F Preferred Stock.

2.             If, upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the amounts payable with respect to the shares of Series D Preferred Stock are not paid in full, the holders of shares of Series D Preferred Stock will, in any distribution of assets of the Corporation, receive such amounts that are in proportion to the liquidation preference to which each such holder is entitled.

3.             If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation will be insufficient to make payment in full to all Holders and all holders of Series E and Series F Preferred Stock, then the assets distributable to the Holders will be distributed among the Holders and the holders of the Series E and Series F Preferred Stock at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled.

Designation of Camber Energy, Inc.’s Series D Convertible Preferred Stock

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F.            Redemption.

1.             Mandatory Redemption. If the Corporation determines to liquidate, dissolve or wind-up its business and affairs, or upon closing or occurrence of any Deemed Liquidation Event, the Corporation will prior to or concurrently with the closing, effectuation or occurrence any such action, redeem the Series D Preferred Stock for cash, by wire transfer of immediately available funds to an account designated by Holder, at an amount equal to the Liquidation Value per share of Series D Preferred Stock.

2.             Corporation’s Redemption Option. The Corporation may, in its sole and absolute discretion, redeem any or all shares of Series D Preferred Stock then outstanding at any time by paying Holder in cash an amount per share equal to the Redemption Value for the shares redeemed.

3.             Mechanics of Redemption. In order to redeem any of the Holders’ Series D Preferred Stock then outstanding, the Corporation will deliver written notice (each, a “Redemption Notice”) to each Holder setting forth the number of shares of Series D Preferred Stock that the Corporation is redeeming and the calculation of the amount paid. Upon receipt of full payment in cash for a complete redemption, each Holder will promptly submit to the Corporation such Holder’s Series D Preferred Stock certificates. In connection with a mandatory redemption, the notice will be delivered as soon as the number of shares can be determined. For the avoidance of doubt, the delivery of a Redemption Notice will not affect Holder’s rights under Section I.G until after receipt of cash payment by Holder at the required time.

G.           Conversion.

1.Mechanics of Conversion

a.          One or more shares of the Series D Preferred Stock may be converted, in part or in whole, into shares of Common Stock, at any time or times after the Issuance Date, in the sole and absolute discretion of Holder; by delivery of one or more written notices to the Corporation or its transfer agent (each, a “Conversion Notice”), of the Holder’s election to convert any or all of its Series D Preferred Stock.

b.          Each Delivery Notice will set forth the number of shares of Series D Preferred Stock being converted and the number of Conversion Shares due as of the time the Conversion Notice is given (the “Notice Time”), as provided in Section I.G.2.

Designation of Camber Energy, Inc.’s Series D Convertible Preferred Stock

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c.          As soon as practicable, and in any event within 1 Trading Day of the Notice Time, time being of the essence, the Corporation will do all of the following: (i) transmit the Delivery Notice by facsimile or electronic mail to the Holder, and to the Corporation’s transfer agent (the “Transfer Agent”) with instructions to comply with the Delivery Notice; (ii) either (A) if the Corporation is approved through The Depository Trust Corporation (“DTC”), authorize and instruct the credit by the Transfer Agent the aggregate number of Conversion Shares set forth in the Delivery Notice, to Holder’s or its designee’s balance account with the DTC Fast Automated Securities Transfer (FAST) Program, through its Deposit/Withdrawal at Custodian (DWAC) system, or (B) only if the Corporation is not approved through DTC, issue and surrender to a common carrier for overnight delivery to the address as specified in the Delivery Notice a certificate registered in the name of Holder or its designee, for the number of Conversion Shares set forth in the Delivery Notice, bearing no restrictive legend unless a registration statement covering the Conversion Shares is not effective and neither Company nor Investor provides an opinion of counsel to the effect that Conversion Shares may be issued without restrictive legend; and (iii) if it contends that the Delivery Notice is in any way incorrect, a through explanation of why and its own calculation, or the Delivery Notice will conclusively be deemed correct for all purposes. The Corporation will at all times diligently take or cause to be taken all actions reasonably necessary to cause the Conversion Shares to be issued as soon as practicable.

d.          If the Corporation for any reason does not issue or cause to be issued to the Holder within 3 Trading Days after the date of a Delivery Notice, the number of Conversion Shares stated in the Delivery Notice, then, in addition to all other remedies available to the Holder, as liquidated damages and not as a penalty, the Corporation will pay in cash to the Holder on each day after such 3rd Trading Day that the issuance of such Conversion Shares is not timely effected an amount equal to 2% of the product of (i) the aggregate number of Conversion Shares not issued to the Holder on a timely basis and to which the Holder is entitled and (ii) the highest Closing Price of the Common Stock between the date on which the Corporation should have issued such shares to the Holder and the actual date of receipt of Conversion Shares by Holder. It is intended that the foregoing will serve to reasonably compensate Holder for any delay in delivery of Conversion Shares, and not as punishment for any breach by the Corporation. The Corporation acknowledges that the actual damages likely to result from delay in delivery are difficult to estimate and would be difficult for Holder to prove.

 e.         No fractional shares of Common Stock are to be issued upon conversion of Series D Preferred Stock, but rather the Corporation shall round any fractional shares up to a full share.  The Corporation will pay any and all taxes which may be payable with respect to the issuance and delivery of any Conversion Shares.

2.Holder Conversion. In the event of a conversion of any Series D Preferred Stock pursuant to a Conversion Notice, the Corporation will issue to the Holder of such Series D Preferred Stock a number of Conversion Shares equal to 1,000 shares of Common Stock, subject to adjustment as otherwise provided herein; all in accordance with the procedures set forth in Section I.G.1.

Designation of Camber Energy, Inc.’s Series D Convertible Preferred Stock

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3.             Stock Splits.  If the Corporation at any time on or after the filing of this Certificate of Designations subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the applicable conversion rate and any other share based metrics in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock issuable will be proportionately increased. If the Corporation at any time on or after such Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the applicable conversion rate and any other share based metrics in effect immediately prior to such combination will be proportionately increased and the number of Conversion Shares will be proportionately decreased. Any adjustment under this Section will become effective at the close of business on the date the subdivision or combination becomes effective.

4.             Rights. In addition to any adjustments pursuant to Section I.G.3, if at any time the Corporation grants, issues or sells any options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which Holder could have acquired if Holder had held the number of shares of Common Stock acquirable upon conversion of all Preferred Stock held by Holder immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

5.             Notices. The holders of shares of Series D Preferred Stock are entitled to the same rights as the holders of Common Stock with respect to rights to receive notices, reports and audited accounts from the Company and with respect to attending stockholder meetings.

6.             Definitions.  The following terms will have the following meanings:

“Conversion Shares” means all shares of Common Stock that are required to be issued upon conversion of Series D Preferred Stock.

“Lineal” means Lineal Star Holdings, LLC, a Delaware limited liability corporation.

“Liquidation Value” means $10 million divided by the total number of Original Series D Shares.

“Merger” means any combination, through any sale of securities or merger, between the Company and Lineal or its affiliates.

“Original Series D Shares” means the total number of shares of Series D Preferred Stock issued pursuant to the terms of that certain Securities Exchange Agreement between the Corporation and the investor named therein dated on or around July 8, 2019, as amended from time to time.

Designation of Camber Energy, Inc.’s Series D Convertible Preferred Stock

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“Redemption Value” means $12 million divided by the total number of Original Series D Shares.

“Trading Day” means any day on which the Common Stock is traded on the Trading Market.

“Trading Market” means the NYSE American or whatever is at the applicable time, the principal U.S. trading exchange or market for the Common Stock. All Trading Market data will be measured as provided by the appropriate function of the Bloomberg Professional service of Bloomberg Financial Markets or its successor performing similar functions.

8.             Issuance Limitation.

               a.           Beneficial Ownership. Notwithstanding any other provision, at no time may the Corporation issue shares of Common Stock to Holder which, when aggregated with all other shares of Common Stock then deemed beneficially owned by Holder, would result in Holder owning more than 4.99% of all Common Stock outstanding immediately after giving effect to such issuance, as determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that Holder may increase such amount to 9.99% upon not less than 61 days’ prior notice to the Corporation. To the extent that any conversion would otherwise result in exceeding the beneficial ownership limitation set forth in the preceding sentence, the Delivery Notice will specify the number of shares that may be delivered without exceeding the limitation, and any issuance beyond such extent will be held in abeyance until such time as it would not result in Holder exceeding the beneficial ownership limitation. No provision of this paragraph may be waived by Holder or the Corporation.

II.            General.

A.            Notices. Any and all notices to the Corporation will be addressed to the Corporation’s Chief Executive Officer at the Corporation’s principal place of business on file with the Secretary of State of the State of Nevada. Any and all notices or other communications or deliveries to be provided by the Corporation to any Holder hereunder will be in writing and delivered personally, by electronic mail or facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the electronic mail, facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such electronic mail, facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder will be deemed given and effective on the earliest of (1) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail prior to 5:30 p.m. Eastern time, (2) the date after the date of transmission, if such notice or communication is delivered via facsimile or electronic mail later than 5:30 p.m. but prior to 11:59 p.m. Eastern time on such date, (3) the second business day following the date of mailing, if sent by nationally recognized overnight courier service, or (4) upon actual receipt by the party to whom such notice is required to be given, regardless of how sent.

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B.            Lost or Mutilated Preferred Stock Certificate.  Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered Holder will be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing shares of Series D Preferred Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the Holder is a financial institution or other institutional investor its own agreement will be satisfactory) or in the case of any such mutilation upon surrender of such certificate, the Corporation will, at its expense, execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

C.            Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and will not be deemed to limit or affect any of the provisions hereof.

D.            No Other Rights or Privileges. Except as specifically set forth herein, the Holders of the Series D Preferred Stock shall have no other rights, privileges or preferences with respect to the Series D Preferred Stock.

NOW THEREFORE BE IT RESOLVED, that the Designation is hereby approved, affirmed, confirmed, and ratified; and it is further

RESOLVED, that each officer of the Corporation be and hereby is authorized, empowered and directed to execute and deliver, in the name of and on behalf of the Corporation, any and all documents, and to perform any and all acts necessary to reflect the approval and ratification of the resolutions set forth above; and it is further

RESOLVED, that in addition to and without limiting the foregoing, each officer of the Corporation and the Corporation’s attorney be and hereby is authorized to take, or cause to be taken, such further action, and to execute and deliver, or cause to be delivered, for and in the name and on behalf of the Corporation, all such instruments and documents as he may deem appropriate in order to effect the purpose or intent of the foregoing resolutions (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments, as the case may be) and all action heretofore taken by such officer in connection with the subject of the foregoing recitals and resolutions be, and it hereby is approved, ratified and confirmed in all respects as the act and deed of the Corporation; and it is further

RESOLVED, that this Designation may be executed in several counterparts, each of which is an original; that it shall not be necessary in making proof of this Designation or any counterpart hereof to produce or account for any of the other.

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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations of Preferences, Powers, Rights and Limitations of Series D Convertible Preferred Stock to be duly executed and approved this 2nd day of July 2019.

CAMBER ENERGY, INC.
By:	/s/ Louis G. Schott

Name: Louis G. Schott

Its: Interim CEO

Designation of Camber Energy, Inc.’s Series D Convertible Preferred Stock

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EX-3.3

Camber Energy, Inc. 8-K

Exhibit 3.3

 

CERTIFICATE OF DESIGNATION

OF

CAMBER ENERGY, INC.

ESTABLISHING THE DESIGNATION, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES E REDEEMABLE CONVERTIBLE PREFERRED STOCK

Pursuant to Section 78.1955 of the Nevada Revised Statutes (the “NRS”), Camber Energy, Inc., a company organized and existing under the State of Nevada (the “Corporation”),

DOES HEREBY CERTIFY that pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the Corporation, as amended, and pursuant to Section 78.1955 of the NRS, the Board of Directors, by unanimous written consent of all members of the Board of Directors on July 2, 2019, duly adopted a resolution providing for the issuance of a series of one million (1,000,000) shares of Series E Redeemable Convertible Preferred Stock, which resolution is and reads as follows:

RESOLVED, that pursuant to the authority expressly granted to and invested in the Board of Directors by the provisions of the Articles of Incorporation of the Corporation, as amended and Section 78.1955 of the NRS, a series of the preferred stock, par value $0.001 per share, of the Corporation be, and it hereby is, established; and

FURTHER RESOLVED, that the series of preferred stock of the Corporation be, and it hereby is, given the distinctive designation of “Series E Preferred Stock”; and

FURTHER RESOLVED, that the Series E Preferred Stock shall consist of one million (1,000,000) shares; and

FURTHER RESOLVED, that the Series E Preferred Stock shall have the powers and preferences, and the relative, participating, optional and other rights, and the qualifications, limitations, and restrictions thereon set forth in this Certificate of Designation (the “Designation” or the “Certificate of Designation”):

1.Definitions. In addition to other terms defined throughout this Designation, the following terms have the following meanings when used herein:

1.1“Applicable Law” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, decree, permit, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition issued under any of the foregoing by, or any determination by any governmental authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such governmental authority), as interpreted and enforced at the time in question, including, but not limited to the NRS.

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1.2“Approval Date” means the later of (a) the first Business Day after the date that all of the requirements of Shareholder Approval are met; and (b) the Business Day that the Corporation has affected a reverse stock split of its outstanding Common Stock subsequent to the Shareholder Approval, to the extent such reverse stock split is deemed necessary by a Majority In Interest in writing prior to the date of Shareholder Approval.

1.3“Business Day” means any day except Saturday, Sunday or any day on which banks are authorized by law to be closed in the City of Houston, Texas.

1.4“Change of Control” means (i) the completion by the Corporation or Lineal of a plan of merger or consolidation with any other Person as a result of which the holders of the voting capital stock of the Corporation and/or Lineal, as a group, would receive less than 50% of the voting capital stock of the surviving or resulting corporation or entity; (ii) the closing of a transaction involving the Corporation or Lineal providing for the sale or transfer of substantially all the assets of the Corporation or Lineal; or (iii) the acquisition of beneficial ownership of more than 50% of the Corporation’s or Lineal’s voting capital stock by any Person within the meaning of Rule 13d-3 under the Exchange Act (other than the Corporation or a Person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation as of or immediately following the Closing Date). Notwithstanding the above, neither the initial issuance of the Series E Preferred Stock or Series F Preferred Stock, nor any changes to the terms thereof which shall occur as a result of the Shareholder Approval, shall constitute a Change of Control.

1.5“Closing Date” means the Closing Date as defined in the Plan of Merger.

1.6“Common Stock” means the common stock, $0.001 par value per share of the Corporation.

1.7“Conversion Percentage Reset Date” means the date that any Conversion Percentage Reset Event occurs.

1.8“Conversion Percentage Reset Event” shall mean that (a) the 30-day average trading price of the Common Stock, as calculated pursuant to applicable NYSE American rules and requirements, is below $0.20 per share (which value is not subject to adjustment in connection with any Recapitalizations) as of any applicable date of determination; or (b) the Corporation’s Common Stock is delisted from the NYSE American.

1.9“Conversion Percentage” means 67%, unless (i) a Conversion Percentage Reset Event occurs within the first 90 days following the Approval Date; or (ii) there is a NYSE American Listing Failure, in which case of the occurrence of an event or events described in (i) or (ii), the Conversion Percentage shall mean 77.5%.

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1.10“Conversion Rate” shall equal (i) (a) the Conversion Percentage; multiplied by, (b) the Fully-Diluted Shares, on the Approval Date, divided by (ii) the total number of Original Series E Preferred Stock Shares, (iii) rounded to the nearest hundred thousandths place (X.XXXXX). The total number of Fully-Diluted Shares and total number of Original Series E Preferred Stock Shares shall be set as of, and shall not change after, the Approval Date, provided that the Conversion Percentage may change on a Conversion Percentage Reset Date, provided further that such change shall not be retroactive to the Original Issue Date, but shall only apply from such Conversion Percentage Reset Date forward.

1.11“Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into, exercisable or exchangeable for Common Stock, except for Preferred Stock of the Corporation and excluding Options.

1.12“Corporation” has the meaning given to such term in the introductory paragraph hereof.

1.13“Distribution” shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise (other than dividends on Common Stock payable in Common Stock), or the purchase or redemption of shares of the Corporation for cash or property other than: (i) repurchases of Common Stock (or securities convertible into Common Stock) issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right or obligation of said repurchase, (ii) repurchases of Common Stock (or securities convertible into Common Stock) issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) other repurchases and redemptions allowed pursuant to the terms of this Designation and/or the designation of the Series F Preferred Stock, or (iv) any other repurchases or redemptions of capital stock of the Corporation approved by a Majority In Interest.

1.14“Exchange Act” means the Securities Exchange Act of 1934, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

1.15“Fully-Diluted Shares” means, with respect to any date of determination, the aggregate of (A) the total number of shares of Common Stock outstanding as of such date (including for the avoidance of doubt the total number of Common Stock equivalents as of such date to which any stock appreciation rights, phantom stock rights or other rights with equity or profit participation features relates), (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all Options outstanding as of such date of exercise, without, for the purposes of such aggregate calculation, taking into account the number of shares of Common Stock into which the Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series F Preferred Stock could be converted, divided by 0.0667.

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1.16“Holder” shall mean the person or entity in which the Series E Preferred Stock is registered on the books of the Corporation, which shall initially be the person or entity which such Series E Preferred Stock is issued to, and shall thereafter be permitted and legal assigns which the Corporation is notified of by the Holder and which the Holder has provided a valid legal opinion in connection therewith to the Corporation and to whom such Preferred Stock Shares are legally transferred.

1.17“Junior Securities” shall mean the Common Stock and each other class of capital stock or series of preferred stock of the Corporation other than the Series D Preferred Stock and the Series F Preferred Stock in existence on or established after the Original Issue Date, unless a Majority In Interest has approved the issuance of such after established preferred stock.

1.18 “Lineal” means Lineal Star Holdings, LLC a Delaware limited liability company.

1.19“Lineal Membership Interests” means any common share or preferred share of Lineal.

1.20“Lineal Company Agreement” means the Limited Liability Company Agreement of Lineal dated July 23, 2018, as such may be amended from time to time subject to the Holders’ rights set forth in Section 7.1(j) hereof.

1.21“Lineal Transaction” means an acquisition by Lineal of assets or securities which results in the Corporation, immediately after such acquisition, being able to meet the initial listing requirements of the NYSE American.

1.22“Liquidation Preference” means the greater of Original Issue Price per share and the amount of cash that would have been received had such share of Series E Preferred Stock been converted into Common Stock immediately prior to such Liquidation Event based on the Conversion Rate, provided that in the event the Approval Date has not yet occurred, the reference to “Approval Date” in the definition of Conversion Rate shall be substituted by the date of liquidation.

1.23“Majority In Interest” means Holders holding a majority of the then aggregate shares of Series E Preferred Stock issued and outstanding.

1.24“Material Asset Transfer” means (i) the sale, license, distribution or transfer, of more than 20% of the assets of (a) the Corporation; or (b) Lineal, in a single transaction or a series of related transactions, other than in a transaction whereby such assets are transferred to a direct or indirect wholly-owned subsidiary of the Corporation; (ii) the merger, consolidation or reorganization of the Corporation or Lineal with another corporation, partnership or other entity and as a result of such merger, consolidation or reorganization less than 50% of the outstanding voting securities of the surviving or resulting corporation, partnership or other entity shall be owned in the aggregate by the shareholders of the Corporation (as to the Corporation) or the Corporation (as to Lineal), as determined immediately prior to the consummation of such merger, consolidation or reorganization.

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1.25“Merger Sub” means Camber Energy Merger Sub 2, Inc., a Delaware corporation.

1.26“NYSE American Listing Failure” means the failure of the Corporation, on the date that the Corporation’s shareholders have approved the transactions contemplated by the Plan of Merger and the issuance of shares of Common Stock upon the Conversion of the Series E Preferred Stock as provided herein, or the first Business Day immediately following such date, to meet the listing standards for the listing of the Corporation’s Common Stock on the NYSE American.

1.27“Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities, but shall not include Preferred Stock.

1.28“Original Issue Date” means the date of issuance of the Series E Preferred Stock pursuant to the terms of the Plan of Merger.

1.29“Original Issue Price” $2,000 per share (as appropriately adjusted for any Recapitalizations).

1.30“Original Series E Preferred Stock Shares” shall mean the one million (1,000,000) shares of Series E Preferred Stock issued on the Original Issue Date.

1.31“Person” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization or other entity or group.

1.32“Plan of Merger” means that certain Agreement and Plan of Merger by and between the Corporation, Merger Sub, Lineal and the Lineal members parties thereto, dated on or around July 8, 2019, as amended from time to time.

1.33“Pari Passu Securities” means the Corporation’s Series D Preferred Stock.

1.34“Post-Shareholder Approval Shares” means 76.0% of the Total Voting Shares of the Corporation on the Approval Date, immediately following the Shareholder Approval, not including the voting rights of the Series E Preferred Stock, and rounded up to the nearest whole share.

1.35“Preferred Stock Certificates” means the stock certificate(s) issued by the Corporation representing the applicable Series E Preferred Stock shares.

1.36“Preferred Stock” means designated shares of preferred stock, $0.001 par value per share of the Corporation, including the Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock.

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1.37“Pre-Shareholder Approval Shares” means 18.9% of the total number of shares of Common Stock issued and outstanding on the date the Plan of Merger is agreed to by the parties thereto.

1.38“Principal Market” means initially the NYSE American, and shall also include the NASDAQ Capital Market, New York Stock Exchange, the NASDAQ National Market, the OTCQB Market, the OTCQX Market, or the OTC Pink Market, whichever is at the time the principal trading exchange or market for the Common Stock, based upon share volume.

1.39“Recapitalization” shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event described in Sections 5.1 through 5.3.

1.40“Redemption Date” means November 22, 2019, or if a Lineal Transaction has not occurred prior to September 23, 2019, a date which is 60 days after the closing of a Lineal Transaction, or such other later date which is approved by the Corporation and a Majority In Interest.

1.41“Restricted Shares” means shares of the Corporation’s Common Stock which are restricted from being transferred by the Holder thereof unless the transfer is effected in compliance with the Securities Act and applicable state securities laws (including investment suitability standards, which shares shall bear the following restrictive legend (or one substantially similar)): “The securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under any such acts.”

1.42“SEC” means the Securities and Exchange Commission.

1.43“Securities Act” means the Securities Act of 1933, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

1.44“Senior Securities” means (a) the Corporation’s Series F Preferred Stock; (b) the Corporation’s capital leases as may be in place from time to time; and (c) any other senior debt or other security holders of the Corporation, including certain banks and/or institutions, which hold security interests over the Corporation’s assets as of the Closing Date, or which the Corporation may agree in the future to provide priority security interests to, which shall require the approval and/or consent of a Majority In Interest.

1.45“Series C Preferred Stock” means the Corporation’s Series C Redeemable Preferred Stock.

1.46“Series D Preferred Stock” means the Corporation’s Series D Convertible Preferred Stock.

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1.47“Series F Preferred Stock” means the Corporation’s Series F Redeemable Convertible Preferred Stock.

1.48“Shareholder Approval” means (i) the approval by the shareholders of the Corporation, as required pursuant to applicable rules and regulations of the NYSE American, of (a) the transactions contemplated by the Plan of Merger; and (b) the issuance of shares of Common Stock upon the Conversion of the Series E Preferred Stock as provided herein; (ii) approval by the NYSE American of the supplemental listing application submitted by the Corporation with respect to the Conversions for the amount of Common Stock then issuable upon conversion of the Series E Preferred Stock (subject to any limitations imposed by the NYSE American); and (iii) such other terms and conditions hereof or the Plan of Merger as may be required to be approved by the NYSE American or the SEC.

1.49“Shareholders Agreement” means that shareholders agreement entered into on the date hereof, by and among the Corporation, Lineal and the Holders.

1.50“Total Voting Shares” means the total number of votes which outstanding securities of the Corporation are eligible to cast at any meeting of shareholders of the Corporation.

1.51“Transfer Agent” means initially, the Corporation, which will be serving as its own transfer agent for the Series E Preferred Stock, but at the option of the Corporation from time to time, may also mean any successor transfer agent which the Corporation may use for its Series E Preferred Stock, including, but not limited to ClearTrust, LLC.

1.52“Voting Shares” means (i) (a) the Pre-Shareholder Approval Shares, prior to the Approval Date; and (b) the Post-Shareholder Approval Shares, subsequent to the Approval Date, divided by (ii) the total number of Original Series E Preferred Stock Shares, and (iii) rounded down to the nearest whole share prior to the Approval Date and rounded up to the nearest whole share subsequent to the Approval Date.

2.Dividends.

2.1Dividends in General. The Series E Preferred Stock shall not accrue any dividends, provided that, subject to the rights of the holders, if any, of any shares of the Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series F Preferred Stock or other securities senior to or pari passu with, the Series E Preferred Stock, the Holders shall, as holders of Series E Preferred Stock, be entitled to such dividends paid and Distributions made to the holders of Common Stock to the same extent as if such Holders had converted the Series E Preferred Stock into Common Stock at the Conversion Rate (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and Distributions. Payments under the preceding sentence shall be made concurrently with the dividend or Distribution to the holders of Common Stock. Following the occurrence of a Liquidation Event (as hereinafter defined) and the payment in full to a Holder of its applicable Liquidation Preference, such Holder shall cease to have any rights hereunder to participate in any future dividends or distributions made to the holders of Common Stock. No Distributions shall be made with respect to the Common Stock until all past due, if any, and/or declared dividends on the Series E Preferred Stock have been paid or set aside for payment to the Holders. Notwithstanding the foregoing, the Holders shall have no right of participation in connection with dividends or Distributions made to the Common Stock shareholders consisting solely of shares of Common Stock.

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2.2Non-Cash Distributions. Whenever a Distribution provided for in this Section 2 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

2.3Other Distributions. Subject to the terms of this Certificate of Designation, and to the fullest extent permitted by the NRS, the Corporation shall be expressly permitted to redeem, repurchase or make distributions on the shares of its capital stock in all circumstances other than where doing so would cause the Corporation to be unable to pay its debts as they become due in the usual course of business.

3.Liquidation Rights.

3.1Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (each a “Liquidation Event”), the holders of Series E Preferred Stock shall be entitled to receive prior to the holders of the Corporation’s Junior Securities, except in the case of the Series C Preferred Stock, which is junior in ranking only to the first Distributions up until the Original Issue Price per share, and then is entitled to pari passu ranking, and pro rata with the holders of the Corporation’s Pari Passu Securities, but not prior to any holders of the Corporation’s Senior Securities, which holders of the Senior Securities shall have priority to the Distribution of any assets of the Corporation, an amount per share for each share of Series E Preferred Stock held by them equal to the Liquidation Preference. If upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation legally available for distribution to the holders of the Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock (i.e., after payment of the Corporation’s liabilities and payment to any holders of the Corporation’s Senior Securities) are insufficient to permit the payment to such holders of the full amounts specified in this Section then the entire assets of the Corporation legally available for distribution shall be distributed pro rata among the holders of the Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section and Applicable Law.

3.2Remaining Assets. After the payment to the Holders of Series E Preferred Stock holders of the full preferential amounts specified above, the entire remaining assets of the Corporation legally available for distribution by the Corporation shall be distributed with equal priority and pro rata among the holders of the Junior Securities in proportion to the number of shares of Junior Securities held by them.

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3.3Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors. In the event of a merger or other acquisition of the Corporation by another entity, the Distribution date shall be deemed to be the date such transaction closes.

4.Conversion. The Holders of the Series E Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

4.1Conversion. Each share of Series E Preferred Stock shall be convertible, at the option of the Holder thereof (a “Conversion”), at any time following the Approval Date, at the office of the Corporation or any Transfer Agent for the Series E Preferred Stock, into that number of fully-paid, nonassessable shares of Common Stock determined by multiplying the Series E Preferred Stock shares desired to be converted, by the then Conversion Rate (such shares of Common Stock issuable upon a Conversion, the “Conversion Shares”). In order to effectuate the Conversion under this Section 4.1, the Holder must provide the Corporation a written notice of conversion in the form of Exhibit A hereto (the “Notice of Conversion”). The Notice of Conversion must be dated no earlier than one (1) Business Day from the date the Notice of Conversion is actually received by the Corporation.

4.2Mechanics of Conversion. In order to effect a Conversion, a Holder shall fax or email a copy of the fully executed Notice of Conversion to the Corporation (or in the discretion of the Corporation, with notice to the Holder, the Transfer Agent)(Attn: Louis Schott, Chief Executive Officer, 1415 Louisiana, Suite 3500 Houston, Texas 77002, Email: louisgschott@gmail.com, or such other address as the Corporation shall notify the Holders of at least ten (10) Business Days prior to the effective date of such change in record address). Upon receipt by the Corporation (or the Transfer Agent) of a facsimile or emailed copy of a Notice of Conversion from a Holder, the Corporation (or the Transfer Agent) shall within one (1) Business Day send, via facsimile or email, a confirmation to such Holder stating that the Notice of Conversion has been received, the date upon which the Corporation (or the Transfer Agent) expects to deliver the Common Stock issuable upon such conversion and the name and telephone number of a contact person at the Corporation (or the Transfer Agent) regarding the Conversion. The Holder shall surrender, or cause to be surrendered, the Preferred Stock Certificates being converted, duly endorsed, to the Corporation (or the Transfer Agent) at the address listed above within three (3) Business Days of delivering the fully executed Notice of Conversion. The Corporation (or the Transfer Agent) shall not be obligated to issue shares of Common Stock upon a Conversion unless either (x) the Preferred Stock Certificates; or (y) the Lost Certificate Materials described in Section 12 below have been previously received by the Corporation or its Transfer Agent. In the event the Holder has lost or misplaced the certificates evidencing the Preferred Stock, the Holder shall be required to provide the Corporation or the Corporation’s Transfer Agent (as applicable) with whatever reasonable documentation and fees each may require to re-issue the Preferred Stock Certificates and shall be required to provide such re-issued Preferred Stock Certificates to the Corporation (or the Transfer Agent) within three (3) Business Days of delivering the Notice of Conversion. Unless the Conversion Shares are covered by a valid and effective registration under the Securities Act or the Notice of Conversion provided by the Holder includes a valid opinion from an attorney stating that such shares of Common Stock issuable in connection with the Notice of Conversion can be issued free of restrictive legend, which shall be determined by the Corporation (or the Transfer Agent) in its sole and reasonable discretion, such shares shall be issued as Restricted Shares. Notwithstanding the above, if requested by the Holder, the Corporation shall cause its counsel at the Corporation’s expense to issue any necessary legal opinion (to the extent lawful) in order to permit sales of the Common Stock pursuant to Rule 144 under the Securities Act or under another applicable exemption from the registration requirements; provided that (i) an exemption under Rule 144 under the Securities Act or another applicable exemption from the registration requirements is available with respect to such shares, and (ii) the Holder provides the Corporation and the legal counsel providing the necessary opinion with such representations and other related information reasonably requested in order for such legal counsel to issue the legal opinion.

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(a)Delivery of Common Stock upon Conversion. Upon the receipt of a Notice of Conversion and the other required materials described above, the Corporation (itself, or through its Transfer Agent) shall, no later than the second (2nd) Business Day following the date of such receipt (subject to the surrender of the Preferred Stock Certificates by the Holder within the period described in Section 4.1(b) or, in the case of lost, stolen or destroyed certificates, after provision of the Lost Certificate Materials) (the “Delivery Period”), issue and deliver (i.e., deposit with a nationally recognized overnight courier service postage prepaid) to the Holder or its nominee (x) a certificate representing the Conversion Shares and (y) a certificate representing the number of shares of Series E Preferred Stock not being converted, if any. Notwithstanding the foregoing, if the Corporation’s Transfer Agent is participating in the Depository Trust Corporation (“DTC”) Fast Automated Securities Transfer program, and so long as the certificates therefor do not bear a legend and the holder thereof is not then required to return such certificate for the placement of a legend thereon, the Corporation shall cause its Transfer Agent to promptly electronically transmit the Common Stock issuable upon Conversion to the Holder by crediting the account of the Holder or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DTC Transfer”). If the aforementioned conditions to a DTC Transfer are not satisfied, the Corporation shall deliver as provided above to the Holder physical certificates representing the Common Stock issuable upon Conversion. Further, a Holder may instruct the Corporation to deliver to the Holder physical certificates representing the Common Stock issuable upon Conversion in lieu of delivering such shares by way of DTC Transfer.

(b)Failure to Provide Preferred Stock Certificates. In the event the Holder provides the Corporation with a Notice of Conversion, but fails to provide the Corporation with the Preferred Stock Certificates or the Lost Certificate Materials (as defined in Section 12 below), by the end of the Delivery Period, the Notice of Conversion shall be considered void and the Corporation shall not be required to comply with such Notice of Conversion. Provided that if the Notice of Conversion only relates to the conversion of accrued Dividends, the Holder shall not be required to provide the Corporation any Preferred Stock Certificates.

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4.3Fractional Shares. If any Conversion of Series E Preferred Stock would result in the issuance of a fractional share of Common Stock (aggregating all shares of Series E Preferred Stock being converted pursuant to the Conversion), such fractional share shall be payable in cash based upon the market value of the Common Stock on the Principal Market prior to the date of Conversion and the number of shares of Common Stock issuable upon Conversion of the Series E Preferred Stock shall be the next lower whole number of shares. If the Corporation elects not to, or is unable to, make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

4.4Taxes. The Corporation shall not be required to pay any tax which may be payable in respect to any transfer involved in the issue and delivery of shares of Common Stock upon Conversion in a name other than that in which the shares of the Series E Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation the amount of any such tax, or has established, to the satisfaction of the Corporation, that such tax has been paid. The Corporation shall withhold from any payment due whatsoever in connection with the Series E Preferred Stock any and all required withholdings and/or taxes the Corporation, in its sole discretion deems reasonable or necessary, absent an opinion from Holder’s accountant or legal counsel, acceptable to the Corporation in its sole determination, that such withholdings and/or taxes are not required to be withheld by the Corporation.

4.5No Charge or Payment. The issuance of certificates for shares of Common Stock upon Conversion of the Series E Preferred Stock pursuant to Section 4 shall be made without payment of additional consideration by, or other charge, cost or tax to, the Holder in respect thereof.

4.6No Impairment. The Corporation will not through any reorganization, transfer of assets, merger, dissolution, issue or sale of any securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion rights of the Holders of Series E Preferred Stock against impairment. Subject to the above noted limitation, nothing in this Section 4.6 shall prohibit the Corporation from amending its Articles of Incorporation, as amended, subject to any restrictions set forth herein, with the requisite consent of its shareholders and the Board of Directors.

4.7Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the Conversion of the shares of the Series E Preferred Stock, such number of its shares of Common Stock as equals the number of shares of Common Stock as shall from time to time be sufficient to effect the Conversion of all then outstanding shares of the Series E Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the Conversion of all then outstanding shares of the Series E Preferred Stock, the Corporation shall use best efforts to take such corporate action as necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

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5.Adjustments For Recapitalizations.

5.1Equitable Adjustments For Recapitalizations. The (a) Liquidation Preference, the Original Issue Price, and the Voting Rights (the “Preferred Stock Adjustable Provisions”); (b) the Conversion Rate (the “Common Stock Adjustable Provisions”), and (c) any and all other terms, conditions, amounts and provisions of this Designation which (i) pursuant to the terms of this Designation provide for equitable adjustment in the event of a Recapitalization; or (ii) the Board of Directors of the Corporation determine in their reasonable good faith judgment is required to be equitably adjusted in connection with any Recapitalizations (collectively Sections (c)(i) and (ii), the “Other Equitable Adjustable Provisions”), shall each be subject to equitable adjustment as provided in Sections 5.2 through 5.4, below, as determined by the Board of Directors in their sole and reasonable discretion.

5.2Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, without a corresponding subdivision of the Series E Preferred Stock, the applicable Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, without a corresponding combination of the Series E Preferred Stock, the Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted.

5.3Adjustments for Subdivisions or Combinations of Series E Preferred Stock. In the event the outstanding shares of Series E Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Series E Preferred Stock, the applicable Preferred Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Series E Preferred Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Series E Preferred Stock, the applicable Preferred Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted; provided, however, that the result of any concurrent adjustment in the Common Stock (as provided under Section 5.2) and the Series E Preferred Stock (as provided under Section 5.3) shall only be to affect the equitable adjustable provisions hereof once.

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5.4Adjustments for Reclassification, Exchange and Substitution. Subject to Section 3 above, if the Common Stock issuable upon Conversion of the Series E Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for above), then, in any such event, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, each holder of such Series E Preferred Stock shall have the right thereafter to convert such shares of Series E Preferred Stock into a number of shares of such other class or classes of stock which a holder of the number of shares of Common Stock deliverable upon Conversion of such Series E Preferred Stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.

5.5Other Adjustments. Subject to the prior written consent of a Majority In Interest, the Board of Directors of the Corporation may adjust equitably, and shall have the right to adjust equitably, any or all of the Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions or Other Equitable Adjustable Provisions from time to time, if the Board of Directors of the Corporation determine in their reasonable good faith judgment that such values and/or provisions are required to be equitably adjusted in connection with any Corporation action.

5.6Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 5, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series E Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series E Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Rate at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the Series E Preferred Stock.

6.Voting; Director Appointment Rights.

6.1Class Voting. Except as otherwise expressly provided in Section 6.4, Section 7, subsection (iv) of the definition of Distribution, or as required by law, the Holders of Series E Preferred Stock and the holders of Common Stock shall vote together as a single class and not as separate classes.

6.2No Series Voting. Other than as provided herein or required by law, there shall be no series voting.

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6.3Series E Preferred Stock. Each outstanding share of Series E Preferred Stock shall be entitled to vote a number of voting shares equal to the Voting Shares on all shareholder matters to come before the shareholders of the Corporation (whether at a meeting of the shareholders of the Corporation, by written action of shareholders in lieu of a meeting or otherwise) (the “Voting Rights”); provided that the Voting Rights shall not apply, and the Holders shall not be allowed to vote on, the Shareholder Approval. Each Holder of outstanding shares of Series E Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in accordance with the Corporation’s bylaws. Notwithstanding the above provisions of Section 6.3, until or unless Shareholder Approval is received, and except as otherwise provided in Section 6.4, below, the Series E Preferred Stock shall have the right to vote for only the Camber Preferred Stock Director in any shareholder vote on the election of directors to the Board of Directors of the Corporation. Upon receipt of Shareholder Approval, the Series E Preferred Stock shall have the voting rights set forth in Section 6.4, below, and shall be able to vote together with the holders of the Common Stock for the appointment of all non-Camber Preferred Stock Directors on the Board of Directors of the Corporation. In no event shall the total number of Voting Shares eligible to be cast by the Holders of the Series E Preferred Stock exceed the Pre-Shareholder Approval Shares prior to the Approval Date.

6.4Corporation Board of Directors Appointment Rights.

(a)For so long as the Series E Preferred Stock shares then outstanding have the right to vote 5% of more of the Corporation’s total voting shares on any shareholder matters (as provided in Section 6.3, above)(the “Preferred Stock Appointment Requirement”), at any meeting of shareholders of the Corporation and/or in any consent to action without a meeting of shareholders, whereby the shareholders are provided the right to vote on the election of members of the Board of Directors and/or appoint members to the Board of Directors (each an “Election Meeting or Consent”), the Holders shall have the exclusive right to nominate, appoint, and elect one (1) member of the Corporation’s Board of Directors following the Director Increase (defined below)(each such member elected by a Majority In Interest, pursuant to this Section 6.4, the “Camber Preferred Stock Director”). The Corporation’s Board of Directors shall provide the Holders notice at least fifteen (15) days prior to the date that any proxy statement or information statement relating to an Election Meeting or Consent is mailed to shareholders (the “Mailing Date”), and the Holders, by action of a Majority In Interest, shall notify the Corporation of its Camber Preferred Stock Director at least ten (10) days prior to such Mailing Date in writing (which may be via email), together with such information regarding such nominee as may be required to be provided in any proxy statement or information statement and/or which may be reasonably requested by the Corporation in order to determine the competency of such individual to serve on the Board of Directors.

(b)On or before the Original Issue Date, the Corporation shall take action to increase the number of members of its Board of Directors from three (3) to four (4) members (the “Director Increase”).

(c)A Camber Preferred Stock Director may be removed at any time as a director on the Board of Directors of the Corporation (with or without cause) upon, and only upon, the written request of a Majority In Interest. In the event that a vacancy is created on the Corporation’s Board of Directors at any time due to the death, disability, retirement, resignation or removal of a Camber Preferred Stock Director, then a Majority In Interest shall have the right to designate an individual to fill such vacancy. In the event that a Majority In Interest shall fail to designate in writing a representative to fill the vacant Camber Preferred Stock Director seat on the Board of Directors, and such Board seat shall remain vacant until such time as a Majority In Interest elects an individual to fill such seat in accordance with this Section 6.4, and during any period where such seat remains vacant, the Board of Directors nonetheless shall be deemed duly constituted.

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(d)The initial Camber Preferred Stock Director shall be designated and appointed immediately following the Original Issuance Date. The Camber Preferred Stock Director may be appointed by the Board of Directors to serve on committees of the Corporation’s Board of Directors, subject to the determination of the non-Camber Preferred Stock Directors of the Corporation’s Board of Directors that such Camber Preferred Stock Directors are independent for the purposes of the Principal Market and SEC rules and requirements, as applicable and as required.

(e)The right to appoint a Camber Preferred Stock Director as provided in this Section 6.4 shall terminate on the date that the Preferred Stock Appointment Requirements are no longer met, and any Camber Preferred Stock Directors shall promptly resign thereafter at the request of the non-Camber Preferred Stock Directors.

6.5Lineal Board of Directors Appointment Rights.

(a)For so long as the Preferred Stock Appointment Requirements are met, and subject to the Shareholders Agreement, at any time Camber is naming members of Lineal’s managers (defined in Lineal’s organizational documents as the Board of Directors) and/or at any time via a written consent of a Majority In Interest, (i) prior to Shareholder Approval, the Holders shall have the exclusive right to nominate, appoint, and elect two (2) members of Lineal’s Board of Directors; and (ii) subsequent to Shareholder Approval, the Holders shall have the exclusive right to nominate, appoint, and elect one (1) member of Lineal’s Board of Directors (each such member elected by a Majority In Interest, pursuant to this Section 6.5(a), a “Lineal Preferred Stock Director”).

(b)A Lineal Preferred Stock Director may be removed at any time as a director on the Lineal Board of Directors (with or without cause) upon, and only upon, the written request of a Majority In Interest. In the event that a vacancy is created on the Lineal Board of Directors at any time due to the death, disability, retirement, resignation or removal of a Lineal Preferred Stock Director, then a Majority In Interest shall have the right to designate an individual to fill such vacancy. In the event that a Majority In Interest shall fail to designate in writing a representative to fill the vacant Lineal Preferred Stock Director seat on Lineal’s Board of Directors, and such Board seat shall remain vacant until such time as a Majority In Interest elects an individual to fill such seat in accordance with this Section 6.5, and during any period where such seat remains vacant, Lineal’s Board of Directors nonetheless shall be deemed duly constituted.

(c)The initial Lineal Preferred Stock Directors shall be designated and appointed immediately following the Original Issuance Date, and may, in the discretion of Lineal’s Board of Directors, be appointed to Lineal’s Board of Directors by Lineal’s Board of Directors.

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(d)The right to appoint Lineal Preferred Stock Directors as provided in this Section 6.5 shall terminate on the date that the Preferred Stock Appointment Requirements are no longer met, and any Lineal Preferred Stock Directors shall promptly resign thereafter at the request of the non-Lineal Preferred Stock Directors.

(e)Unless otherwise approved by a Majority In Interest, the Board of Directors of Lineal shall have no more than three (3) members.

6.6Camber Chief Operating Officer Appointment Rights. For so long as the Series E Preferred Stock shares then outstanding have the right to vote 5% or more of the Corporation’s total voting shares on any shareholder matters (as provided in Section 6.3, above), a Majority In Interest shall have the right, from time to time, by written notice to the Board of Directors of the Corporation, to nominate an individual to serve as the Chief Operating Officer of the Corporation (“COO”). Following such nomination, the Board of Directors of the Corporation shall appoint such person as the COO of the Corporation, unless the Board of Directors of the Corporation, acting reasonably, and pursuant to their fiduciary duties, believes that such individual should not be appointed as COO of the Corporation (a “Nomination Rejection”). The Holders of the Series E Preferred Stock, acting with the approval of a Majority In Interest shall have the right to nominate another individual to serve as COO of the Corporation, after any Nomination Rejection. Once appointed as COO pursuant to this Section 6.6, such individual shall continue to serve as COO until such time as a new COO shall be nominated by a Majority In Interest pursuant to this Section 6.6, or such person’s earlier death or resignation or the removal of any such persons for cause or good reason in the reasonable determination of the Board of Directors of the Corporation, after which time the Holders shall have the right to appoint a new COO pursuant to the terms and conditions of this Section 6.6.

6.7Lineal Officer Appointment Rights. For so long as the Series E Preferred Stock shares then outstanding have the right to vote 5% of more of the Corporation’s total voting shares on any shareholder matters (as provided in Section 6.3, above), a Majority In Interest shall have the right, from time to time, by written notice to the Board of Directors of the Corporation, to nominate individuals to serve as the executive officers of Lineal. Following such nomination, Lineal’s Board of Directors shall appoint such persons as executive officers of Lineal, unless Lineal’s Board of Directors, acting reasonably, and pursuant to their fiduciary duties, believes that such individuals (or any one or more of such individuals) should not be appointed as executive officers of Lineal (a “Lineal Nomination Rejection”). The Holders of the Series E Preferred Stock, acting with the approval of a Majority In Interest shall have the right to nominate other individuals to serve as officers of Lineal after any Lineal Nomination Rejection. Once appointed as executive officers, such individuals shall continue to serve as executive officers of Lineal until such time as new executive officers shall be nominated by a Majority In Interest pursuant to this Section 6.7, or such persons earlier death or resignation, or the removal of any such persons for cause or good reason in the reasonable determination of Lineal’s Board of Directors, after which time the Holders shall have the right to appoint new officers pursuant to the terms and conditions of this Section 6.7.

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6.8Appointment Conditions. Notwithstanding the provisions of Sections 6.4 through 6.7 above, no person shall be required to be nominated as, or appointed as, an officer or director of the Corporation or Lineal, if such person would not be qualified under any applicable law to serve as an officer or director of the Corporation or Lineal, as applicable, as determined in the reasonable discretion of the Board of Directors of the Corporation or Lineal, as applicable (which determination shall set forth in writing reasonable grounds for such determination).

7.Protective Provisions.

7.1General Protective Provisions. Subject to the rights of series of Preferred Stock which may from time to time come into existence (subject to the terms, conditions and approval requirements of the Holders (where applicable), set forth in this Designation), so long as any shares of Series E Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the holders of a Majority In Interest:

(a)Increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series E Preferred Stock;

(b)Re-issue any shares of Series E Preferred Stock redeemed pursuant to the terms of this Designation;

(c)Effect an exchange, reclassification, or cancellation of all or a part of the Series E Preferred Stock;

(d)Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series E Preferred Stock;

(e)Issue any shares of Series E Preferred Stock other than pursuant to the Plan of Merger;

(f)Alter or change the rights, preferences or privileges of the shares of Series C Preferred Stock as to affect adversely the Holders of the Series E Preferred Stock;

(g)Alter or change the rights, preferences or privileges of the shares of Series E Preferred Stock so as to affect adversely the shares of such series;

(h)Enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

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(i)Enter into, create, incur, assume or suffer to exist any liens of any kind, on or with respect to any of Lineal’s property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

(j)Amend the Lineal Company Agreement, except as contemplated in the Plan of Merger; or

(k)Enter into any material transaction outside of the ordinary course of business of the Corporation.

7.2Material Transaction Protective Provisions. Subject to the rights of any series of Preferred Stock which may from time to time come into existence (subject to the terms, conditions and approval requirements of the Holders (where applicable), set forth in this Designation), until the earlier of (a) the fifth (5^th) anniversary of the Closing Date; and (b) the date that 5% or less of the Original Series E Preferred Stock Shares are outstanding, the Corporation shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the Holders of a Majority In Interest affect any Material Asset Transfer or Change of Control.

7.3Securities Issuance Protective Provisions. Subject to the rights of series of Preferred Stock which may from time to time come into existence (subject to the terms, conditions and approval requirements of the Holders (where applicable), set forth in this Designation), until the earlier of (a) the fifth (5^th) anniversary of the Closing Date; (b) the date that 5% or less of the Original Series E Preferred Stock Shares are outstanding; and (c) the Shareholder Approval, the Corporation shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the Holders of a Majority In Interest:

(a)issue any shares of Preferred Stock, other than as contemplated by the Plan of Merger

(b)issue any Lineal Membership Interests; or

(c)issue any shares of Common Stock or Convertible Securities, except for:

(i)shares of Common Stock issued upon conversion of the Series F Preferred Stock;

(ii)shares of Common Stock issued upon conversion of the Series C Preferred Stock and Series D Preferred Stock, or as otherwise provided for in the Certificate of Designations of the Series C Preferred Stock and Series D Preferred Stock;

(iii)shares of Series D Preferred Stock pursuant to that Series C Settlement Agreement (as defined in the Plan of Merger);

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(iv)shares of Common Stock issuable pursuant to the terms of agreements or understandings which were in place as of the Original Issue Date, and which have not been amended, modified or revised after such Original Issue Date, except to make such terms more favorable to the Corporation; and

(v) shares of Common Stock issuable upon the exercise of Options or upon the conversion or exchange of Convertible Securities, outstanding as of the Original Issue Date, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security as was in effect as of the Original Issue Date, except to the extent such terms are amended or revised to make such terms more favorable to the Corporation.

8.Redemption Rights.

8.1Optional Redemption. The Holders, with the consent of a Majority In Interest, shall have the option, exercisable from time to time after the Redemption Date, provided that the Shareholder Approval has not been received by such Redemption Date, to require that the Corporation redeem each share desired to be redeemed by such Majority In Interest, of the outstanding Series E Preferred Stock (a “Redemption” and the “Redemption Rights”), for one Lineal Common Share. Specifically, each Holder shall have that number of shares of Series E Preferred Stock subject to a Redemption redeemed by the Corporation in consideration for that number of Lineal Common Shares (the “Redemption Shares”). Notwithstanding the above, no Redemption shall be completed by the Corporation unless such Redemption (together with each required Series F Redemption (defined below)) complies with, and any and all Redemptions provided for hereunder, shall be subject to the requirements of Applicable Law and specifically, the rules and regulations of the NRS, Chapter 78 – Private Corporations, as such relate to the Corporation’s ability to redeem the Series E Preferred Stock (collectively, the “Redemption Law Requirements”). The Redemption Shares will be Restricted Shares.

(a)The Corporation shall redeem Series E Preferred Stock pro rata between all Holders of Series E Preferred Stock upon an exercise by the Holders of the Redemption Rights.

(b)No Redemption shall be required to be affected by the Corporation unless a pro rata redemption of the Series F Preferred Stock is also affected (and also allowed pursuant to the Redemption Law Requirements) pursuant to the provisions of Section 8.2 of the designation of the Corporation’s Series F Preferred Stock, as such designation and rights may be amended from time to time (a “Series F Redemption”).

(c)To exercise the Redemption Right, a Holder (or representative of a Holder), designated by a Majority In Interest, shall deliver to the Corporation an irrevocable written notice (a “Redemption Notice”), indicating the Holders’ exercise of the Redemption Rights and providing documentation of the approval of such exercise by a Majority In Interest. The vote or consent of a Majority In Interest to exercise the Redemption Rights shall be treated as an exercise of the Redemption Rights by each Holder of Series E Preferred Stock, even if all Holders did not approve or consent to such exercise.

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(d)Upon receipt of the Redemption Notice, and subject to the Redemption Law Requirements, the Corporation shall notify the Holders promptly upon receipt of the Redemption Notice of the date which the Corporation intends to affect the Redemption, which date may not be more than thirty days from the date the Redemption Notice is received by the Corporation (as applicable, the “Redemption Time”), or, if applicable, the fact that the Redemption Law Requirements prohibit such Redemption.

(e)In the event the Corporation is prohibited from completing a Redemption requested in any Redemption Notice as a result of the Redemption Law Requirements, as determined in the reasonable determination of the Board of Directors of the Corporation and its counsel, the Series E Preferred Stock held by the Holders shall be Redeemed up to an amount of lawfully available funds, and the Redemption Notice shall be deemed automatically modified and reduced to only provide for the Redemption of such number of shares of Series E Preferred Stock, if any, which are legally able to be redeemed pursuant to the Redemption Law Requirements. Thereafter, the Corporation shall promptly advise the Holders in writing if additional funds becoming available for future Redemptions, subject in all cases to the Redemption Law Requirements.

(f)In the event the Shareholder Approval has been received by the Redemption Date, the Redemption Rights set forth in this Section 8 shall be deemed terminated for all purposes and the Holders shall have no right to redeem such Series E Preferred Stock.

8.2Effect of Redemption. The payment by the Corporation to each applicable Holder (at each such Holder’s address of record) (or if the Holder fails to deliver the Preferred Stock Certificates and/or Lost Certificate Materials required to be delivered as discussed below in connection with such Redemption, upon the Corporation setting aside such Redemption Shares in trust for the benefit of the Holder) of the Redemption Shares (as applicable, a “Redemption Delivery”) in connection with a Redemption, and effective as of the Redemption Date (provided that the Redemption Shares are transferred in full on such Redemption Date), shall fully discharge the Corporation from any and all further obligations under the Series E Preferred Stock shares redeemed and shall automatically, and without any required action by the Corporation or the Holder or his, her or its assigns (including the requirement that the Holder provide the Corporation or the Corporation’s Transfer Agent the Preferred Stock Certificates relating to such Redemption), result in the cancellation, termination and invalidation of any outstanding Series E Preferred Stock and related Preferred Stock Certificates held by a Holder which are subject to a Redemption.

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8.3Further Actions Following Redemption. Without limiting the obligation of each Holder set forth herein (including in the subsequent Section 8.4), the Corporation and/or the Corporation’s Transfer Agent shall be authorized to take whatever action necessary, if any, following the payment of the Redemption Shares, to reflect the cancellation of the Series E Preferred Stock subject to the applicable Redemption, which shall not require the approval and/or consent of any Holder, and provided that by agreeing to the terms and conditions of this Designation and the acceptance of the Series E Preferred Stock, each Holder hereby agrees to release the Corporation and the Corporation’s Transfer Agent from any and all liability whatsoever in connection with the cancellation of the Series E Preferred Stock subject to and following a Redemption, regardless of the return to the Corporation or the Transfer Agent of any Preferred Stock Certificates evidencing such Series E Preferred Stock subject to the Redemption, which as stated above, shall be automatically cancelled upon the payment of the Redemption Shares to the Holder, or if the provisions of Section 8.5 apply and the Holder fails to deliver the Preferred Stock Certificates and/or Lost Certificate Materials, upon the Corporation setting aside such Redemption Shares in trust for the benefit of the Holder (a “Redemption Cancellation”).

8.4Further Redemption Assurances. Notwithstanding the above, each Holder, by accepting such Preferred Stock Certificates hereby covenants that it will (a) deliver to the Corporation or the Corporation’s Transfer Agent, promptly upon the receipt of any Redemption Notice, but in any case prior to the applicable Redemption Time, the applicable Preferred Stock Certificates relating to the Redemption (or Lost Certificate Materials associated therewith); and (b) whenever and as reasonably requested by the Corporation and the Corporation’s Transfer Agent, at the Corporation’s sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Corporation or the Transfer Agent may reasonably require in order to complete, insure and perfect a Redemption Cancellation, if such may be reasonably required by the Corporation and/or the Corporation’s Transfer Agent.

8.5Additional Redemption Procedures. In the event that (a) Redemption Delivery is unsuccessful notwithstanding the fact that the Corporation has mailed such applicable Redemption Shares to the correct address of the Holder as set forth in the records of the Corporation; or (b) any Holder fails to timely deliver to the Corporation for cancellation the Preferred Stock Certificates evidencing the Series E Preferred Stock subject to such Redemption, or Lost Certificate Materials associated therewith, and the Corporation therefore refrains from completing a Redemption Delivery, such Redemption Shares shall be held by the Corporation in trust and such Redemption Shares shall be released to such Holder upon reasonable evidence to the Corporation or the Transfer Agent that such Holder is (y) the legal owner of such Redemption Shares and/or (z) the delivery to the Corporation or its Transfer Agent of the applicable Preferred Stock Certificates, as applicable, or Lost Certificate Materials, provided that the Holder’s failure to accept such Redemption Shares, the Corporation’s inability to pay any Holder its applicable Redemption Shares, and/or the Holder’s failure to deliver the Preferred Stock Certificates or Lost Certificate Materials, under either of such circumstances shall in no event effect the validity of the Redemption Cancellation or the consequences of a Redemption Delivery as described in Section 8.2 hereof. Furthermore, the Holder shall be due no interest on the Redemption Shares while being held by the Corporation in trust and any and all interest, if any, which shall accrue on such amount shall be the sole property of the Corporation.

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8.6Further Holder Redemption Assurances. Notwithstanding the above, each Holder, by accepting such Preferred Stock Certificates will whenever and as reasonably requested by the Corporation and the Corporation’s Transfer Agent, at its sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Corporation or the Transfer Agent may reasonably require in order to complete, insure and perfect the cancellation of such Holder’s shares in the event of a Redemption, if such may be reasonably required by the Corporation and/or the Corporation’s Transfer Agent.

8.7Effect of Redemptions. The Series E Preferred Stock subject to a Redemption shall have all Dividend Rights immediately terminate effective as of the Redemption Date (provided that such Redemption Shares are paid by the Corporation on such Redemption Date), unless otherwise agreed in the sole discretion of the Corporation.

9.Notices.

9.1In General. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile or email transmission, and shall be effective, unless otherwise provided herein, three days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed facsimile transmission or email, in each case addressed to a party. The addresses for such communications are (i) if to the Corporation to, Louis Schott, Chief Executive Officer, 1415 Louisiana, Suite 3500 Houston, Texas 77002, Email: louisgschott@gmail.com, or such other address as the Corporation shall notify the Holders of at least ten (10) Business Days prior to the effective date of such change in record address, and (ii) if to any Holder to the address set forth in the records of the Corporation or its Transfer Agent, as applicable, or such other address as may be designated in writing hereafter, in the same manner, by such person.

9.2Notices of Record Date. In the event that the Corporation shall propose at any time:

(a)to declare any Distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;

(b)to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or

(c)to voluntarily liquidate or dissolve or undertake a Liquidation Event;

then, in connection with each such event, the Corporation shall send to the Holders of the Series E Preferred Stock at least ten (10) Business Days’ prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Stock shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (b) and (c) above.

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Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Series E Preferred Stock at the address for each such holder as shown on the books of the Corporation and shall be deemed given on the date such notice is mailed, or sent via facsimile or email, if the Holder has consents to receiving notice pursuant to such form of communication.

The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the vote or written consent of the holders of a Majority In Interest, voting together as a single class.

10.No Preemptive Rights. No Holder shall have the right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such right may from time to time be set forth in a written agreement between the Corporation and such stockholder.

11.Reports. The Corporation shall mail to all holders of Series E Preferred Stock those reports, proxy statements and other materials that it mails to all of its holders of Common Stock which materials may, at the option of the Corporation, be provided to such Holders via email, which email will be deemed sufficient notice if it provides a link to the applicable Corporation filing on the Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval system (EDGAR).

12.Replacement Preferred Stock Certificates. In the event that any Holder notifies the Corporation that a Preferred Stock Certificate evidencing shares of Series E Preferred Stock has been lost, stolen, destroyed or mutilated, the Corporation shall issue a replacement stock certificate evidencing the Series E Preferred Stock identical in tenor and date (or if such certificate is being issued for shares not covered in a redemption or conversion, in the applicable tenor and date) to the original Preferred Stock Certificate evidencing the Series E Preferred Stock, provided that the Holder executes and delivers to the Corporation and/or its Transfer Agent, as applicable, an affidavit of lost stock certificate and an agreement reasonably satisfactory to the Corporation and its Transfer Agent to indemnify the Corporation from any loss incurred by it in connection with such Series E Preferred Stock certificate, and provides the Corporation and/or its Transfer Agent such other information, documents and if applicable, bonds and indemnities as the Corporation or its Transfer Agent customarily requires for reissuances of stock certificates (collectively the “Lost Certificate Materials”); provided, however, the Corporation shall not be obligated to re-issue replacement stock certificates if the Holder contemporaneously requests the Corporation to convert or redeem the full number of shares evidenced by such lost, stolen, destroyed or mutilated certificate.

13.No Other Rights or Privileges. Except as specifically set forth herein, the Holders of the Series E Preferred Stock shall have no other rights, privileges or preferences with respect to the Series E Preferred Stock.

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14.Construction. When used in this Designation, unless a contrary intention appears: (i) a term has the meaning assigned to it; (ii) “or” is not exclusive; (iii) “including” means including without limitation; (iv) words in the singular include the plural and words in the plural include the singular, and words importing the masculine gender include the feminine and neuter genders; (v) any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; (vi) the words “hereof”, “herein” and “hereunder” and words of similar import when used in this Designation shall refer to this Designation as a whole and not to any particular provision hereof; (vii) references contained herein to Article, Section, Schedule and Exhibit, as applicable, are references to Articles, Sections, Schedules and Exhibits in this Designation unless otherwise specified; (viii) references to “dollars”, “Dollars” or “$” in this Designation shall mean United States dollars; (ix) reference to a particular statute, regulation or law means such statute, regulation or law as amended or otherwise modified from time to time; (x) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein); (xi) unless otherwise stated in this Designation, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”; (xii) references to “days” shall mean calendar days; and (xiii) the paragraph and section headings contained in this Designation are for convenience only, and shall in no manner affect the interpretation of any of the provisions of this Designation.

15.Miscellaneous.

15.1Cancellation of Series E Preferred Stock. If any shares of Series E Preferred Stock are redeemed pursuant to the terms of this Designation, the shares so redeemed shall be canceled and shall return to the status of designated, but unissued Series E Preferred Stock, subject to the terms of this Designation.

15.2Further Assurances. Each Holder hereby covenants that, in consideration for receiving shares of Series E Preferred Stock, that he, she or it will, whenever and as reasonably requested by the Corporation, do, execute, acknowledge and deliver any and all such other and further acts, deeds, confirmations, agreements and documents as the Corporation or its Transfer Agent may reasonably require in order to complete, insure and perfect any of the terms, conditions or provisions of this Designation.

15.3Technical, Corrective, Administrative or Similar Changes. The Corporation may, by any means authorized by law and without any vote of the Holders of shares of the Series E Preferred Stock, make technical, corrective, administrative or similar changes in this Designation that do not, individually or in the aggregate, adversely affect the rights or preferences of the Holders of shares of the Series E Preferred Stock.

Camber Energy, Inc.: Certificate of Designation of Series E Redeemable Convertible Preferred Stock Page 24

15.4Waiver/Amendment. Notwithstanding any provision in this Designation to the contrary, any provision contained herein and any right of the holders of Series E Preferred Stock granted hereunder may be waived and/or amended as to all shares of Series E Preferred Stock (and the Holders thereof) upon the written consent of a Majority In Interest, unless a higher percentage is required by Applicable Law, in which case the written consent of the Holders of not less than such higher percentage of shares of Series E Preferred Stock shall be required.

15.5Interpretation. Whenever possible, each provision of this Designation shall be interpreted in a manner as to be effective and valid under Applicable Law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under Applicable Law.

NOW THEREFORE BE IT RESOLVED, that the Designation is hereby approved, affirmed, confirmed, and ratified; and it is further

RESOLVED, that each officer of the Corporation be and hereby is authorized, empowered and directed to execute and deliver, in the name of and on behalf of the Corporation, any and all documents, and to perform any and all acts necessary to reflect the Board of Directors approval and ratification of the resolutions set forth above; and it is further

RESOLVED, that in addition to and without limiting the foregoing, each officer of the Corporation and the Corporation’s attorney be and hereby is authorized to take, or cause to be taken, such further action, and to execute and deliver, or cause to be delivered, for and in the name and on behalf of the Corporation, all such instruments and documents as he may deem appropriate in order to effect the purpose or intent of the foregoing resolutions (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments, as the case may be) and all action heretofore taken by such officer in connection with the subject of the foregoing recitals and resolutions be, and it hereby is approved, ratified and confirmed in all respects as the act and deed of the Corporation; and it is further

RESOLVED, that this Designation may be executed in several counterparts, each of which is an original; that it shall not be necessary in making proof of this Designation or any counterpart hereof to produce or account for any of the other.

[Remainder of page left intentionally blank. Signature page follows.]

Camber Energy, Inc.: Certificate of Designation of Series E Redeemable Convertible Preferred Stock Page 25

IN WITNESS WHEREOF, the Corporation has unanimously approved and caused this “Certificate of Designation of Camber Energy, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series E Redeemable Convertible Preferred Stock” to be duly executed and approved this 2nd day of July 2019.

CAMBER ENERGY, INC.
By:	/s/ Louis G. Schott

Name: Louis G. Schott

Its: Interim CEO

Camber Energy, Inc.: Certificate of Designation of Series E Redeemable Convertible Preferred Stock Page 26

Exhibit A

NOTICE OF CONVERSION

This Notice of Conversion is executed by the undersigned holder (the “Holder”) in connection with the conversion of shares of the Series E Redeemable Convertible Preferred Stock (the “Series E Preferred Stock”) of Camber Energy, Inc., a Nevada corporation (the “Corporation”), pursuant to the terms and conditions of that certain Certificate of Designations of Camber Energy, Inc., Establishing the Designations, Preferences, Limitations and Relative Rights of its Series E Redeemable Convertible Preferred Stock (the “Designation”), approved by the Board of Directors of the Corporation on July 2, 2019. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Designation.

Conversion: In accordance with and pursuant to such Designation, the Holder hereby elects to convert the number of shares of Series E Preferred Stock indicated below into shares of Common Stock of the Corporation as of the date specified below.

Date of Conversion:________________

Number of Preferred Shares Held by Holder:________________

Amount Being Converted Hereby:__________

Common Stock Shares Due:________________

Preferred Shares Held After Conversion:_________

Delivery of Shares: Pursuant to this Notice of Conversion, the Corporation shall deliver the applicable number of shares of Common Stock (the “Shares”) issuable in accordance with the terms of the Designation as set forth above. If Shares are to be issued in the name of a person other than the Holder, the Holder will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Corporation in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any. The Holder acknowledges and confirms that the Shares issued pursuant to this Notice of Conversion will, to the extent not previously registered by the Corporation under the Securities Act, be Restricted Shares, unless the Shares are covered by a valid and effective registration under the Securities Act or this Notice of Conversion includes a valid opinion from an attorney stating that such Shares can be issued free of restrictive legend, which shall be determined by the Corporation in its sole discretion.

Camber Energy, Inc.: Certificate of Designation of Series E Redeemable Convertible Preferred Stock – Notice of Conversion Page 1

If stock certificates are to be issued, in the following name and to the following address:	If DWAC is permissible, to the following brokerage account:
	Broker:
	DTC No.:
	Acct. Name:
	For Further Credit (if applicable):

Authority: Any individual executing this Notice of Conversion on behalf of an entity has authority to act on behalf of such entity and has been duly and properly authorized to sign this Notice of Conversion on behalf of such entity.

(Print Name of Holder)

By/Sign:

Print Name:

Print Title:

Camber Energy, Inc.: Certificate of Designation of Series E Redeemable Convertible Preferred Stock – Notice of Conversion Page 2

EX-3.4

Camber Energy, Inc. 8-K

Exhibit 3.4

“6.5

Lineal Board of Directors Appointment Rights.

(a)

For so long as the Preferred Stock Appointment Requirements are met, and subject to the Shareholders Agreement, at any time Camber is naming members of Lineal’s managers (defined in Lineal’s organizational documents as the Board of Directors) and/or at any time via a written consent of a Majority In Interest, (i) prior to Shareholder Approval, the Holders shall have the exclusive right to nominate, appoint, and elect four (4) members of Lineal’s Board of Directors; and (ii) subsequent to Shareholder Approval, the Holders shall have the exclusive right to nominate, appoint, and elect one (1) member of Lineal’s Board of Directors (each such member elected by a Majority In Interest, pursuant to this Section 6.5(a), a “Lineal Preferred Stock Director”).

(b)

A Lineal Preferred Stock Director may be removed at any time as a director on the Lineal Board of Directors (with or without cause) upon, and only upon, the written request of a Majority In Interest. In the event that a vacancy is created on the Lineal Board of Directors at any time due to the death, disability, retirement, resignation or removal of a Lineal Preferred Stock Director, then a Majority In Interest shall have the right to designate an individual to fill such vacancy. In the event that a Majority In Interest shall fail to designate in writing a representative to fill the vacant Lineal Preferred Stock Director seat on Lineal’s Board of Directors, and such Board seat shall remain vacant until such time as a Majority In Interest elects an individual to fill such seat in accordance with this Section 6.5, and during any period where such seat remains vacant, Lineal’s Board of Directors nonetheless shall be deemed duly constituted.

(c)

The initial Lineal Preferred Stock Directors shall be designated and appointed immediately following the Original Issuance Date, and may, in the discretion of Lineal’s Board of Directors, be appointed to Lineal’s Board of Directors by Lineal’s Board of Directors.

(d)

The right to appoint Lineal Preferred Stock Directors as provided in this Section 6.5 shall terminate on the date that the Preferred Stock Appointment Requirements are no longer met, and any Lineal Preferred Stock Directors shall promptly resign thereafter at the request of the non-Lineal Preferred Stock Directors.

(e)

Unless otherwise approved by a Majority In Interest, the Board of Directors of Lineal shall have no more than five (5) members.”

EX-3.5

Camber Energy, Inc. 8-K

Exhibit 3.5

 

CERTIFICATE OF DESIGNATION

OF

CAMBER ENERGY, INC.

ESTABLISHING THE DESIGNATION, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES F REDEEMABLE PREFERRED STOCK

Pursuant to Section 78.1955 of the Nevada Revised Statutes (the “NRS”), Camber Energy, Inc., a company organized and existing under the State of Nevada (the “Corporation”),

DOES HEREBY CERTIFY that pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the Corporation, as amended, and pursuant to Section 78.1955 of the NRS, the Board of Directors, by unanimous written consent of all members of the Board of Directors on July 2, 2019, duly adopted a resolution providing for the issuance of a series of Sixteen Thousand Seven Hundred and Fifty (16,750) shares of Series F Redeemable Preferred Stock, which resolution is and reads as follows:

RESOLVED, that pursuant to the authority expressly granted to and invested in the Board of Directors by the provisions of the Articles of Incorporation of the Corporation, as amended and Section 78.1955 of the NRS, a series of the preferred stock, par value $0.001 per share, of the Corporation be, and it hereby is, established; and

FURTHER RESOLVED, that the series of preferred stock of the Corporation be, and it hereby is, given the distinctive designation of “Series F Preferred Stock”; and

FURTHER RESOLVED, that the Series F Preferred Stock shall consist of Sixteen Thousand Seven Hundred and Fifty (16,750) shares; and

FURTHER RESOLVED, that the Series F Preferred Stock shall have the powers and preferences, and the relative, participating, optional and other rights, and the qualifications, limitations, and restrictions thereon set forth in this Certificate of Designation (the “Designation” or the “Certificate of Designation”):

1.       Definitions. In addition to other terms defined throughout this Designation, the following terms have the following meanings when used herein:

1.1       “Applicable Law” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, decree, permit, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition issued under any of the foregoing by, or any determination by any governmental authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such governmental authority), as interpreted and enforced at the time in question, including, but not limited to the NRS.

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1.2       “Business Day” means any day except Saturday, Sunday or any day on which banks are authorized by law to be closed in the City of Houston, Texas.

1.3       “Calendar Quarter” means any of the following during any calendar year: the three (3) month period ending March 31, June 30, September 30 or December 31, provided the first Calendar Quarter hereunder shall instead be the period of time between the Closing Date and the first to occur following the Closing Date, of March 31, June 30, September 30 or December 31.

1.4       “Change of Control” means (i) the completion by the Corporation or Lineal of a plan of merger or consolidation with any other Person as a result of which the holders of the voting capital stock of the Corporation and/or Lineal, as a group, would receive less than 50% of the voting capital stock of the surviving or resulting corporation or entity; (ii) the closing of a transaction involving the Corporation or Lineal providing for the sale or transfer of substantially all the assets of the Corporation or Lineal; or (iii) the acquisition of beneficial ownership of more than 50% of the Corporation’s or Lineal’s voting capital stock by any Person within the meaning of Rule 13d-3 under the Securities Exchange Act (other than the Corporation or a Person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation as of or immediately following the Closing Date). Notwithstanding the above, neither the initial issuance of the Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock or Series F Preferred Stock, the issuance of Common Stock upon conversion thereof, nor any changes to the terms thereof which shall occur as a result of the Shareholder Approval, shall constitute a Change of Control.

1.5       “Closing Date” means the Closing Date as defined in the Plan of Merger.

1.6       “Common Stock” shall mean the common stock, $0.001 par value per share of the Corporation.

1.7       “Corporation” has the meaning given to such term in the introductory paragraph hereof.

1.8       “Distribution” shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise (other than dividends on Common Stock payable in Common Stock), or the purchase or redemption of shares of the Corporation for cash or property other than: (i) repurchases of Common Stock (or securities convertible into Common Stock) issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right or obligation of said repurchase, (ii) repurchases of Common Stock (or securities convertible into Common Stock) issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) other repurchases and redemptions allowed pursuant to the terms of this Designation and/or the designation of the Series C Preferred Stock, Series D Preferred Stock or Series E Preferred Stock, or (iv) any other repurchases or redemptions of capital stock of the Corporation approved by a Majority in Interest.

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1.9       “Dividend Rate” means 8% per annum.

1.10     “Exchange Act” means the Securities Exchange Act of 1934, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

1.11     “Funding Date” means the date following the Closing Date when the Corporation receives net proceeds from the issuance of equity securities of at least $6,750,000.

1.12      “Fund Raise” means the funds raised by the Corporation pursuant to the sale of equity on or before the Funding Date, but shall not include funds raised from Discover Growth Fund or its affiliates.

1.13       “Holder” shall mean the person or entity in which the Series F Preferred Stock is registered on the books of the Corporation, which shall initially be the person or entity which such Series F Preferred Stock is issued to, and shall thereafter be permitted and legal assigns which the Corporation is notified of by the Holder and which the Holder has provided a valid legal opinion in connection therewith to the Corporation and to whom such Preferred Stock Shares are legally transferred.

1.14      “Interest Rate” means 12% per annum.

1.15      “Junior Securities” shall mean the Common Stock and each class of capital stock or series of preferred stock of the Corporation in existence on or established after the Original Issue Date other than the Series D Preferred Stock, unless a Majority In Interest has approved the issuance of such after established preferred stock.

1.16      “Lineal” means Lineal Star Holdings, LLC, a Delaware limited liability company.

1.17      “Lineal Company Agreement” means the Limited Liability Company Agreement of Lineal dated July 23, 2018, as such may be amended from time to time subject to the Holders’ rights set forth in Section 7.1(f) hereof.

1.18      “Lineal Preferred Shares” means preferred shares of Lineal with the rights set forth in the Lineal Company Agreement.

1.19      “Lineal Transaction” means an acquisition by Lineal of assets or securities which results in the Corporation, immediately after such acquisition, being able to meet the initial listing requirements of the NYSE American.

1.20      “Liquidation Preference” shall equal the Original Issue Price per share.

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1.21      “Majority In Interest” means Holders holding a majority of the then aggregate shares of Series F Preferred Stock issued and outstanding.

1.22      “Mandatory Redeemed Portion” means that number of shares of Series F Preferred Stock as equals (i) the total number of Series E Preferred Stock subject to the applicable Series E Redemption, divided by (ii) the total number of Series E Preferred Stock then outstanding, multiplied by (iii) the total number of Series F Preferred Stock then outstanding.

1.23      “Material Asset Transfer” means (i) the sale, license, distribution or transfer, of more than 20% of the assets of (a) the Corporation; or (b) Lineal, in a single transaction or a series of related transactions, other than in a transaction whereby such assets are transferred to a direct or indirect wholly-owned subsidiary of the Corporation; (ii) the merger, consolidation or reorganization of the Corporation or Lineal with another corporation, partnership or other entity and as a result of such merger, consolidation or reorganization less than 50% of the outstanding voting securities of the surviving or resulting corporation, partnership or other entity shall be owned in the aggregate by the shareholders of the Corporation (as to the Corporation) or the Corporation (as to Lineal), as determined immediately prior to the consummation of such merger, consolidation or reorganization.

1.24     “Merger Sub” means Camber Energy Merger Sub 2, Inc., a Delaware corporation.

1.25     “Original Issue Date” means the date of issuance of the Series F Preferred Stock pursuant to the terms of the Plan of Merger.

1.26     “Original Issue Price” shall mean $100.00 per share (as appropriately adjusted for any Recapitalizations).

1.27     “Original Series F Preferred Stock Shares” mean the 16,750 shares of Series F Preferred Stock issued on the Original Issue Date.

1.28     “Pari Passu Securities” means the Corporation’s Series D Preferred Stock.

1.29     “Person” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization or other entity or group.

1.30     “Plan of Merger” means that certain Agreement and Plan of Merger by and between the Corporation, Merger Sub, Lineal and the Lineal members parties thereto dated on or around July 8, 2019, as amended from time to time.

1.31      “Post-Shareholder Approval Shares” means 4.0% of the Total Voting Shares of the Corporation on the Shareholder Approval Date, immediately following the Shareholder Approval, not including the voting rights of the Series E Preferred Stock or the Series F Preferred Stock, and rounded up to the nearest whole share.

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1.32     “Preferred Stock Certificates” means the stock certificate(s) issued by the Corporation representing the applicable Series F Preferred Stock shares.

1.33     “Preferred Stock” means designated shares of preferred stock, $0.001 par value per share of the Corporation, including the Series B Convertible Redeemable Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock.

1.34     “Pre-Shareholder Approval Shares” means 1.0% of the total number of shares of Common Stock issued and outstanding on the date the Plan of Merger is agreed to by the parties thereto.

1.35     “Recapitalization” shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event described in Sections 5.2 through 5.3.

1.36     “Redemption Date” means November 22, 2019, or if a Lineal Transaction has not occurred prior to September 23, 2019, a date which is 60 days after the closing of a Lineal Transaction, or such other later date which is approved by the Corporation and a Majority In Interest.

1.37      “SEC” means the Securities and Exchange Commission.

1.38     “Securities Act” means the Securities Act of 1933, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

1.39     “Senior Securities” means the Corporation’s capital leases as may be in place from time to time; and any other senior debt or other security holders of the Corporation, including certain banks and/or institutions, which hold security interests over the Corporation’s assets as of the Closing Date, or which the Corporation may agree in the future to provide priority security interests to, which shall require the approval and/or consent of a Majority In Interest.

1.40     “Series C Preferred Stock” means the Corporation’s Series C Redeemable Convertible Preferred Stock.

1.41     “Series D Preferred Stock” means the Corporation’s Series D Convertible Preferred Stock.

1.42     “Series E Preferred Stock” means the Corporation’s Series D Redeemable Convertible Preferred Stock.

1.43     “Shareholder Approval Date” means the first Business Day after the date that all of the requirements of Shareholder Approval are met.

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1.44     “Shareholder Approval” means (i) the approval by the shareholders of the Corporation, as required pursuant to applicable rules and regulations of the NYSE American, of (a) the transactions contemplated by the Plan of Merger; and (b) the issuance of shares of Common Stock upon the conversion of the Series E Preferred Stock and Series F Preferred Stock; (ii) approval by the NYSE American of the supplemental listing application submitted by the Corporation with respect to the conversions for the amount of Common Stock then issuable upon conversion of the Series E Preferred Stock and Series F Preferred Stock (subject to any limitations imposed by the NYSE American); and (iii) such other terms and conditions hereof or the Plan of Merger as may be required to be approved by the NYSE American or the SEC.

1.45     “Total Voting Shares” means the total number of votes which outstanding securities of the Corporation are eligible to cast at any meeting of shareholders of the Corporation.

1.46      “Transfer Agent” means initially, the Corporation, which will be serving as its own transfer agent for the Series F Preferred Stock, but at the option of the Corporation from time to time, may also mean any successor transfer agent which the Corporation may use for its Series F Preferred Stock, including, but not limited to ClearTrust, LLC.

1.47     “Voting Shares” means (i) (a) the Pre-Shareholder Approval Shares, prior to the Shareholder Approval Date; and (b) the Post-Shareholder Approval Shares, subsequent to the Shareholder Approval Date, divided by (ii) the total number of Original Series F Preferred Stock Shares, and (iii) rounded down to the nearest whole share prior to the Shareholder Approval Date and rounded up to the nearest whole share subsequent to the Shareholder Approval Date.

2.       Dividends.

2.1       Dividends in General. Dividends shall accrue at the end of each Calendar Quarter on the outstanding Series F Preferred Stock as of each such accrual date, beginning at the end of the first Calendar Quarter following the Closing Date, based on the Original Issue Price, at the Dividend Rate, until such Series F Preferred Stock is no longer outstanding (“Dividends” and once accrued “Accrued Dividends,” and the right to such Dividends, the “Dividend Rights”).

2.2       Payment of Dividends. The Corporation shall, in accordance with the terms set forth herein, and subject to Applicable Law, pay the Holders of the Series F Preferred Stock the Accrued Dividends in cash, within five (5) Business Days of the end of each Calendar Quarter (each such payment date, as applicable a “Dividend Payable Date”), for so long as the Series F Preferred Stock remains outstanding. If the Corporation is prohibited from paying the Accrued Dividends in cash pursuant to Applicable Law, such Accrued Dividends shall continue to accrue until such time as the Corporation is legally able to pay such Accrued Dividends pursuant to Applicable Law, during which period such Accrued Dividends shall accrue interest, compounded monthly, at the end of each month that such Accrued Dividends remain unpaid, at the Interest Rate. Additionally, subject to the rights of the holders, if any, of any shares of the Series B Preferred Stock, Series C Preferred Stock, Series D and Series E Preferred Stock or other securities senior to or pari passu with, the Series F Preferred Stock, the Holders shall, as holders of Series F Preferred Stock, be entitled to eight percent (8%) of the total amount cash or other property to be distributed such dividends paid and Distributions made to the holders of Common Stock.

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2.3       Cash Dividend Payments. All Dividends payable in cash hereunder shall be made in lawful money of the United States of America to each Holder in whose name the Series F Preferred Stock is registered as set forth on the books and records of the Corporation. Such payments shall be made by wire transfer of immediately available funds to the account such Holder may from time to time designate by written notice to the Corporation or by Corporation cashier’s check, without any deduction, withholding or offset for any reason whatsoever except to the extent required by law.

2.4       Non-Cash Distributions. Whenever a Distribution provided for in this Section Error! Reference source not found. shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

2.5       Participation. The Corporation shall be prohibited from paying any cash dividends on, or making any cash Distributions on, Common Stock, at any time that that any Accrued Dividends are due and payable to the Holders hereunder.

2.6       Liquidation Distributions. Following the occurrence of a Liquidation Event (as hereinafter defined) and the payment in full to a Holder of its applicable Liquidation Preference, such Holder shall cease to have any rights hereunder to any future Dividends.

2.7       Other Distributions. Subject to the terms of this Certificate of Designation, and to the fullest extent permitted by the NRS, the Corporation shall be expressly permitted to redeem, repurchase or make distributions on the shares of its capital stock in all circumstances other than where doing so would cause the Corporation to be unable to pay its debts as they become due in the usual course of business.

3.       Liquidation Rights.

3.1       Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (each a “Liquidation Event”), the holders of Series F Preferred Stock shall be entitled to receive prior to the holders of the Corporation’s Junior Securities, and pro rata with the holders of the Corporation’s Pari Passu Securities, but not prior to any holders of the Corporation’s Senior Securities, which holders of the Senior Securities shall have priority to the Distribution of any assets of the Corporation, an amount per share for each share of Series F Preferred Stock held by them equal to the Liquidation Preference, then, after any distributions to any other shares of Preferred Stock, the Holders shall be entitled to eight percent (8%) of any remaining assets left for Distribution to the holders of the Common Stock. If upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation legally available for distribution to the holders of the Series D Preferred Stock and Series F Preferred Stock (i.e., after payment of the Corporation’s liabilities and payment to any holders of the Corporation’s Senior Securities) are insufficient to permit the payment to such holders of the full amounts specified in this Section then the entire assets of the Corporation legally available for distribution shall be distributed pro rata among the holders of the Series D Preferred Stock and Series F Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section and Applicable Law.

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3.2       Remaining Assets. After the payment to the Holders of Series F Preferred Stock holders of the full preferential amounts specified above, the entire remaining assets of the Corporation legally available for distribution by the Corporation shall be distributed with equal priority and pro rata among the holders of the Junior Securities in proportion to the number of shares of Junior Securities held by them.

3.3       Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors. In the event of a merger or other acquisition of the Corporation by another entity, the Distribution date shall be deemed to be the date such transaction closes.

4.      Conversion. The Series F Preferred Stock shall have no conversion rights.

5.      Adjustments for Recapitalizations.

5.1       Equitable Adjustments for Recapitalizations. (a) The Liquidation Preference, the Original Issue Price and the Voting Rights (each, as and if applicable) (the “Preferred Stock Adjustable Provisions”); and (b) any and all other terms, conditions, amounts and provisions of this Designation which (i) pursuant to the terms of this Designation provide for equitable adjustment in the event of a Recapitalization (the “Other Equitable Adjustable Provisions”); or (ii) the Board of Directors of the Corporation determines in their reasonable good faith judgment is required to be equitably adjusted in connection with any Recapitalizations, shall each be subject to equitable adjustment as provided in Sections 5.2 through 5.3, below, as determined by the Board of Directors in good faith in their sole and reasonable discretion.

5.2       Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, without a corresponding subdivision of the Series F Preferred Stock, the applicable Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, without a corresponding combination of the Series F Preferred Stock, the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted.

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5.3       Adjustments for Subdivisions or Combinations of Series F Preferred Stock. In the event the outstanding shares of Series F Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Series F Preferred Stock, the applicable Preferred Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Series F Preferred Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Series F Preferred Stock, the applicable Preferred Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted. Provided, however, that any concurrent adjustment in the Common Stock (as provided under Section 5.2) and Series F Preferred Stock (as provided under Section 5.3) shall affect the applicable Preferred Stock Adjustable Provisions and the Other Equitable Adjustable Provisions only once for each such concurrent adjustment.

5.4       Other Adjustments. Subject to the consent of a Majority in Interest, the Board of Directors of the Corporation shall also adjust equitably, and shall have the right to adjust equitably, any or all of the Preferred Stock Adjustable Provisions or Other Equitable Adjustable Provisions from time to time, if the Board of Directors of the Corporation determine in their reasonable good faith judgment that such values and/or provisions are required to be equitably adjusted in connection with any Corporation action.

5.5       Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 5, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series F Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series F Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth such adjustments and readjustments.

6.       Voting.

6.1       Class Voting. Except as otherwise expressly provided in Section Error! Reference source not found., Section 7, subsection (iv) of the definition of Distribution, or as required by law, the Holders of Series F Preferred Stock and the holders of Common Stock shall vote together as a single class and not as separate classes.

6.2       No Series Voting. Other than as provided herein or required by law, there shall be no series voting.

6.3       Series F Preferred Stock. Each outstanding share of Series F Preferred Stock shall be entitled to vote a number of voting shares equal to the Voting Shares on all shareholder matters to come before the shareholders of the Corporation (whether at a meeting of the shareholders of the Corporation, by written action of shareholders in lieu of a meeting or otherwise) (the “Voting Rights”); provided that the Voting Rights shall not apply, and the Holders shall not be allowed to vote on, the Shareholder Approval. Each Holder of outstanding shares of Series F Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in accordance with the Corporation’s bylaws. Notwithstanding the above provisions of Section 6.3, until or unless Shareholder Approval is received, the Series F Preferred Stock shall have the right to vote for only the director nominated by the majority in interest of the Series E Preferred Stock in any shareholder vote on the election of directors to the Board of Directors of the Corporation.

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7.       Protective Provisions.

7.1       General Protective Provisions. Subject to the rights of series of preferred stock which may from time to time come into existence (subject to the terms, conditions and approval requirements of the Holders (where applicable), set forth in this Designation), so long as any shares of Series F Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the holders of a Majority In Interest:

(a)       Increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series F Preferred Stock;

(b)       Re-issue any shares of Series F Preferred Stock redeemed pursuant to the terms of this Designation;

(c)       Effect an exchange, reclassification, or cancellation of all or a part of the Series F Preferred Stock;

(d)       Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series F Preferred Stock;

(e)       Issue any shares of Series F Preferred Stock other than pursuant to the Plan of Merger;

(f)       Amend the Lineal Company Agreement; or

(g)       Alter or change the rights, preferences or privileges of the shares of Series F Preferred Stock so as to affect adversely the shares of such series.

7.2       Material Transaction Protective Provisions. Subject to the rights of series of preferred stock which may from time to time come into existence (subject to the terms, conditions and approval requirements of the Holders (where applicable), set forth in this Designation), until the earlier of (a) the fifth (5^th) anniversary of the Closing Date; and the date that 5% or less of the Original Series F Preferred Stock Shares are outstanding, the Corporation shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the Holders of a Majority In Interest, affect any Material Asset Transfer or Change of Control.

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8.       Redemption Rights.

8.1       Optional Redemption. The Holders shall have the option, exercisable from time to time after the Redemption Date, provided that the Shareholder Approval has not been received by such Redemption Date, or if Shareholder Approval has been received, then only after the Funding Date, to require that the Corporation redeem all or any portion of the outstanding shares of Series F Preferred Stock (an “Optional Redemption” and the “Optional Redemption Rights”), by paying each applicable Holder, an amount equal to the Original Issue Price multiplied by the number of Series F Preferred Stock shares held by each applicable Holder, subject to the Optional Redemption (the “Optional Redemption Amount”). The Optional Redemption Amount shall include the pro rata portion of any Accrued Dividends relating to the Series F Preferred Stock subject to the Optional Redemption.

(a)       In the event more than one Holder exercises its Optional Redemption Rights on or around the same time as another Holder or Holders, the Corporation shall redeem and repurchase Series F Preferred Stock pro rata between all Holders of Series F Preferred Stock exercising such Optional Redemption Rights.

(b)       To exercise the Optional Redemption Right, the Holder shall deliver to the Corporation an irrevocable written notice (an “Optional Redemption Notice”), indicating the exercise of the Optional Redemption Rights.

(c)       Upon receipt of the Optional Redemption Notice, and subject to the Redemption Law Requirements (defined below), the Corporation shall notify the Holders promptly upon receipt of the Optional Redemption Notice of the date which the Corporation intends to pay the Optional Redemption Amount, which date may not be more than thirty days from the date the Optional Redemption Notice is received by the Corporation, or, if applicable, the fact that the Redemption Law Requirements prohibit such Optional Redemption.

(d)       In the event the Corporation is prohibited from completing an Optional Redemption requested in any Optional Redemption Notice as a result of the Redemption Law Requirements, as determined in the reasonable determination of the Board of Directors of the Corporation and its counsel, the Series F Preferred Stock held by the Holders shall be Redeemed up to an amount of lawfully available funds (based on the Redemption Law Requirements), and the Optional Redemption Notice shall be deemed automatically modified and reduced to only provide for the Optional Redemption of such number of shares of Series F Preferred Stock, if any, which are legally able to be redeemed pursuant to the Redemption Law Requirements. Thereafter, the Corporation shall promptly advise the Holders in writing if additional funds becoming available for future Optional Redemptions, subject in all cases to the Redemption Law Requirements.

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8.2       Mandatory Redemption. The holders of the Series E Preferred Stock (the “Series E Preferred Holders”), are provided the right, pursuant to the designation of the Series E Preferred Stock, as such may be amended from time to time (the “Series E Designation”), to redeem their shares of Series E Preferred Stock for common shares of Lineal (the “Series E Redemption Right”). In the event the Series E Redemption Right is exercised by the Series E Holders (a “Series E Redemption”), the Holders shall be required to redeem a pro rata portion of the Series F Preferred Stock pursuant to this Section 8.2 (a “Mandatory Redemption” and together with an Optional Redemption, each a “Redemption”). Specifically, concurrently with any Series E Redemption, the Holders shall be required to redeem the Mandatory Redeemed Portion of shares of Series F Preferred Stock for shares of Lineal Preferred Stock, with each share of Series F Preferred Stock being redeemed in consideration for 100 shares of Lineal Preferred Stock (the “Redemption Shares”). The aggregate amount of Redemption Shares due to each Holder in connection with a Mandatory Redemption shall be defined as the “Holder Redemption Shares” and together with the Optional Redemption Amount, the “Redemption Amount”. The Holder Redemption Shares shall be unregistered and issued as restricted under the Securities Act of 1933, as amended.

(a)       The Corporation shall redeem Series F Preferred Stock subject to the Mandatory Redemption Rights pro rata between all Holders of Series F Preferred Stock.

(b)       To affect a Mandatory Redemption, the Corporation shall deliver to each Holder an irrevocable written notice (a “Mandatory Redemption Notice” and together with the Optional Redemption Notice, each a “Redemption Notice”), indicating the triggering of the Mandatory Redemption and the date the Corporation intends to affect the Mandatory Redemption and issue the Holder Redemption Shares.

(c)       In the event the Shareholder Approval has been received by the Redemption Date, the Mandatory Redemption Rights set forth in this Section 8.2 shall be deemed terminated for all purposes.

8.3       Redemptions Subject to Applicable Laws. Notwithstanding the above Sections 8.1 and 8.2, no Redemption shall be completed by the Corporation unless such Redemption (and in the event of a Series E Redemption, such Series E Redemption) complies with, and any and all Redemptions provided for hereunder, shall be subject to, the requirements of Applicable Law and specifically, the rules and regulations of the NRS, Chapter 78 – Private Corporations, as such relate to the Corporation’s ability to redeem the Series F Preferred Stock (collectively, the “Redemption Law Requirements”). In the event the Corporation is prohibited from completing a Redemption as a result of the Redemption Law Requirements, as determined in the reasonable determination of the Board of Directors of the Corporation and its counsel, the Series F Preferred Stock held by the Holders shall be Redeemed up to an amount of lawfully available funds, and the Redemption Notice shall be deemed automatically modified and reduced to only provide for the Redemption of such number of shares of Series F Preferred Stock, if any, which are legally able to be redeemed pursuant to the Redemption Law Requirements. Thereafter, the Corporation shall promptly advise the Holders in writing if additional funds become available for future Redemptions, subject in all cases to the Redemption Law Requirements.

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8.4       Effect of Redemption. The payment by the Corporation to each applicable Holder (at each such Holder’s address of record) (or if the Holder fails to deliver the Preferred Stock Certificates and/or Lost Certificate Materials required to be delivered as discussed below in connection with such Redemption, upon the Corporation setting aside such Redemption Amount in trust for the benefit of the Holder) of the Redemption Amount (as applicable, a “Redemption Delivery”) in connection with a Redemption, and effective as of the date of such Redemption (the “Redemption Effective Date”) (provided that the Redemption Amount is paid in full on such Redemption Effective Date), shall fully discharge the Corporation from any and all further obligations under the Series F Preferred Stock shares redeemed and shall automatically, and without any required action by the Corporation or the Holder or his, her or its assigns (including the requirement that the Holder provide the Corporation or the Corporation’s Transfer Agent the Preferred Stock Certificates relating to such Redemption), result in the cancellation, termination and invalidation of any outstanding Series F Preferred Stock and related Preferred Stock Certificates held by a Holder which are subject to a Redemption.

8.5       Further Actions Following Redemption. Without limiting the obligation of each Holder set forth herein (including in the subsequent Section 8.6), the Corporation and/or the Corporation’s Transfer Agent shall be authorized to take whatever action necessary, if any, following the payment/issuance of the Redemption Amount, to reflect the cancellation of the Series F Preferred Stock subject to the applicable Redemption, which shall not require the approval and/or consent of any Holder, and provided that by agreeing to the terms and conditions of this Designation and the acceptance of the Series F Preferred Stock, each Holder hereby agrees to release the Corporation and the Corporation’s Transfer Agent from any and all liability whatsoever in connection with the cancellation of the Series F Preferred Stock subject to and following a Redemption, regardless of the return to the Corporation or the Transfer Agent of any Preferred Stock Certificates evidencing such Series F Preferred Stock subject to the Redemption, which as stated above, shall be automatically cancelled upon the payment/issuance of the Redemption Amount to the Holder, or if the provisions of Section 8.7 apply and the Holder fails to deliver the Preferred Stock Certificates and/or Lost Certificate Materials, upon the Corporation setting aside such Redemption Amount in trust for the benefit of the Holder (a “Redemption Cancellation”).

8.6       Further Redemption Assurances. Notwithstanding the above, each Holder, by accepting such Preferred Stock Certificates hereby covenants that it will (a) deliver to the Corporation or the Corporation’s Transfer Agent, promptly upon the receipt of any Redemption Notice, but in any case prior to the applicable Redemption Effective Date, the applicable Preferred Stock Certificates relating to the Redemption (or Lost Certificate Materials associated therewith); and (b) whenever and as reasonably requested by the Corporation and the Corporation’s Transfer Agent, at the Corporation’s sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Corporation or the Transfer Agent may reasonably require in order to complete, insure and perfect a Redemption Cancellation, if such may be reasonably required by the Corporation and/or the Corporation’s Transfer Agent.

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8.7       Additional Redemption Procedures. In the event that (a) Redemption Delivery is unsuccessful notwithstanding the fact that the Corporation has mailed such applicable Redemption Amount to the correct address of the Holder as set forth in the records of the Corporation; or (b) any Holder fails to timely deliver to the Corporation for cancellation the Preferred Stock Certificates evidencing the Series F Preferred Stock subject to such Redemption, or Lost Certificate Materials associated therewith, and the Corporation therefore refrains from completing a Redemption Delivery, such Redemption Amount shall be held by the Corporation in trust and such Redemption Amount shall be released to such Holder upon reasonable evidence to the Corporation or the Transfer Agent that such Holder is (y) the legal owner of such Redemption Amount and/or (z) the delivery to the Corporation or its Transfer Agent of the applicable Preferred Stock Certificates, as applicable, or Lost Certificate Materials, provided that the Holder’s failure to accept such Redemption Amount, the Corporation’s inability to pay any Holder its applicable Redemption Amount, and/or the Holder’s failure to deliver the Preferred Stock Certificates or Lost Certificate Materials, under either of such circumstances shall in no event effect the validity of the Redemption Cancellation or the consequences of a Redemption Delivery as described in Section 8.2 hereof. Furthermore, the Holder shall be due no interest on the Redemption Amount while being held by the Corporation in trust and any and all interest, if any, which shall accrue on such amount shall be the sole property of the Corporation.

8.8       Further Holder Redemption Assurances. Notwithstanding the above, each Holder, by accepting such Preferred Stock Certificates will whenever and as reasonably requested by the Corporation and the Corporation’s Transfer Agent, at its sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Corporation or the Transfer Agent may reasonably require in order to complete, insure and perfect the cancellation of such Holder’s shares in the event of a Redemption, if such may be reasonably required by the Corporation and/or the Corporation’s Transfer Agent.

8.9       Effect of Redemptions. The Series F Preferred Stock subject to a Redemption shall have all Dividend Rights immediately terminate effective as of the Redemption Effective Date (provided that such Redemption Amount is paid by the Corporation on such Redemption Effective Date), unless otherwise agreed in the sole discretion of the Corporation.

9.       Notices.

9.1       In General. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile or email transmission, and shall be effective, unless otherwise provided herein, three days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed facsimile transmission or email, in each case addressed to a party. The addresses for such communications are (i) if to the Corporation to, Louis Schott, Chief Executive Officer, 1415 Louisiana, Suite 3500 Houston, Texas 77002, Email: louisgschott@gmail.com, or such other address as the Corporation shall notify the Holders of at least ten (10) Business Days prior to the effective date of such change in record address, and (ii) if to any Holder to the address set forth in the records of the Corporation or its Transfer Agent, as applicable, or such other address as may be designated in writing hereafter, in the same manner, by such person.

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9.2       Notices of Record Date. In the event that the Corporation shall propose at any time:

(a)       to declare any Distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;

(b)       to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or

(c)       to voluntarily liquidate or dissolve or undertake a Liquidation Event;

then, in connection with each such event, the Corporation shall send to the Holders of the Series F Preferred Stock at least ten (10) Business Days’ prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Stock shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (b) and (c) above.

Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Series F Preferred Stock at the address for each such holder as shown on the books of the Corporation and shall be deemed given on the date such notice is mailed, or sent via facsimile or email, if the Holder consents to receiving notice pursuant to such form of communication.

The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the vote or written consent of the holders of a Majority In Interest, voting together as a single class.

10.       No Preemptive Rights. No Holder shall have the right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such right may from time to time be set forth in a written agreement between the Corporation and such stockholder.

11.       Reports. The Corporation shall mail to all holders of Series F Preferred Stock those reports, proxy statements and other materials that it mails to all of its holders of Common Stock which materials may, at the option of the Corporation, be provided to such Holders via email, which email will be deemed sufficient notice if it provides a link to the applicable Corporation filing on the Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval system (EDGAR).

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12.       Replacement Preferred Stock Certificates. In the event that any Holder notifies the Corporation that a Preferred Stock Certificate evidencing shares of Series F Preferred Stock has been lost, stolen, destroyed or mutilated, the Corporation shall issue a replacement stock certificate evidencing the Series F Preferred Stock identical in tenor and date (or if such certificate is being issued for shares not covered in a redemption or conversion, in the applicable tenor and date) to the original Preferred Stock Certificate evidencing the Series F Preferred Stock, provided that the Holder executes and delivers to the Corporation and/or its Transfer Agent, as applicable, an affidavit of lost stock certificate and an agreement reasonably satisfactory to the Corporation and its Transfer Agent to indemnify the Corporation from any loss incurred by it in connection with such Series F Preferred Stock certificate, and provides the Corporation and/or its Transfer Agent such other information, documents and if applicable, bonds and indemnities as the Corporation or its Transfer Agent customarily requires for reissuances of stock certificates (collectively the “Lost Certificate Materials”); provided, however, the Corporation shall not be obligated to re-issue replacement stock certificates if the Holder contemporaneously requests the Corporation to convert or redeem the full number of shares evidenced by such lost, stolen, destroyed or mutilated certificate.

13.       No Other Rights or Privileges. Except as specifically set forth herein, the Holders of the Series F Preferred Stock shall have no other rights, privileges or preferences with respect to the Series F Preferred Stock.

14.       Construction. When used in this Designation, unless a contrary intention appears: (i) a term has the meaning assigned to it; (ii) “or” is not exclusive; (iii) “including” means including without limitation; (iv) words in the singular include the plural and words in the plural include the singular, and words importing the masculine gender include the feminine and neuter genders; (v) any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; (vi) the words “hereof”, “herein” and “hereunder” and words of similar import when used in this Designation shall refer to this Designation as a whole and not to any particular provision hereof; (vii) references contained herein to Article, Section, Schedule and Exhibit, as applicable, are references to Articles, Sections, Schedules and Exhibits in this Designation unless otherwise specified; (viii) references to “dollars”, “Dollars” or “$” in this Designation shall mean United States dollars; (ix) reference to a particular statute, regulation or law means such statute, regulation or law as amended or otherwise modified from time to time; (x) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein); (xi) unless otherwise stated in this Designation, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”; (xii) references to “days” shall mean calendar days; and (xiii) the paragraph and section headings contained in this Designation are for convenience only, and shall in no manner affect the interpretation of any of the provisions of this Designation.

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15.       Miscellaneous.

15.1     Cancellation of Series F Preferred Stock. If any shares of Series F Preferred Stock are redeemed pursuant to the terms of this Designation, the shares so redeemed shall be canceled and shall return to the status of designated, but unissued Series F Preferred Stock, subject to the terms of this Designation.

15.2     Further Assurances. Each Holder hereby covenants that, in consideration for receiving shares of Series F Preferred Stock, that he, she or it will, whenever and as reasonably requested by the Corporation, do, execute, acknowledge and deliver any and all such other and further acts, deeds, confirmations, agreements and documents as the Corporation or its Transfer Agent may reasonably require in order to complete, insure and perfect any of the terms, conditions or provisions of this Designation.

15.3     Technical, Corrective, Administrative or Similar Changes. The Corporation may, by any means authorized by law and without any vote of the Holders of shares of the Series F Preferred Stock, make technical, corrective, administrative or similar changes in this Designation that do not, individually or in the aggregate, adversely affect the rights or preferences of the Holders of shares of the Series F Preferred Stock.

15.4     Waiver/Amendment. Notwithstanding any provision in this Designation to the contrary, any provision contained herein and any right of the holders of Series F Preferred Stock granted hereunder may be waived and/or amended as to all shares of Series F Preferred Stock (and the Holders thereof) upon the written consent of a Majority In Interest, unless a higher percentage is required by Applicable Law, in which case the written consent of the Holders of not less than such higher percentage of shares of Series F Preferred Stock shall be required.

15.5     Interpretation. Whenever possible, each provision of this Designation shall be interpreted in a manner as to be effective and valid under Applicable Law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under Applicable Law.

——————————————————————————

NOW THEREFORE BE IT RESOLVED, that the Designation is hereby approved, affirmed, confirmed, and ratified; and it is further

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RESOLVED, that each officer of the Corporation be and hereby is authorized, empowered and directed to execute and deliver, in the name of and on behalf of the Corporation, any and all documents, and to perform any and all acts necessary to reflect the Board of Directors approval and ratification of the resolutions set forth above; and it is further

RESOLVED, that in addition to and without limiting the foregoing, each officer of the Corporation and the Corporation’s attorney be and hereby is authorized to take, or cause to be taken, such further action, and to execute and deliver, or cause to be delivered, for and in the name and on behalf of the Corporation, all such instruments and documents as he may deem appropriate in order to effect the purpose or intent of the foregoing resolutions (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments, as the case may be) and all action heretofore taken by such officer in connection with the subject of the foregoing recitals and resolutions be, and it hereby is approved, ratified and confirmed in all respects as the act and deed of the Corporation; and it is further

RESOLVED, that this Designation may be executed in several counterparts, each of which is an original; that it shall not be necessary in making proof of this Designation or any counterpart hereof to produce or account for any of the other.

[Remainder of page left intentionally blank. Signature page follows.]

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IN WITNESS WHEREOF, the Corporation has unanimously approved and caused this “Certificate of Designation of Camber Energy, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series F Redeemable Preferred Stock” to be duly executed and approved this 2nd day of July 2019.

CAMBER ENERGY, INC.
By:	/s/ Louis G. Schott
Name:	Louis G. Schott
Its:	Interim CEO

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EX-10.1

Camber Energy, Inc. 8-K

Exhibit 10.1

SECURITY EXCHANGE AGREEMENT

This Security Exchange Agreement (“Agreement”) is made and entered into on July 8, 2019 (“Agreement Date”), by and between Camber Energy, Inc., a Nevada corporation, formerly known as Lucas Energy, Inc. (“Company”), and the investor whose name appears below (“Investor”).

Recitals

A.       On November 23, 2018, Company and Investor entered into a Stock Purchase Agreement (“C Agreement”) pursuant to which Investor purchased 263 shares of Series C Redeemable Convertible Preferred Stock (“C Preferred”) convertible into shares of Common Stock of Company (“Common Stock”) pursuant to a Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock filed by the Company with the Secretary of State of Nevada on August 25, 2016 (“C Certificate”).

B.       Investor has at all times fully and completely complied with all of its obligations under the Agreement and the Certificate, and all Delivery Notices and calculations provided to Company by Investor were and are fully correct and accurate in all respects.

C.       Company desires to effectuate the Plan of Merger (the “Merger Agreement” and the “Merger”) with Lineal Star Holdings, LLC, a Delaware limited liability company (the “Merger Party”), as announced on May 13, 2019.

D.       As an accommodation to Company and in order to help facilitate implementation of the Merger and continued trading on the NYSE American (the “Trading Market”), Investor is willing to exchange its C Preferred for shares of Series D Convertible Preferred Stock (“D Preferred”) convertible into Common Stock pursuant to a Certificate of Designations of Preferences, Powers, Rights and Limitations of Series D Convertible Preferred Stock filed by the Company with the Secretary of State of Nevada (“D Certificate”), in accordance with the terms hereof.

E.        The exchange of the securities provided for herein is being made pursuant to Section 3(a)(9) of the Act, and as set forth herein the shares of Common Stock of Company into which the shares of Series D Preferred Stock are convertible may be immediately resold without restriction pursuant to Rule 144(d)(3)(ii) under the Act.

Agreement

In consideration of the premises, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Company and Investor agree as follows:

I.            Definitions. The parties acknowledge the accuracy of the Recitals set forth above, which are incorporated herein by reference. In addition to the terms defined elsewhere in this Agreement, capitalized terms that are not otherwise defined have the meanings set forth in the C Agreement, C Certificate or D Certificate.

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II.            Security Exchange; C Agreement Termination.

A.       Exchange. On the Approval Date, subject to the terms and conditions herein and the satisfaction of the conditions to Closing set forth below, all shares of C Preferred held by Investor as of Approval Date will be exchanged for a number of shares of D Preferred equal to four (4) times the total number of shares of Common Stock outstanding as of such date divided by 1,000, rounded up to the nearest whole share (the “Exchange Shares”). For example only, if the total number of shares of Common Stock outstanding are 3,000,000, the number of D Preferred shares due to the Investor shall equal 12,000 (3,000,000 x 4 = 12,000,000, divided by 1,000 = 12,000).

B.       Deliveries. The following documents will be fully executed and delivered at the Closing:

1.       This Agreement;

2.       Transfer Agent Instructions, in the form attached hereto as Exhibit 2;

3.       Legal Opinion, in the form attached hereto as Exhibit 3;

4.       Officer’s Certificate, in the form attached hereto as Exhibit 4;

5.       Secretary’s Certificate, in the form attached hereto as Exhibit 5; and

6.       Transfer Agent book entry for the Exchange Shares issued to Investor as required by Section II.A. hereof.

C.       Closing Conditions. The consummation of the transactions contemplated by this Agreement (“Closing”) is subject to the satisfaction of each of the following conditions:

1.        Approval has been obtained. As used herein, “Approval” means (i) the approval by the shareholders of the Corporation, as required pursuant to applicable rules and regulations of the NYSE American, of (a) the transactions contemplated by the Merger Agreement; (b) the issuance of shares of Common Stock upon the conversion of the Corporation’s Series E Redeemable Convertible Preferred Stock; (c) the transactions contemplated by this Agreement; and (d) the issuance of shares of Common Stock upon the conversion of the D Preferred; (ii) approval by the NYSE American of the supplemental listing application submitted by the Corporation with respect to the conversions for the amount of Common Stock then issuable upon conversion of the Series E Redeemable Convertible Preferred Stock (subject to any limitations imposed by the NYSE American); and (iii) such other terms and conditions as may be required to be approved by the NYSE American, including for the continued listing of the Company’s Common Stock after the transactions contemplated by the Merger Agreement, or the SEC. “Approval Date” means the first business day after the date that all of the requirements of Approval are met;

2.       Immediately following the issuance of the Exchange Shares, such shares of D Preferred will be convertible into 26.67% of the Company’s shares of Common Stock on a fully-diluted basis;

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3.       All documents, instruments and other writings required to be delivered by Company to Investor pursuant to any provision of this Agreement or in order to implement and effect the transactions contemplated herein have been fully executed and delivered, including without limitation those enumerated in Section II.B above;

4.       The Common Stock is listed for and currently trading on the NYSE American, Company is in compliance with all requirements to maintain listing on the Trading Market, there is no notice of any suspension or delisting with respect to the trading of the shares of Common Stock on such Trading Market, and Company is not aware of any current facts or circumstances that, with the passage of time, would reasonably be expected to cause such disqualification;

5.       The representations and warranties of Company and Investor set forth in this Agreement are true and correct in all material respects as if made on such date (except for representations and warranties expressly made as of a specified date, which will be true as of such date);

5.       No material breach or default has occurred under this Agreement, the Transaction Documents (as defined in the C Agreement) or any other agreement between Company and Investor;

6.       Company has the number of duly authorized shares of Common Stock reserved for issuance as required pursuant to the terms of the D Preferred;

7.       There is not then in effect any law, rule or regulation prohibiting or restricting the transactions contemplated in any Transaction Document, or requiring any consent or approval which will not have been obtained, nor is there any completed, ongoing, pending, threatened or, to Company’s knowledge, contemplated proceeding or investigation which may have the effect of prohibiting or adversely affecting any of the transactions contemplated by this Agreement, including without limitation the sale, issuance, listing, trading or resale of any Shares on the Trading Market; no statute, rule, regulation, executive order, decree, ruling or injunction will have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits the transactions contemplated by this Agreement, and no actions, suits or proceedings will be completed, ongoing, pending, threatened or, to Company’s knowledge, contemplated by any person other than Investor or any Affiliate of Investor, that seek to enjoin or prohibit the transactions contemplated by this Agreement; and

8.       Any rights of first refusal, preemptive rights, rights of participation, or any similar right to participate in the transactions contemplated by this Agreement, if any, shall have been waived in writing or complied with in all material respects.

D.       Closing. When all conditions set forth in Section II.C have been fully satisfied:

1.       The C Preferred will immediately and automatically be exchanged for the Exchange Shares, without the necessity of any further action on the part of Investor or Company, all shares of C Preferred then held by Investor will be cancelled by the Transfer Agent, and the Exchange Shares will be issued to Investor in exchange therefor; and

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2.        The C Agreement and all other agreements entered into between the Investor and the Company prior to the Approval Date, other than this Agreement (the “Prior Agreements”), shall each be deemed terminated in all respects, the Investor shall be deemed to have released the Company from any and all obligations under such Prior Agreements including, but not limited to obligations or liabilities for past defaults or failures to comply with the terms of such Prior Agreements or the securities issued in connection therewith and the Company shall have no further liability thereunder, and the Investor shall have no further rights, in connection with such Prior Agreements.

III.       Representations and Warranties.

A.          Representations Regarding Transaction. Except as set forth under the corresponding section of the Disclosure Schedules, if any, Company hereby represents and warrants to, and as applicable covenants with, Investor as of the Closing:

1.       Organization and Qualification. Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, as applicable, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents, except as would not reasonably be expected to result in a Material Adverse Effect. Each of Company and each Subsidiary is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not reasonably be expected to result in a Material Adverse Effect and there is no completed, pending or, to the knowledge of Company, contemplated or threatened proceeding in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

2.       Authorization; Enforcement. Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder or thereunder. The execution and delivery of each of the Transaction Documents by Company and the consummation by it of the transactions contemplated hereby or thereby have been duly authorized by all necessary action on the part of Company and no further consent or action is required by Company. Each of the Transaction Documents has been, or upon delivery will be, duly executed by Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of Company, enforceable against Company in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable law.

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3.       No Conflicts. The execution, delivery and performance of the Transaction Documents by Company, the issuance and sale of the D Preferred and the consummation by Company of the other transactions contemplated thereby do not and will not (a) conflict with or violate any provision of Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other instrument (evidencing Company or Subsidiary debt or otherwise) or other understanding to which Company or any Subsidiary is a party or by which any property or asset of Company or any Subsidiary is bound or affected, (c) conflict with or result in a violation of any material law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Company or a Subsidiary is subject (including U.S. federal and state securities laws and regulations), or by which any material property or asset of Company or a Subsidiary is bound or affected, or (d) conflict with or violate the terms of any material agreement by which Company or any Subsidiary is bound or to which any property or asset of Company or any Subsidiary is bound or affected; except in the case of each of clauses (b), (c) and (d), such as would not reasonably be expected to result in a Material Adverse Effect.

4.       Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation completed, ongoing, pending, threatened or, to the knowledge of Company, contemplated against or affecting Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”), which would reasonably be expected to adversely affect or challenge the legality, validity or enforceability of any of the Transaction Documents or the sale, issuance, listing, trading or resale of any Shares on the Trading Market. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by Company or any Subsidiary under the Exchange Act or the Act.

5.       Filings, Consents and Approvals. Neither Company nor any Subsidiary is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by Company of the Transaction Documents, other than required federal and state securities filings and such filings and approvals as are required to be made or obtained under the applicable Trading Market rules in connection with the transactions contemplated hereby, each of which has been, or if not yet required to be filed will be, timely filed.

6.       Issuance of Shares. The Conversion Shares are duly authorized and, when issued in accordance with the D Certificate, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. Company has reserved and will continue to reserve from its duly authorized capital stock sufficient shares of its Common Stock for issuance pursuant to the D Certificate. “Conversion Shares” means all shares of Common Stock that are required to be issued upon conversion of the Exchange Shares.

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7.       Disclosure; Non-Public Information. Company will timely file a current report on Form 8-K (“Current Report”) by 8:30 am Eastern time on the Trading Day after the Agreement Date describing the material terms and conditions of this Agreement, a copy of which will be provided to Investor prior to the filing thereof. All information that Company has provided to Investor that constitutes or might constitute material, non-public information will be included in the Current Report. Notwithstanding any other provision, except for information that will be, and only to the extent that it actually is, included in the Current Report, (a) neither Company nor any other Person acting on its behalf has provided Investor or its representatives, agents or attorneys with any information that constitutes or might constitute material, non-public information, including without limitation this Agreement and the Exhibits and Disclosure Schedules hereto, (b) no information contained in the Disclosure Schedules constitutes material non-public information and (c) there is no adverse material information regarding Company that has not been publicly disclosed prior to the Agreement Date. Company understands and confirms that Investor will rely on the foregoing representations and covenants in effecting transactions in securities of Company. All disclosure provided to Investor regarding Company, its business and the transactions contemplated hereby, including without limitation the Disclosure Schedules, furnished by or on behalf of Company with respect to the representations and warranties made herein are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

8.       No Integrated Offering. Neither Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering to be integrated with prior offerings by Company that cause a violation of the Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the Trading Market.

9.       Financial Condition. The Public Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of Company or any Subsidiary, or for which Company or any Subsidiary has commitments, and any material default with respect to any Indebtedness. Company does not intend to incur debts beyond its ability to pay such debts as they mature, taking into account the timing and amounts of cash to be payable on or in respect of its debt.

10.       Section 5 Compliance. No representation or warranty or other statement made by Company in the Transaction Documents contains any untrue statement or omits to state a material fact necessary to make any of them, in light of the circumstances in which it was made, not misleading. Company is not aware of any facts or circumstances that would cause the transactions contemplated by the Transaction Documents, when consummated, to violate Section 5 of the Act or other federal or state securities laws or regulations.

11.       Investment Company. Company is not, and at Closing will not be, an “investment company” required to be registered under the Investment Company Act of 1940, as amended. Company will conduct its business in a manner so that it will not be required to register as an “investment company” under the Investment Company Act.

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12.      Acknowledgments Regarding Investor. Company’s decision to enter into this Agreement has been based solely on the independent evaluation by Company and its representatives, and Company acknowledges and agrees that:

a.       Investor is not, has never been, and as a result of the transactions contemplated by the Transaction Documents will not become an officer, director, insider, or control person of Company, or to Company’s knowledge a 10% or greater shareholder or otherwise an affiliate of Company as defined under Rule 12b-2 of the Exchange Act;

b.       Investor and its representatives have not made and do not make any representations, warranties or agreements with respect to the D Preferred, this Agreement, or the transactions contemplated hereby other than those specifically set forth in Section III.C below; Company has not relied upon, and expressly disclaims reliance upon, any and all written or oral statements or representations made by any persons prior to this Agreement;

c.       The conversion of the D Preferred and resale of Conversion Shares will result in dilution, which may be substantial; and Company’s obligation to issue and deliver Conversion Shares in accordance with this Agreement and the D Certificate is absolute and unconditional regardless of the dilutive effect that such issuances may have; and

d.       Investor is acting solely in the capacity of arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby; neither Investor nor any of its Affiliates, agents or representatives has or is acting as a legal, financial, investment, accounting, tax or other advisor to Company, or fiduciary of Company, or in any similar capacity; neither Investor nor any of its Affiliates, agents or representatives has provided any legal, financial, investment, accounting, tax or other advice to Company; any statement made in connection with this Agreement or the transactions contemplated hereby is not advice or a recommendation, and is merely incidental to Investor’s purchase of the Shares.

13.      No Bad Actor Disqualification. Neither Company, any predecessor of Company, any affiliate of Company, any director, executive officer, other officer of Company participating in the offering, or any beneficial owner of 20% or more of Company’s outstanding voting equity securities is subject to any bad actor disqualification as provided in Rule 506(d) of Regulation D, and Company is not aware of any current facts or circumstances that, with the passage of time, would reasonably be expected to cause such disqualification.

14.      No Commission. No commission or other remuneration has been or will be paid or given directly or indirectly for soliciting the exchange provided for in this Agreement.

15.      Rule 144. The Conversion Shares issuable upon conversion of the D Preferred, issuable pursuant to the terms of this Agreement, will be unrestricted and freely tradable in the hands of Investor. The C Preferred were issued to Investor and fully paid for on December 4, 2018. To Company’s knowledge, (a) Investor is not an affiliate of the Company and has not been for at least the preceding 90 days, and (b) none of the officers, directors or managers of Investor is a director, executive officer or 10% shareholder of the Company nor has been one for at least the preceding 90 days. Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, and has been for at least 90 days prior to the Closing, and has filed with the Commission all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months. Company is not, and has never been, a shell company as defined in Rule 144(i). Assuming that, at the time of any resale, the Investor is not and, for the 90 days preceding such resale, has not been an affiliate of the Company, the Investor will be eligible to resell Conversion Shares without registration under the Act pursuant to Section 4(a)(1) and Rule 144(d)(iii)(2) thereunder.

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16.      Capitalization. The capitalization of the Company as of the Closing is as described in the Public Reports. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents which has not been waived or satisfied. Except as a result of the purchase and sale of the D Preferred, and/or contemplated by the Merger Agreement, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or securities convertible into or exercisable for shares of Common Stock, except as set forth on Schedule 16. Other than pursuant to any participation rights, which will be complied with or waived, the issuance and sale of the Shares will not obligate Company to issue shares of Common Stock or other securities to any Person, other than Investor, and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange, or reset price under such securities. All of the outstanding shares of capital stock of Company are validly issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors of Company or others is required for the issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to Company’s capital stock to which Company is a party or, to the knowledge of Company, between or among any of Company’s stockholders, except as set forth in the Merger Agreement.

17.       Certain Fees. No brokerage or finder’s fees or commissions are or will be payable to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. Notwithstanding any other provision, Investor will have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this section that may be due in connection with the transactions contemplated by this Agreement or the other Transaction Documents.

18.       Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12 of the Exchange Act, and Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has Company received any notification that the Commission is contemplating terminating such registration. Company has not, in the 12 months preceding the Closing, received notice from the Trading Market on which the Common Stock is listed or quoted to the effect that Company is not in compliance with the listing or maintenance requirements of such Trading Market, except in connection with notices which relate to compliance issues which have since been cured. Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements of the Trading Market.

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C.       Representations and Warranties of Investor. Investor hereby represents and warrants to Company as of the Closing as follows:

1.       Organization; Authority. Investor is an entity validly existing and in good standing under the laws of the jurisdiction of its organization with full right, company power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by Investor of the transactions contemplated by this Agreement have been duly authorized by all necessary company or similar action on the part of Investor. Each Transaction Document to which it is a party has been, or will be, duly executed by Investor, and when delivered by Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of Investor, enforceable against it in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (c) insofar as indemnification and contribution provisions may be limited by applicable law.

2.       Investor Status. Investor is acquiring the D Preferred as principal for its own account. At the time Investor was offered the D Preferred, it was, and at the Closing it is an accredited investor as defined in Rule 501(a) under the Act, and not a registered broker-dealer, member of FINRA, or an affiliate thereof.

3.       Experience of Investor. Investor, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Investor is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

IV.       Securities and Other Provisions.

A.       Furnishing of Information. As long as Investor owns any D Preferred, Company will timely file all reports required to be filed by Company after the Closing pursuant to the Exchange Act. As long as Investor owns any D Preferred, Company will prepare and make publicly available such information as is required for Investor to sell its Conversion Shares under Rule 144. Company further covenants that, as long as Investor owns any D Preferred, Company will take such further action as Investor may reasonably request, all to the extent required from time to time to enable Investor to sell its Conversion Shares without registration under the Act within the limitation of the exemptions provided by Rule 144.

C.       Disclosure and Publicity. Company will provide to Investor for review and approval prior to filing or issuing any current or periodic report, registration statement, press release, public statement or communication relating to Investor or the transactions contemplated hereby (any such approval not to be unreasonably withheld, conditioned or delayed).

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D.       No Non-Public Information. Company covenants and agrees that neither it nor any other Person acting on its behalf will, provide Investor or its agents or counsel with any information that Company believes or reasonably should believe will constitute material non-public information after Closing. On and after Closing, neither Investor nor any Affiliate of Investor will have any duty of trust or confidence that is owed directly, indirectly, or derivatively, to Company or the stockholders of Company, or to any other Person who is the source of material non-public information regarding Company. Company understands and confirms that Investor will be relying on the foregoing in effecting transactions in securities of Company, including without limitation sales of the Shares.

E.       Indemnification of Investor.

1.       Obligation to Indemnify. Subject to the provisions of this Section IV.G, Company will indemnify and hold Investor, its Affiliates, managers and advisors, and each of their officers, directors, shareholders, partners, employees, representatives, agents and attorneys, and any person who controls Investor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (collectively, “Investor Parties” and each a “Investor Party”), harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, reasonable costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by Company in this Agreement or in the other Transaction Documents or (b) any action by a creditor or stockholder of Company who is not an Affiliate of an Investor Party, challenging the transactions contemplated by the Transaction Documents; provided, however, that Company will not be obligated to indemnify any Investor Party for any Losses finally adjudicated to be caused solely by such Investor Party’s unexcused material breach of an express provision of this Agreement or another Transaction Document.

2.       Procedure for Indemnification. If any action will be brought against an Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party will promptly notify Company in writing, and Company will have the right to assume the defense thereof with counsel of its own choosing. Investor Parties will have the right to employ separate counsel in any such action and participate in the defense thereof, but the reasonable fees and expenses of such counsel will be at the expense of Investor Parties except to the extent that (a) the employment thereof has been specifically authorized by Company in writing, (b) Company has failed after a reasonable period of time to assume such defense and to employ counsel or (c) in such action there is, in the reasonable opinion of such separate counsel, a material conflict with respect to the dispute in question on any material issue between the position of Company and the position of Investor Parties such that it would be inappropriate for one counsel to represent Company and Investor Parties. Company will not be liable to Investor Parties under this Agreement (i) for any settlement by an Investor Party effected without Company’s prior written consent, which will not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is either attributable to Investor’s breach of any of the representations, warranties, covenants or agreements made by Investor in this Agreement or in the other Transaction Documents. In no event will the Company be liable for the reasonable fees and expenses for more than one separate firm of attorneys (plus local counsel as applicable) to represent all Investor Parties.

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3.       Other than the liability of Investor to Company for uncured material breach of the express provisions of this Agreement, no Investor Party will have any liability to Company or any Person asserting claims on behalf of or in right of Company as a result of acquiring the Shares under this Agreement.

H.       Reservation of Shares. Prior the Closing, the Company will have, and at all times thereafter will, maintain a reserve from its duly authorized Common Stock for issuance pursuant to the D Certificate authorized shares of Common Stock in an amount equal to the number of shares sufficient to immediately issue all Conversion Shares potentially issuable at such time.

I.       Activity Restrictions. For so long as Investor or any of its Affiliates holds any Shares, neither Investor nor any Affiliate will: (1) vote any shares of Common Stock owned or controlled by it, sign or solicit any proxies, attend or be present at a shareholder meeting for purposes of determining a quorum, or seek to advise or influence any Person with respect to any voting securities of Company; (2) engage or participate in any actions, plans or proposals which relate to or would result in (a) acquiring additional securities of Company, alone or together with any other Person, which would result in beneficially owning or controlling more than 9.99% of the total outstanding Common Stock or other voting securities of Company, (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Company or any of its Subsidiaries, (c) a sale or transfer of a material amount of assets of Company or any of its Subsidiaries, (d) any change in the present board of directors or management of Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (e) any material change in the present capitalization or dividend policy of Company, (f) any other material change in Company’s business or corporate structure, including but not limited to, if Company is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by Section 13 of the Investment Company Act of 1940, (g) changes in Company’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of Company by any Person, (h) a class of securities of Company being delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act, or (j) any action, intention, plan or arrangement similar to any of those enumerated above; or (3) request Company or its directors, officers, employees, agents or representatives to amend or waive any provision of this section.

J.       Agreement to Vote. Investor will vote any and all shares of Common Stock which it holds as of the record date for the shareholder meeting to request the Approval (the “Meeting”) in favor of and “for” the Merger, the terms thereof and the securities issuable upon conversion of preferred stock issued therewith, and those other proposals which are recommended by approval by the Board of Directors of the Company in the proxy statement filed by the Company in connection with the Meeting.

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K.        Approval of Merger. Investor (i) agrees to, and consents to, the terms of the Merger, the agreements entered into between the Company and the Merger Party (and its affiliates, employees and related parties) in connection with the Merger (the “Merger Agreement”) and all of the securities issued or issuable in connection therewith, and the issuance of shares of Company capital stock in connection therewith; (ii) waives any and all rights the Investor has, or may have, under the C Agreement, Prior Agreements, the C Preferred and the C Certificate, and any other agreements between the Investor and the Company other than this Agreement, to further consent to, approve or agree to, the terms of such Merger, the Merger Agreement or the securities issued or issuable in connection therewith; and (iii) further waives and releases the Company from any anti-dilution, reset, favorable nations or similar clauses, and/or any other rights whatsoever of such Investor or any securities of the Company held by such Investor, under such C Agreement, Prior Agreements, the C Preferred and the C Certificate, and any other agreements between the Investor and the Company other than this Agreement, in connection with the Merger, the Merger Agreement or the securities issued or issuable in connection therewith.

L.        Preferred Lock Up. For the period commencing on the Agreement Date and terminating upon the earlier of (a) the Approval Date; and (b) the Termination Date, the Investor will not, directly or indirectly offer for sale, sell, pledge, hypothecate, transfer, assign or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the sale, pledge, hypothecation, transfer, assignment or other disposition at any time) (including, without limitation, by operation of law) any or all of the C Preferred shares held by the Investor or any other C Preferred shares obtained by the Investor after the date hereof, without the prior written consent of the Company. The restriction set forth in this Section will not however prohibit the Investor from converting any shares of C Preferred into Common Stock pursuant to the terms of the C Certificate or prohibit the sale of such Common Stock. Investor may convert any or all shares of C Preferred and resell any or all Conversion Shares at any time in its sole and absolute discretion.

M.        No Shorting. For so long as Investor holds any Conversion Shares, neither Investor nor any of its Affiliates will engage in or effect, directly or indirectly, any short sale means (as defined in Rule 200 of Regulation SHO of the Exchange Act, “Short Sale”) of Common Stock. For the avoidance of doubt, selling against delivery of Conversion Shares after delivery of a Conversion Notice is not a Short Sale. There will be no restriction or limitation of any kind on Investor’s right or ability to sell or transfer any or all of the Conversion Shares at any time, in its sole and absolute discretion.

V.          General Provisions.

A.        Term of this Agreement. This Agreement shall terminate in the event the Approval Date has not occurred on or prior to December 31, 2020 (the “Termination Date”).

B.        Notice. Unless a different time of day or method of delivery is specifically provided in the Transaction Documents, any and all notices or other communications or deliveries required or permitted to be provided hereunder will be in writing and will be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail prior to 5:00 p.m. Eastern time on a Trading Day and an electronic confirmation of delivery is received by the sender and provided to the recipient, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered later than 5:00 p.m. Eastern time or on a day that is not a Trading Day, (c) the next Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with confirmation of delivery prior to 5:00 p.m. Eastern time on such next Trading Day, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses for such notices and communications are such other address as may be designated in writing, in the same manner, by such Person.

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C.        Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by Company and Investor or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement will be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor will any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

D.        Fees and Expenses. Except as otherwise provided in this Agreement, each party will pay the fees and expenses of its own advisers, attorneys, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. Company acknowledges and agrees that Investor’s counsel solely represents Investor, and does not represent Company or its interests in connection with the Transaction Documents or the transactions contemplated thereby. Company will pay all stamp and other taxes and duties, if any, levied in connection with the sale or issuance of the Shares to Investor. As of the date hereof, the parties understand and agree that no such stamp or other taxes or duties would be imposed by the jurisdiction of Investor’s organization or, to Investor’s knowledge, by any other jurisdiction as a result of the nature or conduct of Investor’s business.

E.        Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement will not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, will incorporate such substitute provision in this Agreement.

F.       Replacement of Certificates. If any certificate or instrument evidencing any D Preferred is mutilated, lost, stolen or destroyed, Company will issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances will also pay any reasonable third-party costs associated with the issuance of such replacement certificates.

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G.       Governing Law. All matters between the parties, including without limitation questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents will be governed by and construed and enforced in accordance with the laws of the U.S. Virgin Islands, without regard to the principles of conflicts of law that would require or permit the application of the laws of any other jurisdiction, except for corporation law matters applicable to Company which will be governed by the corporate law of its jurisdiction of formation. The parties hereby waive all rights to a trial by jury. In any action, arbitration or proceeding, including appeal, arising out of or relating to any of the Transaction Documents or otherwise involving the parties, the prevailing party will be awarded its reasonable attorneys’ fees and other costs and expenses reasonably incurred in connection with the investigation, preparation, prosecution or defense of such action or proceeding.

H.       Arbitration. Any dispute, controversy, claim or action of any kind arising out of, relating to, or in connection with this Agreement, or in any way involving Company and Investor or their respective Affiliates, including any issues of arbitrability, will be resolved solely by final and binding arbitration in English before a retired judge at JAMS, or its successor, in the Territory of the Virgin Islands, pursuant to the most expedited and Streamlined Arbitration Rules and Procedures available. Any interim or final award may be entered and enforced by any court of competent jurisdiction. The final award will include the prevailing party’s reasonable arbitration, expert witness and attorney fees, costs and expenses. Notwithstanding the foregoing, Investor or the Company, as the case may be, may in its sole discretion bring an action in Delaware District Court or the U.S. District Court for the District of Delaware in aid of arbitration or for temporary, preliminary or provisional relief pending completion of arbitration.

I.         Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and will not be deemed to limit or affect any of the provisions hereof.

J.        Survival. The representations and warranties contained herein will survive the Closing and the delivery of the D Preferred until all D Preferred issued to Investor have been converted or redeemed. Neither party will be under any obligation to update or supplement any of its representations or warranties following the Closing due to a change that occurred after the Closing.

K.       Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of the Transaction Documents or any amendments hereto. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. All currency references in any Transaction Document are to U.S. dollars.

L.        Further Assurances. Each party will take all further actions and execute all further documents as may be reasonably necessary to implement the provisions and carry out the intent of this Agreement fully and effectively.

M.       Acknowledgement. Company hereby acknowledges and agrees that Investor has at all times fully and completely complied with all of its obligations under the C Agreement, this Agreement, the C Certificate and all other Transaction Documents between Company and Investor, and that all Delivery Notices and calculations provided by Investor to Company were and are fully correct and accurate in all respects.

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N.       General Release. Company, on behalf of itself and on behalf of each of its predecessors, successors, parents, subsidiaries, shareholders, and affiliated and/or related companies, and each of its respective present and former officers, directors, shareholders, employees, representatives, business entities, executors, administrators, conservators, assignors and assignees (collectively, the “Releasing Parties”) hereby knowingly and voluntarily fully and forever absolutely and irrevocably waive, release and discharge Investor and its predecessors, successors, parents, subsidiaries, and affiliated and/or related companies and entities, and each of their respective present and former officers, directors, shareholders, partners, members, employees, representatives, agents, attorneys, advisors, business entities, executors, administrators, conservators, assignors and assignees and all parties acting through, under or in concert with them, and each of them, in their individual and representative capacities (collectively, the “Released Parties”) from any and all claims, charges, complaints, grievances, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, indemnity, attorneys’ fees, expenses, damages, judgments, orders, and liabilities of whatever kind and/or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, which have existed or may have existed, or which do exist or which hereafter can, shall or may exist as of the date this Agreement is executed, including without limitation any that are based upon, connected with, or otherwise arising out of or in any way relating to any Transaction Documents (collectively, the “Released Claims”). The Releasing Parties, and each of them, expressly waive and relinquish, to the fullest extent permitted by law, the provisions, rights and benefits conferred by any law which would limit the scope of the release provided above. The Releasing Parties acknowledge that they or any of them may hereafter discover facts in addition to or different from those which they now know to be true with respect to the subject matters of the claims released herein, but hereby stipulate and agree that they have fully, finally, and forever settled and released any and all such claims, whether known or unknown, suspected or unsuspected, contingent or non-contingent, concealed or hidden, which now exist or heretofore existed upon any theory of law or equity now existing or coming into existence in the future, without regard to the discovery or existence of such different or additional facts.

O.       Amendment. Section II.E, Subsequent Closings, of the C Agreement is hereby deleted in its entirety, and shall be of no further force or effect.

P.       Ratification. Except as expressly provided herein, the C Agreement, which is incorporated by reference as though set forth in full herein, and the C Certificate are hereby ratified and affirmed in all respects, and remain in full force and effect. Except as expressly provided herein, the execution of this Agreement shall not operate as a waiver of any right, power or remedy of the Investor, constitute a waiver of any provision of any of the C Agreement, C Certificate or any Transaction Document or serve to effect a novation of the obligations under the C Agreement, C Certificate or any Transaction Document. Except as expressly provided herein, the C Agreement and all Transaction Documents between Company and Investor shall continue in full force and effect and nothing herein shall act as a waiver of any of the Investor’s rights under any of the foregoing.

Q.       Execution. This Agreement may be executed in two or more counterparts, all of which when taken together will be considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by portable document format, facsimile or electronic transmission, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

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R.       Entire Agreement. This Agreement, including the Exhibits hereto, which are hereby incorporated herein by reference, contains the entire agreement and understanding of the parties, and supersedes all prior and contemporaneous agreements, term sheets, letters, discussions, communications and understandings, both oral and written, which the parties acknowledge have been merged into this Agreement. No party, representative, advisor, attorney or agent has relied upon any collateral contract, agreement, assurance, promise, understanding, statement or representation not expressly set forth herein or in the C Agreement. The parties hereby absolutely, unconditionally and irrevocably waive all rights and remedies, at law and in equity, directly or indirectly arising out of or relating to, or which may arise as a result of, any Person’s reliance on any such statement or assurance.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories on the Agreement Date.

Company:
CAMBER ENERGY, INC.
By:	/s/ Louis G. Schott
Name:	Louis G. Schott
Title:	Interim CEO
Investor:
DISCOVER GROWTH FUND LLC
Investor Name
By:	/s/ John C. Kirkland
Name:	John C. Kirkland
Title:	President of G.P. of Member

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Schedule 16

The following is a summary of the Company’s outstanding warrants:

Warrants		Exercise		Expiration
Outstanding		Price ($)		Date
	108		1,572.44		April 21, 2019
	199		937.50		April 26, 2021
	2,560		156.25		June 12, 2022
	40,000		9.75		May 24, 2023
	42,867

The following tabulation summarizes the remaining terms of the options outstanding:

Exercise		Remaining		Options		Options
Price ($)		Life (Yrs.)		Outstanding		Exercisable
	32,344.00		1.8		4		4
			Total		4		4

EX-10.2

Camber Energy, Inc. 8-K

Exhibit 10.2

TERMINATION AGREEMENT

This Termination Agreement (“Agreement”) is made and entered into on July 8, 2019 (“Agreement Date”), by and between Camber Energy, Inc., a Nevada corporation, formerly known as Lucas Energy, Inc. (“Company”), and the investor whose name appears below (“Investor”).

Recitals

A.            Investor holds certain rights under the (a) Preferred Stock Purchase Agreement between the Investor and the Company, dated April 6, 2016; (b) Securities Purchase Agreement between the Investor and the Company, dated April 6, 2016; (c) Stock Purchase Agreement between the Investor and the Company, dated October 5, 2017; and (d) Stock Purchase Agreement between the Investor and the Company, dated October 26, 2018, each of (a) through (d), as amended from time to time (collectively, the “Purchase Agreements”);

B.            Investor holds a Redeemable Convertible Subordinated Debenture from Company in the original principal amount of $530,000 (“Debenture”), which has been converted into shares of common stock of the Company (“Common Stock”), provided that the Company currently owes the Investor additional shares of Common Stock pursuant to the true-up provisions of such Debenture (“Debenture True-Up Shares”);

C.            Investor holds 2,042 shares of Series C Redeemable Convertible Preferred Stock (“C Preferred”), convertible into shares of Common Stock of Company (“Common Stock”) pursuant to a Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock filed by the Company with the Secretary of State of Nevada on August 25, 2016 (“C Certificate”).;

D.            Investor has at all times fully and completely complied with all of its obligations under the Agreement, the Debenture and the C Certificate, and all Delivery Notices and calculations provided to Company by Investor were and are fully correct and accurate in all respects.

E.             Company desires to effectuate the Plan of Merger (the “Merger Agreement” and the “Merger”) with Lineal Holdings, LLC, a Delaware limited liability company (the “Merger Party”), as announced on May 13, 2019.

F.             As an accommodation to Company and in order to help facilitate implementation of the Merger and continued listing on NYSE American (the “Trading Market”), and subject to Investor’s right to receive and sell Debenture True-Up Shares and Conversion Shares unless and until the Approval for the Merger has occurred, Investor is willing to terminate the Purchase Agreements, and all rights it has to the Debenture True-Up shares and C Preferred shares, in accordance with the terms hereof.

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Agreement

In consideration of the premises, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Company and Investor agree as follows:

I.            Definitions. The parties acknowledge the accuracy of the Recitals set forth above, which are incorporated herein by reference. In addition to the terms defined elsewhere in this Agreement, capitalized terms that are not otherwise defined have the meanings set forth in the Purchase Agreements and/or C Certificate.

II.          Termination.

A.          Termination Conditions. The terminations provided for below are subject to the satisfaction of each of the following conditions:

1.           Approval has been obtained. As used herein, “Approval” means (i) the approval by the shareholders of the Corporation, as required pursuant to applicable rules and regulations of the NYSE American, of (a) the transactions contemplated by the Merger Agreement; and (b) the issuance of shares of Common Stock upon the conversion of the Corporation’s Series E Redeemable Convertible Preferred Stock; (ii) approval by the NYSE American of the supplemental listing application submitted by the Corporation with respect to the conversions for the amount of Common Stock then issuable upon conversion of the Series E Redeemable Convertible Preferred Stock (subject to any limitations imposed by the NYSE American); and (iii) such other terms and conditions as may be required to be approved by the NYSE American, including for the continued listing of the Company’s Common Stock after the transactions contemplated by the Merger Agreement, or the SEC. “Approval Date” means the first business day after the date that all of the requirements of Approval are met;

2.           Between the Agreement Date and the Approval Date, (a) the Common Stock is listed for and trading on the NYSE American, (b) no material breach or default has occurred under any of the Purchase Agreements or any other agreements ancillary to the Purchase Agreements (the “Transaction Documents”), and (c) Investor has timely received all Conversion Shares under the Debenture and C Preferred requested prior to the Approval Date; and

3.           Upon the Approval Date, the Common Stock is listed for and trading on the NYSE American.

B.           Terminations. When all conditions set forth in Section II.A have been fully satisfied:

1.           Investor’s rights under the Debenture and to the C Preferred shares (including all shares of C Preferred which the Investor holds as of such date) will immediately and automatically be terminated, without the necessity of any further action on the part of Investor or Company, all shares of C Preferred then held by Investor will be cancelled by the Transfer Agent;

2.           Investor shall be deemed to have waived rights to any further shares of Common Stock due to Investor, or which may become due to the Investor, for any reason whatsoever, in connection with the C Preferred, under the Purchase Agreements, the C Certificate, or for any other reason whatsoever, including, but not limited to, the Debenture True-Up Shares and the shares of Common Stock due to the Investor in connection with true-ups of C Preferred conversions; and

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3.           The Purchase Agreements and all other agreements and securities entered into between the Investor and the Company or issued to the Investor by the Company, as of the date of such Approval Date and all C Preferred and all rights thereto and therewith (the “Agreements and Securities”), shall each be deemed terminated in all respects, the Investor shall be deemed to have released the Company from any and all obligations under such Purchase Agreements and Agreements and Securities including, but not limited to obligations or liabilities for past defaults or failures to comply with the terms of such Purchase Agreements and Agreements and Securities and the Company shall have no further liability, and the Investor shall have no further rights, in connection with such Purchase Agreements and Agreements and Securities whatsoever.

III.        Representations and Warranties.

A.          Representations Regarding Transaction. Except as set forth under the corresponding section of the Disclosure Schedules, if any, Company hereby represents and warrants to, and as applicable covenants with, Investor as of the Closing:

1.           Organization and Qualification. Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, as applicable, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents, except as would not reasonably be expected to result in a Material Adverse Effect. Each of Company and each Subsidiary is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not reasonably be expected to result in a Material Adverse Effect and there is no completed, pending or, to the knowledge of Company, contemplated or threatened proceeding in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

2.           Authorization; Enforcement. Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder or thereunder. The execution and delivery of each of the Transaction Documents by Company and the consummation by it of the transactions contemplated hereby or thereby have been duly authorized by all necessary action on the part of Company and no further consent or action is required by Company. Each of the Transaction Documents has been, or upon delivery will be, duly executed by Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of Company, enforceable against Company in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable law.

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3.           No Conflicts. The execution, delivery and performance of this Agreement by Company, and the consummation by Company of the transactions contemplated thereby do not and will not (a) conflict with or violate any provision of Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other instrument (evidencing Company or Subsidiary debt or otherwise) or other understanding to which Company or any Subsidiary is a party or by which any property or asset of Company or any Subsidiary is bound or affected, (c) conflict with or result in a violation of any material law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Company or a Subsidiary is subject (including U.S. federal and state securities laws and regulations), or by which any material property or asset of Company or a Subsidiary is bound or affected, or (d) conflict with or violate the terms of any material agreement by which Company or any Subsidiary is bound or to which any property or asset of Company or any Subsidiary is bound or affected; except in the case of each of clauses (b), (c) and (d), such as would not reasonably be expected to result in a Material Adverse Effect.

4.           Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation completed, ongoing, pending, threatened or, to the knowledge of Company, contemplated against or affecting Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”), which would reasonably be expected to adversely affect or challenge the legality, validity or enforceability of any of the Transaction Documents or the sale, issuance, listing, trading or resale of any Shares on the Trading Market. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by Company or any Subsidiary under the Exchange Act or the Act.

5.           Filings, Consents and Approvals. Neither Company nor any Subsidiary is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by Company of the Transaction Documents, other than required federal and state securities filings and such filings and approvals as are required to be made or obtained under the applicable Trading Market rules in connection with the transactions contemplated hereby, each of which has been, or if not yet required to be filed will be, timely filed.

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6.            Disclosure; Non-Public Information. Company will timely file a current report on Form 8-K (“Current Report”) by 8:30 am Eastern time on the Trading Day after the Agreement Date describing the material terms and conditions of this Agreement, a copy of which will be provided to Investor prior to the filing thereof. All information that Company has provided to Investor that constitutes or might constitute material, non-public information will be included in the Current Report. Notwithstanding any other provision, except for information that will be, and only to the extent that it actually is, included in the Current Report, (a) neither Company nor any other Person acting on its behalf has provided Investor or its representatives, agents or attorneys with any information that constitutes or might constitute material, non-public information, including without limitation this Agreement and the Exhibits and Disclosure Schedules hereto, (b) no information contained in the Disclosure Schedules constitutes material non-public information and (c) there is no adverse material information regarding Company that has not been publicly disclosed prior to the Agreement Date. Company understands and confirms that Investor will rely on the foregoing representations and covenants in effecting transactions in securities of Company. All disclosure provided to Investor regarding Company, its business and the transactions contemplated hereby, including without limitation the Disclosure Schedules, furnished by or on behalf of Company with respect to the representations and warranties made herein are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

7.            Acknowledgments Regarding Investor. Company’s decision to enter into this Agreement has been based solely on the independent evaluation by Company and its representatives, and Company acknowledges and agrees that:

a.           Investor is not, has never been, and as a result of the transactions contemplated by the Transaction Documents will not become an officer, director, insider, or control person of Company, or to Company’s knowledge a 10% or greater shareholder or otherwise an affiliate of Company as defined under Rule 12b-2 of the Exchange Act;

b.           Investor and its representatives have not made and do not make any representations, warranties or agreements with respect to the Securities, this Agreement, or the transactions contemplated hereby other than those specifically set forth in Section III.C below; Company has not relied upon, and expressly disclaims reliance upon, any and all written or oral statements or representations made by any persons prior to this Agreement;

c.           The conversion of the C Preferred and resale of Conversion Shares will result in dilution, which may be substantial; and Company’s obligation to issue and deliver Conversion Shares in accordance with this Agreement and the C Preferred is absolute and unconditional regardless of the dilutive effect that such issuances may have; and

d.           Investor is acting solely in the capacity of arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby; neither Investor nor any of its Affiliates, agents or representatives has or is acting as a legal, financial, investment, accounting, tax or other advisor to Company, or fiduciary of Company, or in any similar capacity; neither Investor nor any of its Affiliates, agents or representatives has provided any legal, financial, investment, accounting, tax or other advice to Company; any statement made in connection with this Agreement or the transactions contemplated hereby is not advice or a recommendation, and is merely incidental to Investor’s purchase of the Shares.

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8.           Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12 of the Exchange Act, and Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has Company received any notification that the Commission is contemplating terminating such registration. Company has not, in the 12 months preceding the Agreement Date, received notice from the Trading Market on which the Common Stock is listed or quoted to the effect that Company is not in compliance with the listing or maintenance requirements of such Trading Market, except in connection with notices which relate to compliance issues which have since been cured. Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements of the Trading Market.

C.          Representations and Warranties of Investor. Investor hereby represents and warrants to Company as of the Closing as follows:

1.           Organization; Authority. Investor is an entity validly existing and in good standing under the laws of the jurisdiction of its organization with full right, company power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by Investor of the transactions contemplated by this Agreement have been duly authorized by all necessary company or similar action on the part of Investor. Each Transaction Document to which it is a party has been, or will be, duly executed by Investor, and when delivered by Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of Investor, enforceable against it in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (c) insofar as indemnification and contribution provisions may be limited by applicable law.

IV.         Securities and Other Provisions.

A.          No Non-Public Information. Company covenants and agrees that neither it nor any other Person acting on its behalf will, provide Investor or its agents or counsel with any information that Company believes or reasonably should believe will constitute material non-public information after the Agreement Date. On and after the Agreement Date, neither Investor nor any Affiliate of Investor will have any duty of trust or confidence that is owed directly, indirectly, or derivatively, to Company or the stockholders of Company, or to any other Person who is the source of material non-public information regarding Company. Company understands and confirms that Investor will be relying on the foregoing in effecting transactions in securities of Company, including without limitation sales of the Shares.

B.          Indemnification of Investor.

1.           Obligation to Indemnify. Subject to the provisions of this Section IV.G, Company will indemnify and hold Investor, its Affiliates, managers and advisors, and each of their officers, directors, shareholders, partners, employees, representatives, agents and attorneys, and any person who controls Investor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (collectively, “Investor Parties” and each a “Investor Party”), harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, reasonable costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by Company in this Agreement or in the other Transaction Documents or (b) any action by a creditor or stockholder of Company who is not an Affiliate of an Investor Party, challenging the transactions contemplated by the Transaction Documents; provided, however, that Company will not be obligated to indemnify any Investor Party for any Losses finally adjudicated to be caused solely by such Investor Party’s unexcused material breach of an express provision of this Agreement or another Transaction Document.

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2.           Procedure for Indemnification. If any action will be brought against an Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party will promptly notify Company in writing, and Company will have the right to assume the defense thereof with counsel of its own choosing. Investor Parties will have the right to employ separate counsel in any such action and participate in the defense thereof, but the reasonable fees and expenses of such counsel will be at the expense of Investor Parties except to the extent that (a) the employment thereof has been specifically authorized by Company in writing, (b) Company has failed after a reasonable period of time to assume such defense and to employ counsel or (c) in such action there is, in the reasonable opinion of such separate counsel, a material conflict with respect to the dispute in question on any material issue between the position of Company and the position of Investor Parties such that it would be inappropriate for one counsel to represent Company and Investor Parties. Company will not be liable to Investor Parties under this Agreement (i) for any settlement by an Investor Party effected without Company’s prior written consent, which will not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is either attributable to Investor’s breach of any of the representations, warranties, covenants or agreements made by Investor in this Agreement or in the other Transaction Documents. In no event will the Company be liable for the reasonable fees and expenses for more than one separate firm of attorneys (plus local counsel as applicable) to represent all Investor Parties.

3.           Other than the liability of Investor to Company for uncured material breach of the express provisions of this Agreement, no Investor Party will have any liability to Company or any Person asserting claims on behalf of or in right of Company as a result of acquiring the Shares under this Agreement.

C.            Agreement to Vote. Investor will vote any and all shares of Common Stock which it holds as of the record date for the shareholder meeting to request the Approval (the “Meeting”) in favor of and “for” the Merger, the terms thereof and the securities issuable upon conversion of preferred stock issued therewith, and those other proposals which are recommended by approval by the Board of Directors of the Company in the proxy statement filed by the Company in connection with the Meeting.

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D.            Approval of Merger. Investor (i) agrees to, and consents to, the terms of the Merger, the agreements entered into between the Company and the Merger Party (and its affiliates, employees and related parties) in connection with the Merger (the “Merger Agreement”) and all of the securities issued or issuable in connection therewith, and the issuance of shares of Company capital stock in connection therewith; (ii) waives any and all rights the Investor has, or may have, under the Purchase Agreements, Agreements and Securities or the Designation, and any other agreements between the Investor and the Company other than this Agreement, to further consent to, approve or agree to, the terms of such Merger, the Merger Agreement or the securities issued or issuable in connection therewith and any other agreements between the Investor and the Company other than this Agreement; and (iii) further waives and releases the Company from any anti-dilution, reset, favorable nations or similar clauses, and/or any other rights whatsoever of such Investor or any securities of the Company held by such Investor, under such Purchase Agreements, Agreements and Securities or the Designation, in connection with the Merger, the Merger Agreement or the securities issued or issuable in connection therewith.

D.            Preferred Lock Up. For the period commencing on the Agreement Date and terminating upon the earlier of (a) the Approval Date; and (b) the Termination Date, the Investor will not, directly or indirectly offer for sale, sell, pledge, hypothecate, transfer, assign or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the sale, pledge, hypothecation, transfer, assignment or other disposition at any time) (including, without limitation, by operation of law) the Debenture or any or all of the C Preferred shares held by the Investor or any other C Preferred shares obtained by the Investor after the date hereof, without the prior written consent of the Company. The restriction set forth in this Section will not however prohibit the Investor from converting any shares of C Preferred into Common Stock pursuant to the terms of the C Certificate or prohibit the sale of such Common Stock. Investor may convert any or all shares of C Preferred and resell any or all Conversion Shares under the C Preferred or Debenture at any time in its sole and absolute discretion.

V.          General Provisions.

A.            Term of this Agreement. This Agreement shall terminate in the event the Approval Date has not occurred on or prior to December, 31 2020 (the “Termination Date”).

B.            Notice. Unless a different time of day or method of delivery is specifically provided in the Transaction Documents, any and all notices or other communications or deliveries required or permitted to be provided hereunder will be in writing and will be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail prior to 5:00 p.m. Eastern time on a Trading Day and an electronic confirmation of delivery is received by the sender and provided to the recipient, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered later than 5:00 p.m. Eastern time or on a day that is not a Trading Day, (c) the next Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with confirmation of delivery prior to 5:00 p.m. Eastern time on such next Trading Day, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses for such notices and communications are such other address as may be designated in writing, in the same manner, by such Person.

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C.            Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by Company and Investor or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement will be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor will any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

D.            Fees and Expenses. Except as otherwise provided in this Agreement, each party will pay the fees and expenses of its own advisers, attorneys, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. Company acknowledges and agrees that Investor’s counsel solely represents Investor, and does not represent Company or its interests in connection with the Transaction Documents or the transactions contemplated thereby. Company will pay all stamp and other taxes and duties, if any, levied in connection with the sale or issuance of the Shares to Investor. As of the date hereof, the parties understand and agree that no such stamp or other taxes or duties would be imposed by the jurisdiction of Investor’s organization or, to Investor’s knowledge, by any other jurisdiction as a result of the nature or conduct of Investor’s business.

E.             Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement will not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, will incorporate such substitute provision in this Agreement.

F.             Governing Law. All matters between the parties, including without limitation questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents will be governed by and construed and enforced in accordance with the laws of the U.S. Virgin Islands, without regard to the principles of conflicts of law that would require or permit the application of the laws of any other jurisdiction, except for corporation law matters applicable to Company which will be governed by the corporate law of its jurisdiction of formation. The parties hereby waive all rights to a trial by jury. In any action, arbitration or proceeding, including appeal, arising out of or relating to any of the Transaction Documents or otherwise involving the parties, the prevailing party will be awarded its reasonable attorneys’ fees and other costs and expenses reasonably incurred in connection with the investigation, preparation, prosecution or defense of such action or proceeding.

G.            Arbitration. Any dispute, controversy, claim or action of any kind arising out of, relating to, or in connection with this Agreement, or in any way involving Company and Investor or their respective Affiliates, including any issues of arbitrability, will be resolved solely by final and binding arbitration in English before a retired judge at JAMS, or its successor, in the Territory of the Virgin Islands, pursuant to the most expedited and Streamlined Arbitration Rules and Procedures available. Any interim or final award may be entered and enforced by any court of competent jurisdiction. The final award will include the prevailing party’s reasonable arbitration, expert witness and attorney fees, costs and expenses. Notwithstanding the foregoing, Investor or the Company, as the case may be, may in its sole discretion bring an action in Delaware District Court or the U.S. District Court for the District of Delaware in aid of arbitration or for temporary, preliminary or provisional relief pending completion of arbitration.

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H.            Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and will not be deemed to limit or affect any of the provisions hereof

I.              Survival. The representations and warranties contained herein will survive until the earlier of the Approval Date or the Termination Date. Neither party will be under any obligation to update or supplement any of its representations or warranties following the Closing due to a change that occurred after the Closing.

J.             Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of the Transaction Documents or any amendments hereto. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. All currency references in any Transaction Document are to U.S. dollars.

K.            Further Assurances. Each party will take all further actions and execute all further documents as may be reasonably necessary to implement the provisions and carry out the intent of this Agreement fully and effectively.

L.            Acknowledgement. Company hereby acknowledges and agrees that Investor has at all times fully and completely complied with all of its obligations under the Agreement, the C Certificate and all other Transaction Documents between Company and Investor, and that all Delivery Notices and calculations provided by Investor to Company were and are fully correct and accurate in all respects.

M.           General Release. Company, on behalf of itself and on behalf of each of its predecessors, successors, parents, subsidiaries, shareholders, and affiliated and/or related companies, and each of its respective present and former officers, directors, shareholders, employees, representatives, business entities, executors, administrators, conservators, assignors and assignees (collectively, the “Releasing Parties”) hereby knowingly and voluntarily fully and forever absolutely and irrevocably waive, release and discharge Investor and its predecessors, successors, parents, subsidiaries, and affiliated and/or related companies and entities, and each of their respective present and former officers, directors, shareholders, partners, members, employees, representatives, agents, attorneys, advisors, business entities, executors, administrators, conservators, assignors and assignees and all parties acting through, under or in concert with them, and each of them, in their individual and representative capacities (collectively, the “Released Parties”) from any and all claims, charges, complaints, grievances, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, indemnity, attorneys’ fees, expenses, damages, judgments, orders, and liabilities of whatever kind and/or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, which have existed or may have existed, or which do exist or which hereafter can, shall or may exist as of the date this Agreement is executed, including without limitation any that are based upon, connected with, or otherwise arising out of or in any way relating to any Transaction Documents (collectively, the “Released Claims”). The Releasing Parties, and each of them, expressly waive and relinquish, to the fullest extent permitted by law, the provisions, rights and benefits conferred by any law which would limit the scope of the release provided above. The Releasing Parties acknowledge that they or any of them may hereafter discover facts in addition to or different from those which they now know to be true with respect to the subject matters of the claims released herein, but hereby stipulate and agree that they have fully, finally, and forever settled and released any and all such claims, whether known or unknown, suspected or unsuspected, contingent or non-contingent, concealed or hidden, which now exist or heretofore existed upon any theory of law or equity now existing or coming into existence in the future, without regard to the discovery or existence of such different or additional facts.

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N.            Ratification. Except as expressly provided herein, the Agreement, which is incorporated by reference as though set forth in full herein, and the Debenture and C Certificate are hereby ratified and affirmed in all respects, and remain in full force and effect. Except as expressly provided herein, the execution of this Agreement shall not operate as a waiver of any right, power or remedy of the Investor, constitute a waiver of any provision of any of the Agreement, Certificate or any Transaction Document or serve to effect a novation of the obligations under the Agreement, Certificate or any Transaction Document. Except as expressly provided herein, the Agreement and all Transaction Documents between Company and Investor shall continue in full force and effect and nothing herein shall act as a waiver of any of the Investor’s rights under any of the foregoing.

O.            Execution. This Agreement may be executed in two or more counterparts, all of which when taken together will be considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by portable document format, facsimile or electronic transmission, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

P.            Entire Agreement. This Agreement, including the Exhibits hereto, which are hereby incorporated herein by reference, contains the entire agreement and understanding of the parties, and supersedes all prior and contemporaneous agreements, term sheets, letters, discussions, communications and understandings, both oral and written, which the parties acknowledge have been merged into this Agreement. No party, representative, advisor, attorney or agent has relied upon any collateral contract, agreement, assurance, promise, understanding, statement or representation not expressly set forth herein or in the Purchase Agreements. The parties hereby absolutely, unconditionally and irrevocably waive all rights and remedies, at law and in equity, directly or indirectly arising out of or relating to, or which may arise as a result of, any Person’s reliance on any such statement or assurance.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories on the Agreement Date.

Company:
CAMBER ENERGY, INC.
By:	/s/ Louis G. Schott
Name:	Louis G. Schott
Title:	Interim CEO
Investor:
DISCOVER GROWTH FUND
Investor Name
By:	/s/ David Sims
Name:	David Sims
Title:	Director

12

EX-10.3

Camber Energy, Inc. 8-K

Exhibit 10.3

FUNDING AND LOAN AGREEMENT

THIS FUNDING AND LOAN AGREEMENT (this “Agreement”) is made and entered into as of July 8, 2019, by and among Camber Energy, Inc., a Nevada corporation (“Parent”), Lineal Star Holdings, LLC, a Delaware limited liability company (“LSH”), and the Parent preferred stockholders set forth on the signature page hereto (the “Preferred Holders” and, together with LSH and the Parent, sometimes referred to individually as a “Party” and collectively as the “Parties”).

RECITALS

WHEREAS, the Parties are parties to that certain Agreement and Plan of Merger, dated as of even date herewith (the “Merger Agreement”) (capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement);

WHEREAS, immediately following the Closing, the Parent shall deposit or cause to be deposited into a newly opened and dedicated bank account maintained by the Parent (the Account, defined and discussed below), an amount equal to $4,000,000 (the “Deposit”), to be held and distributed by the Parent on the terms set forth herein; and

WHEREAS, the Parties wish to specify their respective rights and obligations with respect to the Account Funds.

NOW THEREFORE, in consideration of the foregoing and the covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.Account Funds.

(a)Within seven (7) days after the Closing, the Parent shall open a dedicated bank account (at a bank mutually agreed to between the Parent and a Majority Interest of the Series E Preferred Stock, provided that the Parties confirm and acknowledge that Veritex Community Bank is a “mutually agreed to” bank) which shall be separate from the Parent’s standard operating bank account (the “Account”). An officer designated by the Parent and one person designated by the Series E Preferred Stock holders (which person shall initially be Tim Connolly) (the “Preferred Authorized Representative”), shall have to approve all disbursements, payments and draws on the Account. The Preferred Authorized Representative may be removed or replaced from time to time with the written consent of a Majority Interest of the Series E Preferred Stock and the holder of the Series F Preferred Stock.

(b)Immediately thereafter, the Parent shall deposit the Deposit in immediately available funds into the Account. The Parent shall hold the Deposit, together with all products and proceeds thereof, including all interest, gains and other income earned with respect thereto (collectively, the “Earnings” and together with the Deposit but less any disbursements, the “Account Funds”) in the Account, in accordance with the terms and subject to the conditions of this Agreement.

(c)All Earnings, to the extent applicable, shall be retained by the Parent and reinvested in the Account Funds, shall become part of the Account Funds, and shall be disbursed in accordance with the terms and subject to the conditions of this Agreement.

2.Disposition and Termination of the Account Funds.

The Parent and LSH shall act in accordance with, and the Parent shall hold and release the applicable portions of the Account Funds as provided in, this Section 2 as follows:

(a)Release Approval and Final Determination. Upon receipt of a Release Approval, or a Final Determination, as applicable, with respect to all or a portion of the Account Funds, the Parent shall promptly, but in any event within two (2) Business Days after the receipt of a Release Approval or Final Determination, disburse all or part of the Account Funds in accordance with such Release Approval or Final Determination.

(b)Method of Payment. All payments of any part of the Account Funds shall be made by wire transfer of immediately available funds as set forth in the Release Approval or Final Determination, as applicable.

(c)Certain Definitions.

(i)“Final Determination” means a final, non-appealable order of any court or arbitrator of competent jurisdiction which may be issued, together with (A) a certification of the prevailing Party to the effect that such order is final and non-appealable and from a court or arbitrator of competent jurisdiction having proper authority and (B) the written payment instructions of the prevailing Party to effectuate such order.

(ii)“Release Approval” means the written agreement executed by (a) a Majority Interest of the Series E Preferred Stock and the holder of the Series F Preferred Stock; and (b) the Parent, setting forth the disbursement of all or a portion of the Account Funds, as applicable, for Acquisitions. The Release Approval shall also set forth the structure of the Acquisition, including the ownership breakdown of any acquired entity, business or assets, between LSH and Parent (each an “Acquisition Structure”). For the sake of clarity, all of the terms of the Acquisitions and each Acquisition Structure shall be approved by (i) a Majority Interest of the Series E Preferred Stock and the holder of the Series F Preferred Stock; and (ii) the Parent.

(d)“Acquisitions” means acquisitions of assets and/or securities of complementary businesses of LSH.

3.Loan. Within two (2) days after the Closing, the Parent shall wire $1,050,000 in immediately available funds to LSH’s account at Veritex Community Bank (the “Loan”). The Loan shall be documented by a promissory note (signed by LSH as borrower and the Parent as lender) in the form of Exhibit A hereto, which shall accrue interest, compounded monthly, at 10% per annum, beginning upon the date that the Holder no longer owns at least 50% of the voting securities of the Company, and which note (and the amounts owed thereunder) shall either be (a) forgiven on the date that Parent Shareholder Approval is received; or (b) be payable in full together with accrued interest thereon, two (2) years from the date that Parent no longer owns at least 50% of LSH’s voting securities due to redemptions of Series E Preferred Stock and Series F Preferred Stock, by the holders thereof.

Funding and Loan Agreement

Page 2 of 7

4.Notices. All notices, requests, demands, and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when (a) delivered by hand, (b) one (1) Business Day after being sent by a nationally recognized overnight courier service (costs prepaid), (c) sent by facsimile or email with confirmation of transmission by the transmitting equipment, or (d) received by the addressee, if sent by certified mail, postage prepaid and return receipt requested. If notice is given to a Party, it shall be given at the address for such party set forth below. It shall be the responsibility of the Parties to notify the other Parties in writing of any name or address changes.

If to the Parent to:

Camber Energy, Inc.

Attn:    Louis G. Schott; Robert Schleizer

1415 Louisiana, Suite 3500

Houston, Texas 77002

Email: louisgschott@gmail.com and bschleizer@camber.energy

With a copy, which shall not constitute notice to:

Dickinson Wright PLLC

Attn: Joel D. Mayersohn 

350 East Las Olas Blvd.

Suite 1750

Fort Lauderdale, Florida 33301

Fax       844-670-6009

Email    JMayersohn@dickinsonwright.com

If to the Company or the Preferred Holders, to:

Lineal Star Holdings, LLC

Attn: Tim Connolly

123 N. Post Oak Lane Suite 440

Houston, Texas 77024

Fax: 713-586-6678

Email: tim@csbankers.com

With a copy, which shall not constitute notice to:

Hughes Arrell Kinchen LLP

Attn: Mark Hughes

1221 McKinney St., Suite 3150

Houston, Texas 77010

Fax: 713-942-2266

Email: mhughes@hakllp.com

Funding and Loan Agreement

Page 3 of 7

K&L Gates LLP

Attn: Clayton Parker

Southeast Financial Center

200 S. Biscayne Boulevard, Suite 3900

Miami, FL 33131

Fax: 305-358-7095

Email: Clayton.Parker@klgates.com

5.Termination. This Agreement shall terminate on the first to occur of (a) the distribution of all of the amounts in the Account in accordance with this Agreement; (b) delivery to the Parent of a written notice of termination executed by a Majority Interest of the Series E Preferred Stock and the holder of the Series F Preferred Stock; and (c) delivery to the Preferred Holders of a written notice of termination executed by the Parent, in the event the Series E Preferred Stock and Series F Preferred Stock have been fully redeemed by the Parent, after which this Agreement shall be of no further force and effect.

6.Representation by the Parent.

(a)The Parent hereby represents and warrants to the other Parties hereto that the Account and the Deposit are owned solely and directly by the Parent and are free and clear of all Liens.

(b)The Parent hereby acknowledges that the entry into this Agreement was a material inducement for the Preferred Holders to enter into the Merger Agreement and the Preferred Holders would not have entered into the Merger Agreement but for the Parent entering into this Agreement.

7.Miscellaneous.

(a)The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by all of the Parties.

(b)Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by any Party without the prior written consent of the other Parties.

(c)This Agreement shall be governed by and construed under the laws of the State of Texas without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction).

(d)Any action or proceeding arising out of or relating to this Agreement shall be heard and determined exclusively by the State and Federal Courts located in Harris, County, Texas, and each of the Parties to this Agreement irrevocably submits to the exclusive jurisdiction of such courts in any such action or proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the action or proceeding shall be heard and determined only in any such court and agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. The Parties hereto agree that any or all of them may file a copy of this Section 7(d) with any court as written evidence of the knowing, voluntary and bargained-for agreement among the parties irrevocably to waive any objections to venue or to convenience of forum. Process in any action or proceeding referred to in the first sentence of this Section 7(d) may be served on any Party anywhere in the world.

Funding and Loan Agreement

Page 4 of 7

(e)EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE ANCILLARY DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.

(f)This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the parties to this Agreement may be transmitted by facsimile or electronic transmission in portable document format (.pdf), and such facsimile or .pdf will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces, and will be binding upon such party.

(g)If any provision of this Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in such jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction.

Funding and Loan Agreement

Page 5 of 7

8.Nothing in this Agreement, whether express or implied, shall be construed to give any Person other than the Parent, LSH or the holders of the Series E and Series F Preferred Stock any legal or equitable right, remedy, interest or claim under or in respect of this Agreement or any funds provided for hereunder. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and the parties intend that no rule of strict construction will be applied against any Person. The Parties agree that, notwithstanding anything to the contrary contained in this Agreement or in any other agreement, in the event of any conflict or inconsistency between the terms of this Agreement (on the one hand) and the Merger Agreement (on the other hand), the terms of this Agreement shall govern.

9.Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

10.Further Assurances. Following the date hereof, each Party shall deliver to the other Parties such further information and documents and shall execute and deliver to the other parties such further instruments and agreements as any other Party shall reasonably request to consummate or confirm the transactions provided for herein, to accomplish the purpose hereof or to assure to any other Party the benefits hereof.

Funding and Loan Agreement

Page 6 of 7

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.

PARENT:
CAMBER ENERGY, INC.
By:	/s/ Louis G. Schott
Name:  Louis G. Schott Title:  Interim CEO

LSH:
LINEAL STAR HOLDINGS, LLC
By:	/s/ Timothy J. Connolly
Name:  Timothy J. Connolly Title:  Chief Executive Officer

PREFERRED HOLDERS:
JSHAN ENERGY, LLC
By:	/s/ Jerry C. Shanklin
Name:  Jerry C. Shanklin Title:  President

/s/ Brian Shanklin

BRIAN SHANKLIN

/s/ Blain Shanklin

BLAIN SHANKLIN

/s/ Craig Crawford

CRAIG CRAWFORD

/s/ Timothy J. Connolly

TIMOTHY J. CONNOLLY

Funding and Loan Agreement

Page 7 of 7

EX-10.4

Camber Energy, Inc. 8-K

Exhibit 10.4

PROMISSORY NOTE

US $1,050,000 Effective July 8, 2019

NOW THEREFORE FOR VALUE RECEIVED, the undersigned, Lineal Star Holdings, LLC, a Delaware limited liability company (the “Company”), hereby promises to pay to the order of Camber Energy, Inc., a Nevada corporation and its assigns (“Holder”), the principal sum of One Million Fifty-Thousand Dollars and No Cents (US $1,050,000) (the “Principal”), in lawful money of the United States of America, which shall be legal tender, bearing interest and payable as provided herein. This Promissory Note (this “Note” or “Promissory Note”) has an effective date of July 8, 2019 (the “Effective Date”). This Note is entered into to evidence amounts loaned from the Holder to the Company on the Effective Date, pursuant to that certain Funding and Loan Agreement entered into between the Company, the Holder, and certain holders of the Holder’s preferred stock, on or around July 8, 2019.

1.Interest (“Interest”) shall accrue on the Principal amount of this Note at the rate of ten percent (10%) per annum (the “Interest Rate”), compounded monthly on the last day of each calendar month beginning on the Interest Effective Date (“Monthly Interest”). All Interest payable hereunder shall be calculated by multiplying the actual days elapsed in the period for which Interest is being calculated by a daily rate based on the Interest Rate (or Default Rate, as applicable) and a 365 day year. All Monthly Interest shall be due on the Maturity Date. The Company will pay interest on the first day of each month of each year after the Interest Effective Date. All past-due Principal and Interest shall bear interest at the lesser of (a) the rate of eighteen percent (18%) per annum; and (b) the Maximum Rate, until paid in full (the “Default Rate”). For the sake of clarity, this Note shall not accrue Interest prior to the Interest Effective Date.

2.The “Interest Effective Date” shall be the date that the Holder no longer owns at least 50% of the voting securities of the Company.

3.The “Maturity Date” of this Note shall be the earlier of (a) two (2) years from the Interest Effective Date; and (b) the date that Holder has effected an Acceleration.

4.In the event the Parent Shareholder Approval has been received, as such term is defined in that certain Agreement and Plan of Merger, dated on or around the date hereof, by and between the Holder, the Company and the owners of the Company prior to the Holder (the “Merger Agreement”), this Note, and all Principal and Interest due hereunder, shall be deemed automatically forgiven by the Holder and this Note shall be cancelled without any additional action on the part of the Company.

5.Upon the occurrence of an Event of Default hereunder the Principal amount of this Note and any accrued Interest thereon shall bear interest at the Default Rate.

6.This Note may be prepaid in whole or in part, at any time and from time to time, without premium or penalty.

Page 1 of 6

Promissory Note

7.All payments made by Company under this Note will be applied: (i) first, to late charges, costs of collection or enforcement, and similar amounts due, if any, under the Note; (ii) second, to Interest that is due and payable under this Note, if any; and (iii) third, the remainder to Principal due and payable under this Note.

8.If any payment of Principal or Interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks are not open for business, such payment shall be made on the next succeeding business day.

9.This Note shall be binding upon Company and inure to the benefit of Holder and Holder’s respective successors and assigns. Each holder of this Note, by accepting the same, agrees to and shall be bound by all of the provisions of this Note. Holder may assign this Note or any of its rights, interests or obligations to this Note without the prior written approval of Company.

10.No provision of this Note shall alter or impair the obligation of Company to pay the Principal of and Interest on this Note at the times, places and rates, and in the coin or currency, herein prescribed.

11.Company will do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate existence, rights and franchises and comply with all laws applicable to Company, except where the failure to comply could not reasonably be expected to have a material adverse effect on Company.

12.Notwithstanding anything to the contrary in this Note or any other agreement entered into in connection herewith, whether now existing or hereafter arising and whether written or oral, it is agreed that the aggregate of all Interest and any other charges constituting interest, or adjudicated as constituting interest, and contracted for, chargeable or receivable under this Note or otherwise in connection with this loan transaction, shall under no circumstances exceed the Maximum Rate.

13.Company represents and warrants to Holder as follows:

(a)The execution and delivery by Company of this Note (i) are within Company’s power and authority, and (ii) have been duly authorized by all necessary action.

(b)This Note is a legally binding obligation of Company, enforceable against Company in accordance with the terms hereof, except to the extent that (i) such enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights, and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefore may be brought.

Page 2 of 6

Promissory Note

14.          If an Event of Default (as defined herein) occurs (unless all Events of Default have been cured or waived by Holder), Holder may, by written notice to Company, declare the Principal amount then outstanding of, and the accrued Interest and all other amounts payable on, this Note to be immediately due and payable (an “Acceleration”) (provided that upon the occurrence of an Event of Default described in Section 12(c) below, the Principal amount then outstanding of, and the accrued Interest and all other amounts payable on, this Note shall immediately be due and payable) and can take any and all other actions provided for under applicable law. The following events and/or any other Events of Default defined elsewhere in this Note are “Events of Default” under this Note:

(a)Company shall fail to pay, when and as due, the Principal, Interest or any other amount payable hereunder, within five (5) days from the due date of such payment; or

(b)Company shall have breached in any material respect any covenant, term or condition in this Note, and, with respect to breaches capable of being cured, such breach shall not have been cured within ten (10) days after written notice thereof has been provided by Holder to Company; or

(c)Company shall: (i) be adjudicated insolvent or take any action which constitutes its admission of inability to pay its debts as they mature; (ii) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or a trustee for it or a substantial portion of its assets; (iii) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation or statute of any jurisdiction, whether now or hereafter in effect; (iv) have filed against it any such petition or application in which an order for relief is entered or which remains undismissed for a period of ninety (90) days or more; (v) indicate its consent to, approval of or acquiescence in any such petition, application, proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or a substantial portion of its assets; (vi) suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ninety (90) days or more; or (vii) Company shall take any action authorizing, or in furtherance of, any of the foregoing.

In case any one or more Events of Default shall occur and be continuing, Holder may proceed to protect and enforce its rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or for an injunction against a violation of any of the terms hereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. In case of a default in the payment of any Principal of or premium, if any, or Interest on this Note, Company will pay to Holder such further amount as shall be sufficient to cover the reasonable cost and expenses of collection, including, without limitation, reasonable attorneys’ fees, expenses and disbursements. No course of dealing and no delay on the part of Holder in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice Holder’s rights, powers or remedies. No right, power or remedy conferred by this Note upon Holder shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.

Page 3 of 6

Promissory Note

15.Except as expressly provided otherwise in this Note, Company and every endorser or guarantor, if any, of this Note waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note, and assent to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral available to Holder, if any, and to the addition or release of any other party or person primarily or secondarily liable.

16.If from any circumstance any holder of this Note shall ever receive Interest or any other charges constituting interest, or adjudicated as constituting interest, the amount, if any, which would exceed the Maximum Rate shall be applied to the reduction of the Principal amount owing on this Note, and not to the payment of interest; or if such excessive interest exceeds the unpaid balance of Principal hereof, the amount of such excessive interest that exceeds the unpaid balance of Principal hereof shall be refunded to Company. In determining whether or not the interest paid or payable exceeds the Maximum Rate, to the extent permitted by applicable law (i) any non-Principal payment shall be characterized as an expense, fee or premium rather than as Interest; and (ii) all Interest at any time contracted for, charged, received or preserved in connection herewith shall be amortized, prorated, allocated and spread in equal parts during the period of the full stated term of this Note. The term “Maximum Rate” shall mean the maximum rate of interest allowed by applicable federal or state law.

17.This Note may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Note or any counterpart hereof to produce or account for any of the other counterparts. A copy of this Note signed by one party and faxed or scanned and emailed to another party (as a PDF or similar image file) shall be deemed to have been executed and delivered by the signing party as though an original. A photocopy or PDF of this Note shall be effective as an original for all purposes.

18.It is the intention of the parties hereto that the terms and provisions of this Note are to be construed in accordance with and governed by the laws of the State of Texas, except as such laws may be preempted by any federal law controlling the rate of Interest which may be charged on account of this Note. The parties hereby consent and agree that, in any actions predicated upon this Note, venue is properly laid in Texas and that the Circuit Court in and for Harris County, Texas, shall have full subject matter and personal jurisdiction over the parties to determine all issues arising out of or in connection with the execution and enforcement of this Note.

19.The term “Company” as used herein in every instance shall include Company’s successors, legal representatives and permitted assigns, including all subsequent grantees, either voluntarily by act of Company or involuntarily by operation of law and shall denote the singular and/or plural and the masculine and/or feminine and natural and/or artificial persons, whenever and wherever the contexts so requires or properly applies. The term “Holder” as used herein in every instance shall include Holder’s successors, legal representatives and assigns, as well as all subsequent assignees and endorsees of this Note, either voluntarily by act of the parties or involuntarily by operation of law. Captions and paragraph headings in this Note are for convenience only and shall not affect its interpretation. As used herein, words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires.

Page 4 of 6

Promissory Note

20.Holder may not assign or pledge this Note and its rights hereunder without the prior written approval of Company which may be withheld in Company’s sole discretion. Company may not assign its obligations hereunder, whether by operation of law or otherwise, without the prior written approval of Holder which may be withheld in Holder’s sole discretion.

21.Anything else in this Note to the contrary notwithstanding, in any action arising out of this Agreement, the prevailing party shall be entitled to collect from the non-prevailing party all of its attorneys’ fees. For the purposes of this Note, the party who receives or is awarded a substantial portion of the damages or claims sought in any proceeding shall be deemed the “prevailing” party and attorneys’ fees shall mean the reasonable fees charged by an attorney or a law firm for legal services and the services of any legal assistants, and costs of litigation, including, but not limited to, fees and costs at trial and appellate levels.

22.If any term or other provision of this Note is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Note shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Note so as to affect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

23.No modification, amendment, addition to, or termination of this Note, nor waiver of any of its provisions, shall be valid or enforceable unless in writing and signed by all the parties hereto.

24.The Note constitutes the entire agreement of the parties regarding the matters contemplated herein, or related thereto, and supersedes all prior and contemporaneous agreements, and understandings of the parties in connection therewith.

[Remainder of page left intentionally blank. Signature page follows.]

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Promissory Note

IN WITNESS WHEREOF, Company has duly executed this Promissory Note as of July 8, 2019, with an Effective Date as provided above.

“Company”
Lineal Star Holdings, LLC
By:	/s/ Timothy J. Connolly
Its:	CEO

Printed Name:  Timothy J. Connolly

Page 6 of 6

Promissory Note

EX-10.5

Camber Energy, Inc. 8-K

Exhibit 10.5

FORM OF

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is entered into as of [DATE] by and between Camber Energy, Inc., a Nevada corporation (the “Company”) and [Indemnitee], an individual (“Indemnitee”).

RECITALS

A. The Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for its directors, officers, employees, agents and fiduciaries, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance.

B. The Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited.

C. Indemnitee does not regard the current protection available as adequate under the present circumstances, and Indemnitee may not be willing to continue to serve the Company in the position of [Position] of the Company without additional protection.

D. The Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company and, in part, in order to induce Indemnitee to provide services to the Company, wishes to provide for the indemnification and advancing of expenses to Indemnitee to the maximum extent permitted by law.

In view of the considerations set forth above, the Company desires that Indemnitee be indemnified by the Company as set forth herein.

NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

1.           Indemnification.

(a) Indemnification of Expenses. The Company shall indemnify to the fullest extent permitted by law if Indemnitee was or is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other (hereinafter a “Claim”) by reason of (or arising in part out of) any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity (hereinafter an “Indemnifiable Event”) against any and all expenses (including attorneys’ fees and all other costs, expenses and obligations incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any such action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) of such Claim and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (collectively, hereinafter “Expenses”), including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses. Such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than twenty (20) days after written demand by Indemnitee therefor is presented to the Company.

(b) Reviewing Party. Notwithstanding the foregoing, (i) the obligations of the Company under Section 1(a) shall be subject to the condition that the Reviewing Party (as described in Section 10(e) hereof) shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel referred to in Section 10(c) hereof is involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) the obligation of the Company to make an advance payment of Expenses to Indemnitee pursuant to Section 2(a) (an “Expense Advance”) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). The Indemnitee’s obligation to reimburse the Company for any Expense Advance shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control (as defined in Section 10(c) hereof), the Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 10(c) hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual basis therefor, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee.

(c) Change in Control. The Company agrees that if there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control) then, with respect to all matters thereafter arising concerning the rights of the Indemnitee to payments of Expenses and Expense Advances under this Agreement or any other agreement or under the Company’s Articles of Incorporation, as amended, or Bylaws as now or hereafter in effect, Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld, conditioned or delayed). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and the Company agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

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Indemnification Agreement	[Indemnitee]

(d) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 9 hereof, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit, proceeding, inquiry or investigation referred to in Section (1)(a) hereof or in the defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in connection therewith.

2.           Expenses; Indemnification Procedure.

(a) Advancement of Expenses. The Company shall advance all Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid by the Company to Indemnitee as soon as practicable but in any event no later than twenty (20) days after written demand by Indemnitee therefor to the Company.

(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitee’s right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be directed to the Board of Directors of the Company at the address set forth in Section 14(d)(i) hereof (or such other address as the Company shall designate in writing to Indemnitee as provided in Section 14 hereof). In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.

(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law, shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.

(d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms of such policies.

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Indemnification Agreement	[Indemnitee]

(e) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim; provided that, (i) Indemnitee shall have the right to employ Indemnitee’s counsel in any such Claim at Indemnitee’s expense and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. The Company shall have the right to conduct such defense as it sees fit in its sole discretion, including the right to settle any claim against Indemnitee without the consent of the Indemnitee.

3.           Additional Indemnification Rights; Non-exclusivity.

(a) Scope. The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Articles of Incorporation, as amended, the Company’s Bylaws, as amended, or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Nevada corporation to indemnify a member of its Board of Directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Nevada corporation to indemnify a member of its Board of Directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 8(a) hereof.

(b) Non-exclusivity. The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company’s Articles of Incorporation, as amended, its Bylaws, as amended, any agreement, any vote of stockholders or directors, the Nevada Revised Statutes, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action Indemnitee took or did not take while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.

(c) Change in Domicile. In the event the Company shall at any time change its state or other jurisdiction of organization from Nevada, each reference herein to “Nevada” shall refer to such state or other jurisdiction of organization which rules and regulations the Company is then organized under and each reference herein to the “Nevada Revised Statutes” shall refer to such analogous statutes of such state or other jurisdiction of organization which the Company is then organized under.

4.           No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Articles of Incorporation, as amended, Bylaws, as amended, or otherwise) of the amounts otherwise indemnifiable hereunder from any party whatsoever.

5.           Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

Page 4 of 10	Camber Energy, Inc. and
Indemnification Agreement	[Indemnitee]

6.          Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in certain instances, Federal law or applicable public policy may prohibit the Company from indemnifying its directors, officers, employees, agents or fiduciaries under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

7.          Liability Insurance. The Company shall, from time to time, make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses from wrongful acts, or to ensure the Company’s performance of its indemnification obligations under this Agreement. Among other considerations, the Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. In all policies of directors’ and officers’ liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if Indemnitee is a director; of the Company’s officers, if Indemnitee is not a director of the Company but is an officer; of the Company’s key employees, if Indemnitee is not an officer or director but is a key employee; or of any combination of the foregoing in which Indemnitee serves, if Indemnity serves in more capacities than just a director, an officer or a key employee. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Company.

8.           Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

(a) Excluded Action or Omissions. To indemnify Indemnitee for Expenses resulting from acts, omissions or transactions for which Indemnitee is prohibited from receiving indemnification under this Agreement or applicable law;

(b) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (i) with respect to actions or proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Company’s Articles of Incorporation, as amended, or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under the Nevada Revised Statutes, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be;

(c) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous; or

Page 5 of 10	Camber Energy, Inc. and
Indemnification Agreement	[Indemnitee]

(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

9.          Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of one (1) year from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such one-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

10.         Construction of Certain Phrases.

(a) For purposes of this Agreement, references to the “Company” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.

(b) For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

(c) For purposes of this Agreement a “Change in Control” shall be deemed to have occurred if, on or after the date of this Agreement, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company acting in such capacity or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 50% of the total voting power represented by the Company’s then outstanding Voting Securities (as defined in Section 10(f) hereof), (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of related transactions) all or substantially all of the Company’s assets.

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Indemnification Agreement	[Indemnitee]

(d) For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 1(c) hereof, who shall not have otherwise performed services for the Company or Indemnitee within the last three (3) years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).

(e) For purposes of this Agreement, a “Reviewing Party” shall mean any appropriate person or body consisting of a member or members of the Company’s Board of Directors or any other person or body appointed by the Board of Directors who is not a party to the particular Claim for which an Indemnitee is seeking indemnification, or Independent Legal Counsel.

(f) For purposes of this Agreement, “Voting Securities” shall mean any securities of the Company that vote generally in the election of directors.

(g) For the purposes of this Agreement, “Articles of Incorporation” shall mean the Articles of Incorporation, or similar governing document of the Company in effect as of the date of determination.

(h) For the purposes of this Agreement, “Bylaws” shall mean the Bylaws of the Company in effect as of the date of determination.

11.         Counterparts, Effect of Facsimile, Emailed and Photocopied Signatures. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail (any such delivery, an “Electronic Delivery”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party, each other party shall re execute the original form of this Agreement and deliver such form to all other parties. No party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.

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Indemnification Agreement	[Indemnitee]

12.        Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect with respect to Claims relating to Indemnifiable Events regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary of the Company or of any other enterprise at the Company’s request.

13.        Attorneys’ Fees. In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is ultimately successful in such action, and shall be entitled to the advancement of Expenses with respect to such action, unless, as a part of such action, a court of competent jurisdiction over such action determines that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in defense of such action (including costs and expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action, unless, as a part of such action, a court having jurisdiction over such action determines that each of Indemnitee’s material defenses to such action was made in bad faith or was frivolous.

14.        Notice. All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one (1) day after the business day of delivery by facsimile transmission, if delivered by facsimile transmission, with copy by first class mail, postage prepaid, to the parties and the following addresses:

(i) if to the Company, to:	Attention: Board of Directors
	Camber Energy, Inc.
	1415 Louisiana, Suite 3500
	Houston, Texas 77002
	Fax: ________________
(ii) if to Indemnitee, to:	[Indemnitee]
	Address
	Address
	Address
	Fax

or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto.

Page 8 of 10	Camber Energy, Inc. and
Indemnification Agreement	[Indemnitee]

15.        Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Texas for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the courts of the State of Texas, which shall be the exclusive and only proper forum for adjudicating such a claim.

16.         Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

17.         Choice of Law. This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Texas, as applied to contracts between Texas residents, entered into and to be performed entirely within the State of Texas, without regard to the conflict of laws principles thereof.

18.         Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

19.         Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

20.        Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.

21.         No Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries.

Page 9 of 10	Camber Energy, Inc. and
Indemnification Agreement	[Indemnitee]

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

CAMBER ENERGY, INC.

By:

Name:

Title:

AGREED TO AND ACCEPTED BY:

[Indemnitee]

Page 10 of 10	Camber Energy, Inc. and
Indemnification Agreement	[Indemnitee]

EX-10.6

Camber Energy, Inc. 8-K

Exhibit 10.6

EX-10.7

Camber Energy, Inc. 8-K

Exhibit 10.7

EX-99.1

Camber Energy, Inc. 8-K

 Exhibit 99.1

Camber Energy, Inc. Announces the Acquisition of Lineal Star Holdings

HOUSTON, TX / ACCESSWIRE / July 9, 2019 / Camber Energy, Inc. (NYSE American: CEI) (“Camber” or the “Company”) based in Houston, Texas, announced today that on July 8, 2019, it closed the previously announced acquisition of Lineal Star Holdings, LLC (“Lineal”) www.LinealStar.com. The acquisition was completed in an all-stock transaction, by the entry into an Agreement and Plan of Merger.

Lineal, based in Houston, Texas, is the parent company of (a) 64-year-old Lineal Industries Inc. (“Lineal Industries”), based in Pittsburgh, Pennsylvania, and (b) Lineal Star Incorporated (“Lineal Star”), headquartered in Houston, each of which were acquired by the Company as part of the merger. Lineal Industries has provided over six decades of upstream, midstream, and utilities pipeline maintenance, specialty construction and integrity services to Fortune 500 companies located in the states of Ohio, Pennsylvania, Virginia, West Virginia, Maryland and New York.

The Company plans to expand the Lineal brand by acquiring and developing complementary specialty engineering, procurement and construction energy infrastructure service businesses, as well as generating organic growth in downstream field services in Lineal Star, Lineal’s newly formed Gulf Coast based operation. The Company’s strategy is a balanced approach to acquire and grow energy service businesses that focus in upstream, midstream and downstream sectors that are not severely affected by wide swings in the commodity price of oil and natural gas.

Camber Energy Interim Chief Executive Officer, Louis G. Schott, commented, “We are extremely excited to announce the closing of the acquisition of Lineal which we have been working on for the past several months to complete. We believe that as a result of the acquisition, and by implementing technological efficiencies with centralized financial systems and controls, we can build a less volatile, more diverse income stream. In addition, we plan to remain focused on the 64-year-old Lineal Industries model – providing day-to-day maintenance requirements of public utilities rights of way, upstream, midstream, downstream and pipeline maintenance, and the specialty construction and integrity services required by Lineal’s client base. These are services that are needed every day, regardless of the price of oil or natural gas. We believe the acquisition will significantly increase our future revenue streams which will in turn increase shareholder value.”

Pursuant to the transaction, the former members of Lineal received shares of the Company’s newly designated Series E and Series F Preferred Stock, which in aggregate vote 19.9% of the Company’s voting shares prior to such time, if ever, as the merger agreement and the issuance of shares of common stock in connection therewith have been approved by the Company’s shareholders (“Shareholder Approval”), and will vote 80% of the Company’s voting stock(Series E Preferred Stock) and convert into between 67% and 70% of the Company’s total fully-diluted shares, upon Shareholder Approval (Series E Preferred Stock). As part of the transaction, we also entered into agreements with the Company’s Series C Preferred Stock holders, which subject to the terms thereof, and the Shareholder Approval, have agreed to exchange all of their shares of Series C Preferred Stock for shares of a new Series D Preferred Stock which will fix the number of shares of common stock issuable upon conversion thereof and significantly reduce the liquidation preference of such preferred stock.

* * * * *

More information regarding the Plan of Merger, related agreements and transactions, the terms of the Series E and F Preferred Stock and the other matters discussed herein and related to the merger, are included in a Current Report on Form 8-K which the Company has filed with the Securities and Exchange Commission.

About Camber Energy, Inc.

Based in Houston, Texas, Camber Energy (NYSE American: CEI) is a growth-oriented, independent oil and gas company engaged in the development of crude oil, natural gas and natural gas liquids in the Texas Panhandle as well as other basins with a new focus on midstream and downstream pipeline integrity services, specialty construction and field services. For more information, please visit the Company’s website at www.camber.energy.

Safe Harbor Statement and Disclaimer

This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations, opinion, belief or forecasts of future events and performance. A statement identified by the use of forward-looking words including “will,” “may,” “expects,” “projects,” “anticipates,” “plans,” “believes,” “estimate,” “should,” and certain of the other foregoing statements may be deemed forward-looking statements. Although Camber believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. These include risks described in Camber's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and other filings with the SEC, available at the SEC’s website at www.sec.gov. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The Company takes no obligation to update or correct its own forward-looking statements, except as required by law, or those prepared by third parties that are not paid for by the Company. The Company’s SEC filings are available at http://www.sec.gov.

EX-99.2

Camber Energy, Inc. 8-K

Exhibit 99.2

  1415 Louisiana, Suite 3500 Houston, Texas 77002  

Notice of Ratification

July 8, 2019

To the Stockholders of Record

of Camber Energy, Inc.

Re: Ratification Pursuant to Nevada Revised Statues Section 78.0296

This Notice of Ratification (“Notice”) is being provided to the stockholders of record of Camber Energy, Inc. (the “Company”) as of July 2, 2019, pursuant to Nevada Revised Statutes (“NRS”) Section 78.0296.

Section 78.0296 of the NRS provides that, “except to the extent expressly prohibited in the articles of incorporation [of the Company], any corporate act [which definition includes (1) Any act or purported act of the board of directors; (2) Any act or purported act of the stockholders; or (3) Any other act or transaction taken or purportedly taken by or on behalf of the corporation, including, without limitation, any issuance or purported issuance of stock or other securities of the corporation] not in compliance, or purportedly not in compliance, with [Chapter 78 of the NRS] or the articles of incorporation or bylaws in effect at the time of such corporate act may be ratified or validated in accordance with [Section 78.0296 of the NRS].”

Section 78.0296 of the NRS further provides that “[a]ny ratification or validation of a corporate act pursuant to [Section 78.0296 of the NRS] must be approved by the board of directors and, as applicable, the stockholders . . .” and that “[n]otice of any ratification or validation of a corporate act pursuant to [Section 78.0296 of the NRS] must be given not later than 10 days after the approval of such ratification or validation . . . to each stockholder of record at the time of such ratification or validation, whether or not action by the stockholders is required for such ratification or validation.”

In connection with the Company’s recently announced acquisition of Lineal Star Holdings, LLC (“Lineal”), it came to the attention of the Company’s Board of Directors that the Company’s corporate record book was missing minutes relating to the issuance of certain prior shares of common stock and preferred stock, which issuances have occurred over the past several years, going back to the incorporation date of the Company. As a result, and as a required condition to closing the acquisition of Lineal, the Board of Directors, on July 2, 2019, approved, confirmed and ratified the validly issued and fully paid and nonassessable status of all (a) 48,813,199¹ shares of common stock; and (b) 2,305 shares of Series C Redeemable Convertible Preferred Stock, issued and outstanding as of July 2, 2019, pursuant to NRS 78.0296 (the “Ratification”). The Ratification did not require the approval of the stockholders of the Company.

This Notice serves as the required notice to the record stockholders of the Ratification pursuant to NRS 78.0296.

Should you have any questions regarding the ratified issuances, please feel free to contact us.

Sincerely,

/s/ Louis G. Schott

Louis G. Schott

Interim Chief Executive Officer

___________

¹ Represents shares of common stock issued and outstanding prior to the Company’s 1-for-25 reverse split of its outstanding common stock effective on July 8, 2019.